Simon Court ACT MP and Undersecretary to the Minister for RMA Reform and Infrastructure.
Whether we own our home or rent, interest rates affect how much we pay for the roof over our head. If you have a mortgage you will have felt the pain of higher rates directly over the past few years. If you rent, you’ll have noticed your rent go up too, and part of that will be your landlords passing their higher interest costs to you.
The recent 0.5 point cut in the Official Cash Rate brings a glimmer of hope to households that have been navigating the stormy seas of a cost-of-living crisis. This cut is not just a number. It is a reflection of the sacrifices made by New Zealanders who have tightened their belts and displayed remarkable financial discipline in the face of higher bills. It’s crucial to recognise that the easing of inflation is a direct result of their efforts, not just those of politicians and central bankers. Lower inflation has in turn paved the way for much-needed mortgage relief.
However, we cannot afford to rest on our laurels. While the Government has taken steps to rein in Labour’s excessive spending commitments, we must push for more rigorous actions to ensure that households continue to benefit from this relief. The reality is simple: the people who are paying the bills deserve a government that mirrors their discipline and commitment to financial responsibility.
Expecting ongoing interest rate cuts without sustained effort from Wellington is unrealistic. It’s imperative that we maintain a laser focus on cutting wasteful spending. ACT is actively championing solutions and ideas designed to streamline government expenditure. It’s time for the Government to adopt a mindset of efficiency that aligns with the financial strategies of everyday New Zealanders.
New Zealand’s government debt interest costs are projected to be $9.2 billion in the 2024/25 fiscal year. That’s equal to ten Puhoi-Warkworth motorways, just to cover the cost of a year’s worth of interest payments. This bill is so high in part due to higher interest rates and increased debt issuance. Without significant additional reductions in Government spending the cost of servicing Government debt will exceed what we spend on education, police, defence and many other vital areas. This is completely unsustainable.
By reducing waste and lowering interest rates, we empower firms, farms, and families to keep more of their hard-earned money. This approach allows them to allocate funds according to their own priorities, fostering an environment where real prosperity and economic growth can flourish. ACT believes it is time to seize this moment and work together to build a more disciplined, financially responsible government that truly serves the interests of its people.
