RBNZ changes mean more inflation, tax

The only impact of monetary policy amendment is increased inflationary pressure, says group

RBNZ changes mean more inflation, tax
The Government’s plan to amend the Reserve Bank Act, in an effort to “maximise employment,” will lead to more taxation by stealth, according to New Zealand Taxpayer’s Union.

Taxpayer’s Union economic advisor Joe Ascroft said: “We now know that the only impact of this kind of policy is increased inflationary pressure.

“Higher inflation hurts householders. It pushes workers into higher tax brackets over time – effectively hiking tax by stealth,” he said.

Ascroft went on to say that monetary policy has been known internationally to be an ineffective tool for lowering unemployment over the long run.

What is being suggested, Ascroft said, is similar to Australian and American central banks’ employment target – whose “dual mandates are simply relics of a by-gone macroeconomic era.”


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