Headline: Green Party launches new bill to make Reserve Bank more transparent
“Increased transparency will result in stronger financial markets making them less prone to shocks.”
The Green Party today launched an exposure draft of new legislation to bring the Reserve Bank into the twenty-first century.
The draft legislation, in the form of a Member’s Bill, will make the Reserve Bank Board responsible for setting the Official Cash Rate (OCR), not the Governor alone, and require the Board to publish its minutes within a fortnight of meeting.
“No other country in the OECD gives full responsibility for the OCR decision to one person – the Reserve Bank Governor,” said Green Party Co-leader Dr Russel Norman.
“This is antiquated. It leads to poorer decisions, decisions which don’t reflect the wider economic interests at stake when the Official Cash Rate is set.
“This draft bill will bring the Reserve Bank into the twenty-first century by making the Reserve Bank Board accountable for setting the OCR, rather than the Governor alone.
“In Government, we would also ensure that the Board includes representatives from the export and manufacturing sectors so that Reserve Bank decisions represent the broader economy,” Dr Norman said.
As part of the Green Party’s commitment to open and transparent government, Dr Norman yesterday released over a hundred pages of previous Reserve Bank Board minutes obtained under the Official Information Act. Another tranche of minutes will be released shortly.
“My bill will also make it mandatory for the Bank to release its Board meeting minutes within a fourteen days enhancing the Bank’s transparency and allowing for better public scrutiny of their decisions,” Dr Norman said.
“The UK, US, and Australian central banks all publish their minutes within a fortnight of meeting.
“The minutes detail important economic challenges that the Bank is attempting to address through their monetary policy settings.
“Increased transparency will result in stronger financial markets making them less prone to shocks.”
Dr Norman has invited public feedback on his draft legislation and expressed a hope that these largely uncontroversial modernisation measures will be supported by all parties.
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