Labour leader Phil Goff today has outlined his party's monetary policy, saying it would require the Reserve Bank to pursue broader objectives while retaining its independence and focus on inflation.

In a speech to the Federated Farmers annual conference in Invercargill, Goff said he already had a bill drafted to enact changes in the Reserve Bank.

New Zealand needs policy that better supports exports, which have been disadvantaged by high interest rates, and investment in "job-rich production and enterprise".

"The heavy trade in our currency comes at the price of a highly volatile kiwi dollar. And the volatile dollar makes the business environment riskier for you and for others involved in export business."

It would take more than a single policy response, he said.

Supportive domestic policy and investment in better skills and research and development were part of it, Mr Goff said.

"But we also need a more supportive monetary policy that helps rebalance our economy."

Under Labour's proposed changes the Reserve Bank would remain independent and retain its focus on inflation but would also pursue broader objectives.

Other countries had more than one policy for their central banks, said Goff.

Australia requires its Reserve Bank to aim for a stable currency, full employment and the economic prosperity and welfare of Australians.

"The bill I have had drafted will introduce the same outcomes for our Reserve Bank."

Labour would also give the Reserve Bank more tools, possibly including prudential supervision which would allow it to regulate banks' overall lending, he said.

That could help the Reserve Bank better respond to asset bubbles like those which helped create the global financial crisis.

"I firmly believe that if the Reserve Bank had better powers, it wouldn't need to crunch farmers and other exporters to restrain house price bubbles in Auckland," Goff said.

Labour associate finance spokesman David Parker said the Reserve Bank's authority needed to be clarified to ensure it could use tools such as prudential supervision to support monetary policy.

"Faced with rapid credit expansion, such as that in recent years, the change would cause the Reserve Bank to use prudential ratios, rather than rely solely on interest rates.

"This would be better for the export sector. It would reduce the reliance of the Reserve Bank on interest rates (in itself a good outcome) while having a moderating effect on the exchange rate," Parker said.