Finance Minister Bill English has publicly released a letter of expectations he sent to the Reserve Bank board and is seeking to play down suggestions he has been concerned about the central bank's performance.
The release of the letter by English followed publicity about it after documents released under the Official Information Act to Bloomberg and then more widely showed Treasury recommending English send the board a formal statement of expectations in a letter, including around the areas of whether the Governor Graeme Wheeler's performance on monetary policy was meeting the Policy Targets Agreement.
The actual letter to RBNZ chairman Rod Carr on November 23 last year is similar to the draft versions that were released earlier. And it does include a paragraph outlining how the duties of the RBNZ board include keeping under review the performance of the Governor, as well as another paragraph saying that "greater visibility of the board's activities throughout the year" would be welcome "and I would be interested in any suggestions you have to facilitate that". The letter also spoke of establishing six-monthly meetings between the chairman and English.
"In advance of those meetings, I invite you to share any other documents regarding the bank's performance which would support the discussion," English said in the letter.
In a statement accompanying release of the letter, English said it had been prepared "after The Treasury identified an opportunity to bring the accountability framework into line with other Crown agencies".
“This change reflects the Government’s focus on good public sector practice and has not been driven by any concerns with the Reserve Bank’s performance,” English said.
Ministers "typically send letters of expectation to the Boards of entities in their portfolio", he said.
Letters of expectation from the Minister to the boards of State Owned Enterprises are a regular occurrence, but the Reserve Bank's special status as a statutorily independent body with a special Policy Targets Agreement between the Minister and a single decision maker in the Governor has meant there has previously been no such letter. The letters to other SOEs often include detail about expected dividends and can be quite prescriptive.
English has commented with various degrees of frustration over the last year about inflation being below the 2% midpoint in the PTA for more than four years, which has coincided with the Reserve Bank's short-lived hike in interest rates in 2014 and the currency's stubborn strength despite slumping dairy prices.
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English has commented with various degrees of frustration over the last year about inflation being below the 2% midpoint in the PTA for more than four years, which has coincided with the Reserve Bank's short-lived hike in interest rates in 2014 and the currency's stubborn strength despite slumping dairy prices.
Those with money to play with are voting with their feet, believing central banks are past the sell by date when it comes to goodwill and actions that can be associated with credible outcomes.
Australia’s sovereign wealth fund increased the amount of cash it holds to almost one quarter of its A$117.4 billion ($91 billion) portfolio as it says global central banks have less firepower to respond to economic weakness. Read more
I will repeat...instead of deleting my Double Post...
Mr English..
If you screw one faction, with brains, do not ever expect them to spend up large like a MP's expenses account. It will never work. Why should they keep you layabouts in the style you have all become accustomed to.
Get a real job.
I thought he was going to tell them to keep some profits here to shore up the books, to stop lending so much into a high risk housing bubble, smack them across the head for all the bad dairy debt and to make sure they never get into an OBR event or there will be hell to pay.
Nah, to easy, lets just screw the savers again.
peoples' champion
https://www.youtube.com/watch?v=BCn7Kp2M8Cc
Economics explained
this is one government department trying to blame the other for not hitting there targets.
treasury sorry bill with no inflation we can not get an increase in the GST take
not sorry bill your policies suck and there is no growth apart from the money brought in by immigrants
and in other news as reported by Steve McKnight (Author/investor):
"Earlier today, the Victorian Treasurer - Tim Pallas - announced that from 1 July foreign purchasers of Victorian real estate will pay the normal stamp duty PLUS an extra 7% of a property's value. It should be noted that this is an increase (to 7%) from the the already imposed 3%.
As an example, an Aussie citizen buying a $700,000 home in Victoria would pay stamp duty of $37,070. A foreigner buying today would pay $58,070. A foreigner buying after 1 July 2016 will pay $86,070. That's 12.29% of the purchase price. Ouch.
There is also a nasty little increase to land tax too for 'absentee owners' - an increase from 0.5% to 1.5%"
Looks like someone has finally listening to Joe Public's stamp duty call after 10+ posts. Shame it isn't all investors and isn't NZ. Love the idea of a land tax. Why are we not following Australia's lead. Lets hope we don't end up with egg on our face.
Attached a bloomberg link. Hope thats a worthy news source.
http://www.bloomberg.com/news/articles/2016-04-21/foreigners-face-highe…
Why are they taxing only the land. It should be based on the total value. As you say below these foreign buyers contribute nothing else to the country who's tax payers finance all the benefits of the country in which they enjoy by owning property. Even if they fully paid their fair share of running the country, it could still be argued that they should be charged an extra annual fee for the privilege of owning property there and offset some of the negative impact that they have on the locals. If you want to argue that they have no negative impact, ask any would be first time home buyer in Sydney or Auckland.
This was a good point from the bloomberg article :
“It’s only fair that foreign buyers of residential real estate, who enjoy the capital growth as a result of Victoria’s livability and the amenity of our cities, contribute to the maintenance of government services and infrastructure,” Pallas said in a statement. Foreign buyers don’t pay other taxes such as payroll and the goods and services tax, known as GST.
National should have implemented a similar tax. Imagine the millions of tax that could have been collected and put towards infrastructure.
Clearly this government is not working for the interests of average New Zealanders. The beneficiaries of their governance are a small % at the top of the economic spectrum and just about any body else overseas, particularly those with a few dollars. It is hard to find an honest explanation for this. The Australians may have their problems, but at least there is some obvious honest loyalty in how they look out for the interests of their citizens.
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