Watts SimonSIMON WATTS (National—North Shore): I rise on behalf of National and as the member of Parliament for North Shore on the Reserve Bank of New Zealand Bill second reading. This is a major piece of legislation for one of our most important economic institutions. It is with some regret that National opposes this bill but I'm going to use this short call to outline our reasons why and provide a pathway forward.The purpose of this bill is it's the second of three bills that are going to reform the Reserve Bank of New Zealand Act 1989. The first bill that was introduced in 2018 established what is the monetary policy committee and revised the bank's monetary policy objectives. This specific bill the second of three reforms the bank's institutional arrangements particularly around governance structures overarching statutory functions objectives and also touches on some of the roles of the Minister of Finance.I want to make some observations around the process and I think in particular one around bipartisan approach to such legislation. Reform of this sort should seek cross-party support. National is comfortable with much of this bill but has raised a limited number of important issues that we believe should be reflected in this bill. It is with regret that the Government has chosen not to work on a cross-party basis and these issues remain outstanding. As I said before the Reserve Bank is New Zealand's most important economic institution and the reforms that we are going to put in place need to be enduring. It is not in the country's interest that central bank legislation changes every time there is a change of Government and this is why it is with regret that the Government did not take a cross-party consensus approach on this bill.The first point I want to raise is in regards to the bank's financial stability objective that should retain a reference to efficiency. Pursuing financial stability without regard to efficiency in our view is a gap and the dropping of efficiency from the Reserve Bank's financial stability objective was also poorly supported by policy analysis and was also strongly opposed by a number of stakeholders including the banking sector. This is an issue about getting the balance right between pursuing financial stability on one hand and ensuring a healthy degree of progress and innovation in the regulated financial sector on the other—both aspects are critical to the strength of New Zealand's financial system.The other aspect I want to raise is the move to an executive board which is a significant departure from the original reforms some 30 years ago. It relies on appointing quality people to the board but the proposed criteria within this bill focuses more on who cannot be a member vs the qualities required to make this work. The other element is around how the Minister of Finance's hands should not be tied by the Reserve Bank particularly where there is a need to introduce or perform additional functions. We believe that both the Minister and the governor should be in a position to propose changes to the functions of the Reserve Bank.Parliament should be given some oversight role also in terms of the changes for the bank's monetary policy remit and when the bank is given additional functions. The bill also needs stronger provisions for the Minister of Finance to manage some of the fiscal risk that the Crown will see arising from the bank's activities. The bill's current provisions for determining the bank's minimum capital are not sufficient and potentially leave the Crown exposed.We acknowledge that the Finance and Expenditure Committee did form a majority view on this bill. However it is for the record that National recorded a differing view. We hope that the Government considers through the committee of the whole House phase these recommendations so that these changes will endure not only for this Parliament but into the future.