NZ not going to be printing money, Finance Minister English says; 'It sets off a whole train of future problems'

NZ not going to be printing money, Finance Minister English says; 'It sets off a whole train of future problems'
English does have experience with printing machines though...

New Zealand won't be following in the footsteps of a number of larger economies and printing money if Finance Minister Bill English has anything to do with it.

Actions taken by the US, UK, Japan, and Switzerland were not relevant in New Zealand's context, as the Official Cash Rate here was still at 2.5%, while rates in those economies were at, or near, zero. Such a policy would also artificially pump up the values of certain assets, undermine the Reserve Bank's balance sheet, and create the possibility of future high inflation, English said.

English outlined why he was opposed to such a move while speaking to a Wellington Employers' Chamber of Commerce lunch on Thursday afternoon. He had been asked for his views on Green Party co-leader Russel Norman's comments that the Reserve Bank needed to do more to lower the New Zealand dollar.

“The National Government’s current policy is not working for New Zealand. Our trading partners, using the tools proposed by the Green Party, are actively lowering their currencies while our government has done nothing,” Norman said in a press release on Thursday morning.

“Major trading partners, including Japan, the US, and the UK have successfully used quantitative easing to lower their currencies. The IMF recently backed the Switzerland’s quantitative easing, saying the measure was “appropriate” in the circumstances," he said.

“Other countries have introduced new domestic capital requirements on banks and controls on foreign capital to prevent wild swings in their exchange rates."

Hypothetically RBNZ could implement QE, but only if OCR at, or near, zero

Reserve Bank Governor Alan Bollard has said quantitative easing is a policy the Reserve Bank could consider, but only after conventional monetary policy tools, like the Official Cash Rate had been used up - ie if the OCR was at zero.

In comments in March to Parliament's Finance and Expenditure Select Committee, Bollard said it should not just be assumed such a policy would lower the New Zealand dollar.

"[Markets would] say that this country is growing and is near full capacity – that’s got to mean inflationary pressures. Therefore the OCR is going to at some stage have to go up faster than it otherwise would," Bollard said on March 8.

"Therefore the NZ dollar might look attractive to buy in," he said.

“Hypothetically, if we were to feel that something further needed to be done, it would be more likely that we would reduce the Official Cash Rate as an acknowledgement of the fact that the high dollar is resulting in less inflation in the New Zealand system," he said.

Bollard also noted on March 8 that the Reserve Bank would consider using the types of macro-prudential tools referred to by Norman, like controlling loan-to-value ratios or demanding banks hold more capital on their balance sheets, if the housing market returned to the boom times of the 2000s.

'Not relevant to NZ'

English said the notion of quantitative easing was irrelevant to New Zealand's circumstances.

“Again it’s this view that there’s a free lunch here somewhere: In this case, free money," English said.

“The countries who are printing money are setting off a whole train of future problems, which is why normally they don’t do it. They only do it when they’re in extreme circumstances," he said.

“It distorts the value of particular assets, it undermines the strength of the balance sheets of central banks, it creates a high possibility of future inflation which would be hard to deal with. And even the people who are doing it, are doing it with their fingers crossed behind their backs. It’s not at all relevant to New Zealand, and it’s got its own dangers."

“We’re not going to be printing money.”

English said he was surprised Norman had raised the subject.

“Because he’s worked quite hard, I think successfully, to make more of a contribution to the economic debate than the four Labour Party economic spokespeople. But he’s usually been pretty reasonable.”

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The problem with traditional QE is it's administrated from a Banking perspective and just creates more credit that need to get paid back. A side affect of too much credit is that interest rates have to stay low for a long time to enable the Government or in trouble Banks to pay back the loan without going bust themselves.
Rather than concentrating on the Banks QE should be administrated directly(not loaned) to citizens who then pay back their loans to the Banks.  Because they have more money they spend it and the econonmy gets a boost.
Banks can be a problem as the only way they make a profit is to lend money, so often they create asset bubbles. The Banking rules need to change dramatically.
These are Steve Keen ideas, if I have interpreted them correctly. 

Yes, so far they have cut the OCR to save the hides of those who borrowed too much. So the people who were reckless are rewarded and those who saved are penalised. That may be justified in extremis but it is a daft way to run things.
Why not put the OCR up but put $1000 in everyone's bank account? Bypass the stupid politicians who were/are too busy fiddling their expenses to do anything useful anyway.

