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Talk of negative interest rates a 'slap in the face for savers, for retirees' – Simon Bridges


Talks of negative interest rates by the Government is a "slap in the face for savers, for retirees", Simon Bridges says after the Reserve Bank last week slashed the Official Cash Rate to a record low.

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The National Party Leader blames the suffering economy on a Government which doesn’t know how to manage it. Source: Breakfast

The Reserve Bank last week cut the OCR by 0.5 percentage points to one per cent. Economists had predicted the drop, although most predicted a fall of 0.25 per cent.

The National Party leader blames the suffering economy on a Government which he says doesn’t know how to manage it.

Mr Bridges told TVNZ 1's Breakfast today that New Zealand needs a plan for growth which the Government didn't have.

"What concerns me, and I know it's worth putting on the record, is they are now talking openly in Government and the Reserve Bank about negative interest rates. Well that's a real slap in the face for savers, for retirees with a nest egg.

"They're even talking, and this is less likely I accept, but about other unconventional measures like quantitative easing - that is printing money - a real concern about "that's what we've got to do". Now it seems to me that the reason for that is bad management."

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Oliver Hartwich from the NZ Initiative talked about the possibility of going into the negatives after the OCR dropped to a record low last week. Source: Breakfast

Mr Bridges said certainty and confidence needed to be injected into the economy, adding New Zealand needed tax relief, less red tape and regulation, and a strong plan for infrastructure.

He said if he was in charge health, education and infrastructure would be the priorities, but said without a strong economy that wouldn't be possible.

"If you don't have a strong economy, and I think it's becoming clearer and clearer by the day that this Government doesn't understand how to do that, actually you can't do the things you're talking.

"It's not just how much you spend ... it's how you invest it as well."

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Retail banks have already started cutting interest rates on home loans after the surprise move from the Reserve Bank today. Source: 1 NEWS