Oct 21, 2008

Now Is Not The Time To Be Playing Politics With The Economy!

We agree fully with today's Editorial in the Dominion Post. Shame on those who have been trying to make political gain from this crisis.

New Zealand stands on the brink of an election. The world stands on the brink of economic disaster. Now is not the time for playing politics with the economy, The Dominion Post writes.
National leader John Key has offered to work with the Government to protect the country's banks. His offer should be accepted.
In less than three weeks New Zealanders will cast their votes for the next government. Polls suggest that government will be led by Mr Key.
Neither he nor Prime Minister Helen Clark has the luxury of being able to use the economy as a political plaything as former National leader Sir Robert Muldoon did after the 1984 election when he refused the incoming government's requests to devalue the dollar.
Officials dealing with the crisis, bankers, investors and the public need to know that decisions taken over the next few weeks have the support of the existing government and the next, whoever heads it.
The most pressing item on the agenda is bank liquidity. In a popular move, the Government has guaranteed $150 billion worth of retail deposits, ensuring New Zealanders' savings are safe. But, unlike its Australian counterpart, it has not guaranteed the $300 billion the banks have borrowed from overseas to meet local demand for credit – giving rise to fears that the New Zealand branches of Australian-owned banks may have difficulty obtaining credit in future. Were such an eventuality to occur it would stifle investment, drive the housing market even lower and disrupt day-to-day business activity.