Slashing interest rates won’t fix economy on its own

The Reserve Bank has today slashed the Official Cash Rate (OCR) by 50 basis points, to 4.75%.

Commenting on this, Taxpayers’ Union Policy and Public Affairs Manager, James Ross, said:

“High interest rates have caused a bigger per-capita recession than the one experienced in the wake of the Global Financial Crisis, and the backsliding of Kiwis’ living standards doesn’t look set to stop any time soon.

“Growth is the only answer, and slashing interest rates could be the first step in the right direction. But the risk of long-term damage hasn’t gone away, and the Government needs to work to make sure this OCR cut pays off.

“Domestic inflation still hangs at 5.4% thanks to the reckless previous Government’s overspending. The current Government must double down on any efforts to cut wasteful expenditure, and any savings should be used to start chipping away at anti-growth tax policies like one of the highest corporate tax rates in the developed world.”