Scoop has an Ethical Paywall
Work smarter with a Pro licence Learn More
Parliament

Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search

 

Government Renews RBNZ Focus On Inflation

With Parliament now having passed the Reserve Bank of New Zealand (Economic Objective) Amendment Bill, the coalition Government has met its 100-Day commitment to return the Reserve Bank to a single focus on inflation, Finance Minister Nicola Willis says.

“Inflation has been out of the Reserve Bank’s target range for two-and-a-half years and New Zealanders are doing it tough. In order to address the cost-of-living crisis, the Government is taking a number of early steps to support the Reserve Bank in its fight to beat inflation.

“Today we have delivered on one of those early commitments by passing legislation to return the Reserve Bank to a single focus on price stability – a key part of the National-ACT coalition agreement.

“For nearly 30 years, the Reserve Bank’s sole objective for monetary policy was price stability. The introduction of that policy regime was a tremendous success – supporting the end of the high and volatile inflation that had previously plagued New Zealand for decades.

“In 2018, the Labour government amended the Reserve Bank’s governing legislation to introduce a new secondary objective of achieving maximum sustainable employment, sitting alongside the prior focus on inflation.

“This change was a mistake. With no hierarchy of objectives, the introduction of a dual mandate heightened the risk of a future policy error – with monetary policy led in multiple directions, even as inflation embedded itself in the economy.

“Over time, a single focus on price stability is the best way to achieve strong, consistent growth in employment.

Advertisement - scroll to continue reading

Are you getting our free newsletter?

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.

“Risking higher inflation in the pursuit of unsustainably high employment, just creates the conditions for a more severe hike in interest rates later on to bring inflation back under control. The result – as New Zealanders are experiencing today – is high inflation, high interest rates, and the prospect of rising unemployment.

“I want to thank the Reserve Bank for its support while the Government makes this change to legislation. Accompanying this change to the Reserve Bank Act will be an updated Remit and Charter for the Monetary Policy Committee, reflecting the renewed focus on price stability.

“Beating inflation is this Government’s top priority – and today’s announcement is just one part of that agenda. Constraining growth in government spending, reducing costs on business, and unshackling the economy from regulation will all play a role in reducing inflationary pressure in the economy.”

© Scoop Media

Advertisement - scroll to continue reading
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines


Gordon Campbell: On The Perils Of Joining AUKUS Pillar Two


The lure for New Zealand to join the AUKUS military alliance is that membership of only its “second pillar” will still (supposedly) give us access to state of the art military technologies. As top US official Kurt Campbell said during his visit to Wellington a year ago:
...We've been gratified by how many countries want to join with us to work with cutting-edge technologies like in the cyber arena, hypersonics, you can go down a long list and it's great to hear that New Zealand is interested...
More


 
 


ACT: New Zealand Dodges Dopey Experiment In Prohibition

“Labour’s attempted crackdown on smokers would have delivered criminal groups a near-monopoly over the cigarette trade,” says ACT Health spokesman Todd Stephenson... More


Government: Backs Police To Crackdown On Gangs
The coalition Government is restoring law and order by providing police new tools to crack down on criminal gangs, says Justice Minister Paul Goldsmith and Police Minister Mark Mitchell. “Over the last five years gangs have recruited more than 3000 members, a 51 per cent increase... More


Government: Humanitarian Support For Gaza & West Bank

Winston Peters has announced NZ is providing a further $5M to respond to the extreme humanitarian need in Gaza and the West Bank. “The impact of the Israel-Hamas conflict on civilians is absolutely appalling," he said... More


Government: New High Court Judge Appointed

Judith Collins has announced the appointment of Wellington Barrister Jason Scott McHerron as a High Court Judge. Justice McHerron graduated from the University of Otago with a BA in English Literature in 1994 and an LLB in 1996... More

 
 
 
 
 
 

LATEST HEADLINES

  • PARLIAMENT
  • POLITICS
  • REGIONAL
 
 

InfoPages News Channels


 
 
 
 

Join Our Free Newsletter

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.