I  think though that most of the blame should be laid at the feet of those who lent too much. 
The bankers are supposed to be the experts however they have a vested interest in creating asset bubbles by lending excessive credit as this is how they make greater profits. In doing this though they can create a huge system risk which endangers the financial system as loans that can not be paid back will not be paid back.
The average borrower financing a home does not have degrees in Finance,  However the Bankers should know what they are doing and have a responsibility to not endanger themselves and everyone else.
There is a perverse rewards system with Banks though that the more credit they create, the greater their profits and the higher their bonus. 

Quite true of course but I don't know what you do about that. How do you stop management stuffing up the business they are hired to run? A class action suit by shareholders?
How do you restrain finance as a percent of GDP becoming too high and therefore parasitic? Put the Core Funding Ratio up?

Steve Keen has some ideas on this, but it amounts to allowing lending to business's because  they create wealth, and having rules in place to stop unproductive credit gowth.
NZ Debt increased too much last decade and if people are brave enough I think the whole Banking system needs looking at.
The Reserve Bank and Banks in NZ didn't manage the last decade properly and given that the whole concept of personal responsibility is popular with the people who run the country I think they need to look at themselves and their actions more and see if the whole Banking system needs a rethink

Full reserve banking, this forms a democratic constraint, because the money invested is done at the real risk to the investors (they can't just withdraw it at any time). This means investors will be given more knowledge of where and how their money is invested, and so a democratic constraint is formed on investment behaviour.

Any blame for those who borrowed too much?
Any business is supposed to turn a profit so that in itself isn't much of an accusation to level.  And if governments kept out of the finance industry the risk of assets bubbles is more likely to be priced correctly.
Don't forget it was government policy in the US to systemically under price the cost of money for years, placing great pressure on the rest of the OECD to do the same to remain competitive.  The goal of getting every family into it's own home seems heroic until you see the unintended consequences.
Banks are not blameless but it could be argued they did what you would expect in the circumstance and were simply part of the machine not architects.  Regulators deregulated, policing agencies went to sleep and rating agencies colluded in what I would call fraud.

Any blame for those who borrowed too much?

Much less blame when the whole country has been setup by Banks to have the feel of a Casino.
Don't forget it was government policy in the US to systemically under price the cost of money for years
The Federal Reserve is not technically part of the US Government. The Fed is primarily responsible to their banks. 
Banks are not blameless but it could be argued they did what you would expect in the circumstance and were simply part of the machine not architects.
For Banks that were not actually breaking the law they could have this excuse, but if now is not a good time to look at Bank lending architecture, when will be a good time?

Well it's a bit of a stretch to say banks setup their own regulatory infrastructure.
They also don't run the regulatory framework around themselves either.
And whilst we know the US Federal Reserve is not a government department it's head is a political appointment.  President Bush knew Bernanke was a money printer in the mold of Greenspan - it was very well documented.
By and large banks in NZ did not break any laws so I think they could use the excuse (to some degree).
I think it is a dangerous rewrite of history to narrow blame to one group when there are many links in the chain of consequences.

Well it's a bit of a stretch to say banks setup their own regulatory infrastructure
Wasn't the Federal Reserve created by a whole lot of Bankers meeting secretively on an island somewhere and deciding what the future structure of the system would be?
This basic system is now pretty much in place around the whole world.
I think this basic system needs examining as the global financial crisis indicates that it has failed in spectacular fashion. 
Question. Will interest rates ever rise in the states? How could the US Government pay back their loans? I think the current system is doomed.
I think it is a dangerous rewrite of history to narrow blame to one group when there are many links in the chain of consequences.
At the moment the Banks seem to be getting off scott free from any examination. The blame seems to get pointed at irresponsible governments and their citizens. As an example people say that Greek is getting bailed out, but really what is happenning is that the European Banks that made the bad laons are getting bailed out. 

