Bayly AndrewANDREW BAYLY (National—Port Waikato): Thank you Madam Speaker. It's a pleasure to be talking on this Reserve Bank of New Zealand Bill 2020. With an institution like the Reserve Bank—which as the Minister of Finance just identified plays a crucial part in managing monetary policy in New Zealand—I think it's particularly important that decisions to change the institutional arrangements or in fact even the remit around the Reserve Bank should go through a process of consultation with all parties to this House. I think it's very disappointing that this is the second in two pieces of legislation—and as the Minister said we're about to get a third in due course—which contain changes that have not been agreed by the Opposition. Just to put on record we will be opposing these changes. The context for that is the first round of changes that the Minister imposed on this House in the 52nd Parliament—back in 2018—was one which first of all gave the bank a dual mandate and added to the existing and long-held view that the bank was principally there to manage price stability—in other words keeping inflation low between 1 and 3 percent over the medium term. The change added the dual mandate—the second mandate—around maximum sustainable employment. As an Opposition we expressed our displeasure and disagreement with that approach and noted at the time that we thought there would be potential that there would be a conflict depending on the economic circumstances. I don't think given the life of time since 2018 we have actually achieved much from the dual mandate and others would argue even more strongly against that move. So that was what was put forward at the time and there were a couple of other changes that were proposed. I think the most disappointing thing was it wasn't done with the blessing of the whole House. Of course the first step in the change of the governance structure was the incorporation or establishment of the monetary policy committee (MPC) which has now been in operation for a couple of years. At the time we were concerned that that had the potential to be full of appointees—political hacks ex - political hacks and people who would not bring the sufficient expertise to that role. Now I'm not casting aspersions on any of the members of the current monetary policy committee but this second bill is the ongoing corporatisation of the Reserve Bank. I use the word corporatisation" because we are now going to end up with three levels. We're now going to end up with a fully fledged board which will have its own riding instructions issued by the Minister of Finance and will be appointed by the Minister of Finance. We still have a governor who is appointed by the Minister of Finance. And we still have this relatively new creation called the monetary policy committee appointed—not all the members but most of the members—by the Minister of Finance.I noted in the speech from the Minister earlier that he talked about the importance of independence. Well I think we are seriously diverging from that concept. I know from wider conversations that we've been having in very recent times—the last couple of weeks where it's been suggested that we may need to be clear about our instructions to the Reserve Bank—someone has claimed that I personally was imposing on the independence of the Reserve Bank and went so far as to call me "Muldoon-like". I would suggest to you that if you ever want to be Muldoon-like and you want to have control of the Reserve Bank just have a Minister of Finance who appoints the board appoints the governor and appoints the monetary policy committee. That's the problem with this bill. It's not a good put.We should not be debating this in the House and we should not be debating it in select committee because this is the type of thing which spans multiple Governments over much time and should involve all of us in this House in making sure we get the right outcome. But here we have a Government who has got outright control of this House who's going to ram through this legislation like they did last time. I think this is something that's cutting to the core of how we manage the financial system in New Zealand and I think it's wrong—I think it's wrong. That's my first principal concern and I've only got four minutes so I'm going to have to leave some of this to my good colleagues here.The other side of this is there is a move in terms of the overarching new financial stability objective. Previously—or currently until this bill is rammed through the House by the Parliament—the objective was to protect and promote the stability of New Zealand's financial system. Now there is a new clause and it's quite nuanced wording but it now moves to a new objective around efficiency and that replaces the existing requirement to have regard for the efficiency and soundness of the financial system. We are now at an issue that talks about efficiency which means something quite different from what is in the current wording. Efficiency should be a critical consideration of the Reserve Bank but this change is quite significant in terms of what it means for the governor for the monetary policy committee and also essentially at a board level. I think this is something we need to understand more from the people behind the bill and the officials who have written the bill because unfortunately we haven't had a briefing on it but it does have potentially quite wide-ranging implications.The last thing I'm going to talk about—because I've been talking about this issue in the last couple of weeks—is that in the current situation where we've got a significant level of liquidity going into the banking market I have been promoting that it may be appropriate for the Minister to write a letter of intent to the Reserve Bank Governor under section 68(b) of the existing Reserve Bank of New Zealand Act. So I find it slightly perverse that one of the things in this bill is that that option which is sitting latent in the existing legislation is now being turned in this current bill into a requirement. Even though the Minister was only a matter of a few days ago saying we shouldn't be doing that and it's wrong and we're interfering we now have in this bill provision for the Minister of Finance—yet again another level of interference. This is a requirement; it's not optional as currently section 68(b) is. The Minister is required to send to the governor the financial policy remit. I just think that's a wonderful contradiction—and a perverse outcome given where we've been over the last couple of weeks—that here we are with the Minister at one stage saying we're full of independence and we want to protect all that and here they are taking the very clause that could have been a way for their finance Minister to influence the direction of the Reserve Bank from time to time and enshrining it in legislation as a requirement. I just think that is a wonderful piece of inventive thinking by the Minister of how to achieve something and call it something different.Todd Muller: Sleight of hand.ANDREW BAYLY: Sleight of hand my learned colleague tells me beside me and I think it is.We will be opposing this bill on the principal grounds that it's blurring the level of accountability between the Minister of Finance and section 68(b); of the blurring of the lines of accountability between the governor the MPC and the board; of the increased Treasury influence—and I'm sure my other colleagues are going to pick up on it—and of this new financial stability objective particularly around the efficiency. It is going to be a very interesting select committee."