Russell DeborahDr DEBORAH RUSSELL (Labour—New Lynn): Thank you Mr Speaker. It ain't broken. Why are we trying to fix it?" Those are the exact words from Mr Alastair Scott to help out our Hansard clerks there. It ain't broken. Why are we trying to fix it? You know what Mr Speaker? I agree that the inflation targeting the general policy targets agreement of the Reserve Bank isn't necessarily broken but it can be made better. We can do better. That is what this bill is attempting to do.Listening to the speeches in particular from the Opposition benches what I have been struck by is the fear of change—the fear that we might try anything different the fear that moving away from one target for the Reserve Bank might be somehow an irremediable step into some disastrous economic disaster I suppose. But let me reassure the members of the Opposition. This is a sensible and incremental change that is being made to the Reserve Bank and it's one that as a conservative party they ought to embrace. The nature of conservatism is not about no change whatsoever. The nature of conservatism is not simply about some idealised very old-fashioned morality. The real nature of conservatism—the conservatism that comes to us from Edmund Burke—is about making change and not change based on some ideology but change based on experience; piecemeal pragmatic reform informed by the experience of those who are able to see what is happening and to think of what could be done a little bit better. And that is what this particular bill is about. So rather than having this overwhelming call from the Opposition of "It ain't broke so don't fix it." let me show you why we do actually need some change. Now I agree that back when the Reserve Bank of New Zealand Act was first introduced we did need some serious work on inflation. I recall back in those days as my husband and I bought our first home together paying 20 percent interest rates. Inflation was out of control. I recall my mother talking about when she went to the supermarket she almost couldn't keep track of what our ordinary consumer items ought to cost because the prices changed so frequently. I mean compare that to today. When we walk into the supermarket we know that a couple of litres of milk will cost about $4 a loaf of bread will cost about $3 a can of tomatoes about a $1.30 a pack of 32 tampons about $8. Those prices are predictable because we do have inflation under control and it was totally out of control in the 1980s. So it was a good move to introduce the inflation targeting but there were some costs that went along with it. I asked the library to find some data for me—not just hand-waving but actual data of what happened to inflation rates and what happened to unemployment rates. So in the years between September 1995 and about September 2002 inflation went—it was around about 3.5 percent then 2.4 percent 1 percent 1.7 percent in September 1998. This is the year to September 1998. It was negative 0.5 to September 1999 3 percent in the year 2000 2.4 percent 2.6 percent. Inflation did indeed get under control but what was happening to unemployment at that time? In the September quarter of 1995 unemployment was 6.2 percent. The previous year September 1994 it had been 8 percent September 1996 it was 6.5 percent September 1997 it was 7 percent 7.7 percent the year after and on it goes. It got down to 5.5 percent by September 2002.And what does that mean? That means people without jobs. That means people without a standing place in their communities. That means people who are disenfranchised. They are unattached to work to places of employment. We know that having employment gives people a sense of place a sense of standing a sense that they have real standing as a person. It is a way of enabling citizenship—ensuring that people have meaningful work—and when unemployment is rising and is high we are disenfranchising our citizens. That is the problem that we face alongside inflation and that is the problem that we are now trying to fix—just a bit.This is not revolutionary change. We are not asking the Reserve Bank Governor and the committee there to do anything outrageous. For many years now they have been considering employment and unemployment as they set the interest rates. They've been doing it as part of the interest rate discussion. What this new legislation does is bring that employment target right into the forefront of their thinking. So this is not a revolutionary change; it is an evolution. It is a small incremental change based on experience; exactly the sort of change that a conservative party ought to embrace and I do not understand why the Opposition do not see its merits and its worth.I want to raise one final point and I'm going to take this from something that Alastair Scott just said. He said "We want people's living standards to rise." and indeed we all want to do that. But then he said "A certain level of employment is not necessary for that to occur." What an absurd thing to say. We know that employment matters to people. We know that employment makes a difference to people's lives. He carried on to talk about making it easier for employers to talk about employment as something to do with the market and to ask the questions around really employment and labourers as a commodity to be supplied. And in fact these are often the questions that are asked in economics. Is there a sufficient labour force? Do we have enough workers? Is the price for labour right? I say to you that we must turn those questions around the other way. The question is not: should people serve the economy as a labour force? But the economy should serve the people and the question we must ask all the time is: is the economy supplying enough jobs? Is there enough employment for all the people who want to work? Are we putting people front and centre of our decision making? And that is precisely what this amendment to the Reserve Bank of New Zealand Act does: it puts people front and centre. It says that employment matters. It says that we must consider the effect on people—not just on GDP not just on interest rates not just on all those technical things. Those are all important and people are important too. That is the importance of this legislation. It is saying that whenever we make decisions about our economy what matters most is the people.That is why I support this bill. It is not wild radical change after all. Those radical revolutionary countries—the United States and Australia—also have a dual mandate legislated for their central banks. This is not unprecedented change. It is small piecemeal change based on experience and it is change that puts people first. That is why I support this bill."