13 Feb 2013

Labour says English's stance on dollar ridiculous

9:00 pm on 13 February 2013

The Labour Party has criticised the Minister of Finance's claim that a call for a lower exchange rate to help manufacturers is effectively the same as calling for a cut in workers' wages.

Bill English made the comment in response to questions at Parliament's finance and expenditure select committee about how manufacturers wanted monetary policy changed to help take the pressure off the New Zealand dollar.

Mr English said the high dollar has increased the purchasing power of workers' wages and helped New Zealand weather the global downturn better than many countries.

Mr English said the flip side of a lower currency would be a decrease in living standards.

"What they're actually telling you is that they want to cut the real wages of their workers, because that is the other side of this equation."

The minister says workers need a voice in this debate.

Labour's finance spokesperson David Parker said it is ridiculous to say that the economy is better off when New Zealand's exporters are not doing as well as they would with different economic settings.

Mr Parker said Mr English's comments are hardly relevant to workers who have lost their jobs because their employer's business has been destroyed by the high currency.

The Green Party says the Government should dump its do-nothing approach to the exchange rate.

The Finance Minister later told reporters the Government also wants the value of the dollar cut, but suggesting changing monetary policy to do so is simply magical thinking.

Bill English says intervening in the currency markets would be risky and without any guarantee of success.