Responding to the Reserve Bank’s decision to raise the Official Cash Rate by 25 basis points to 2.50 percent, Taxpayers’ Union spokesperson Tory Relf said:

“Higher interest rates are what happens when Wellington refuses to stop spending.”

“The Reserve Bank is being forced to lean on mortgage holders and businesses because the Government has not done its bit on inflation.”

“Monetary policy is a blunt tool, especially when inflation is being driven by supply pressures. But every dollar of unnecessary government spending makes the Bank’s job harder and keeps pressure on interest rates.”

“Taxpayers should not be hit twice: first through wasteful spending, and then through higher mortgage and borrowing costs. The Government needs to cut actual spending, not just promise slower increases.”

Responding to this afternoon’s Official Cash Rate announcement, Taxpayers’ Union spokesperson Tory Relf said:

“With ongoing uncertainty around the Iran conflict’s impact on inflation, the Reserve Bank has rightly chosen to sit tight and hold the OCR at 2.25 percent as expected."

“But while the Reserve Bank can wait for the inflation picture to clear, the Government does not have the same luxury. Tomorrow, Nicola Willis' Budget must show credible spending restraint if it wants any believable path back to surplus."

“That means Ministers, not departmental chief executives, going line by line through spending and scrapping programmes that are wasteful, ineffective, or no longer needed. The Taxpayers’ Union’s Back to Black report gives them a ready-made place to start.”

The Taxpayers’ Union pre-Budget report, Back to Black, is available at https://www.taxpayers.org.nz/back_to_black