Hide Rodney: General Debate 
Hide Rodney: General Debate 
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RODNEY HIDE (Leader—ACT) 
: 
 It is worth reflecting that while we are debating in this House hard-working successful Kiwi businesses are going under and hard-working Kiwis are losing their jobs. Our economy is actually going to tank next year because on Thursday the Reserve Bank governor will be hiking interest rates to drive down the New Zealand economy. We see nothing in response in this House and from this Government to assist the New Zealand economy. In fact every decision that has been made has been to make matters worse. 
By the way for the benefit of those who are interested in what is happening in the New Zealand economy I believe that the best analysis is provided by economist Rodney Dickens from Strategic Risk Analysis Ltd. We can read his material online at www.sra.co.nz. 
Here is what has happened and here is what is going to happen. With the replacement of Don Brash by Alan Bollard an experiment was undertaken in having a looser approach to monetary policy—a less Presbyterian approach and a more catholic one I would guess. The approach was to wait watch and worry rather than to deal with the issues. That had the go-ahead of the Government. In fact that is why Rod Carr did not get the job of Reserve Bank governor. The approach to monetary policy was loose from 2002 onwards and we have seen underlying inflation within the New Zealand economy in the non-tradable sector tip up to 4.5 percent. Of course the economy booms. We saw Government members patting themselves on the back because the economy was booming. Actually anyone can have that by running a loose monetary policy. 
The trouble is that the chickens come home to roost and now the chickens are coming home to roost. We are actually seeing a Muldoon-like response to that where the Government wants to pile up intervention on intervention rather than deal with the underlying problem. It may undermine the independence of the Reserve Bank governor by intervening and telling him what it can do. The Reserve Bank governor himself was trying to intervene in the market and according to John Key who knows about these things blew $100 million—all to no avail. Of course what will happen is that interest rates will go up. Let us make it clear that the purpose of that is to drive the New Zealand economy into a recession which by the way runs the risk of throwing this Government out of office because we are heading into an election in 2008. That is why Michael Cullen is running around trying to avert the disaster. Well Michael Cullen can try. 
What we need to do is to get Government spending under control. We should not beat up on the productive sector which creates the wealth. We should deal to the Government which is destroying it. It is because of the Government’s spending that businesses are going to the wall not because of the Reserve Bank of New Zealand Act and the Reserve Bank governor. We have—and Treasury has documented this—a 1.7 percent fiscal stimulus heading into an election year and everyone knows what Labour and Michael Cullen are going to do. They are going to spend up next year. How do we know that? It is in the Budget. That is what is driving up interest rates now. The markets are not stupid; they know that this crowd will be spending up. Interest rates are going up now in order to counteract that and businesses are going under. We are running the risk of collapsing the housing market all because we have a Minister of Finance and a Labour Government that are not prepared to get their own finances in order. 
So hard-working New Zealanders who pay for everything through their taxes are the ones who are going down. They are the ones who are going under while the Government just spends their money and spends it and spends it. Then Muldoon-like the Government turns round and blames them. It says to try this or that which drives up the dollar further because the expectation is of a spend-up. I tell Dr Cullen to get his house in order. That will get the economy under control.