NZ Herald
  • Home
  • Latest news
  • Herald NOW
  • Video
  • New Zealand
  • Sport
  • World
  • Business
  • Entertainment
  • Podcasts
  • Quizzes
  • Opinion
  • Lifestyle
  • Travel
  • Viva
  • Weather

Subscriptions

  • Herald Premium
  • Viva Premium
  • The Listener
  • BusinessDesk

Sections

  • Latest news
  • New Zealand
    • All New Zealand
    • Crime
    • Politics
    • Education
    • Open Justice
    • Scam Update
  • Herald NOW
  • On The Up
  • World
    • All World
    • Australia
    • Asia
    • UK
    • United States
    • Middle East
    • Europe
    • Pacific
  • Business
    • All Business
    • MarketsSharesCurrencyCommoditiesStock TakesCrypto
    • Markets with Madison
    • Media Insider
    • Business analysis
    • Personal financeKiwiSaverInterest ratesTaxInvestment
    • EconomyInflationGDPOfficial cash rateEmployment
    • Small business
    • Business reportsMood of the BoardroomProject AucklandSustainable business and financeCapital markets reportAgribusiness reportInfrastructure reportDynamic business
    • Deloitte Top 200 Awards
    • CompaniesAged CareAgribusinessAirlinesBanking and financeConstructionEnergyFreight and logisticsHealthcareManufacturingMedia and MarketingRetailTelecommunicationsTourism
  • Opinion
    • All Opinion
    • Analysis
    • Editorials
    • Business analysis
    • Premium opinion
    • Letters to the editor
  • Politics
  • Sport
    • All Sport
    • OlympicsParalympics
    • RugbySuper RugbyNPCAll BlacksBlack FernsRugby sevensSchool rugby
    • CricketBlack CapsWhite Ferns
    • Racing
    • NetballSilver Ferns
    • LeagueWarriorsNRL
    • FootballWellington PhoenixAuckland FCAll WhitesFootball FernsEnglish Premier League
    • GolfNZ Open
    • MotorsportFormula 1
    • Boxing
    • UFC
    • BasketballNBABreakersTall BlacksTall Ferns
    • Tennis
    • Cycling
    • Athletics
    • SailingAmerica's CupSailGP
    • Rowing
  • Lifestyle
    • All Lifestyle
    • Viva - Food, fashion & beauty
    • Society Insider
    • Royals
    • Sex & relationships
    • Food & drinkRecipesRecipe collectionsRestaurant reviewsRestaurant bookings
    • Health & wellbeing
    • Fashion & beauty
    • Pets & animals
    • The Selection - Shop the trendsShop fashionShop beautyShop entertainmentShop giftsShop home & living
    • Milford's Investing Place
  • Entertainment
    • All Entertainment
    • TV
    • MoviesMovie reviews
    • MusicMusic reviews
    • BooksBook reviews
    • Culture
    • ReviewsBook reviewsMovie reviewsMusic reviewsRestaurant reviews
  • Travel
    • All Travel
    • News
    • New ZealandNorthlandAucklandWellingtonCanterburyOtago / QueenstownNelson-TasmanBest NZ beaches
    • International travelAustraliaPacific IslandsEuropeUKUSAAfricaAsia
    • Rail holidays
    • Cruise holidays
    • Ski holidays
    • Luxury travel
    • Adventure travel
  • Kāhu Māori news
  • Environment
    • All Environment
    • Our Green Future
  • Talanoa Pacific news
  • Property
    • All Property
    • Property Insider
    • Interest rates tracker
    • Residential property listings
    • Commercial property listings
  • Health
  • Technology
    • All Technology
    • AI
    • Social media
  • Rural
    • All Rural
    • Dairy farming
    • Sheep & beef farming
    • Horticulture
    • Animal health
    • Rural business
    • Rural life
    • Rural technology
    • Opinion
    • Audio & podcasts
  • Weather forecasts
    • All Weather forecasts
    • Kaitaia
    • Whangārei
    • Dargaville
    • Auckland
    • Thames
    • Tauranga
    • Hamilton
    • Whakatāne
    • Rotorua
    • Tokoroa
    • Te Kuiti
    • Taumaranui
    • Taupō
    • Gisborne
    • New Plymouth
    • Napier
    • Hastings
    • Dannevirke
    • Whanganui
    • Palmerston North
    • Levin
    • Paraparaumu
    • Masterton
    • Wellington
    • Motueka
    • Nelson
    • Blenheim
    • Westport
    • Reefton
    • Kaikōura
    • Greymouth
    • Hokitika
    • Christchurch
    • Ashburton
    • Timaru
    • Wānaka
    • Oamaru
    • Queenstown
    • Dunedin
    • Gore
    • Invercargill
  • Meet the journalists
  • Promotions & competitions
  • OneRoof property listings
  • Driven car news

