I released our Trade policy this evening, as promised. Trade is a bipartisan issue because both National and Labour recognise that we are too small and our electoral cycle is too short to risk our exporters’ efforts and foreign direct investment in our industries, by potentially pulling the policy rug out from under them every three years. So we both promote New Zealand’s trading interests overseas equally.
So it will come as no surprise that we wish to build on the international market access we have gained in recent years, particularly in Asia after the successful FTA with China, signed by Phil Goff.
Labour will support the Trans Pacific Partnership negotiations as they proceed but Pharmac remains a bottom line for us. It works for the public good of New Zealanders and should not be compromised, despite pressure from large multinational pharmaceutical companies.
We need more openness and better engagement of civil society in our trade relationships, and so we will establish a Trade Advisory Commission to give contestable advice to the Minister about trade relationships. This Commission would comprise union, business, exporter, academic and NGO interests.
Where we differ from the National Party however in the Trade area is in the fundamentals of monetary policy which underpins the environment in which our struggling exporters work. We will alter monetary policy by introducing a Capital Gains Tax which will moderate interest rates, which will in turn take pressure off the exchange rate. We will broaden the Reserve Bank’s objectives to include employment and the health of the export sector amongst other things in its brief. We will put an exporter on the Board of the Reserve Bank to represent their interests.
And more besides……to see the whole policy, go here.
Learn the difference between monetary and fiscal policy.
Finally a policy I agree on!! Free trade really is a win win situation. The only loosers are those that cant foot it with international business or then fail to differentiate their product.
Good policy.
Thomas, a CGT will moderate speculation, it was speculation that forced the RB to increase the OCR to dampen the inflationary impact of the the housing sector bubble.
“New Zealand did well out of the Free Trade Agreement with China, with our exports growing exponentially since the agreement’s start date in October 2008.”
I have never been understand where these extra exports came from. Were they diverted from other markets or were they actually reexports from other countries?
You say that Pharmac is a sticking point for the TPPA – but what about the US’s attempts to force us into passing counter-productive copyright laws?
New Zealand has already been through this with section 92a of the Copyright Act and the better, but still flawed, law we ended up with. Is this hard won compromise to be rewritten by US lobbyists?
SPC, that still doesn’t make it monetary policy. If the test is that it affects potential decisions by RBNZ then all forms of fiscal policy should count as monetary policy.
It will certainly alter the monetary policy of the RB and that is all that was claimed – remember at the time the government had a solid fiscal policy, saving surpluses into the Cullen Fund and paying back debt, but even so there was inflationary pressure because of factors outside the control of fiscal policy. The only way to control that was to restrain demand for borrowing money from offshore – and a CGT is/was one way. Another is such measures as criteria for banks to have more local and or longer term savings to underpin lending. Personally I like the idea of a mortgage surcharge on landlord property borrowing (if that forces some to sell off stock and own fewer rentals with lower gearing so be it).
Either bring down housing prices or raise wages. I don’t care which. The rich took this country by slight of hand, but we will certainly have to take it back by force.