You can’t refute economics, Jacinda

Wed, 09 Feb, 2022

“The economists at Treasury have undermined the Prime Minister’s claim that the Government’s out-of-control spending has had no impact on rising prices”, says ACT Leader David Seymour.

“Last month, Jacinda Ardern responded to a question about whether government spending has led to higher inflation by saying, ‘I refute that, I absolutely refute that’.

“However, advice provided by Treasury to the Finance Minister in October, and obtained by ACT, says, ‘Increases in fiscal stimulus...have exerted inflationary pressures...by increasing aggregate demand’.

“That the Prime Minister is a communications graduate is no excuse for her ignorance – she has an army of bureaucrats to give her economic advice.

“Why can’t she just accept a basic economic truth? Inflation is the result of more money chasing fewer goods.

“The Reserve Bank has printed – and Labour has borrowed and spent – tens of billions of dollars in the past two years. That money is moving around the economy and pushing up the price of everything.

“Border restrictions and Red traffic light restrictions mean less is being produced and business costs are higher. New rules and new taxes push up prices as well.

“Prices have gone up 5.9 per cent. Wages have gone up just 2.6 per cent. Kiwis can buy less with their money – they’re getting poorer.

“Inflation is at a 31-year high and Kiwis are being squeezed from every direction – at the checkout, at the petrol pump, and when they pay the rent.

“The only adequate response is a return to rational economics.

ACT would:

  • Get borrowing and wasteful spending under control
  • Change the Reserve Bank legislation back to focusing on inflation only
  • Provide tax relief, cutting the 30 per cent tax rate to 17.5 per cent, giving the average worker an extra $2,000
  • Stop hitting businesses and productive people with new rules and taxes
  • Immediately allow all vaccinated, negative tested travellers into the country – New Zealanders, workers, students and tourists.

“Jacinda Ardern is entitled to her own damaging opinions, but she can’t refute economics.”