Puzzles & Quizzes

  • Puzzles
    • All Puzzles
    • Sudoku
    • Code Cracker
    • Crosswords
    • Cryptic crossword
    • Wordsearch
  • Quizzes
    • All Quizzes
    • Morning quiz
    • Afternoon quiz
    • Sports quiz

Regions

  • Northland
    • All Northland
    • Far North
    • Kaitaia
    • Kerikeri
    • Kaikohe
    • Bay of Islands
    • Whangarei
    • Dargaville
    • Kaipara
    • Mangawhai
  • Auckland
  • Waikato
    • All Waikato
    • Hamilton
    • Coromandel & Hauraki
    • Matamata & Piako
    • Cambridge
    • Te Awamutu
    • Tokoroa & South Waikato
    • Taupō & Tūrangi
  • Bay of Plenty
    • All Bay of Plenty
    • Katikati
    • Tauranga
    • Mount Maunganui
    • Pāpāmoa
    • Te Puke
    • Whakatāne
  • Rotorua
  • Hawke's Bay
    • All Hawke's Bay
    • Napier
    • Hastings
    • Havelock North
    • Central Hawke's Bay
    • Wairoa
  • Taranaki
    • All Taranaki
    • Stratford
    • New Plymouth
    • Hāwera
  • Manawatū - Whanganui
    • All Manawatū - Whanganui
    • Whanganui
    • Palmerston North
    • Manawatū
    • Tararua
    • Horowhenua
  • Wellington
    • All Wellington
    • Kapiti
    • Wairarapa
    • Upper Hutt
    • Lower Hutt
  • Nelson & Tasman
    • All Nelson & Tasman
    • Motueka
    • Nelson
    • Tasman
  • Marlborough
  • West Coast
  • Canterbury
    • All Canterbury
    • Kaikōura
    • Christchurch
    • Ashburton
    • Timaru
  • Otago
    • All Otago
    • Oamaru
    • Dunedin
    • Balclutha
    • Alexandra
    • Queenstown
    • Wanaka
  • Southland
    • All Southland
    • Invercargill
    • Gore
    • Stewart Island
  • Gisborne

Media

  • Video
    • All Video
    • NZ news video
    • Herald NOW
    • Business news video
    • Politics news video
    • Sport video
    • World news video
    • Lifestyle video
    • Entertainment video
    • Travel video
    • Markets with Madison
    • Kea Kids news
  • Podcasts
    • All Podcasts
    • The Front Page
    • On the Tiles
    • Ask me Anything
    • The Little Things
  • Cartoons
  • Photo galleries
  • Today's Paper - E-editions
  • Photo sales
  • Classifieds

NZME Network

  • Advertise with NZME
  • OneRoof
  • Driven Car Guide
  • BusinessDesk
  • Newstalk ZB
  • Sunlive
  • ZM
  • The Hits
  • Coast
  • Radio Hauraki
  • The Alternative Commentary Collective
  • Gold
  • Flava
  • iHeart Radio
  • Hokonui
  • Radio Wanaka
  • iHeartCountry New Zealand
  • Restaurant Hub
  • NZME Events

SubscribeSign In
Advertisement
Advertise with NZME.
Home / Business / Business Reports

Mood of the Boardroom: Liam Dann – Is the Reserve Bank straying from its brief?

