Labour’s Barbara Edmonds admits error as she challenges Nicola Willis to ‘be honest’ about Reserve Bank saga

Labour’s finance spokeswoman Barbara Edmonds has admitted to making a fundamental mistake as she attacked Finance Minister Nicola Willis for her handling of controversy at the Reserve Bank.

Responding to news Reserve Bank chairman Neil Quigley quit late in the day on Friday, Edmonds incorrectly said in a Facebook post that Quigley had also been a member of the bank’s Monetary Policy Committee.

The committee plays an essential role in the economy, as it is tasked with keeping inflation in check. It sets the Official Cash Rate (OCR) and initiated the Reserve Bank’s Covid-era money printing programme, shortly after it was established under the Labour-led Government in 2019.

Edmonds was embarrassed when the Herald alerted her to the blunder on Saturday morning.

She clarified it was a genuine slip-up, as she did in fact know that Quigley wasn’t a member of the powerful committee that sets the OCR.

She corrected the mistake, which wasn’t picked up by her staff and colleagues.

‘It’s time for Nicola Willis to be honest’

The point of Edmonds’ Facebook post was to call out Willis for being cagey over the circumstances around Adrian Orr’s sudden resignation as Reserve Bank Governor in March.

It took Treasury releasing documents the Reserve Bank wanted withheld, as well as intervention from the Ombudsman, for the Reserve Bank to provide a more detailed version of events on Thursday, which told quite a different story to that presented six months prior.

“It’s time for Nicola Willis to be honest with the public about what she knows, what she has been told about the situation and when. What actions has she taken to manage the situation?” Edmonds said.

When pushed by Newstalk ZB on Friday night, Willis admitted she knew key details about Orr’s resignation, which were kept quiet until Thursday.

She acknowledged she knew Orr had stepped down as governor a week before his resignation, as the board raised a series of concerns with him.

In March, Quigley refused to elaborate on why Orr resigned, only to say it was a “personal decision”.

Then in June, the Reserve Bank explained the issue was that Orr disagreed with the board over the amount of government funding to pitch for.

Willis reiterated she didn’t want to get involved in a legalistic employment issue between Orr and the board and wanted to respect the Reserve Bank’s independence from the Government.

However, she took the opportunity to tell Newstalk ZB listeners she would have asked Quigley to resign, had he not done so himself on Friday.

She also noted she met with Quigley shortly before he resigned, telling him the handling of Orr’s resignation was impacting the Reserve Bank’s reputation.

The press release Willis issued to announce Quigley’s resignation made no mention of this or the Ombudsman compelling the Reserve Bank to be more transparent.

Rather, it said, “Mr Quigley has decided that having overseen a number of key workstreams for the bank, now is the appropriate time to hand over to a new chair”.

Quigley and Orr have been contacted for comment.

Jenée Tibshraeny is the Herald’s Wellington business editor, based in the parliamentary press gallery. She specialises in government and Reserve Bank policymaking, economics and banking.