Williams ArenaARENA WILLIAMS (Labour—Manurewa): Thank you Mr Chair. I'm disappointed to hear from the Minister that she won't be considering the amendments in the name of Grant Robertson to the commencement date. However I have proposed in my name an amendment to the commencement date for a completely different reason and I hope she'll consider it. Sorry it's not in my name; it's in the name of the Hon Damien O'Connor and his thinking there with the suggestion that 18 months should be the appropriate time for this is that there is a lag between the decisions of the monetary policy committee (MPC) and the effect of those on the real economy. I know the Minister is very serious about the effect of monetary policy on our real economy. So that would allow time for the decisions that the monetary policy has made in the last year to be felt within the economy and to test whether there is in fact a need for a further focus on fighting inflation as the Minister has contended.We heard some contributions from the ACT members last night and I see he's here. He referred to the work of Milton Friedman. Milton Friedman also suggested that the effect of monetary policy decisions from a central reserve bank might take anywhere from four to 29 months to take into account so I would also gladly hear from the Minister if she would consider a commencement date of 29 months for this bill so that we can be sure that we are making policy with an evidence basis testing those decisions as a reserve bank and testing their effect on the real economy and on the fluctuations of unemployment particularly.I'd also like to speak because I really fear that I'm not going to get another call in this debate but I would like one on my amendments in my name. It's clause 1 and clause 4. I'll just speak to the one amending the name of the Act and that's clause 1. I propose to replace the Reserve Bank of New Zealand (Economic Objective) Amendment Act"—that's on page 2—with the words "The Reserve Bank of New Zealand (Elevation of the MPC Remit to Primary Legislation) Amendment Act".Now we usefully had the Minister make a contribution prompted by one of her advisers on the ability of primary legislation and secondary legislation to promote the Government's intention to set economic policy. That's something we all agree is the role of Government to direct the Reserve Bank of New Zealand (RBNZ) in some way to take a position on what it should be focusing on at any given time. That is not something I'm contending with. What I am interested in in changing the name of this Act is to be really clear about what it is doing because we've heard in the regulatory impact statement that it was Treasury's advice that the MPC remit may be issued by the Minister of Finance already within the powers of the existing Act and that would be the preferred method of making the sort of change that the Minister has been speaking about doing today.What they've said in the regulatory impact statement is that the view of Treasury is that ensuring a new MPC remit without amending the Act would be sufficient to ensure monetary policy decision makers focus primarily on achieving and maintaining price stability—i.e. by setting out a hierarchy for dual economic objectives. None the less they say they're amending the Act to signal a greater focus on price stability. But what this would do is allow a very clear signal as Treasury has proposed that the Monetary Policy Statement which would usually be used by the Minister of Finance to direct the RBNZ to focus on one of the economic objectives which is in the previous Act should be elevated to this stage. I should be really clear for anyone who is observing the passage of this Act that this was about elevating what the Minister wants right now to be the focus. So that Monetary Policy Statement was not the primary mechanism—because that is in effect what it is doing—because the Minister could use the Monetary Policy Statement which is a tool within the legislation provided for already. Instead she is choosing to amend the primary legislation and to use the House's time on that.So we should be really clear that this House today will pass something that could have been done by the Minister using a regulatory tool that has been available to finance Ministers since the beginning of this regime in 1989 but instead she is using the tool of using the House's entire time in urgency without a select committee process to do so. That is a use of executive power which is unusual in our constitutional framework between the RBNZ and the Government.So that's why we should be really clear in this House that the Act says what it does on the tin—that this is a new tool that we are making out here that we are setting a new precedent where finance Ministers will come to the House and order the RBNZ around with primary legislation despite the Opposition's calls for a select committee process despite the Opposition's calls for pause within the committee stage to debate those clauses which are important.And I come back to clause 4 which was not fully debated in this Chamber which makes those objective changes that were not fully debated. [Bell rung] Mr Chair? Thank you. I seek