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 / Economy / Official Cash Rate

Overhaul of Reserve Bank outlined: Employment to be added as objective

Nicholas Jones
By Nicholas Jones
Investigative Reporter·NZ Herald·
6 Nov, 2017 09:50 PM4 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

Finance Minister Grant Robertson (left) and Acting Reserve Bank Governor Grant Spencer signing the policy targets agreement today. Photo Nicholas Jones

Finance Minister Grant Robertson (left) and Acting Reserve Bank Governor Grant Spencer signing the policy targets agreement today. Photo Nicholas Jones

Finance Minister Grant Robertson has released details of a review of the Reserve Bank that will broaden the focus of the bank from controlling inflation to include employment.

The review will also work towards changing the model for monetary policy decisions to a committee model.

Robertson said the review would be undertaken in two phases, with an expert advisory panel to provide input.

"Phase one of the review will focus on the election commitments made by Labour to add maximising employment to the price stability of the bank, and to provide for a committee decision-making model for monetary policy decisions," Robertson said.

"In addition, the review will consider whether changes are required to the role of the Reserve Bank board as a consequence of the alterations to the decision making model."

Advertisement
Advertise with NZME.
Advertisement
Advertise with NZME.

The NZ dollar held steady following the release of the terms of review, and is currently trading at $0.6945 - a sign that markets were unfazed and saw no surprises.

Robertson said the work was important for New Zealand.

"Our monetary policy framework with its focus around price stability and inflation control has served New Zealand well in general.

Advertisement
Advertise with NZME.

"There has been significant pressure on monetary policy in recent years, particularly in wake of the global financial crisis. In addition, it is my view that monetary policy should play its part in the overall economic goals of our Government."

Robertson said the operational independence of the bank would remain, and he did not accept that broadening its objectives would make inflation rises more likely.

"We are proposing to retain the 1-3 per cent band."

Asked whether the changes could mean lower interest rates for Kiwis with mortgages, Robertson said the goal was to provide stability but those decisions were for the bank.

Discover more

Business

Butter prices soften from record highs

07 Nov 12:50 AM
Official Cash Rate

Market relieved as Govt sets out Reserve Bank plan

07 Nov 05:06 AM
Banking and finance

Super Fund boss Adrian Orr named new Reserve Bank Governor

11 Dec 02:55 AM

"It is true that in other jurisdictions they have to weigh up the different measures they look at...my view is the bank understands the importance for all New Zealanders of stability and certainty in outcomes."

In phase two, the Reserve Bank and Treasury will work together to "produce a list of areas where further investigations of the bank's activities may be desirable". That list will be outlined by early next year.

New Zealand First's coalition deal with Labour included an agreement to "review and reform the Reserve Bank Act". Today's review outline doesn't go as far as moving towards a so-called "Singaporean model" which leader Winston Peters wanted.

Robertson also re-signed the current policy targets agreement (PTA) with the Acting Governor of the Reserve Bank, Grant Spencer.

Opposition leader Bill English said it would be misleading for the Government to claim that reforming the Reserve Bank Act would greatly improve the economy.

"In an economy that's been growing at 3 per cent, [and should] continue to do so for the next three or four years, they should be careful about making changes that are unnecessarily disruptive.

Advertisement
Advertise with NZME.

"It's hard to tell whether they are trying to do some window-dressing or make some fundamental change. The lesson from around the world is that the decisions of central banks are fairly similar, even if you include things like employment and exports.

"But we've yet to see what it is they're actually proposing. There's a range of signals from business as usual through to quite radical change, so it's up to the Government to explain what it wants to achieve with a review."

National finance spokesman Steven Joyce said Labour needed to ensure there remained complete clarity over the bank's primary role.

"The bank already takes employment into account when setting interest rates so this makes Mr Robertson's plan to introduce maximising employment as a second objective for the bank redundant at best, and potentially confusing.

"Monetary policy can only work successfully alongside appropriate fiscal and microeconomic policy settings and these are controlled by the government of the day. Mr Robertson needs to be aware he won't be able to put in place policies that reduce employment and then blame the Reserve Bank if they can't achieve full employment."

Save

    Share this article

Latest from Official Cash Rate

Premium
Official Cash Rate

Rates on hold: What the Reserve Bank's decision means for Kiwis

09 Jul 06:00 AM
Business|economy

Reserve Bank keeps OCR on hold at 3.25%

09 Jul 02:05 AM
Premium
Official Cash Rate

Economists divided over Reserve Bank's next OCR call

06 Jul 05:00 PM

From early mornings to easy living

sponsored
Advertisement
Advertise with NZME.

Latest from Official Cash Rate

Premium
Rates on hold: What the Reserve Bank's decision means for Kiwis

Rates on hold: What the Reserve Bank's decision means for Kiwis

09 Jul 06:00 AM

The Reserve Bank kept the OCR at 3.25%, amid international uncertainty.

Reserve Bank keeps OCR on hold at 3.25%

Reserve Bank keeps OCR on hold at 3.25%

09 Jul 02:05 AM
Premium
Economists divided over Reserve Bank's next OCR call

Economists divided over Reserve Bank's next OCR call

06 Jul 05:00 PM
'Least upbeat': Construction sector struggles as demand weakens

'Least upbeat': Construction sector struggles as demand weakens

01 Jul 12:41 AM
Solar bat monitors uncover secrets of Auckland’s night sky
sponsored

Solar bat monitors uncover secrets of Auckland’s night sky

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