Scott Alastair: General DebateText is incorporated into the Bound VolumeScott Alastair: General Debate[Sitting date: 16 March 2016. Volume:712;Page:9811. Text is incorporated into the Bound Volume.]ALASTAIR SCOTT (National—Wairarapa): Yesterday Mr Little once again demonstrated that he thinks New Zealanders are idiots that Kiwis do not know how to manage their affairs that we all need his superior wisdom and knowledge. The sanctimonious attitude of the Labour Party is alive and well. He thinks that he knows how to determine interest rates and he will strong arm and legislate to ensure that. Apparently he has more knowledge of interest rates and markets than the collective wisdom of the banks the lenders the borrowers the businessmen and businesswomen and the farmers. Clearly he has no understanding of how the interest rate markets work. He obviously did not consult Grant Robertson or Mr Parker or his commodity-trading colleague Stuart Nash who have some familiarity with the market place.I have worked and traded in the interest rate markets for more than 10 years in Wellington London and Tokyo. Interest rate cuts by a central bank can have a number of consequences. They can drop by the same amount as the cut as Mr Little is advocating. They can drop by more than the interest rate cut because the interest rate cut is seen as bad news and so people begin to flatten the yield curve. Interest rate cuts can kick off a whole series of expectations of lower rates. Thirdly interest rates can actually rise on the back of an interest rate cut and that is because the cut is seen as a stimulant to the economy. So people build in further interest rate rises as the economy is expected to improve and the currency of course will also appreciate if the expectation is there that that interest rate cut is a good thing for the economy. Or the rates may not move at all after an interest rate cut in the official cash rate and that is because the markets fully expect and have built in that inevitable and fully expected interest rate cut. So there may not be any consequential movement in rates post an official cash rate cut.Mr Little’s policy of strong arming the banks demonstrates first of all that he thinks he knows best and that we the general public including farmers small-business people are just idiots. Secondly it demonstrates his lack of understanding of the economy and how it works. He has no understanding of the interaction between official cash rate cuts interest rate curves and foreign exchange levels. Thirdly it has demonstrated that he has not communicated with his own caucus because I know that in that caucus there is some knowledge of markets interest rates and foreign exchange.His plan to interfere with interest rates which is a global market is a very poorly thought-out piece of policy. Telling banks business people farmers and homeowners that he knows best demonstrates once again the sanctimonious attitude that pervades throughout the Labour Party. Next thing you know they are going to tell us what sorts of lightbulbs to put in our sockets or maybe what sized shower heads to put in our showers. [Interruption] Well that is the attitude that comes from that side of the House and as we know that is exactly what has come before.We need to let New Zealanders decide for themselves which bank to borrow from for what term and for what amount. Consumer power is far more important and far more effective to achieving competitive and efficient market place prices. If Mr Little really wants to support farmers exporters and small-business people instead of interfering with international markets which he has no understanding of I suggest he supports irrigation projects to increase economic benefit environmental benefit and social benefit. I suggest he votes in support of the Trans-Pacific Partnership to allow greater access to our markets for those farmers and our exporters and I suggest he supports the Resource Management Act reforms to minimise bureaucracy which are on the table. Does Mr Little really support New Zealanders as he claims? No he does not.