OECD: Govt spending increasing prices

Tue, 01 Feb, 2022

“The OECD is the latest organisation to remind Labour that prices are soaring in part because of its out-of-control spending”, says ACT Leader David Seymour.

“The OECD’s Economic Survey of New Zealand released this morning noted that ‘highly expansionary macroeconomic policies’ were contributing to soaring inflation.

“Treasury has also warned Grant Robertson that the Government’s massive stimulus was having an effect on rising prices.

“Labour needs to start listening. Inflation amounts to a 5.9 per cent tax on Middle New Zealand.

“2022 is now the Year of the Hangover. New Zealanders are now feeling the effects of our lock ‘em down, lock ‘em out, borrow, print and spend approach to COVID-19.

“Labour bought into the delusion that sealing ourselves off from the world for two years would cost us nothing. If the economy seems buoyant, it’s only because of enormous borrowing propped up by artificially low interest rates – that’s now pushing up the price of everything.

“Inflation is effectively a 5.9 per cent COVID tax on everything you buy. If the Government put up GST by 5.9 per cent there would be an uproar. Inflation amounts to the same thing.

“Kiwis need tax relief and businesses need workers.

“Businesses can’t get workers, so acute labour shortages are increasing their costs. We need to end MIQ in favour of home isolation for fully-vaccinated, negative tested travellers, so Kiwis can come home and businesses can get the skills they need.

“The Government’s relentless borrowing and spending has also added to the cost of just about everything. Locking the economy down and borrowing $50 billion so far has left us with a mountain of debt and rising prices.

“The cost of living for New Zealand families is through the roof. Rents are up, mortgage rates are on the rise, the cost of food is up, petrol is up, but wages aren’t keeping up.

“Kiwi battlers are being squeezed from all directions and they need some tax relief.

ACT set out a range of solutions to the cost of living crisis last month, including:

  • Delivering a middle income tax cut while reducing wasteful spending to balance the budget sooner.
  • Ending MIQ in favour of home isolation for fully-vaccinated, negative tested travellers, so Kiwis can come home, and international students and tourists can return.

“In the Year of the Hangover, Kiwi Battlers will find it increasingly difficult to make ends meet.

“ACT’s package of solutions will make life more affordable for middle New Zealand. We will keep listening to the concerns of New Zealanders and pushing for better solutions to make life more affordable for Kiwi families.”