Willis NicolaRESERVE BANK OF NEW ZEALAND (ECONOMIC OBJECTIVE) AMENDMENT BILLFirst ReadingHon NICOLA WILLIS (Minister of Finance): I present a legislative statement for the Reserve Bank of New Zealand (Economic Objective) Amendment Bill.DEPUTY SPEAKER: That legislative statement is published under the authority of the House and can be found on the Parliament website. Hon NICOLA WILLIS: I move That the Reserve Bank of New Zealand (Economic Objective) Amendment Bill be now read a first time.It is a highly symbolic and important act that we take today because we are remedying one of the greatest stains of the outgoing Government and that is the stain of the cost of living crisis they have left behind them. Under the watch of the previous Government inflation was allowed to ramp on unchecked out of target for 2½ years and that is far too long and has left New Zealanders suffering. So we in this new Government are committed to taking the actions needed to address the cost of living and we understand that inflation is our enemy. It is our economic enemy it has corroded the living standards of New Zealanders it has taken pay from their bank accounts it has made their lives more expensive. We cannot have good employment outcomes; we cannot have a good economy unless we get inflation under control. So today in this bill we will be focusing the Reserve Bank on that objective: the economic objective of stability and the general level of prices. To do that we will undo the experiment that the past Government embarked on. That was an experiment which they decided to embark on after 30 years of successful monetary policy in which with one mandate the Reserve Bank had kept inflation under control. But members opposite decided to make a change and introduce a dual mandate and today we will remove that dual mandate; we will remove the economic objective in this Act to support maximum sustainable employment. That will return the Reserve Bank to a single mandate for monetary policy of achieving and maintaining stability in the general level of prices over the medium term. Now I want to acknowledge the ACT Party because both the National Party and ACT Party policy programmes for this Government set out our intention to introduce legislation to remove this dual mandate and to get the Reserve Bank focused on putting the lid back on inflation. We have committed to introducing this legislation within our first 100 days in Government to make our intentions crystal clear and I intend for this bill to be passed under urgency to amend the Act before Christmas. When the dual mandate was added in 2019 it undid success in the past and as we've seen inflation in recent years has been consistently well above the Reserve Bank's target of achieving and maintaining annual inflation between 1 and 3 percent over the medium term as measured by the Consumers Price Index. That persistently above-target inflation is negatively impacting hard-working New Zealanders who are trying to meet their day-to-day living costs. We need to ensure that monetary policy decision makers have no doubt that busting inflation is our goal and to do that they must have a much stronger focus on achieving price stability. I believe that having a dual mandate clouds monetary policy. By returning to a single objective focused on achieving and maintaining price stability the task of the monetary policy committee (MPC) is clearer simpler and therefore more likely to be met.It is perhaps characteristic of the outgoing administration that where there could be one priority they tended to pick nine; that where there were three things that could have been achieved they tried nine and achieved none. Under a single mandate approach it is also easier to determine when the monetary policy committee has or has not fulfilled its primary function. Now I anticipate some of the comments from the members opposite and I say that it's important to note that returning to a single mandate will not require the monetary policy committee to discount the impacts of monetary policy on the real economy. Flexible inflation targeting whereby the MPC has regard to the impact of monetary policy on the broader economy when determining how quickly to return inflation to target has been central to New Zealand's successful inflation targeting regime for many years and was the case prior to Robertson's dual mandate hitting the books regardless of whether there is a single or dual mandate that remains the case. Chlöe Swarbrick: What does Orr say in your meetings? What does Orr say? Hon NICOLA WILLIS: So the member opposite Chlöe Swarbrick asks What does Adrian Orr say?" This is what he says in a letter that he has written to me. He says that "The Reserve Bank is supportive of your intention to amend the Reserve Bank Act to focus the economic objective of the monetary policy committee on achieving and maintaining price stability." And he says "The intended focus is consistent with the views we expressed in our recent monetary policy committee remit review published in June 2023." And I'd encourage the member opposite to read that review which made clear the Reserve Bank's view that there needed to be a clearer statement of priority on the inflation objective. The Reserve Bank goes on to say "Giving the inflation objective priority will assist the credibility of the inflation target." Because let's face it while the Labour Government were in charge the credibility of that target was eroded. That's not in the Reserve Bank piece; that's my editorialising. "Maintaining the flexible inflation targeting approach"—I return to the Reserve Bank's comments—"will best minimise unnecessary instability in output interest rates and the exchange rate and simplifying the remit will clarify the Reserve Bank's operational independence."Chlöe Swarbrick: Can you table the letter Nicola?Hon NICOLA WILLIS: I'm very happy to table that letter for the member.Document laid on the Table of the House.It is my intention upon this bill passing in this House that I will also publish a revised remit and charter for the Reserve Bank which is necessary given the changed mandate. Let the message be very simple and very clear let there be no confusion: ours is a Government which is going to get inflation under control. The Reserve Bank have the primary instruments for achieving that and so we ask that they have that clear objective. But we know that we too must do our bit that monetary policy needs mates. We know that the fiscal policies of the outgoing Government directly contributed to the inflationary position we are in today and so this is but the first step in an agenda from our Government to get the cost of living under control to strengthen the productivity of our economy and to deliver better economic outcomes for all New Zealanders. Thank you Madam Speaker.CHLÖE SWARBRICK (Green—Auckland Central): E te Māngai point of order. I just wanted to clarify that that letter will indeed be tabled and disseminated for the sake of the argument that we'll be having under urgency over the next few hours.DEPUTY SPEAKER: I believe the Minister clarified that when she spoke."