Today’s decision by the Reserve Bank to further increase interest rates, even as they forecast recession this year, will be tough news for any Kiwi with a mortgage, National’s Finance spokesperson Nicola Willis says.

“This latest interest rate hike may have been avoided if the Government had been more disciplined with its own spending and done more to take pressure off inflation.

“Instead, Labour’s mismanagement of the economy has delivered New Zealanders the toxic trio of high inflation, rising interest rates and looming recession. 

“The Reserve Bank’s Monetary Policy Committee warned everyone in February that risks to inflation from fiscal policy were ‘skewed to the upside’. Since then, Grant Robertson has only poured more fuel on the fire with the RBNZ noting in today’s report that ‘fiscal policy is projected to add to demand over the 2023/24 fiscal year’ and ‘fiscal policy is projected to be less contractionary than the Committee had assumed in February.’

“It was obvious there would be costs from the rebuild of the East Coast and Hawkes’ Bay. Those should have increased the pressure to find savings, particularly in the back-office bureaucracy in Wellington.

“Instead, Grant Robertson once again broke his own spending limit. It has become such a problem that Treasury was driven to comment in the Budget that ‘[over] the last five years, the operating Budget packages have been, on average, $0.6 billion per annum higher than the allowances signalled in the Government’s Budget Policy Statement.’

“Now Kiwis are facing the consequences. Today’s hike alone in interest rates means an additional $1250 a year for a family with a $500,000 mortgage.

“Kiwis deserve a government with a plan to fix the economy and get New Zealand back on track.

“National has a plan to fight inflation – we’ll rein in government spending, clear out blockages in the economy, stop adding costs to business, deliver tax relief to Kiwis struggling with the cost of living, and return the Reserve Bank to having a single focus on inflation.”