Woolerton R Doug: General Debate 
Woolerton R Doug: General Debate 
[Volume:639;Page:9842] 
R DOUG WOOLERTON (NZ First) 
: 
 This week we saw the unprecedented move of the Reserve Bank Governor intervening in the currency market something we have not seen since the dollar was floated in the 1980s. That came just 1 week after the Reserve Bank Governor had raised the cash rate to 8 percent the highest in the developed world. This of course caused the dollar to rise and speculators and investment funds went on a buying spree. We are doing long-term damage to our exporters and in fact this is as good as telling them to nick off. 
The Reserve Bank Governor explained to the Finance and Expenditure Committee the other day that the proposed record pay-out of Fonterra was a concern in that it would add inflationary pressures to the economy. So dairy farmers who were looking forward to some debt repayment and to replacing some plant and machinery are suddenly disadvantaged all over again. In other words we are killing the goose that laid the golden eggs all because the Reserve Bank Governor is required to rely on one single blunt instrument which is the inflation target of 1 to 3 percent. 
In New Zealand we either export or die. Export growth is reliant on a favourable dollar. So much work has been done over the past year on Export Year with Business New Zealand coming on board along with the Chamber of Commerce and we are finally getting somewhere by forming strong Government agency and business links designed to bolster our exports. Now that is being undermined by the high dollar. The Reserve Bank Act is too restraining the focus is too narrow and the governor needs new tools that will recognise the uniqueness of our economy not some other foreign economy. We need a Reserve Bank Act custom-made for us not imported from one of the other countries and for the convenience of those on foreign shores. 
Exporters—and here we are talking about everybody from agricultural industries to manufacturers to high-tech software companies and the like—need our help. They are our lifeblood and right now they need a transfusion of new thinking. We must rewrite the Reserve Bank Act. It must consider more than just inflation alone. Right now the only people who are benefiting from the Act are currency traders and paper shufflers. Exporters must be the priority not the afterthought when things have got out of hand. For far too long in this country we have seen an economy relying on consumerism and forgetting about the lifeblood which is exporting. We risk losing so much of our productive sector if we do not act now. It was this Parliament that created this problem through the Reserve Bank Act and it is this Parliament that now must do something to fix it up. 
The two old parties in this Parliament have long held the view that we should have a hands-off sort of an operation when we come to monetary policy. In recent years—and particularly the last year—that has been shown to be at fault and we must do something about it. New Zealand First has said for years now that we cannot rely on just the one mechanism of inflation alone. We must have the Reserve Bank Governor looking at things like exporting. We must require him to take into account the jobs in this country before he goes out and raises the interest rates that so badly hurt our exporters. The sheep farmers the foresters and the fishers in this country are all suffering under this extremely high dollar—a dollar that has only been exacerbated by the rise in interest rates we have recently seen. 
It is ironic that within a week—as I said before—the governor had to come out into the market and buy New Zealand dollars. We think that has gone some way towards alleviating the problem but commentators countrywide and overseas are telling us that that will not work for long and it is not a long-term solution and we agree. Something has to be done and that something is to rewrite the Reserve Bank Act.