Labour leader David Cunliffe says he is open to
overhauling the Reserve Bank and it would not be a radical
change for an independent committee to set interest rates.
Under the current legislation, the Reserve Bank governor is
solely responsible for setting the official cash rate (OCR).
However, Mr Cunliffe said today he had an "open mind" about
whether the OCR should instead be set by a monetary policy
He told TV3's The Nation there were some good
arguments for a monetary committee - including that a range
of views would be on the table when decisions were made.
Mr Cunliffe said the matter was being considered by Labour's
shadow finance minister, David Parker, and any decisions
would be signalled before next year's election.
One point of detail to consider was whether the committee
should have external members representing the likes of unions
"If you had someone like a leader of one of the main business
lobbies or a manufacturer or an exporter, then they would
have a first-hand understanding of the impact of overvalued
exchange rates on exporting, which is a critical issue for
He denied a monetary committee would be a radical change,
saying it would still make independent decisions subject to
the objectives of the Reserve Bank legislation.
"We'll make good policy in the interests of New Zealand. All
I'm saying is that it's perfectly possible to have the
independence of the Reserve Bank enshrined whether it is a
single governor or a monetary policy committee assisting the
"That is not a particularly radical change."
Labour has already signalled it would make first-home buyers
exempt from the Reserve Bank's new lending limits, introduced
this month, until its capital gains tax and low-cost housing
policies came into effect.
Mr Cunliffe said he believed in the bank's independence, but
added he would refine its policy targets to make it clear it
should have regard to government housing policy.
- By Matthew Backhouse of APNZ