A leading economist in New Zealand has called the economic policies of small political parties as "mad" and described them as a risk to the country. Shamubeel Eaqub, NZIER principal economist, in his address to the Shareholders Association, said National and Labour are fundamentally centrist in their policies.But what is scaring the economist is the policies of fringe parties and a few of them are "mad." In his view, voting on the 20th of September is not voting for National or Labour. It must be a way to keep out the fringe parties with their crazy policies, reported NZ Herald.

Keep Interest Rates Low

Eaqub was critical of the small parties for not pursuing policies that are good for New Zealand. They are only thinking of policies to benefit their small constituency. Eaqub also blamed the Reserve Bank, which was acting as if "stuck in the 80s" with a preoccupation for inflation control. In the current economic environment, it should not have raised the interest rates. Recently, the central bank lifted the Official Cash Rate (OCR) by one percentage point to touch 3.5 per cent in 2014.

Eaqub said interest rates should not be raised before 2016. Eaqub said the local and global economies are experiencing highly uneven growth. The global financial crisis gas made exports concentrated into certain economies like China. The demand pattern in the global economy in the last few years has shrunk. New Zealand economy also became narrow because of the recession and the uneven demand in the global economy.

Reaction

The Kiwi blog reacted to the comment of the economist and agreed that major parties do look at the overall impact of their policies. But small parties are happy with small segments and want policies to benefit their core voters, at the expense of others.

In a National-led coalition, National policy may dominate with 95 per cent of the Government activities. The influence of the minor parties will be modest. But Labour, which has stitched a coalition deal, may see 50 per cent of its policies and minor parties wielding the other 50 percent of influence, the Kiwi blog noted.