Mike's Minute: Is Grant Robertson just out of ideas?

Author
Mike Hosking,
Publish Date
Fri, 26 Feb 2021, 9:45AM

Mike's Minute: Is Grant Robertson just out of ideas?

Author
Mike Hosking,
Publish Date
Fri, 26 Feb 2021, 9:45AM

Quick suggestion, why don’t we just ask Adrian Orr to be the Finance Minister? Grant Robertson seems to have given up.

The latest "Robertson to Orr" letter asks the Reserve Bank to take housing into account when they make their various statements and announcements. That on top of inflation and employment.

The Reserve Bank used to have a sweet job. The cash rate. What is the cash rate? What will the cash rate be? Is it going up? Is it going down? And they decided that on all the stuff that was going on in the economy around them, none of which they had any control over.

To be fair, a lot of people quite correctly thought it was slightly unfair that the Reserve Bank had such authority with so few tools. That's why they called the cash rate such a blunt instrument. And it's why, of late, you've heard the phrase "tools in the tool kit” a lot more.

We have seen movement from the bank no one has seen before. The talk of negative rates, printing money eloquently dressed up under the term QE, and LVRs coming and going.

The Reserve Bank has never been more vital and more involved, but then never it has been asked to do more by a politician clearly out of ideas. Especially on housing.

You'll remember Robertson was due to give us his magic bag full of tricks on tilting the housing market towards the first home buyer. That announcement was due by now. It's been delayed, I suspect because Robertson made the announcement with no idea of what the actual action entailed. Where have we seen that trick before?

Robertson has already written to Orr before about this, and Orr put the letter in the bin, so to speak. So now the instruction, solve employment, fix inflation, and tell us how housing works.

As Cameron Bagrie, quite rightly, says this goes too far. Unless, of course, you want to draft Orr into cabinet, flag the Reserve Bank's independence and just return to the days of Rob Muldoon.

The rotten thing here.is not the abdication of responsibility from the government by palming off yet another of their worries, it's the fact they’ve done so because they won't admit they're stuck. They’ve over-promised and they're stuck.

Progressive housing this week, Kiwibuild last term. Housing and labour, water and oil, they don’t know how to make it work.

But you don’t make it work by making it someone else's problem. That's not what you go into government to do, passing the buck should not be government policy.