further time to be able to elucidate for the House why that change to clause 4 actually needs to be really made clear that this name change which I am talking about now is simply what it's doing. I'm sorry.CHAIRPERSON (Greg O'Connor): Clause 4 you're talking about?ARENA WILLIAMS: Yes I'm talking about why clause 4 should have been amended even though it wasn't. We're now in the situation where the name of the bill doesn't do what it says it will do.CHAIRPERSON (Greg O'Connor): Well ensure that when you're straying off the parts of the bill we're discussing that you actually do relate them.ARENA WILLIAMS: Thanks Mr Chair; I'm just learning.It brings us back to the name of the bill here because if the Minister's intention is not to use the tools that were provided for in the previous regime but to come to the House and set everything out in primary legislation then we get into the trouble of not being able to allow experts who have been appointed to the monetary policy committee or experts within the broader range of economic commentators and people with an interest in the way that the fluctuations of the real economy affect New Zealanders being able to contribute at all. So that's why it would be useful to change the name of this amendment to make it really clear that finance Ministers of all colours over time may come to this House and elevate those usual tools that they would use in secondary legislation and in regulation and indeed communicating with the chair of the RBNZ in the letter which the Minister has been asked to table in this House and has not—Hon Nicola Willis: I have tabled.ARENA WILLIAMS: Oh sorry sorry apologies to the Minister. She said she has tabled her letter to the Reserve Bank Governor so I will look for that on the Table when I'm finished with my contribution. I am sorry and I would like to make a contribution on that letter so I hope I get another chance.So we are saying in this bill if we pass it today that it is acceptable practice for a finance Minister to use the House's time to use primary legislation to do all of those things which would usually be in conversation with the Reserve Bank and in conversation with the monetary policy committee. So when we look at those experts appointed to that committee who are experts in their fields—they are often academics they are often practitioners of economics within our community they have some form of expertise in this—that we're saying they don't need to be listened to—Hon Scott Simpson: Tell us about the commencement.ARENA WILLIAMS: —that they don't need to come to a select committee the Hon Scott Simpson. And instead it's generally accepted practice for the Minister of Finance to come and make those changes to what is something that is constitutionally important to New Zealand to make those changes. And I would say to those members interjecting on the other side that we have not been able to have a select committee process on this where I would have proposed the changes that I am setting out to the name of the Act. They're very quick to shut down debate in this discussion which is really central to the constitutional framework of our economy. Because the RBNZ's independence is something that we all agree with—that the RBNZ when it can make its own decisions is the exact point of a 1980 Act.Tim van de Molen: Point of order. CHAIRPERSON (Greg O'Connor): If this is about the relevance of what this member is talking about then that is a job for the Chair. But I'll invite you to carry on with your point of order anyway.Tim van de Molen: Yes thank you. No I notice you're doing that Mr Chair. I just noticed she hadn't seen your attempts to bring her back to the bill. So I was just trying to draw her attention to your gestures there. Thank you.CHAIRPERSON (Greg O'Connor): Thank you for your attention to the Chair Mr van de Molen. But the point is you do need to keep referring back regularly to the point especially when you stray off these three parts of the bill we're discussing.ARENA WILLIAMS: Thank you Mr Chair. The point I'm hoping to make is that the name of this bill is really important and would have been important to the select committee's process if it were to have occurred. It did not occur which is a change in the way that we might otherwise make you know amendments to the way that the Government directs the RBNZ.So I would have proposed in select committee that the name would have changed because it's really important that we're clear that we are establishing a new practice for finance Ministers to make changes in this way. So we should be clear when we're elevating things that are usually in secondary legislation to primary legislation that we are doing so. This might have also been something the excellent committee the Regulations Review Committee might have also considered but we're actually moving away now from a secondary legislation tool and into primary legislation. So the job of the select committee would have been the only check and balance of reviewing that legislation because primary legislation only goes through those select committees. That is an opportunity that has been denied to this House and that's why we should accept this amendment."