Willis Nicola; Robertson GrantNICOLA WILLIS (National): I want to turn to clause 11 of Part 2. In doing so I'm hoping that the Minister will have time to reflect on the questions put by Michael Woodhouse and perhaps will have the opportunity to address those.But clause 11 is quite perplexing because it arrived after the select committee deliberation had been taking place. It arrived from officials and was a change to what we had initially considered. What this clause does is it says that the bank may request the Minister to direct the bank to perform any additional function that is consistent with the bank's objectives. So it's quite extraordinary because what it says is if the Minister of Finance wishes to ask the Reserve Bank to perform an additional function the Minister can only do so if the Reserve Bank first asks the Minister to do that which simply on the face of it seems a little bit absurd.I think members of the select committee could well understand the need perhaps for the Minister to have consulted with the Reserve Bank prior to making a direction for an additional function. That could've been understood. But to have this requirement that the bank request the Minister before the Minister directs the bank to perform any additional functions seems on the face of it quite strange and really does seem to subjugate the Minister's ability to ask the bank to perform any additional function. It is in effect a veto. Because unless the Reserve Bank says to the Minister Yep we're happy to be asked to do that." the Minister simply cannot ask for that additional function. In fact the Minister would have to return to this House and amend the Act itself in order to have that additional function.So I would be very interested in hearing the Minister's explanation for this change and to ask why it is that he wishes his powers to be fettered in this way in relation to this section.Hon GRANT ROBERTSON (Minister of Finance): Yeah I thank the member for the opportunity to have a little bit more of a discussion around clause 11. At its basis this comes down to the question of operational independence of the bank. As I've said on a number of occasions in my contributions tonight and earlier the balance between operational independence and the Government setting out the framework in which the bank works is a delicate balance. The way in which the bank might go about its work and has historically gone about its work is that it will consult often with the Government on particular things that it wants to do. But where those are within its power it then has the ability to do it. That has been a fundamental tenet of the way the Reserve Bank Act has operated since 1989. So it was as the member has noted upon further consideration a cause of concern that perhaps we would be seen to be undermining the independence of the bank had we done this.This is a decision-making power which is an existing mechanism in the Crown entity framework. There's a process that is gone through for issuing directions and the bill's got safeguards around how the bank can undertake particular actions if it's in respect of a particular person or persons that's covered under clause 168 as well.So it is our view that protecting the operational independence of the bank matters. Adding functions to the bank's role is a substantial thing to do and we do not believe that it should be done only by the Minister's fiat.We get some different views from across the House about where the operational independence line lies. I'm not 100 percent sure where the National Party currently sees that. But for us adding a whole new function to the work of the bank seemed to us to be something that the Minister should not be able to do on their own. It should be something that the bank and the Minister work together on and that is the process that clause 11 it now gives us."