Economic Intervention? Selwyn Manning Interviews Labour’s Finance Spokesperson David Parker On Rekindling An Export-Led Economy
Triangle TV: Selwyn Manning interviews Labour Finance Spokesperson, David Parker on whether the New Zealand Government ought to embark on interventionist measures to curb and control the rise of the New Zealand Dollar.
Exports have fallen eight per cent compared to last year, and Labour’s finance spokesperson David Parker says the high value of the New Zealand dollar is a significant contributor to a constraining export market.
In a recent statement David Parker said: “Other countries are actively lowering their currencies so they can export more…” and added: “National’s out-of-date economy isn’t working for ordinary New Zealanders, National have no adequate plans to fix it. Our external deficit is getting worse.”
In this interview with Selwyn Manning, David Parker is questioned on whether the Reserve Bank should be instructed to broaden its manipulation of the economy beyond the fixing of the official cash rate (OCR); and on how exactly a Labour-led government would intervene in the economy.
In this interview David Parker also admitted that a Financial Transaction Tax “has merit, it should be considered…”
He added: “Whether it (a FTT) is practical or not depends not upon New Zealand in that instance because if you are going to tax speculation and currencies, which is one of the proposals, you have to do that on a world-wide basis, and, if New Zealand did that alone it would just mean that those transactions took place elsewhere.
“But it is true that countries like Brazil they control inward flows of capital, when they are pumping up asset prices and helping to get inflation away, rather than just jacking up interest rates – which is what we have traditionally done in New Zealand.
“So there are lots of different choices around the world, and many countries around the world that are doing better than New Zealand pursue different cources, and we are saying it is time to say look the current regime is not working, we are losing too many jobs in our export sector, too many people are without income, the dire effects of unemployment are terrible for those who are laid off, and the businesses that are reliant on exporting are going broke too often or are not thriving as they ought to. We need to change,” David Parker said.
Q1: Why is it that exports have fallen eight percent compared to this time last year?
Q2: Is the high value of the New Zealand Dollar the primary cause of the export volume downturn?
Q3: What would be a satisfactory value for the NZD?
ON IGNORING OVERSEAS INTERVENTIONS
On September 19, Business Desk reported you as saying: In the wake of the global financial crisis, the major economies were pursuing “competitive devaluation” of their currencies to kick-start economic activity.
“We ignore this at our peril.”
Q4: If the New Zealand Government continues to ignore how major economies are intervening to devalue their currencies – what will the consequence be on New Zealand?
Q5: Should the Reserve Bank be given a mandate to cool the currency down? If so how should it do this?
Q6: Would you propose a currency cap on the NZD?
Q7: If the New Zealand Dollar was forced downward, how can a government reduce the risk of inflationary pressures manifesting in the domestic economy?
Q8: How can it protect domestic businesses and families from increased imported energy costs?
In June, nine EU countries (including France, Germany and Spain) indicated they want to introduce a tax on financial transactions – including on trades of shares and bonds.
Q9: Is a Financial Transaction Tax a means of addressing imbalances in the New Zealand domestic economy?
Q10: New Zealand First is proposing a solution to the high NZD. Does Labour support the New Zealand First leader Winston Peters’ measures to intervene in the economy to drive down the dollar?