Scott AlastairALASTAIR SCOTT (National—Wairarapa): I am still not convinced that this bill is necessary. The wheel has been spinning well. It is absolutely unnecessary at best and at worst—well you've just heard the worst scenario from the speaker before me David Seymour.There are two prongs to this. The first is what Mr Seymour has just alluded to: the political interference of the process. The Minister of Finance will argue that is not the case but unfortunately the perception is reality. Perception in the market place is what counts. A perception that there is Government interference in the monetary policy is not a good thing for the economy of New Zealand and therefore the outcome for all New Zealanders. So I totally agree with the previous speaker and Mr McKelvie before me highlighting the issue around political interference and the appointment by the Minister of Finance.The most important point—for me at least—is the dual task given to the Governor of the Reserve Bank. Mr Coffey just earlier talked about maximum sustainable employment as being one of the targets and it's explicit in the bill but he didn't tell us how that was to occur. He didn't tell us how the Governor of the Reserve Bank was supposed to maintain maximum sustainable employment and I would say that it's not able to. The Governor of the Reserve Bank and the Reserve Bank are not able to do anything to ensure maximum sustainable employment.The Reserve Bank Governor has only a limited number of tools the main one being setting the official cash rate (OCR) the interest rates. The Minister even in the chair at the committee stage could not tell us how the Governor of the Reserve Bank was going to use it and what tools to implement to maximise sustainable employment. In fact he said I don't know. It's the committee's prerogative. It's up to them. I sort of set the framework and it's for the committee with the Governor of the Reserve Bank to work it out and to give priority." We've displayed and we've clearly enunciated the conflict that arises vis-à-vis the employment rate and inflation rate: both can go up both can go down at the same time and they can go against each other as well. So as I say the Minister has sort of abdicated his responsibility and has not explained why he's put employment in. Why maximum sustainable employment? He may as well have said GDP per capita. That would have been more useful and more measurable for every New Zealander. But he didn't; he chose employment. Of course the Governor of the Reserve Bank cannot control GDP per capita just as he can't control maximum sustainable employment. Of course he considers employment. He considers employment when he's setting the rate of interest because he has to understand the rate of activity in the economy. He has to understand how fast inflation or the perception of rising prices is out there. Employment is just one measure that one would look at. There are a whole lot of other measures that the governor would look at when considering the OCR rate setting—for example immigration.Now we've seen immigration being maintained at relatively high levels. The Governor of the Reserve Bank has continually for months and in fact years—for years—expected immigration to come off quite aggressively in their projections but we know that it hasn't taken place. But again my point is that the governor cannot control immigration but must consider it just as he cannot control confidence levels in the economy—confidence levels and business people's attitude to taking on another employee—but he must consider it.Surpluses—we don't set the Governor of the Reserve Bank surplus targets but he must consider them. There are a whole lot of things the Governor of the Reserve Bank considers: asset prices the levels of leverage in the banking system household debt inflation imported inflation tradable inflation—all of these things the Governor of the Reserve Bank considers when setting the OCR which is a tool that does directly affect inflation. That has been his target for years and in my view that is what he or she should continue to focus on because it can be controlled by the OCR which affects the yield curve which affects expectations which of course is what inflation is. It's just people's expectations of where prices go including the price of labour.But I come back to my point: there is absolutely nothing that the Governor of the Reserve Bank can do to effect maximum sustainable employment. In fact price stability—another mandate in the Reserve Bank of New Zealand Act—in the medium term has also been really difficult for the governor to manage but he introduced tools such as the loan-to-value ratio. He was also considering leverage related to income levels of individuals but disregarded that tool that could have been available thankfully.But I come back to the main point: this bill is absolutely unnecessary. It focuses on the political interference—reality or perceived—in the process of setting the policy statements and of course the target of maximum sustainable employment is outside of the Reserve Bank Governor's control. I submit that they should continue to focus on the inflation rate and that is why we will be—and I'm not going to waste this House's time by continuing for no purpose at all because I think I've made my point very very very clear."