last week raised the idea<\/a> as one of several options the next Reserve Bank Governor could consider, acknowledging it was likely to be contentious.<\/p>\n“We’ve had a target at 2 percent for a very long time going over quite a few cycles now, but we’re really not able to consistently hit 2 percent,” Eckhold said.<\/p>\n
“What tends to happen is that sometimes inflation is a little bit below … but when it goes above, it spends a lot more time above and by further above.”<\/p>\n
He said it would not matter much for affecting growth or unemployment, and would not increase inflation overall – presumably because the upper bounds of the band would remain the same.<\/p>\n
Edmonds said she had seen those comments.<\/p>\n
“I’ve also seen some comments from [economic commentators] Michael Reddell, also Cameron Bagrie had been discussing it last year. I think it’s actually a debate and a discussion that probably does need to be had.<\/p>\n
“I’d be open to hearing from other economists as well as to what they think … let’s see where that conversation gets to.”<\/p>\n
But Willis said it was “just insane economic illiteracy”.<\/p>\n
“They are literally saying they want to target higher price increases across the economy – that means a higher cost of living for every New Zealander.<\/p>\n
“It’s very hard to take Labour seriously on the cost of living when they’re literally saying they’re prepared to target a higher inflation rate … it’s a good reminder to new Zealanders that you shouldn’t trust Labour on the cost of living.”<\/p>\n
![\"Chris](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2025\/09\/4K1CGDA_250998_Bridge_9_September_3_jpg\")
<\/p>\n
\nChris Hipkins says Labour hasn’t indicated it’s reviewing this particular part of its policy.
\nPhoto: RNZ \/ Samuel Rillstone\n<\/p>\n
Labour leader Chris Hipkins, however, said Willis claiming such a shift was Labour Party policy was “a massive misrepresentation of what Barb has said”.<\/p>\n
“Barb has said that she’s interested in hearing from the economists. That isn’t to say that the Labour Party is considering increasing the rate.<\/p>\n
“A finance spokesperson saying that they’re interested in hearing from economists, is a finance spokesperson being a good finance spokesperson. We certainly haven’t indicated that the Labour Party is reviewing this particular part of our policy.”<\/p>\n
Willis said Hipkins would have been “much better to overrule his finance spokesperson.”<\/p>\n
She said Hipkins “probably doesn’t understand” that increasing the inflation target would mean increased living costs, “and that’s the real worry with Labour, they don’t understand fundamental economics”.<\/p>\n
The latest Consumer Price Index inflation figures for the 12 months to June are at 2.7 percent, within the target band.<\/p>\n
Asked earlier in the day about the prospect – before Labour had said it was open to exploring the idea – Willis had said it was “not on our agenda”.<\/p>\n
“I did like the fact that Westpac pointed out that over the next few years, they expect the New Zealand economy will be growing faster than Australia,” she said.<\/p>\n
“Actually, low inflation is the key to keeping price increases down. And essentially, what Westpac is arguing for is a high level of inflation. That’s a hi gh level of price increases for New Zealanders, that’s a higher cost of living.”<\/p>\n
Sign up for Ng\u0101 Pitopito K\u014drero<\/a>, a daily newsletter curated by our editors and delivered straight to your inbox every weekday.<\/p>\n","protected":false},"excerpt":{"rendered":"Photo: RNZ \/ Samuel Rillstone Nicola Willis is calling Labour’s willingness to discuss increasing the Reserve Bank’s inflation…\n","protected":false},"author":2,"featured_media":129694,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[64,1590,63,99,1589,164,44,1591,1588,1586,1587],"class_list":["post-129693","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-au","tag-audio","tag-australia","tag-business","tag-current-affairs","tag-economy","tag-news","tag-podcasts","tag-public-radio","tag-radio-new-zealand","tag-rnz"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/129693","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=129693"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/129693\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/129694"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=129693"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=129693"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=129693"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}