STUFF INFLATION

[duncan macgregor]

The Reserve bank is killing the country with this stupidity. Its time to rethink the countries monetry policy. This is the Macdunk method.
1,Sack bollard change RB guidlines.
2,cut company tax with exporters incentives.
3, Cut personal tax, add saving incentives.
4,Gadually do away with income tax on earnings compensate with GST on spending.
5, Increase GST on all luxury none essential items to compesate on the reduction in income tax.
5,GST on spending should be where the tax take comes from crucify the people financially who regard high powered cars and boats as an every day essentual.
6,Example GST on a low powered budjet car at 12.5% on a high powered petrol guzzler 90%.
THERE I FEEL MUCH BETTER NOW.:D:D:D macdunk

[Halebop]

I personally think Bollard is doing OK. If anything, he's been a little light & slow with interest rates. If there is a problem with monetary policy, its up to legislators to fix. RBNZ only has so many tools in the toolbox. I think focussing on inflation is absolutely the correct strategy, irrespective of how that focus is achieved.

As to your other suggestions, they all have merit but I suspect a progressive GST system would be a nightmare to administer and people would be incentivized to mislabel products / sales in order to be captured in low GST bands.

[CJ]

Put GST up to 20%, Income and corporate tax down to 20%. Would that slow down spending?

Bollard is just doing his job - not his fault the system is broken (he may have been a bit to slow but he was probably trying to avoid acting too fast).

[FarmerGeorge]

I may only be a farmer but Halebop is right in saying Bollard was too light and slow with interest rates. The system is not broken, although globalisation makes the job harder, Bollard misjuded the whole situation about twelve to eighteen months ago and now is playing catch up. The good thing is that if you are a net saver now you can enjoy fantastic interest rates while inflation is actually not that bad: real risk free interest is relatively high :)

[Hommel]

I fear that the way Bollard has played it - that is put up interest rates a couple of years too late - will now end up resulting in the feared "hard landing" scenario due to the huge increase in consumer debt over the last few years. I can see housing dropping at least 15% at some stage which will put many of those who have to sell "upside down" on their mortgages. The effect of this will ripple through the whole economy. I hope I am wrong about this....

[Crypto Crude]

I agree with Hail the bop on this one...
Bollard is doing his job by keeping inflation intact...
The goal of the RBNZ is to have high sustainable growth rates over the medium to long term by controlling inflation, which is the best tool...
In the short term we give up growth when inflation is high but over the long term we benefit much much more...
growth rates in NZ were 1.2% between 1976-1994 well below the average between 1960-2002 of 2.8%...
we were still paying for the high inflation of the 70s and part of 80s on growth rates in the 90s
since 2000 we have averaged growth rates of 3.94%...

so beat inflation and we will have better growth for all... dont beat inflation and then lag behind OECD and face the consequences of lower real incomes...
its a lose lose situation for Bollard he will get it either way....
with high OCR hes hated
with low OCR then he would still be hated...(because high inflation would blur and destroy growth for the next decade), blur price signals, deter investment, create fiscal drag, discouage savings, encourages borrowing, profits specualtors, and increases unemployment...
hes just trying to give us a better future in the long term and damn the consequences in the short term
[8D]
.^sc