Liam Dann
By Liam Dann
Business Editor at Large·NZ Herald·
22 Sep, 2022 04:59 PM5 mins to read

Subscribe to listen

Access to Herald Premium articles require a Premium subscription. Subscribe now to listen.
Already a subscriber?  Sign in here

Listening to articles is free for open-access content—explore other articles or learn more about text-to-speech.
‌
Save

    Share this article

    Reminder, this is a Premium article and requires a subscription to read.

Reserve Bank of New Zealand Governor Adrian Orr. Photo / Mike Scott

Reserve Bank of New Zealand Governor Adrian Orr. Photo / Mike Scott

Liam Dann
Opinion by Liam Dann
Liam Dann, Business Editor at Large for New Zealand’s Herald, works as a writer, columnist, radio commentator and as a presenter and producer of videos and podcasts.
Learn more

OPINION:

With inflation rising to peaks not seen since the 1980s the Reserve Bank has faced intense scrutiny over its pandemic monetary policy response.

Questions have been asked by senior economists — including former Reserve Bank of New Zealand (RBNZ) staff and the previous Governor — about the extent of the stimulus provided to support the economy and the timing of its withdrawal.

Others — including Finance Minister Grant Robertson — have suggested the criticism smacks of 20/20 hindsight. They point to enormous uncertainty caused by the pandemic, the RBNZ being the first major central bank to begin removing stimulus and its aggressive stance in the past 12 months.

While business leaders in the Mood of the Boardroom survey seem wary of laying blame directly and are divided over the extent of policy failures, they do overwhelmingly favour an independent review to assess the RBNZ's response.

Advertisement
Advertise with NZME.

Some 77 per cent said yes to the survey question about the possibility of an independent review.

Just 18 per cent said no and a further 5 per cent were unsure.

"The central banks globally overstimulated economies and we are now paying for it," said one company chair.

Advertisement
Advertise with NZME.

"Our RBNZ was probably no worse than some of the others but they printed too much money and kept printing it way past when they should have stopped."

This view was shared widely by respondents, although many noted that they didn't see the need for a review to target Reserve Bank Governor Adrian Orr or judge him for decisions made at the height of the pandemic crisis.

"This isn't about dumping on Adrian Orr, it's about reviewing how we responded to an economic and social shock on a scale never seen before, where the tools we have worked well, where they fell short and what, with the benefit of hindsight, we can learn from our response when (not if) the next shock comes," said one property company chief executive.

It may not be Covid or even a pandemic; but there would be another shock, he warned.

The review should include the Reserve Bank but also the Government's fiscal response, said one senior realtor.

"This is not critical of them but we have never had to face a crisis like this in recent years and we have to learn what worked or didn't.

"This is what most businesses do, don't they?"

"I don't look to allocate blame to the Reserve Bank in the ways others do — including how they are looking to connect purpose to Māori culture — which I am relaxed about," said Deloitte chair Thomas Pippos.

Advertisement
Advertise with NZME.

But others did express concern that the Reserve Bank was straying from its brief in developing policies around culture and climate change.

One business organisation leader argued that the RBNZ went "off the rails before Covid hit — and then it got worse in the pandemic."

"What is the Reserve Bank doing wading into areas outside their remit? Clawback immediately," said one respondent.

However, at the other end of the spectrum, there were some who questioned the value of a review.

"Hindsight is too easy to be clever with. If a review was to be undertaken it should be forward-looking with scenarios that are transparent to all," said an energy sector chief executive.

"We don't need this government (and their bureaucrats) doing any more reviews," argued another business organisation leader.

The Reserve Bank has already indicated that there are plans for a formal review underway — as part of its standard five-yearly process — and that this will include a report by independent international experts.