The local banks seem to have form gaming rules and regulation:
Looking at our situation, the main banks controlled out of Sydney and Melbourne have their brightest minds applied to navigate/game rules and regs - banking & tax.
Lending at a substantial loss was a "classic indicator" of tax avoidance.
The transactions were templated, which could also indicate tax avoidance.
They generated claimed deductible expenses in a contrived and artificial way.
The department disputed the tax on nine Westpac structured finance transactions undertaken between 1998 and 2002, claiming they were tax avoidance.
The ruling has implications for other Australian banks, which also carried out structured finance transactions.
The court ruled the structured finance deductions were "tax avoidance arrangements entered into for a purpose of avoiding tax."
And on this site we see the bank friends crying for "hands-off"
Bank regulation is an art, however a continuation of the privatisation of profits and socialisation losses (heads I win, tails you loose) would seem a shame....

Yes, I agree many of the problems came from outside the country, but have we learned enough from them? Personally I think the exchange rate generally sits too high - ie everyone else is better at manipulating their exchange rate than we are. Well, maybe we beat the Aussies, but only by accepting relative poverty.
Governor Bollard is a good bloke but a bit more cunning on his part would not go amiss. We need to outsmart the other central banks rather than let them outsmart us.
My personal favourite is to just buy a tonne of gold a day until the exchange rate comes down to something sensible. The good doctor is quite capable of the managing the inflation that would cause. The high exchange rate benefits consumers, causes real estate bubbles and destroys what little manufacturing remains. Managing it down would increase the profitability of export business and ensure a future other than as debt serfs to JP Morgan et al.

It's an interesting one the exchange rate because the other side of that coin is that no nation became wealthy by devaluing its currency.
At the moment with the US a a reserve currency we are on a hiding to nothing trying to "compete" with it (whatever form that might proposed).  In this context the US owns the casino.
Mr Bollard is stuck in his regulatory straight jacket that is not of his own making, so it's slightly uncharitable to attack him personally.
It will be interesting to see how successful Brazil is at novel forms of exchange intervention, the reserve bank purchasing option doesn't work.

Yes, as I see it the job of the RBNZ might be better stated as matching internal inflation to external inflation. So the US pretends to run at inflation of 1-3% so we match that target. However, the US actually runs at an inflation rate of 7 - 10% (depending how you measure it, but that's based on how they used to measure it). So we end up with an exchange rate that bumps along the upper boundary of what the country can cope with, resulting in asset bubbles and a gutted manufacturing sector, ie a debt serf economy.

Agreed.  Colossal volumes of derivatives have gone far beyond the hedging against risk they were originally intended for.  For example, re-hypothecation in the City of London enables the same assets to be used infinitely as collatoral for any lending. 
The global exposure to derivatives is now thought be around $1.5 quadrillion.  It's a patently ridiculous number as it is virtually impossible to get ones head around how much that actually is.  JP Morgan derivatives exposure alone is around $75 trillion; the entire US banking sector exposure is some $240 trillion.  To put it into some kind of perspective, global GDP is around $60 trillion.  The whole thing is insane.
This risk was taken on solely by the banks for easy profits but it's just the tip of the iceberg.  If one considers Goldman Sach's actions around the Greek sovereign debt alone: hiding the debts of the Greek economy in order to make Greece look better for EU entry, while shorting the Greek economy on the side and you get a good picture of malpractice in the financial sector.  This sort of behaviour is not limited to Goldman Sachs.  The global financial sector is rotten to the core. 
It needs to be reset because it can never be paid back.  We had the chance in 2008 but instead we now have a scenario where the central banks are bailing out the investment banks at the expense of the global economy.

There's a summation of Keen's jubilee idea and public credit here.
"The way Keen gets around the moral hazard problem is to give everyone a large chunk of cash whether they have debt or not. The proviso is that anyone with mortgage, student, consumer or personal debt would have to have the money applied towards that debt. They would remove or radically reduce their debt and thus free up more of their current earnings for consumption or savings. They could not use their money to leverage more debt or speculate. There would be no incentive to load up on debt before a jubilee. The people without debt would be able to use their unencumbered money to spend or invest in the economy immediately, unlike borrowed credit with no interest attached, jump starting economic activity again. Keen doesn’t mention a figure but consider how your own and the nation’s situation would change if say every adult over eighteen got $100-200 000.
This leads to the other major criticism of this jubilee concept, that it would be hyper inflationary. After all we are talking in New Zealand’s case about the government creating hundreds of billions of dollars out of thin air. This would not necessarily be inflationary if a number of other things were done concurrently. The idea isn’t just to pay off debts and restart the current credit system – it is to completely reform and re-regulate credit to prevent the same lunacy of the GFC happening again."

