Labour may back new-look Reserve Bank
Labour may overhaul the Reserve Bank if they win the next election – but the party’s leader is making no firm promises.
Speaking on TV3’s The Nation, Labour leader David Cunliffe was open to changing the Reserve Bank Act to create a monetary policy committee which would set the official cash rate (OCR).
Currently the Reserve Bank governor has sole responsibility for setting the OCR, but under Labour’s possible new plan, the job would fall to a committee, which could be comprised of representatives from government, unions and the bank.
Mr Cunliffe said there was an “active debate” about whether a committee or governor would be best, and he had an open mind on the matter.
“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 governor.
“That is not a particularly radical change.”
Mr Cunliffe would not say whether a committee would include external members, such as unionists and manufacturers, but he did not rule out the possibility.
“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 New Zealand.”