Meddling with the exchange rate isn’t a panacea for the world’s woes, Employers’ and Manufacturers’ Association chief executive Kim Campbell says.
He says many of the factors influencing the dollar’s values are largely out of our control.
“The things that are in our control include re-examining how central and local government can avoid adding to inflationary pressures,” says Mr Campbell.
* Freeing up the supply of land at local government level to make building a house more affordable.
* Ensuring tax policy takes account of its impact on monetary policy. For example, any new government spending should be assessed for its impact, both short-term and longer term, on inflation.
* Introducing a Regulatory Responsibility Act to improve the quality of regulation.
* Reducing government and private sector debt where appropriate (high debt drives up interest rates as lenders demand a risk premium) – we need to stay the course.
These are far more likely to help and less likely to have nasty consequences than meddling with the exchange rate.