I totally disagree that exporters problems are related to the exchange rate. The rate of exchange reflects the confidence investors have in the currency relative to other currencies. Reducing the value of the currencie by debasment is like being paid for your exports with gold watered down with copper. It might feel good receiving the same quantity of gold for your products but not when you go to spend it! 
 I am invloved in exporting, I am a kiwi but in live in Europe I have relationships with ingredients businesses some of which are supplied from NZ. The problem is a structual problem around cost of manufacture and of course shipping costs and lead times.
To make NZ competitive we really must make the business environment more efficient and economically attractive than any other competitor to over come the distance from market. We need lower business tax rates, less burden of business in compliance with goverment rules and regulation from tax collection to health and safety. Business need to ensure that their products have an edge also to command a premium. It does not have to mean low wages some of the world best exporter don't have low wages.
When the USA was a net exporter and sold its products consumers all over the world, they also had the highest paid work force, but since then, the ever growing size of their goverment and regulations amongest a whole other bunch of issues, they have killed their gooose that laid their golden eggs.
Debased currency may be a short term fix but I think the world has had more than enough of those.

Yes, well I was coming at it from the angle that in order to have an export surplus you need to have net saving (ie as a country you spend less than you earn) and so a system that encourages that would be a good idea. In contrast to the current system that encourages borrowing rather than saving.
The transition is a rocky road as just putting up interest rates would cause a house price collapse and quite a bit of chaos on all levels. The outcome might not be what you want. So the RBNZ bailed out the borrowers and left the balance in their favour.
Also I feel that the world's best exporters - Germany and China - do in fact game their currency lower.

Yes they many be the best exporters but look where the currency gaming has got them.
China - pile of USA govt bonds of dubious value and unlikely to be repaid and a number of property / commodity bubbles with inflation (not reflected in the 'offical stats) boomimg.
Germany was a bit smarter. It joined a currency that fundimently weaker than their economy. Then they used that currency weakness as a 'strength' to export to the rest of the EU (and countries outside the EU). The problem was the same as the Chinese, they had to lend to the other countries so they can buy their exports. Now they have to bail out these countries to save their banks. 

Quite right Neville, which is why this thread started by considering "QE for the people" rather than QE for the bankers and politicians. It is probably fraught with potential unintended consequences but the alternatives seem pretty awful too.

less burden of business in compliance with goverment rules and regulation from tax collection to health and safety
I wonder if part of the problem is that an efficient employee working for the Government or a Council will by default create more and more paperwork that needs to be followed. 

hear hear!

While its very pleasing that the subject of QE has been raised- and plaudits somewhat surprisingly to the Greens and Labour for raising it, Mr English's response is disappointing in either specifics or logic, at least to me.
His specific objections are as follows
“It distorts the value of particular assets, it undermines the strength of the balance sheets of central banks, it creates a high possibility of future inflation which would be hard to deal with."
How does QE distort the price of assets more than borrowing money from say Switzerland does? Recently the ASB I believe borrowed some $325 million from Swiss banks (and despite what English says, the Swiss are doing so from enormous financial strenghth, and are hardly in crisis. They have got the money from Swiss money printing). This money presumably funds 1-2 weeks of our current account deficit. If this money had been printed by the Reserve Bank, how does that distort asset prices?
Surely the balance sheet of the Central Bank is under far more pressure from borrowing offshore. If it borrows from itself, (the QE process) it has a debit and a credit.
The influence of a lower exchange rate on inflation is accepted, but he cannot have it both ways. As noted separately in the Herald we can have 2 out of 3 of no capital controls, a competitive exchange rate, and low inflation. Other countries have chosen to let inflation inch up. It seems arrogant to think we are smarter than them, especially when we still seem to be heading backwards

Stephen L: "Other countries have chosen to let inflation inch up. It seems arrogant to think we are smarter than them."
Other countries are more desperate that is why they have resorted to QE - you can't honestly think they would debase their currencies out of real choice?

Switzerland has over a $trillion of net international assets; (we are $150 billion in deficit) they still have a current account surplus; and yet they have printed billions to keep their exchange rate competitive. (They are also very smart bankers). Norway is the richest per capita country in the world, but is printing money. Our government is determined to have us in Whitechapel and Old Kent Rd in the Monopoly World, selling off or mortgaging whatever they can as fast as they can. Unless we want to become a larger version of Fiji,where anyone useful has left the country in 10 years, we need to start sorting things out rapidly. We seem to pretend that Europe is on Mars or somewhere. We actually compete with them, along with the Chinese and others. A lower exchange rate is easily the best way to become competitive quickly, and in a way that shares the pain as fairly as practical. Small doses of inflation,if in fact it came about, would be the least of the evils that we face, and that we have already got ourselves into.