But National Party leader Christopher Luxon has said this does not go far enough and has called for a fully independent review.

Another National Party policy call — returning the RBNZ to a sole focus on inflation targeting — also appears popular with business leaders.

The Labour Party moved the RBNZ to a dual mandate — targeting unemployment and inflation in 2018.

Some 59 per cent of Mood of the Boardroom survey respondents said they supported a return to a sole focus on inflation.

But 30 per cent said no and 11 per cent were unsure.

"Dual mandates don't work," said one company chair.

"I suspect they did such a great job of keeping inflation in check for decades that there grew this belief that they could do two things at once (full employment and low inflation). Of course, we now see the folly of that."

Monetary policy was a single instrument and simply couldn't be used to hit two targets, argued a senior banker.

"One of most widely agreed principles in economics is that one needs as many policy instruments as targets."

Some, like Foodstuffs chief executive Chris Quinn, felt the RBNZ shouldn't be "solely" focused on inflation.

But he warned that housing should not be conflated with its core goals.

Others felt there was room for a broader approach.

"Inflation doesn't happen in a vacuum, and nor should policy setting to control it," argued a property sector chief executive.

"Inflation should be the primary focus, but I think 'having regard to' other factors is not just valid, but essential."

Save

    Share this article

    Reminder, this is a Premium article and requires a subscription to read.

Latest from Business Reports

Agribusiness

Strong demand driving NZ primary exports to record high

11 Jun 06:00 PM
New Zealand

Dargaville water crisis: Businesses face losses and residents raise health concerns

31 May 12:09 AM
New Zealand|crime

'She is not going to prison': Woman avoids jail after cousin's fatal mattress fall from car roof

26 May 07:00 AM

Jono and Ben brew up a tea-fuelled adventure in Sri Lanka

sponsored
Advertisement
Advertise with NZME.

Latest from Business Reports

Strong demand driving NZ primary exports to record high

Strong demand driving NZ primary exports to record high

11 Jun 06:00 PM

Dairy export revenue has lifted 16% to a record $27 billion.

Dargaville water crisis: Businesses face losses and residents raise health concerns

Dargaville water crisis: Businesses face losses and residents raise health concerns

31 May 12:09 AM
'She is not going to prison': Woman avoids jail after cousin's fatal mattress fall from car roof

'She is not going to prison': Woman avoids jail after cousin's fatal mattress fall from car roof

26 May 07:00 AM
Premium
Liam Dann: After Orr – is it time for a Reserve Bank reset?

Liam Dann: After Orr – is it time for a Reserve Bank reset?

13 May 05:02 PM
Help for those helping hardest-hit
sponsored

Help for those helping hardest-hit

NZ Herald
  • About NZ Herald
  • Meet the journalists
  • Newsletters
  • Classifieds
  • Help & support
  • Contact us
  • House rules
  • Privacy Policy
  • Terms of use
  • Competition terms & conditions
  • Our use of AI
Subscriber Services
  • NZ Herald e-editions
  • Daily puzzles & quizzes
  • Manage your digital subscription
  • Manage your print subscription
  • Subscribe to the NZ Herald newspaper
  • Subscribe to Herald Premium
  • Gift a subscription
  • Subscriber FAQs
  • Subscription terms & conditions
  • Promotions and subscriber benefits
NZME Network
  • The New Zealand Herald
  • The Northland Age
  • The Northern Advocate
  • Waikato Herald
  • Bay of Plenty Times
  • Rotorua Daily Post
  • Hawke's Bay Today
  • Whanganui Chronicle
  • Viva
  • NZ Listener
  • Newstalk ZB
  • BusinessDesk
  • OneRoof
  • Driven Car Guide
  • iHeart Radio
  • Restaurant Hub
NZME
  • About NZME
  • NZME careers
  • Advertise with NZME
  • Digital self-service advertising
  • Book your classified ad
  • Photo sales
  • NZME Events
  • © Copyright 2025 NZME Publishing Limited
TOP