Genter Julie Anne: Oral Questions — Questions to MinistersText is incorporated into the Bound VolumeGenter Julie Anne: Oral Questions — Questions to Ministers[Sitting date: 10 September 2015. Volume:708;Page:6533. Text is incorporated into the Bound Volume.]9.JULIE ANNE GENTER (Green) to the Minister of Finance: Does he have confidence in the Reserve Bank in light of today’s official cash rate cut which has now reversed 75 points of the 100-point hike it made in 2014?Hon STEVEN JOYCE (Associate Minister of Finance) on behalf of theMinister of Finance: Yes.Julie Anne Genter: Does he think that a panel of experts from across the economy instead of only one Reserve Bank Governor might make better decisions around monetary policy; if not why not?Hon STEVEN JOYCE: The suggestion that the member makes of having a panel of people making the decision is I have to say not the silliest suggestion in monetary policy we have heard from the Greens over the years and many countries—Mr SPEAKER: Order! Just answer the question.Hon STEVEN JOYCE: I think the challenge is though the way the member phrases it if I may be fair because I think it is a very important point. The suggestion is that she is unhappy with the decision that the Reserve Bank Governor has made; therefore she would shop around to find a group of people who would make a decision that she agrees with. The whole idea of having an independent Reserve Bank Governor and an independent process is that politicians may or may not agree with that process at some time but the decision is independent. On that basis I could not support the member’s proposal.Julie Anne Genter: Does he agree with Treasury’s advice to him that “The current single decision-maker approach poses risks” and that “on balance we think there would be benefits to moving towards a monetary policy committee in the future.”; if not why not?Hon STEVEN JOYCE: I am of course aware of that policy advice. But it is important to note that the New Zealand system has served us very well I think over the last 26-odd years. Yes you could have a change at some point but again I think that if you wanted to do it and it is not a proposal that we are at all considering at this point but if it was something that you wanted to do you would have to do it for the right reasons and not because you disagreed. The member framed her primary question in such a way that suggested she was concerned about what had happened. In fact in her press release today she was concerned about a mistaken decision by the Reserve Bank Governor. I just cannot agree with that.Julie Anne Genter: Given that the Reserve Bank’s own analysis suggests that last year’s unnecessary official cash rate increases will have cost the economy up to $2.4 billion why is he so complacent about the governance structure surrounding these decisions?Hon STEVEN JOYCE: I am not remotely complacent but again I think the member is just—I do not know whether she wanted to do this or whether she just inadvertently made the point I was making in that she said that it was a wrong decision last year. I think that is a very interesting statement to make because actually if you look at the situation that was in place last year a number of those things have subsequently changed. I think it is very interesting that the member would seek to second-guess the Reserve Bank Governor in that way because they can only make the decisions that they make at the time based on the information that is available at the time.Julie Anne Genter: Is the Minister aware that we are basically the only OECD country that has this single decision-maker structure and that there are a whole number of other countries that use a broad panel of experts?Hon STEVEN JOYCE: I said at the outset in one of my earlier answers that there are different ways of doing it. I acknowledge that. I am not saying that you would never want to move from that but you certainly would not want to do that just because one or a number of members of Parliament had decided that in their view the Reserve Bank Governor had made “the wrong decision”. I do not believe that that has happened and actually that would be the wrong basis on which you would make any decisions about independent monetary policy.Julie Anne Genter: I raise a point of order Mr Speaker. Mr Speaker I seek your guidance on this. I am struggling because I do not believe that there has been any assertion in any of my questions that implies what the Minister is saying that I have said and therefore he is changing his answers.Mr SPEAKER: I think there has been some assertion because if I go back to the previous supplementary question the member inserted the words herself—“the unnecessary adjustment to the official cash rate” etc. But the point that I think is fair is that on that particular occasion the question was not addressed and I think it is really because perhaps the Minister did not hear it correctly. The way forward is to repeat that supplementary question to the Minister.Julie Anne Genter: Thank you Mr Speaker. Is the Minister aware that we are one of the only OECD countries to have this single decision-maker—[Interruption]Mr SPEAKER: Order! I declared that I was not happy with the answer. It had not been addressed. That is it. So I am going to invite the member to ask it again—I do not expect interjection from the two Ministers on my right-hand side—and then the Minister can have the opportunity to answer.Julie Anne Genter: Is the Minister aware that no other OECD country with a central bank gives so much legal power to a single official?Hon STEVEN JOYCE: As I said previously I am aware of that. Actually as I said to the member in one of my earlier answers—this is on behalf of the Minister of Finance—actually there is a range of ways in which that is done internationally. But the basis on which you would change that is not on the basis that a number of members of Parliament think that the Reserve Bank Governor had made the wrong or unnecessary decision in a previous year which the member asserted in one of her previous questions.Julie Anne Genter: Given that the only independent review of New Zealand’s monetary policy framework since the 1989 Act was put in place recommended changing the law in regard to bank governance and that no other OECD country with a central bank gives so much power to a single individual will his Government consider updating the law?Hon STEVEN JOYCE: I thought I had answered that previously but the answer is no we have no plans to do so at this stage.