Two academics and a long time trade unionist are the ‘external’ members on the new Monetary Policy Committee that from May 8 will be responsible for setting the Official Cash Rate.
The externals are Professor Caroline Saunders from Lincoln University, Professor Bob Buckle from Victoria University and Peter Harris, former CTU Economist. Saunders has been appointed for four years and the other two members for three-year terms.
The other four members of the committee are senior Reserve Bank staff, including Governor Adrian Orr who will chair the committee.
The committee has been thrown straight into the public eye with Orr’s Wednesday shift of the RBNZ to an ‘easing bias’ and amid expectation that the very first meeting of the committee in May could include an interest rate cut.
This is the statement from Finance Minister Grant Robertson:
A new independent decision-making body at the Reserve Bank brings a broad range of experience to important decisions like setting interest rates and how monetary policy can support maximising employment in the New Zealand economy, Finance Minister Grant Robertson says.
The members of the new Monetary Policy Committee (MPC) were announced today, delivering on the Coalition Government’s plan to reform and modernise the Reserve Bank Act.
“The MPC members have a wide range of experience, covering monetary policy, agribusiness, international trade, private business and labour market issues,” Grant Robertson said.
“The Coalition Government previously expanded the Reserve Bank’s mandate to support maximum sustainable employment alongside maintaining price stability. The expert seven-member MPC will make the monetary policy decisions needed to achieve those goals.
“The MPC follows international evidence on the benefits of committee decision-making structures, and brings New Zealand into line with international best-practice,” Grant Robertson said.
The MPC was established by the Reserve Bank of New Zealand (Monetary Policy) Amendment Act 2018. It replaces the previous structure under which the Reserve Bank Governor alone was responsible for the Bank’s monetary policy decisions.
The committee is a combination of four experienced Reserve Bank economists and three outside experts:
·Reserve Bank Governor Adrian Orr and Deputy Governor Geoff Bascand are the two ex officio internal members. Christian Hawkesby and Yuong Ha have been appointed as the other two internal members. The Governor will Chair the MPC.
·On the recommendation of the Board of the Reserve Bank, the Minister of Finance has appointed Caroline Saunders, Bob Buckle and Peter Harris as the external members.
Reserve Bank Board Chair Neil Quigley said the revamped MPC and its operating model are designed to ensure monetary policy decisions are robust, fully informed, and appropriately transparent and challenged.
“These include the inclusion of external members into the MPC, the Bank Board’s oversight of the MPC functioning, and the publishing of the MPC’s minutes – all of which are global best-practice for decision making under uncertainty. The operational independence of the Reserve Bank’s monetary policy decision-making is also appropriately maintained,” Neil Quigley said.
Reserve Bank Governor Adrian Orr congratulated the inaugural external members of the new MPC. “The team at the Bank look forward to working constructively together in pursuit of Bank’s refreshed monetary policy remit,” Adrian Orr said.
External members are appointed to the MPC for terms of up to four years. Terms of the inaugural members have been staggered to provide for continuity on the committee over time. The Governor and Deputy Governor are ex-officio members who remain members of the MPC until the conclusion of their terms as officers of the Bank. The other internal members are appointed for terms of up to five years. All members may be reappointed for one subsequent term.
The external and new internal members start their terms on 1 April 2019. The MPC’s first scheduled monetary policy decision will be the Official Cash Rate decision and Monetary Policy Statement on 8 May 2019.
External member bios:
Professor Caroline Saunders holds a PhD in Agricultural Economics. She is currently Professor of International Trade and the Environment and Director, Agribusiness and Economics Research Unit, at Lincoln University. Professor Saunders is a Director on the board of Landcare Research NZ, and sits on the Biosecurity Ministerial Advisory Committee. She is a former director of AgriQuality and Council member for the Royal Society of New Zealand. Professor Saunders has been appointed for a four year term.
Professor Bob Buckle is Professor Emeritus at Victoria University of Wellington. He was Pro Vice-Chancellor and Dean of the Victoria Business School from 2008 to 2017; Principal Adviser at NZ Treasury from 2000 to 2008, Chair of the Economic Committee of APEC, Chair of the Government’s 2009-10 Tax Working Group, and Chair of the External Panel for Treasury’s Long-Term Fiscal Statement in 2012. He chairs review teams for European Foundation for Management Development (EFMD) and is an ambassador for Victoria Business School’s ‘Great Futures’ scholarships. Professor Buckle has been appointed for a three year term.
Peter Harris is an economist with extensive experience in the trade union movement, including a decade as CTU Economist. He is currently an economic consultant. He has been a member of the Electricity Commission and an associate member of the Commerce Commission. He was Economic Advisor to the Minister of Finance from 1999 to 2002. He was a management head of the Public Service Association, and a Board Member of PSIS Ltd and the NZ Universities Academic Audit Board. He led the Government’s Savings Product Working Group in 2004. He is also a member of the Wellington City Council Finance Audit and Risk Committee. Mr Harris has been appointed for a three year term.
Internal member bios:
Adrian Orr is the Governor of the Reserve Bank. Before re-joining the Bank as Governor, Mr Orr held the positon of Chief Executive Officer at the Guardians of the New Zealand Superannuation Fund. Prior to this he was the Reserve Bank’s Deputy Governor and Head of Financial Stability, and has held Chief Economist roles for Westpac Banking Corporation and National Bank, as well as economist and analyst roles for The Treasury and the Organisation for Economic Cooperation and Development.
Geoff Bascand is the Deputy Governor and General Manager of Financial Stability at the Reserve Bank. Before joining the Bank, Geoff was the Government Statistician and Chief Executive of Statistics New Zealand. He had previously worked in senior management roles in the Department of Labour and the New Zealand Treasury, and was a staff economist at the International Monetary Fund.
Christian Hawkesby is Assistant Governor and General Manager of Economics, Financial Markets and Banking at the Reserve Bank. He was previously a senior member of the Harbour Asset Management team. Mr Hawkesby worked as Head of Market Intelligence for the Bank of England during the global financial crisis. Mr Hawkesby has been appointed for a five year term.
Yuong Ha is Manager for International and Markets Analysis at the Reserve Bank. His career has spanned several economics and financial markets roles at the Reserve Bank, as well as secondments to the IMF and Statistics NZ. Mr. Ha has been appointed for a one year term to ensure that the MPC is fully resourced whilst the role of Chief Economist at the Reserve Bank is vacant.