By Bernard Hickey
Greens co-leader Russel Norman has announced the party has dropped its controversial proposal that the Reserve Bank of New Zealand print money to buy government bonds to pay for the reconstruction of infrastructure in Christchurch.
The National-led coalition has regularly argued in recent months that a Labour/Green coalition would run an irresponsible money printing monetary policy. Labour has pointedly not supported the proposal and it was not included in the recommendations from the Labour/Green/NZ First/Mana Manufacturing Inquiry.
Norman told a news conference in Parliament the policy change came after it received feedback from exporters in the Manufacturing Inquiry and it became clear a consensus position on it with Labour was not possible.
He said a coalition with Labour was now more possible after the Green Party had changed its position, which had been the subject of repeated and heated attack by the government.
Norman released the proposal in October last year. Here's the original release.
"That discussion document also proposed the use of quantitative easing, as has been widely used in other countries, to help lower the dollar," Norman said.
"The feedback we’ve received on that element of our proposal made clear it did not have the broad support it would need to work. New Zealanders expect their politicians to listen, the Greens do listen, and so we’re not pursuing the QE element of our monetary policy package," Norman said.
Meanwhile, the Green Party launched draft of a new Member's Bill to make the Reserve Bank board, rather than the Governor alone, responsible for Official Cash Rate decisions.
“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," he said.
The bill would also require the bank to issue minutes of its policy setting meetings within 14 days of the meetings and that the board include representatives from the export and manufacturing sectors.
(Updated with detail, quotes)