Williams Arena; Kuriger BarbaraARENA WILLIAMS (Labour—Manurewa): Thank you Madam Chair and thank you for the opportunity to take the committee through some of my proposed amendments. I'll begin with clause 8 which is the first clause within Part 2 that I seek to amend. My proposal is to amend new section 117(1). After the words over the medium term" I would propose to insert "and continue to take a flexible approach to monetary policy that improves welfare by ensuring that monetary policy does not exacerbate periods of economic decline" and given what the Minister has said on this topic I think that will be well-received in this committee. Let me then turn to the regulatory impact statement that was prepared by Treasury because Treasury have also advised on the usefulness of the flexible monetary approach that is concerned not only with stabilising the change in prices at any given time but also stabilising people's experience of the real economy. So Treasury's advice around this issue was that there would be an alternative to the approach that the Government is taking here to elevate that through primary legislation to just propose in the monetary policy committee (MPC) remit that there should be a more hierarchical focus on inflation but they also recommended in the third paragraph of the regulatory impact statement that "The view of Treasury is that issuing a new MPC Remit without amending the Act would be sufficient to ensure monetary policy decision makers focus primarily on achieving and maintaining price stability". So what this advice is doing is recognising that the monetary policy committee has a role in creating a more stable economy and so therefore it would be useful for us to say this clearly. My second amendment there to clause 9 is that in clause 9 I'm proposing that in the new amendment to section 118—it will be a really simple amendment. It's replacing the words "economic objectives" with "objective economic measure" and what I'm hoping to achieve with that amendment is to make sure that the monetary policy committee itself can determine what an objective economic measure of success is given what their role in setting monetary policy in New Zealand would be. It belongs in clause 9 there because that is a clause that's subsequent to clause 4. It would take into account the Government's objectives with this bill to elevate the role of the Reserve Bank of New Zealand (RBNZ) to focus on inflation but by doing this in clause 9 it would mean that the monetary policy committee had some room to interpret what a flexible approach in monetary policy in any given circumstance would be. That's important because if I take the committee back to my contribution in the first part of this debate where we've been for a period—which was really unusual in New Zealand's economy—in the last three to six years with fluctuations at whiplash speed between the need for a focus on employment to then a focus on taking the heat out of the economy that would provide the monetary policy committee with the tools it needed to determine what at any given time was the appropriate approach. My proposal to amend clause 10 would see in the new amendment to section 123 the replacing of the words "economic objective" with the words "an economic objective suitable for the prevailing economic conditions of the time". What's different about this amendment to my proposal to amend clause 9 is that this isn't a section which directs the monetary policy committee to use its powers in a way which it sees fit so in adding this the House would be saying in primary legislation that the prevailing economic conditions of the time are something that's useful for the monetary policy committee to consider. Just building on the contribution of the Hon Grant Robertson when he pointed to the example of the RBNZ chair Graeme Wheeler making those decisions to tighten monetary policy in such a way that it would have arguably exacerbated unemployment when it was already high this would focus the monetary policy committee's attention to when unemployment is high. When there are tens of thousands of New Zealanders who will be affected by even a one basis point change in the official cash rate—because they will bear the costs of inflation because there will be higher unemployment in the economy—then they should take that into account specifically and it would be elevated to primary legislation. My amendment to clause 11 is a little bit different from that. It would replace new section 125(2) with the words: "The economic objective or objectives may be: (a) the objectives specified by the Government taking into account the Government's role in setting monetary policy;" and then a new paragraph (b) which is different from the previous Government's approach but it would be in line with the new Government's approach which would subordinate the Government's priority for supporting maximum sustainable employment to that new paragraph (a). So what this would do essentially is recognise that this Government's priority though this side of the House disagrees with it is a single-minded focus on inflation regardless of the effect on the employment of those New Zealanders who will bear it otherwise—accepting that that is this Government's approach which is wrong-headed then there would be a subordinate concern for the monetary policy committee to take into account of supporting maximum sustainable employment in addition to or instead of that objective. So where there were prevailing economic conditions that require the RBNZ to take an approach to unemployment which did not see more New Zealanders out of work or those New Zealanders who lost their work not able to find it again they would take that into account. Clause 12 is also a bit different from that and I'd like to hear the Minister's willingness to take this on because it is a more simple change. It's not as substantive. It would be a new amendment to section 136(1) to replace the words "economic objectives" with "economic objective which stabilises the real economy for example in helping reduce fluctuations in unemployment" so this one points back to the actual Act as amended. This would be in a subsequent amendment to it. It's still subordinate to that clause 4 but it would bring in this need for the RBNZ monetary policy committee to have in their minds the fluctuations of unemployment at any given time within the economy. It's useful when paired alongside the amendment of the Hon Dr Megan Woods—sorry I'm not considering an amendment to that amendment; I would consider another amendment that would be a substantive amendment which would be in order. It is that if we had further representation on the monetary policy committee of someone with expertise in the experience of working people within the economy then this amendment to clause 12 would guide that person within the monetary policy committee's ability to make decisions which stabilised the fluctuations of unemployment in the economy. To give you an example of what that would mean in Manurewa after the global financial crisis people who looked like me—Māori women who are between the ages of 20 and 30—experienced unemployment that was up to 15 and 16 percent. The unemployment of men who are Pākehā in any given city but particularly in somewhere like South Auckland was only up around 3.5 percent. When we talk about unemployment increasing it's not felt evenly. That is an effect that is borne primarily by those people who are already on the margins of employment. When you have a Government working in tandem with an RBNZ to bring unemployment to a low rate you see people who have never had the opportunity to work because they would have otherwise been locked out of the employment market. Perhaps they didn't have the requisite skills as our economics textbooks would teach us but perhaps for some other reason they were locked out of employment. Then those people are able to seek work and I think in this House but especially between the two parties who are best represented in this House now we agree that working is important to people's lives. If you are able to seek employment if you are able to contribute to a job where you find respect from not only your colleagues but your peers and your family you live a better life and so by making this amendment to clause 12 we would give the RBNZ the tools that it needs to be able to constantly prioritise making sure that there was not a trade-off between young Māori women's employment prospects—because that was the trade-off after the global financial crisis; those were the people who bore the cost of high inflation and the policy of the governor of the time to tighten monetary policy at a time that unemployment was high—and doing two things at once by making sure that those women in South Auckland who look and sound like me can continue to be able to work in the jobs that they have now that if they lose their job they will be able to get a new one and that their wages will continue to go up. That's the other thing that we haven't really dwelt on in this debate. It's that when the RBNZ pursues a single-minded policy of reducing inflation at the cost of working people wages are also driven down. We end up with an economy in New Zealand where we're in a constant race to the bottom where people's wages do not progress and therefore their purchasing power goes down. So even though inflation might be under control the purchasing power of working people continues to decline under that sort of policy. Clause 13 is also an important one and I hope I can have more time to discuss that. It's a change to section 138(1) which would replace—CHAIRPERSON (Barbara Kuriger): The member's time has expired."