Kiwis received welcome news last week as the Reserve Bank again reduced the Official Cash Rate. The latest reduction means the OCR has now fallen from 5.5 per cent to 3 per cent in just a year.
The Reserve Bank has also signalled two further reductions this year. This gives banks the confidence they need to lower their loan rates – representing real savings. Mortgages, businesses loans, and credits cards will all be cheaper as a result of this decision.
If you are one of the half of mortgage holders ready to refix in the next six months, you could see savings of hundreds of dollars a fortnight. Repayments on a 25-year, $500,000 floating mortgage are about $330 less a fortnight today than they were a year ago. That is money in your back pocket.
Falling interest rates are also good for growth. They support businesses to expand, encourage increased construction activity, and create more and higher paying jobs.
Our Government’s responsible economic management is making a difference. Stopping wasteful spending has eased inflation and allowed the Reserve Bank to lower the OCR.
We’ve also recently passed changes to the RMA as part of our ongoing plan to stop the culture of ‘no’ in New Zealand. These changes allow for more housing development in the Auckland CBD, will stop councils from starting work on costly plan changes, and takes urgent action to stop thousands of farmers from requiring resource consents for routine on-farm activities.
I’m pleased to see latest quarterly update from the New Zealand Infrastructure Commission, which shows that the value of infrastructure initiatives in the National Infrastructure Pipeline has grown to $237.1 billion, an increase of $30.2 billion over the past quarter. This is great news for the construction sector and the wider economy.
The Pipeline now contains over 9,200 projects that are underway or being planned, helping New Zealand’s infrastructure construction sector plan ahead for major upcoming projects and hire and retain key staff in the right locations.
The Government also announced two new visas to help New Zealand businesses access the workers they need during peak periods, while also prioritising New Zealand workers. These changes make it easier for farmers, growers, and tourism operators alike to bring back experienced seasonal workers and to fill short-term roles that are hard to fully staff locally.
The National-led Government has delivered tax relief and stopped wasteful spending to get inflation under control and lower Kiwis’ mortgage repayments. Wages are still growing faster than inflation, and more than $6 billion worth of infrastructure to start before Christmas, which will not only make Kiwis better off, but will deliver thousands of jobs up and down the country.
There’s a long way to go but the direction is clear, and under a National-led Government there’s good reason to feel hopeful about the future. –Rt Hon Christopher Luxon, Prime Minister of New Zealand