Labour is still refusing to put a figure on the probable impact of its plan to let the Reserve Bank lift KiwiSaver contributions to fight inflation.
There’s only two possible explanations for this.
- They have no idea what the impact will be, and didn’t bother to calculate it in developing their policy.
- They do know what the impact will be, but don’t want anyone to know.
I’m not sure which explanation is worse.
Economic Development Minister Steven Joyce has put the figure at $400 million against a $2.5 billion impact from a rise of 1 per cent in the official cash rate, the central bank’s other inflation-fighting tool.
Labour finance spokesman David Parker said Joyce’s $400m figure was wrong, but he was “not going to play his narrow little game” by releasing what Labour thought the impact would be.
It’s not a game. It’s called credibility. If Labour wants people to think that a VSR will mean lower interest rates, then they need to say what they believe the impact will be.
He said the variable savings rate (VSR) was just one of the mix of policies Labour would introduce.
That’s irrelevant. One can debate the impact of the other policies also. But this is the policy that they have said will mean lower interest rates. Why are they unwilling to give us their calculation of what the impact would be?Tags: Labour, Monetary Policy