Barbara Edmonds: Labour's Finance Spokesperson on the OCR falling to 2.5%, inflation

The Reserve Bank's cut the OCR 50-basis-points to 2.5%, despite acknowledging inflation is above or almost above where they'd like it. 

Finance Minister Nicola Willis says they've factored in broader economic conditions. 

She says the central bank clearly thinks any fluctuation in inflation will be constrained by spare capacity in the economy. 

Labour's Finance Spokesperson Barbara Edmonds told Ryan Bridge it’s a direct response to the economic damage caused by Christopher Luxon. 

She says the economy has gone backwards under the Coalition Government, with 36,000 jobs lost, 2,700 businesses liquidated, and more Kiwis moving overseas. 

“Christopher Luxon promised to make it better, but he’s made it worse.” 

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Episode Transcript

Speaker 1 (00:00):
The OCRs dropped fifty points or a two and a
half percent full consensus with the Monetary Policy Committee, and
we may get another quarter hit before Christmas. Labour's finance
spokesperson Barbara Edmonds says the bank's taking a risk.

Speaker 2 (00:11):
My concern is around the inflation, particularly being sticky, as
it might come down next year, but those administered costs
that we are seeing are quite a concern for me.

Speaker 1 (00:19):
She's with me now. Good morning, Good morning, Ryan. Good
to have you on the show. As always, did they
make the wrong call?

Speaker 2 (00:27):
I think they made the right call given the data
that they've got before them, and even in their media
statement they did talk about those inflationary risks, but ultimately
right now they believe they're a spare capacity in the economy,
which is why they had to cut interest rates. Have
indicated a potential service put and to me it's a
direct response to the economic damage caused by Christopher Luxem.

Speaker 1 (00:50):
You're talking about the inflation problem, domestic inflation. Council rates
always a big one. Are you going to support a
rates cap? You know, what are you going to do
to keep that down? If inflation is such.

Speaker 2 (01:00):
A worry for you, we can to see where the
government gets to with their work on that, and we
want to see the detail. If it's a good policy proposal,
we know that it will help bring rates down, we
will provide the support where we need to.

Speaker 1 (01:14):
What does a good proposal look like.

Speaker 2 (01:17):
And again they've got a group working on that. We
want to see what that looks like. And you do
need the detail about that because obviously any policy detail
may have other consequences. So we really hope the governments
when they do come up with a response to it,
that it be something that we can support because we
know that ratepayers are hurting.

Speaker 1 (01:36):
If they say, look, we want to elect capita inflation,
would you be on board with that?

Speaker 2 (01:44):
And it depends on then how the councils are going
to be supported to pay for the infrastructure that they need.
So there are pros and cons to that, because councils
obviously need money for historical water infrastructure that hasn't been
kept up to date. So again we're open to apporting
the government, but we need to see the detail and
we do look forward to that.

Speaker 1 (02:04):
You've said this is down to National's economic mismanagement and
its talent and hand basket stuff. When labor left office
in fation was six to seven percent, the ocr was
five and.

Speaker 2 (02:14):
A half, and we were coming off the back held
some really high tradable infation, so real high global prices.
But ultimately, since the government has come in, the economy
is going backwards. We've lost thirty six thousand jobs since
they took over. We've had two seven hundred business liquidations,

(02:35):
and Kiwis are leaving overseas like two hundred per day,
So the economy has gone backwards. Christall lacks and promised
to make it better, but he's made it worse.

Speaker 1 (02:43):
Hey, Barbara, A lot of people were impressed by your
performance at the mood of the boardroom the other week.
Have you had much good feedback about that?

Speaker 2 (02:51):
I have, and it was an interesting time time to
be there. And then ultimately I think it was a
very strong message to Nikola Willis and for Christopher Laxling
that you can keep saying gross, gross growth, but you
actually that they actually want to see action on net All.

Speaker 1 (03:08):
Right, Barbara, appreciate your time this morning. Thanks for being
on the show. Barbara Edmonds, whose Labour's finance spokesperson. For
more from early edition with Ryan Bridge, listen live to
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