Prime Minister can’t define medium term

Tue, 26 Jul, 2022

“How can the Reserve Bank Governor tell what his goal is when the Prime Minister can’t even explain it in Parliament,” asks ACT Leader David Seymour.

“The Policy Targets Agreement used to tell the Governor ‘hit this target by this quarter or you’re fired.’ Now it says achieve this target in the ‘medium term’ while having regard to five other things. He’s accountable for everything and nothing, and it cost Kiwis billions.

“Today in Parliament I asked Jacinda Ardern to define “medium term” and she couldn’t. If the Prime Minister can’t explain it, and it’s her Government who set the target, how on earth is Adrian Orr meant to know what it means?

“Early Policy Targets Agreements between the Minister of Finance and the Reserve Bank set specific targets with specific timeframes. For example, the first Policy Targets Agreement gave the Reserve Bank Governor 18-Months to get inflation from seven per cent down to two per cent, or have their position reviewed.

“As released in our cost of living document last week, ACT says we need to give the Reserve Bank Governor real targets.

“I also asked the Prime Minister whether her cost of living payment, discounted public transport and petrol policy would be inflationary – something she couldn’t deny.

“If the Prime Minister is going to set targets, she needs to understand what she’s asking of them.

“ACT would Restore monetary policy credibility to the Reserve Bank by returning its mandate to solely taming inflation, allowing the appointment of monetary policy experts from New Zealand and abroad, and applying stricter scrutiny in future before granting Crown indemnities.”