Nicola Willis says it is the regular practice of Finance Ministers tomeet with the Reserve Bank (RBNZ) governor before a Monetary Policy Statement (MPS), which the central bank was also deliberating on in the weeks before Orr‘s resignation.
“Mr Orr did not discuss his intention to resign at any of these meetings,” the Finance Minister told the Herald this week.
Little information has been released about the reason for the resignation, with Orr refusing to do interviews with media. Chair Neil Quigley has said it was a personal decision by Orr and there were no conduct issues at the time.
As theHerald has previously reported, Willis met with Orr on February 24, less than two weeks before the governor‘s bombshell resignation on March 5.
That followed multiple requests from the minister‘s office for a meeting, with Willis wanting to discuss bank capital settings and the RBNZ’s funding agreement.
However, it has not been so widely reported that Willis had several other meetings and conversations with Orr and Reserve Bank officials in the weeks prior.
The Herald requested details about these meetings under the Official Information Act in April, but Willis’ office has extended its timeline to respond until June because it needs to make consultations.
Meanwhile, the Herald also asked the Reserve Bank for information related to Orr‘s resignation.
The bank has decided it will provide only a summary because of the volume of the information and the amount of material that it says needs to be withheld. That’s expected to be released at the end of the month alongside part of what it says is a paper from RBNZ’s general counsel to the RBNZ board about the resignation. No further details were provided.
Adrian Orr resigned in March and it's still not quite clear why. (Image: NZME)
According to her proactively released diary for the month of February, Willis met with Paul Conway, the bank’s chief economist, and officials on February 4.
On February 18, the diary shows Willis met with Orr and the Prime Minister. Christopher Luxon’s diary also mentions the attendance of the secretary to the Treasury, Iain Rennie.
According to an email from Orr to Willis’ office on February 5, this was a regular meeting held before the Reserve Bank delivered its MPS. The MPS was delivered alongside an Official Cash Rate (OCR) decision on February 19, the day after their meeting.
An email from Treasury to Willis’ office, obtained by the Herald, shows proposed talking points for the meeting.
They include asking the governor about changes to the economy since the last MPS, risks about inflation, the implications of global trade frictions, and the possible impacts of US tariff announcements.
Willis’ diary also shows she had a phone call with Orr the next day, hours before the OCR announcement.
The next recorded meeting between Willis, Orr and Quigley is the February 24 one. Emails obtained under the Official Information Act show this followed several requests by Willis’ office in early February to discuss bank capital settings.
The governor‘s office said he would be unable to attend suggested dates and times, highlighting that he was involved in preparing for the MPS.
Eventually, Orr himself responded to Willis’ office, apologising for “being so difficult to nail down for what appears a simple meeting request”.
“The Monetary Policy week is sacrosanct to the Monetary Policy Committee’s independence and deliberately so to protect the minister – amongst other parties – and NZ’s financial reputation,” he said.
“This makes meetings during this period difficult, unless urgent and necessary. I can’t assess either based on the information to date. Please understand I am here to assist but need to act appropriately.”
He explained that bank capital was a “wide and long-running topic” and others from the bank could assist sooner “if critical”.
“I am fine to discuss post MPS, or via a written briefing, or via staff outside of the MPC if more urgent. We have significant interaction with the minister which we respect and appreciate. We have several topics on the boil with the minister, so a more general discussion post MPS would be greatly appreciated.”
Finance Minister Nicola Willis would not elaborate on the reasons for Orr's resignation in March. Photo / Mark Mitchell
Despite that, Willis’ office continued to push for a meeting before the MPS.
Orr again responded saying he wouldn’t be able to discuss bank capital issues until after MPS deliberations, but noted he had a regular pre-MPS discussion coming up with the minister (the meeting on February 18). Eventually, the two offices settled on February 24.
“Do not give the purpose of the meeting,” Willis said.
Under questioning last week from Labour‘s finance spokeswoman, Barbara Edmonds, current Reserve Bank governor Christian Hawkesby – who was also at the February 24 meeting – said he couldn’t recall details of it.
The diary also shows the minister met with officials from the Reserve Bank on February 26.
Willis told Herald this week that the meeting on February 18 was “the regular meeting that occurs to discuss the economic outlook prior to the Reserve Bank issuing a Monetary Policy Statement”.
“The phone conversation the following day continued the long-established practice of the governor advising the Finance Minister ahead of time of the Monetary Policy Committee’s decision,” she said.
“Mr Orr did not discuss his intention to resign at any of these meetings.”
She told reporters last week that occasionally meeting with a Reserve Bank governor has been the practice of previous Finance Ministers to discuss their work programme.
Asked why it was so important to try to meet with Orr in early February, Willis said she was conscious she was making public statements about the bank capital issues and “I wanted to test with the Reserve Bank governor his views”.
“This is a decision that the Reserve Bank governor has come to. And it is therefore for him to characterise,” she said.
Willis said the Treasury’s Iain Rennie had informed her the RBNZ board had been in conversations with Orr about a possible resignation. She said she’d been aware of these discussions in the days prior.
Orr‘s resignation was brought forward several days. Documents released under the Official Information Act suggest Orr‘s departure was due to be announced on March 10, but it ended up being on March 5.
Since the resignation, the Reserve Bank has said it is considering loosening its controversial bank capital rules, which Orr had defended. The board made the decision to review the multibillion-dollar rules, which are in place to ensure banks have enough capital to withstand a major shock.
Jamie Ensor is a political reporter in the NZ Herald press gallery team based at Parliament. He was previously a TV reporter and digital producer in the Newshub press gallery office.
