New Treasury role for Westpac chief economist Dominick Stephens

Westpac chief economist Dominick Stephens. Photo / NZ Herald

Westpac chief economist Dominick Stephens says he is "excited by the opportunity to spend time at the centre of public policy making" as part of a 10-month secondment to Treasury.

Stephens will take-up the temporary position with Treasury in the role of Deputy Secretary Chief Economic Adviser.

In the new role he would be "responsible for ensuring that Treasury's policy advice on raising New Zealand living standards is supported and strengthened by sound economic theory and evidence," he said.

Stephens will be filling in for incumbent Tim Ng who is on a study sabbatical, and resumes his role next January.

"It's a broad role that will, hopefully, allow me to work on a wide range of issues.

"I'm personally very interested in the Treasury's Living Standards Framework, which feeds into the Government's Wellbeing Budget."

The Living Standards Framework - developed by Treasury in 2011 - seeks to broaden the outlook of economic policy makers to consider natural capital, human capital and social capital as well the traditional financial.

It has been fundamental to current Finance Minister Grant Robertson' approach to producing his Wellbeing Budgets.

Stephens said he was looking forward to learning more about public policymaking and fiscal policy in New Zealand, which would "hopefully add another string to my bow as an economist".

Stephens began his career at the Reserve Bank of New Zealand before joining the Westpac NZ Economics team in 2006.

He has been a prominent voice in economic debate in the past few years and was one of the most optimistic forecasters last year as Covid-19 hit.

However, he and his team recently forecast that New Zealand would slip back into "technical recession" territory with GDP to fall 0.7 per cent over the six months to March.

Stephens has advocated strongly for a capital gains tax and, lately, argued that low interest rates are the primary driver of the house price boom.

Last week he published a report that suggested the latest house price boom had now effectively peaked, that enough houses were now being built and prices were likely to fall in coming years as interest rates started to rise.

Meanwhile, Treasury has faced criticism in the past few years for lacking depth in its economics team.

Think tank The NZ Initiative has argued that the weighting of Treasury's senior managers was drifting away from those with training in economics.

Michael Gordon will be Acting Chief Economist in Stephens' absence, having been second-in-charge of the Economics team since 2011.