OCR cut doesn't mean we're out of the woods

Responding to the Reserve Bank of New Zealand's decision to cut the OCR by 25 basis points, Taxpayers' Union spokesman James Ross said:

"With the economy grinding to a halt, calls to bring the OCR down below 2.5 percent have been growing. New Zealand isn't in a normal dip in the cycle."

"This is a drawn‑out recession that needs both monetary and fiscal action. The Bank had previously been slow to recognise that, and the Government has kept spending at levels that continue to fuel inflation. Now, at least, the Reserve Bank has finally accepted New Zealand's economic reality and lowered the OCR further."

"But the OCR cut isn't enough on its own. Taxpayers' Union–Curia polling last month found 58 percent of New Zealanders want Nicola Willis to cut low‑priority spending, with just 11 percent opposed. Yet Government spending as a share of the economy is still higher than when Grant Robertson left office. Overspending is keeping inflation sticky and stopping the deeper OCR cuts needed to get the economy moving again."

"We're now seeing the effects of high spending, weak growth, and inflationary pressure piling on top of each other. If the Minister of Finance wants to relieve the pressure, she needs to do what she was elected to do and start cutting the waste."