However isnt a lot of Switzeralnd's international "assets" mortgages? especially to eastern Europe?  I seem to recall that this is the I wonder what they are really worth.
The countries that have printed say USA, UK etc, are they showing signs of improvements? The UK certainly isnt, USA at best treading water, so you cherry picked a bit.......I think using them as an argument to print is frankly lacking....and we dont need to....and if everyone else does, it achieves nothing but can kicks a bit....
I agree small inflation is the lesser evil, especially when we face a Great Depression, but the World needs to get out of that we cannot on our own as we are so inter- linked.
Now reducing volitility can be achieved, bring in a tiny tobin tax....From what I can read it would also curb the micro-trader banks who get in just before our exporters buy....thus blood sucking off them....

I strongly suspect the Swiss bankers have a very broad range of investments, and that their Trillion is pretty safe. For the USA and the UK, the correct but difficult to answer question, is where would they have been without QE? Their exchange rates would have been higher, so those with money would have enjoyed more overseas holidays. Their current account deficits would have headed into an even bigger hole. If they had, like us, somehow borrowed the money instead, (finding a spare 2 trillion between them would have been a challenge), then their national debts would have been 13% and 23% of their GDPs higher. And their exchange rates still would have been uncompetitive. If they had just cut spending, they would have looked something like Spain; unemployment would certainly have been very much higher. More industries would have been lost; more assets sold offshore- which sounds very familiar to our situation. US manufacturing is now rebuilding. In the UK, the devaluation has repositioned the finance industry costs back to possibly being sustainable in a post GFC world.
Even if everyone prints, it is not really can kicking; arguably it helps deflate the bubble- yes with a little inflation. NZ cannot afford to be one of two countries in the world that is not devaluing.
I can't see how a Tobin tax can be applied by just one country. All the foreign exchange will just move to another country. London has said it will never impose one. So forget that idea.
And only the devaluation addresses our current account deficit; which is 100% the reason we are losing all our assets, either mortgaged or sold.

You are making an assumption on their financail strength...and its at best a one off case....ppl are illogically running to the swiss france as a haven of safety just like the USA, NZ doesnt have that luxury........

Kiwi: I think Steve Keen was actually talking about a debt jubilee where each citizen is given x-amount of money to use solely for debt reduction - debt writeoff so to speak. You can watch a BBC HARDtalk interview with Steve Keen where he talks about it.
IMHO, I think NZ will be under greater pressure down the track to issue a round of QE but only because it may become one of the last currencies not to do so therefore pricing NZ exports out of the global market.
In the UK, after two rounds of QE the pound has fallen considerably - we used to get $3 for every pound, now we don't even get $2 for a pound. Why do you think so many kiwis are returning home to Auckland and helping pump up the property market? Because it's not worth them being in the UK any more. 
I don't think QE is the answer and though I can't believe I agree with Bill English, he's right: we would only be pushing known and unknown problems caused by QE down the road. Short term gain and long term pain. As we can see from the EU, US and UK, this kicking the can down the road isn't exactly working for them. The markets have no faith in the central banks or governments there to fix the systemic problems affecting those countries. Once the people lose confidence in them as well and withdraw their money from banks it's all over. Already, the exodus of savings from southern European countries over the past 4 years is nothing short of astonishing. They (and investors from the ME) have been flooding into London's already expensive property market as a safe place to store their money.
When many of the other fiat currencies are losing value and credibility, perhaps it might be in NZ's interest to maintain a currency with value (then maybe we can go on an international buying spree for a change :)).
Okay, so in the meantime we might need to rely on the domestic market and Australia more than we would until the worst is past (if this is even viable) but I think it's better than the super-inflation we could find ourselves facing. Food, fuel, accommodation are already expensive enough in NZ without the consequences of QE added to it - especially as wages/salaries are hardly rising to meet this.

