TLDR: Now we have better idea of how much fiscal and monetary policy room National and Labour have to use with about a year to go until next year’s election.
In short, National has much more flexibility to portray its tax cuts as fiscally responsible and a righteous reversal of fiscal drag, if not either equitable or economically credible. Labour, for its part, also has more room to dream up a new way to shovel cash back to median voters as middle class welfare that doesn’t do too much to add to inflation. By late next year, both will be hoping inflation is calming down enough to avoid accusations their giveaways will make it worse.
I spoke to TVNZ’s Breakfast this morning about both the Crown Accounts and the Reserve Bank’s not-too-surprising OCR hike yesterday. Here’s the full clip.
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