Peters Winston: Questions for Oral Answer — Questions to MinistersText is incorporated into the Bound VolumePeters Winston: Questions for Oral Answer — Questions to Ministers[Sitting date: 08 May 2013. Volume:689;Page:9776. Text is incorporated into the Bound Volume.]5.Rt Hon WINSTON PETERS (Leader—NZ First) to theMinister of Finance: What is his view of Governor Graeme Wheeler’s recent statement to the Finance and Expenditure Committee that with regard to the Reserve Bank’s recent activities “there has been some intervention” in the exchange rate?Hon BILL ENGLISH (Minister of Finance): My view is that the statement is probably correct if the governor said it. He would be following policy that has been in place since 2004.Rt Hon Winston Peters: Does he agree with the Minister for Economic Development Steven Joyce that intervention is “a bit of a fool’s paradise” and why is his ministerial colleague making comments about matters he patently knows nothing about?Hon BILL ENGLISH: In answer to the second part of the question Mr Joyce from my experience does know quite a bit about it and perhaps may even know as much as that member about it—possibly more. In respect of the first part of the question as the governor has said himself foreign currency intervention is unlikely to have a sustained impact on lowering the exchange rate but it can reduce pressures in the short term.Rt Hon Winston Peters: Does he recall the Prime Minister’s statement on the exchange rate that “the Government does not believe that it can influence that through intervention”; if so and in light of the Reserve Bank’s recent action and statement before the select committee has he informed the Prime Minister that his belief was demonstrably wrong?Hon BILL ENGLISH: I think the member is trying to make a mountain out of a molehill here. The fact is that the Reserve Bank—Hon Steven Joyce: That’s a surprise!Hon BILL ENGLISH: Not the first time—yes. At least he is starting with a molehill this time which is quite big really. The point here is that the Reserve Bank has always had the power of intervening. It has published the conditions under which it can make interventions. The bank itself has said that it believes the impact of those interventions is limited and short term. The member on the other hand and the Labour Party advocate that the Government can pick an exchange rate and the Reserve Bank can just push the market to that exchange rate. That is simply wrong. That is the context of the Prime Minister’s statement.Rt Hon Winston Peters: How can New Zealanders the market or anybody interested in this subject possibly have confidence in a Government that has such a dysfunctional relationship with the Reserve Bank in so far as the bank’s actions though they might upset “Big Ears” directly contradict the line spouted by senior Government Ministers?Hon BILL ENGLISH: The public do have some confidence in the Government and the Government has a good relationship with the Governor of the Reserve Bank. However he operates foreign currency intervention quite independently of the Government.Rt Hon Winston Peters: Is it not true that as the Minister of Finance he could have instructed the Reserve Bank to begin intervention in the foreign exchange markets earlier thereby reducing the devastating impact the high New Zealand dollar has had and is having on our export sector as the industries have evidenced in their public statements day after day?Hon BILL ENGLISH: The fact is no I have not issued any direction to it. The decisions have been made by the governor about his intervention and I am not always aware of whether he is or is not intervening.Rt Hon Winston Peters: I raise a point of order Mr Speaker. I am not asking whether he has done anything because I know he has not. What I want to know is this: does he admit that he could have or that he had the power to do it?Mr SPEAKER: Yes. The Hon Bill English.Hon BILL ENGLISH: The answer to that is no and in respect of the damaging impact on the export sector the member should look at the household labour force survey figures today which show an increase in full-time jobs across the economy despite the fact that we have had a high exchange rate. The Reserve Bank Governor would not himself claim that his actions are somehow substantially realigning the exchange rate.