Swarbrick Chlöe; O'Connor GregCHLÖE SWARBRICK (Green—Auckland Central): E te Māngai tēnā koe. Tēnā koutou e te Whare. Madam Speaker just wanted to say I'm grateful to the Minister for tabling that letter from the Reserve Bank and the Reserve Bank Governor. It has largely just referred us back to the monetary policy remit review from June 2023 which spoke to the kind of thoughts from the Reserve Bank after a number of public submissions in a process which then ended up in a memorandum to the former Minister.I just want to quote here from paragraph 22 because I think it's a really important and salient point. Ultimately the Reserve Bank of New Zealand (RBNZ) recommended to the Minister that there was some form of hierarchical nature in which the Minister through the remit could say that the monetary policy committee (MPC) was to take account of maximum sustainable employment but to do that subsequent to a focus on price stability. And here they say at paragraph 22 The Reserve Bank views that introducing a hierarchical ordering of objectives is unlikely to materially affect monetary policy strategy – it clarifies the strategy that the MPC would most likely undertake when the dual mandate objectives come into conflict particularly for when inflation expectations are at risk of becoming unanchored. Furthermore the Reserve Bank has undertaken considerable work in better understanding labour market dynamics and [the] MSE"—that being the maximum sustainable employment—"will remain an important concept in the future whether the Remit has a hierarchical ordering or not."Once again we have there in black and white—as myself and the Minister when she was previously a member of the Finance and Expenditure Committee heard elucidated time and time again from the Reserve Bank Governor—that ultimately there was not all too much difference that was coming out of the monetary policy committee as a result of the dual mandate. It largely was a means by which they interrogated and reflected on the decisions that they were making but it did not materially affect them. So look all of us in here can pontificate about what inflation is and what inflation does but frankly this bill does not do anything to tame that issue of inflation. But I do think it's worthwhile spending some time reflecting on the point from the Minister about why perceptions do matter because I think that's a really important and salient point and actually it goes some way to some broader reflections that some members may like to make on the fact that so much of this stuff that we do inside of the economy is largely driven by perception and therefore is kind of made up and that maybe talking down our economy or certain industries has real-world impacts. To that effect we also heard from the Minister the question to members of the Opposition about whether this is bad or whether it is unnecessary. So to answer that question—is it bad?—what I'd say to the Minister in response is: is a focus on employment a focus on maximum sustainable employment bad? I don't think that it is and what I heard from the Minister whilst saying that it's not going to be within the remit was that it may be one of the considerations in the formulation of monetary policy. So again I don't think that anybody here is saying that a focus on maximum sustainable employment is a bad thing but what we are hearing is that it largely to this point has not impacted the way that the monetary policy committee has come up with monetary policy. Then there was the question of whether it is necessary. Well again as we've heard and as is laid out in the regulatory impact statement this bill is not necessary. These means are not necessary to achieve the ends as stated—that is for the hierarchical consideration of financial stability and of maximum sustainable employment—whether that is achieved by virtue of the remit change or consideration or otherwise. The other point of whether it is necessary or not is about the fact that this simply has not changed the Reserve Bank's approach. Again we have this in hearing after hearing but also in black and white from the remit review from the RBNZ which again is tabled and out there in the public arena. Just given that we've got a little bit more time here in this second reading and before we get to the committee of the whole House stage where I'm looking forward to putting some questions to the Minister it might be worthwhile to reflect on what it is that the Reserve Bank actually does because we have been through an unprecedented period of time and I wanted to acknowledge members from the Finance and Expenditure Committee in the last term who really did our best to hold the RBNZ and Treasury and the Minister to account on that. So monetary policy is the stuff that the Reserve Bank does and as we've all been talking about at present that is largely mandated through the dual mandate of a focus on price stability but also on maximum sustainable employment. The main ways that they have to achieve those outcomes are through largely the official cash rate which then has flow-on effects to mortgages. Outside of that it can engage in what is typically known as unconventional monetary policy and throughout the period of COVID-19 we saw that in full effect with large-scale asset purchases and otherwise. We knew because we ended up with an Official Information Act request back from the Government with advice both from the RBNZ and Treasury that if those unconventional monetary policy means were pursued we would end up with what they called distributional impacts—that is an increase in or an exacerbation of inequality. And they advised that the way to mitigate against those distributional impacts—i.e. that increase in inequality—was through the utilisation of something called fiscal policy. That's the stuff that the Government does. The stuff that the Government does is tax and spend. Spending—as we all should hopefully know in this place—does have inflationary impacts but when it comes to taxation this is a point that I think that we largely diverge on because we've heard a lot in this House today and over the last week or so about the notion of productivity and we've also heard about how inflation is the thief and all of those different things. But we also know that taxation is a deflationary measure that Governments can undertake. We also know that right now we are the only country in the OECD that does not have a capital gains tax a stamp duty an inheritance tax a ghost house tax or any other form of taxation which is explicitly focused on addressing those inequities. But also as a result we end up by virtue of multiple reports from the likes of the Productivity Commission and from the likes of Treasury and the RBNZ with ramifications which rob us of our productivity which rob us of that capital and that investment in the productive market and end up with a disproportionate influence on capital and inflation particularly house price inflation. So if the Government actually wants to do something meaningful on inflation particularly house price inflation and those drivers of Consumers Price Index inflation then it could fix the tax system—I don't know. That's an idea you can take for free from the Greens as we all sit in here to midnight tomorrow and till 10 p.m. tonight. But again the point remains—three key points here from the Greens—that this makes no difference and we're wasting all of our time in debating it; secondarily it is unnecessary to do this in law; and thirdly the Government is still saying that they want the RBNZ to have some kind of mind paid to the impacts on employment. So they still believe that this is somehow important. With all of that information I just think we've got better things to do and if the Government wants to introduce a bill focusing on taxation and betters ways to equitably achieve outcomes and get a more productive economy we're on board.Todd Stephenson: Mr Speaker.ASSISTANT SPEAKER (Greg O'Connor): Todd Stephenson—if you seek the call then I'll call you.Todd Stephenson: Oh thank you Mr Speaker. ASSISTANT SPEAKER (Greg O'Connor): So that's right."