7.2% inflation is "hardly the kind of high performance that deserves a long break," ACT says
ACT New Zealand is urging the Reserve Bank to reconvene in January, saying that with inflation out of control, its performance hardly deserves a long break.
“Kiwis are probably wondering why Reserve Bank Governor Adrian Orr insists that taking three months off is a good idea while inflation is spiralling out of control, ACT hears ya,” said Damien Smith, ACT’s associate finance spokesperson. “In November, I questioned the governor about his plans to take the summer off, with the next OCR announcement not scheduled until February. Orr said, ‘February is fine’ and that the committee will only reconvene if there are major economic shocks.”
Smith said inflation, which the Monetary Policy Committee is supposed to keep under 3%, is currently at 7.2% – “hardly the kind of high performance that deserves a long break.”
“Kiwis trying to pull together a family barbecue over summer or catch up on some DIY around the house are finding everything is too expensive due to inflation,” he said. “The governor owes it to Kiwis to be considering monetary policy that affects these prices regularly.”
The Monetary Policy Committee usually meets every six weeks. And although a three-month break was fine in the days of disappearing inflation, in the decade leading up to COVID, NZ now has a cost-of-living crisis – something that the Monetary Policy Committee needs to “take seriously, frequently,” Smith said.
ACT is calling on the Monetary Policy Committee to hold a meeting in early January.
“Given the pressure that inflation and rising interest rates are putting on households up and down New Zealand, the least that the Monetary Policy Committee could do is come back early from the beach,” the party said. “After all, it's they who are missing their 1-3% inflation target by 4.2% right now.”
Have a thought about this story? Include it in the comments below.