I think Steve Keen was actually talking about a debt jubilee
If you go to and listen to Tonight with Vincent Browne,
right at the very end Keen talks about 
"a modern debt jubilee or quantitive easing for the public"
Once the people lose confidence in them as well and withdraw their money from banks it's all over. 
I think its a good idea to look at alternatives now so that when "its all over" the public can focus their anger on constructive change.
Anger is good when the energy gets used to motivate people to positive change but when people don't see a way out it can be very destructive. The Greeks burn buildings because they can't see a way out of their situation.  

Kiwi, I love the sentiment and agree we should be looking at alternatives now but in truth I don't think the majority of us are evolved enough to skip the anger stage if things go utterly to bust i.e. worthless fiat currencies, no faith in banks, lost savings, mass unemployment, drastic cuts to the welfare system. We're talking about a whole new way of thinking, living, and investing and a large part of the population here and overseas will be completely lost as to how to respond to that.

Keynes used to try to get the  public interested in economics
“The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist.”
Most people don't wan't to be the slaves of some defunct economist, so this is a good incentive for them to understand what their masters are up to.
People like Krugman(and most people who do modern economics) don't think debt can be much of a problem 

People think of debt’s role in the economy as if it were the same as what debt means for an individual: there’s a lot of money you have to pay to someone else. But that’s all wrong; the debt we create is basically money we owe to ourselves, and the burden it imposes does not involve a real transfer of resources.

That’s not to say that high debt can’t cause problems — it certainly can. But these are problems of distribution and incentives, not the burden of debt as is commonly understood. (Krugman 2011)

This is one reason why the whole world is in the mess that it is in.

we used to get $3 for every pound, now we don't even get $2 for a pound. Why do you think so many kiwis are returning home to Auckland and helping pump up the property market? Because it's not worth them being in the UK any more. 
Just out of interest who is we?
Disgruntled kiwi looking to return home with a smaller swag, or?
By the way I am pleased <2 kiwi buys a pound.   

Stephen, you are being too kind. Fair weather friends springs to mind. Times are tough in the UK and the rats are fleeing the sinking ship.

Go back a few years..........well 15 and then the rate was something like 3 to 1
Why are you pleased?

The same way I would be if my Fletcher shares increased in value by a third. Except in this case my net worth has improved on a relative basis.  
And in fact the Kiwi traded as weak as 3.40 to a quid in my trading life time. 

Kiwi - well said. We have to look past the believers, and the power-mongers who would merely shift ownership of essentials.
The need will be for a blueprint; a way forward, when it eventually implodes (Chaston exhibited a lack of physics the other day, describing it as 'exploding').
Cool heads, clear minds, and the guts to say that 'growth' was an unattainable goal which kills off the species. Whether they will be heard as the throng goes into screaming panic, remains to be seen.
Socially, affluence makes folk lose a sense of community/society, and become gated individuals. Presumably the rapid reduction of affluence will re-form the social-support networking, altruism etc. Maybe that will produce the appropriate leadership.

All this talk of debt jubilee is great, but what about the people with no debt?

they keep the cash to spend.

Awesome idea

What would happen if the Govt combined QE with a rise in the OCR/interest rates courtesy of the RBNZ?  On the face of it (so far as I can tell), there would be more money in the system however this would be balanced by a greater incentive to save and/or pay down debt with that extra cash.  Sure, there would be FX issues but these may be able to be mitigated somehow?
I never hear of this suggestion being put forth, however I don't proclaim to know the inner workings of the economy so maybe someone much smarter than I could break it down as to why this would be a bad idea and/or suggestions on how it could work?
This a long article and it covers a lot of ground but it does how some parts that are relevant to this this discussion (from a USA context) Sect 5 is the most relevant.
NZ is running a trade surplus so the exchange rate can't be too over valued, the problem is the balance of payments and this results from past deficits and our low savings rate, which also seems to have increase lately.

When the main two promoters of the current QE policy start disagreeing, is this the beginning of the end?

Why should Bill english like QE? 
They campaigned on bringing this country back to a productive economy that saves money, not borrows and spends, which is all QE encourages.
They haven't particularily done a very good job of it so far though, there is still no ecouragement to save, still only encouragement to invest in the most unproductive thing out there, property.

The BOJ announced another $152 billion of printing today. Japan still has a significant current account surplus. Lucky for us everyone else is stupid, and we are the only ones who are not. Or just maybe we are not so smart, Bill.