Collins JudithHon JUDITH COLLINS (National—Papakura): Thank you Madam Assistant Speaker. The National Party opposes this bill. We don't see quite what the need for it is because we are all very pro-employment. In fact the Government inherited a situation where the economy was going very very well. Unemployment was at historic lows interest rates were at historic lows and in fact they had a wealth of taxpayer money that they have chosen to squander in such a way that one can only wonder what their plans are for next year. They have squandered money and they have at the same time now indicated that they want more control on the Reserve Bank.What we have seen from this Government is a tendency to interfere in issues that should always be independent. When we look at the Reserve Bank one of the reasons that the economy has been left in such a very good position is that despite all the issues that the National-led Government inherited in 2008 including the global financial crisis that we took over with a year before the full extent of the crisis hit New Zealand what we did was we left the Reserve Bank to do its job. That meant that when inflation came to the fore we did not have to be concerned and nor did the public that the inflation rate was going to go through the roof.What concerns us is having a dual purpose for the Reserve Bank—so employment on the one hand and then inflation on the other. Nobody from the Government has been able to yet explain in a satisfactory manner who wins in this where employment for instance could end up going down. What happens there? If employment goes down unemployment goes up what happens then to the inflation rate and the inflation target? How is that balance kept? They've simply said that there are two—two—criteria and targets that the bank now needs to meet. What about when they are in conflict? What will happen then?Then we have the chilling effect of a senior Treasury official now being sent to oversee the meetings of the monetary policy committee and no doubt to report back. What's the next step? Are we going to make the Reserve Bank a Government body? Are we going to make it in fact a Government agency where in fact not only are all the members of the board appointed by the Minister which this does but actually what it says has to go through the Minister?We've already seen today in the House the Minister of Housing and Urban Development dismiss the comments of the Reserve Bank around the targets for KiwiBuild. They've been absolutely dismissed; he doesn't agree with them. What happens next time the Reserve Bank says something that this Government doesn't like? Are they then going to say We'll put another purpose in their mandate."? If we could see that there was a problem to solve then we would support a solution to that problem but all we have seen is a need to tinker.One might well think back to those great disputes that the Rt Hon Winston Peters used to have with the then Governor of the Reserve Bank Don Brash back in the 1990s. He had to be appointed apparently as a Treasurer—I'm not quite sure what that meant. He was appointed Treasurer and he wanted to reform the Reserve Bank of New Zealand Act and bring in all these other requirements that the bank had to adhere to. Nobody gave in to that under a National-led Government. Nobody gave in to it when Helen Clark was the Prime Minister either. Nobody gave in to it when Michael Cullen was the Minister of Finance. We come into this Government and all of a sudden they're giving in and they're giving in not because anyone in this House is concerned about there being too few people employed—in fact we would like to see everybody gainfully employed in an occupation. What this is is interfering with something that affects inflation affects employment and affects the whole financial basis of our economy by interfering in the target setting for the Reserve Bank.I've heard today from Mr Wood who spoke very sincerely for the Government—well he would wouldn't he; he wants to be a Minister and he's wondering why he's not. He's looking around at Iain Lees-Galloway and saying well actually he actually probably could do a better job.ASSISTANT SPEAKER (Poto Williams): Order!Hon JUDITH COLLINS: Yes; thank you Madam Assistant Speaker. He talked about the fact that other countries have done this too—other countries have done this too. Well I've heard that before. Lots of countries do lots of silly things particularly when they have a Government that doesn't like the independence of the independent body and wants to make them far more dependent in their independency.We are broadly comfortable with the introduction of a monetary policy committee (MPC). We already have the Reserve Bank making decisions informally via its governing committee and under the proposed MPC the Reserve Bank still has a majority. Then what's the point of it all? Is it simply that it's nothing more than window dressing? I think it is very foolish to think from the Government side in their arguments that the Reserve Bank is all sitting in their own little offices only talking to other people in the Reserve Bank. They are watching what's happening in the world. They are talking to other agencies. They are consulting. Ultimately when you have two different masters that they're being asked to serve—both the employment rate and the inflation rate—it is going to come to a situation in the future where they're going to have to choose.And how do they choose that? We've already seen some of those inflationary measures starting to have a bit of an impact. We're already starting to see prices moving up. I think we need to consider that. We have in the real world outside of Parliament people who pay their own petrol who are paying more. We are seeing inflation happening through the prices for food for goods and for services and people are sheeting a lot of that back home to the petrol prices. But we are seeing extra prices extra costs going on. So what's to happen when the Reserve Bank says "Well we're going to actually have to make some decisions based on the inflation rate" and instead that might mean that unemployment may in fact rise?I think this is dual purpose and a dual tenet that will bring about some difficulties for the Reserve Bank. It should be a chilling effect I think for those who are on the board of the Reserve Bank to find that they are now going to not only be overviewed by Treasury but are going to be now measured on something over which they have very little control which is employment. The Reserve Bank doesn't employ a lot of people in the country. They're employing their own staff—that's it. What they have to do is they have to help to bring a certainty to people so that they know that if they buy something today at a certain price it's still going to be that price when they come to pay for it. There is not this rampant inflation that we had during the times of the 1970s that probably led to the end of the third Labour Government—as they were then—or that we saw in the 1980s under the Labour Government; what we saw all the way through that. I noticed that the comment today was about the Hon David Caygill and the brilliance that he had in helping to bring this about. David Caygill was of course also the person who did not open up the books. The requirements for fiscal responsibility brought in by the Hon Ruth Richardson—Hon Andrew Little: Let it go. It was a long time ago.Hon JUDITH COLLINS: —that was absolutely—well Andrew Little says "Let it go." Well of course what worries me is this lack of independence in a body like the Reserve Bank. Any attempts to influence the bank in its deliberations and its decisions would be seen as something that would take us back past a time in the 1980s that National got rid of when it brought through the Fiscal Responsibility Act. Since then there has had to be an opening of the books before the election. What really concerns me here—and thus the National Party—is just imagine if a National Party was bringing through this bill to the House. Can one imagine what the Labour Party would be saying? They'd be saying we're trying to influence the Reserve Bank. I say to them here: look in the mirror. You are trying to influence the Reserve Bank. That is not what the people of New Zealand expect."