Low inflation further proof of Labour's argument

The lowest price rises in over a decade show that inflation is no longer the only pressing economic issue and the Reserve Bank must be given the ability to give equal consideration to the exchange rate, as Labour’s Finance spokesperson David Parker has long argued.

“Inflation is at its lowest in 13 years while the dollar is over-valued and crippling our exporters,” says David Parker.

“Yet the Reserve Bank is tasked primarily with controlling inflation and pays insufficient attention to our overvalued and damaging exchange rate. This is despite a $10 billion external deficit, which is worse than every developed country bar Greece.

“National’s economy is stagnating, manufacturing outside primary produce is in crisis and jobs are being cut every week. It’s the dollar that’s causing this, not inflation.

“The Reserve Bank’s primary task is to control inflation, but inflation isn’t the current problem. Labour has long argued that the Reserve Bank must be able to look beyond inflation and give equal weight to other important issues such as the exchange rate. That would help our exporters and manufacturers and allow them to create good jobs that pay a decent wage.

“Labour wants to change the Reserve Bank Act so that the Bank can consider the exchange rate and no longer give primacy to inflation,” says David Parker.