The National Party and the Greens have accused the Government of not doing enough to help the Reserve Bank control inflation.
National's finance spokesman, Bill English, said today's decision by Reserve Bank Governor Alan Bollard to leave the official interest rate unchanged at 8.25 per cent meant more
trouble for working families.
"Home owners now face the double jeopardy situation of high interest and mortgage repayments, overlaid on a cooling property market," he said.
"Those pressures are partly the result of eight years of loose management of tax windfalls,"
Mr English said Finance Minister Michael Cullen had warned his cabinet colleagues before the last budget that unless they were careful with their spending, interest rates would be higher for longer.
"But rather than adopt a prudent approach, he went on to sign off on a record spending spree," he said.
"When he wrote Budget 2007 he was not thinking about the hard working Kiwis paying off their credit cards and mortgages.
"He sacrificed them, so Labour could spend more of other people's money."
Mr English said the Government had missed opportunities and left Dr Bollard to fight inflation on his own.
"Michael Cullen has hit foot hard on the accelerator, while Alan Bollard has his foot on the brake."
Green Party co-leader Russel Norman said Dr Bollard's decision would put home buyers under intense pressure and hurt manufacturers because it would increase the value of the New Zealand dollar.
Dr Norman said one of the key inflation drivers was rising oil prices.
"The Government needs to help the Reserve Bank deal to underlying inflation by rapidly accelerating policies to reduce the oil dependency of the New Zealand economy," he said.
"These policies include better and safer public transport, cycling and walking. They include investing in rail to move freight off roads and onto rail."
Dr Norman said the Government had increased spending in some of those areas but needed to do much more.
"The reality is that finite resources in all areas are adding to inflationary pressures in a world reaching its limits," he said.
"We can't passively rely on the Reserve Bank to magically sort out the inflationary pressures."
- NZPA
