Parliament's finance and expenditure select committee has appointed Stephen Grenville, a former deputy governor of the Reserve Bank of Australia, as its external adviser for the monetary policy inquiry.
The committee will hear evidence from 32 submitters starting on September 5.
Grenville was well regarded and as anAustralian he would bring a "slightly detached" view to the issues, committee chairman Shane Jones said.
Grenville has turned his mind to the challenges facing monetary policy in New Zealand before. He gave a paper to a forum on the issue organised by the Reserve Bank last year.
He concluded that New Zealand had a variant of world's best practice on monetary policy and it would require more serious problems than were then being experienced to justify a radical departure.
That said, he saw attractions in the idea of a mortgage interest levy, which officials have largely dismissed, and in requiring insurance for housing loans where the loan-to-value ratio is above 80 per cent.
He also suggested that the bank be more forthcoming in pointing out when it thought exchange rates or house prices were too high, and that it should follow the RBA's practice of intervening in the foreign exchange market to lop the peaks and fill in the troughs of the exchange rate. The RBNZ has taken some of this advice.
