The Green Party has come up with what co-leader Russel Norman calls a suite of measures to address the high value of the kiwi dollar.
Minister of economic Development Steven Joyce, rightly, calls it snake-oil.
“New Zealand has one of the strongest economies in the OECD over the last 12 months, and yet the Greens are determined to talk us down and promote a bunch of ideas that are only in vogue in countries that have run out of options and have massive and crippling public debt,” Mr Joyce says.
“The Greens solution to supposedly encourage the private sector is to slap a capital gains tax on it. Leaving aside the fact that Australia has a Capital Gains Tax and a high dollar, it’s a strange way to seek to encourage investment and growth by offering to tax it more.
“They then want to abandon sensible monetary policy and whack up the cost of living for every New Zealander, and they want to pay for the Christchurch rebuild by printing money.
“They have truly jumped the shark. The Greens half-baked economic ideas would move one of the few solidly growing OECD economies into the basket case division – more proof that they should never be let near the Treasury benches.
“In the post GFC world New Zealand is doing better than most. Our economy is 2.6% larger than it was this time last year, and the economy has added 57,000 jobs over the last two years.
“The way to achieve faster growth and more and higher paying jobs is to first have responsible fiscal and monetary policy, and then to assist Kiwi firms to become more competitive in the area of skills, innovation, infrastructure, access to raw materials, capital and markets. Not panicky responses from politicians in desperate search for a headline.”
Printing more money as Norman suggests , is one of the failed policies of the 70s and 80s that the late Sir Robert Muldoon might have favoured.
We paid dearly for that with very high interest rates and inflation until our economy was brought back into the real world with the successful policies of the mid to late 80s and early 90s.
Going back to government meddling with the exchange rate and the inflationary impact that would have might provide a temporary fillip for exporters but it would be at a very high cost for the whole economy. Those on middle and lower incomes who can least afford it would pay the highest price.