Federated Farmers calls for fiscal stimulus from government
March 16, 2020
Federated Farmers congratulates the Reserve Bank on a decisive monetary policy stimulus in response to the worsening economic situation, cutting the OCR to 0.25%.
“We also strongly support its decision to delay implementation of its tougher requirements for bank capital to help the banking sector support the economy,” Feds President Katie Milne said.
One bank has already agreed to immediately pass on the lower OCR rate to borrowers. Federated Farmers calls on other banks to follow suit.
“We’re pleased to see the Government has signalled its intention for substantial action.
“A broad-based fiscal stimulus is needed not just to support the businesses and workers in industries directly hit by the response to the Covid-19 outbreak but also more generally to provide confidence to consumers and businesses.”
The Government also needs to follow the Reserve Bank’s lead by deferring a wide range of policy and regulatory impositions coming down the pipeline that will harm the economy at the worst possible time, Milne said.
This includes policies on freshwater management, climate change, biodiversity, RMA reform, minimum wage, immigration and others.
“What’s needed is policy certainty, to give the primary sector and the business community generally a much-needed boost in confidence to keep operating, keep staff employed, and keep investing.”
Also unhelpful would be the potential doubling of emission prices to $50 per tonne envisaged under the current ETS Amendment Bill.
“When businesses and consumers are doing it tough, the last thing we need is extra impost,” Milne said.
Another early and vital action Federated Farmers proposes is a temporary waiver on the requirement for migrant agricultural workers to return home for 12 months before their expired visa can be renewed. This will reduce the infection risk of new and returning migrant workers and make sure we have the experienced workers we need in our key export industry.
“The primary sector is still our export powerhouse and it will become even more important for our economy and wellbeing as the tourism industry goes through an extended downturn.”