Local Labour with Rachel Jones

How do you feel about your mortgage rate increasing? Are you worried about having enough money for retirement? Is your export business struggling because of the exchange rate?

Last week Labour released its monetary policy for the election, and it's a groundbreaking package that means more money for your retirement and for investment in New Zealand.

Say the words ‘monetary policy' and most people's eyes understandably glaze over.

But even if you don't care about or understand the intricacies of official cash rates, and the Reserve Bank's powers, then it is worth understanding the positive effects Labour's decisions will have on your life.

First, you will be putting more money away for your retirement nest egg. Labour is going to make KiwiSaver universal. That means everyone who is employed will be saving.

Second, instead of raising interest rates when inflation is too high, the Reserve Bank will have the power to vary how much you put into KiwiSaver.

That means you won't be throwing money away on interest that invariably goes offshore; instead you will be saving more for yourself.

It's a clever tool that means New Zealanders' money stays in New Zealand, while controlling interest rates and keeping our exchange rate fairly valued.

Let's face it; Robert Muldoon's decision not to have a compulsory savings scheme for superannuation is probably the worst political decision in living memory.

The current government's suspension of payments to the Cullen fund is also exceptionally shortsighted.

Labour's innovative policy addresses several monetary issues, while still maintaining the independence of the Reserve Bank. It's smart stuff.