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  • rmacculloch

The Minister of Finance is in outer space, issuing nonsense statements, and should just retire

Upon release of the GDP figures yesterday confirming NZ has entered two quarters of contraction & so is in a recession, Grant Robertson responded in the following way - he issued a statement blaming the weather:


“[Today’s] result reflects the impact of the Auckland Anniversary floods & Cyclone Gabrielle"


The recession's true cause, of course, has been NZ's sharp rise in interest rates, one the steepest in the world. The Finance Minister & Reserve Bank Governor engineered high inflation & now have engineered a recession to (over) correct their mistake. A recession was formally stated as being the objective of the Reserve Bank by its Governor to quell inflation, even though other Central Bank Governors have stated they prefer a "soft landing".


As previously argued on DownToEarth Kiwi, the Bank played politics at its last Official Cash Rate Announcement with the precise intention of enabling the Finance Minister to include in his statement issued yesterday this line:


"The Reserve Bank has indicated that interest rates have peaked and inflation is projected to fall, returning to the target range next year".


How come the Chair of the US Federal Reserve, where rates are presently similar to ours, was reported by Bloomberg News as saying a few days ago:


"Powell Says Further Rate Hikes Needed"


The reason is that the US Federal Reserve is an independent central bank - its line is that the Fed has to wait for incoming data before knowing how to adjust the Federal Funds Rate. By contrast, our Central Bank knows National & ACT strongly disapprove of its leadership, which has biased the Bank in favor of supporting the government's re-election prospects, as evidenced by the line the Bank enabled the Minister of Finance to insert in his statement.


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