increase font size
Federated Farmers believes quantitative easing now would be incredibly bad for New Zealand.
"Printing $5 notes would set off an inflationary bomb that risks returning New Zealand to the dark days of double-digit interest rates," says Bruce Wills, Federated Farmers president.
"Our dollar's strength has been based on an economy 'less bad' than many others plus high levels of government borrowing.
"Just look at the way our dollar dropped off the back of improved US jobs figures. Better news from other countries will help to drive our dollar lower.
"This is why quantitative easing is and remains a 'break glass in case of fire' policy option - a last desperate option only.
"New Zealand is nowhere near such desperate measures because our Official Cash Rate is 2.5% versus 0.5% in the United Kingdom, 0.25% in the United States and 0.10% in Japan.
"As an export-led economy we need to keep a strong lid on our inflation because we import a fair slice of it from those we trade with. Low global inflation won't last forever and if we stoke domestic inflation by printing dollars, we will be hammered by importing more from overseas.
"We are not alone with a strong dollar because the Canadian is up 60% against the greenback. An article I read on Canada could apply to New Zealand, 'the strength of the economy in Great White North, which has in abundance what the rest of the world needs more and more of: commodities such as oil, basic materials and agriculture'.
"As for direct intervention, does anyone seriously believe our Reserve Bank can set then defend an exchange rate against all comers?
"Our solution is to ask if each dollar being spent by Government is the best use for that dollar.
"The dollar is being kept artificially high because of borrowing 'to smooth the rough edges' of recession.
"We must undertake reforms to strengthen our productivity and competitiveness. If exporters can generate greater revenue this means more money for our schools and hospitals.
"As a country we just need to stop borrowing so much money, we need to reduce government spending and return to surplus. This will take upward pressure off both interest rates and the currency," Wills says.
Federated Farmers is celebrating following the Government's announcement that young farmers will be able to use their KiwiSaver funds to buy their first home or farm.
OPINION: The euphoria over the Government’s two new bills to replace the broken Resource Management Act is over.
Canterbury arable farmers are down by tens of millions of dollars after a rollercoaster of wild changeable January weather saw harvests delayed and some crops destroyed by violent hailstorms.
OPINION: The past few weeks have been tough on farms across the North Island: floods and storms have caused damage and disruption to families and businesses.
Sheep and beef farmers in Hawke's Bay are being urged to keep a close eye on the wells that supply water to their stock.
Donald Trump's latest tariff tantrum has again thrown the world of trade into a new round of turmoil and uncertainty, and NZ is caught up in it.
The third edition of the NZ Dairy Expo, held in mid-February in Matamata, has shown that the KISS principle (keep it simple stupid) was getting a positive response from exhibitors and visitors alike.
Twenty years ago, South African dairy farm manager Louis Vandenberg was sent to a farm in Waikato to provide training on Afimilk technology.
Strong farmgate milk price is helping boost investment on farms, says PGG Wrightson chief executive Stephen Guerin.
Fonterra's 460 milk suppliers in Australia, who will switch to Lactalis end of this month, are unfazed with the impending change.
The 5+ A Day Charitable Trust has launched a collection of affordable recipes designed to turn everyday vegetables into seasonal stars.
OPINION: A mate of yours truly reckons rural Manawatu families are the latest to suffer under what he calls the…
OPINION: If old Winston Peters thinks building trade relations with new nations, such as India, isn't a necessary investment in…
