Reserve Bank's advice to Finance Minister Grant Robertson is that current inflation targets remain - but targeting of house prices should be removed from the RBNZ Monetary Policy Committee's remit

I'd say this push is right, that house prices should not come under the RBNZ's remit. Putting it there is more about the Government avoiding it's responsibilities than actually doing its job. 

But I'd like to know if anyone disagrees and why?

Managing inflation and supporting asset speculations are at odds with each other. Drop any protective housing mandate. It should be purely at the mercy of the market.

Thus instead of the central banking narrative that lower rates lead to higher growth, the empirical and verifiable reality is that higher growth leads to higher rates and lower growth leads to lower rates. If rates are the result of growth, they cannot be the cause.

This raises some new questions. Firstly, if it is not interest rates that drive growth, what then? And secondly, why do central banks keep insisting that they are using interest rates as their main monetary policy tool, when this is simply impossible? Recently, central banks have been lowering rates, while proclaiming that this is a measure to stimulate the economy. But the empirically verifiable fact is that they lowered rates, because economic growth has decelerated. Falling growth means interest rates must follow down. And what has been the role of central banks in the growth slowdown preceding the lower rates? We may presume that they had not used their vast powers to engineer economic growth – powers they worked hard to obtain in previous decades, in the form of independence with little meaningful accountability.

Instead of unravelling this mystery, central bankers have been making counter-factual assertions about the causation of interest rates and growth. Yet we know them to be in possession of thousands of highly trained staff and the best quantitative data sources on the economy of anyone. Since the hypothesis of complete incompetence or irrationality is a last resort, it stands to reason to adopt the working hypothesis that central banks have employed these counter-factual assertions on purpose. Two reasons come to mind: Firstly, they are using the interest rate narrative in order to suggest that they are adopting beneficial policies, when this may not really be the case. Secondly, they may in this way be able to distract public attention from the true causal relationships in the economy. In this case, a far less benevolent interpretation of central bank policy becomes suggestive.

As Forder (2002) has argued, obfuscation has served central banks particularly well since they have become so all-powerful: the danger for them in this era of unprecedented powers is that the general public may simply (and rightly) link bad economic outcomes to bad economic policies adopted by central banks, not to the – now far less powerful – governments. In other words, since almost all economic keys have been handed over to the central banks, one can reasonably expect them to be blamed for the economic mess that is such a recurring feature of economic policy during those decades of ever greater central bank power. As a defense mechanism, central banks could be expected to argue that they are doing all in their power to help the economy, while pinning the blame on other actors. But for this to work, observers need to be misinformed about what the true levers of monetary policy are.

A desire by central banks to misinform would explain why they have spent vast resources on “economic research” – pseudo-scientific writings that are often far removed from reality, but are designed to place any blame for the terrible economic performance that they have been responsible for on other actors – preferably the government, fiscal policy or ‘irrational’ and ‘uneducated’ ordinary people who are looking for ‘easy answers’ or seeking ‘populist explanations’, while anyone contemplating the possibility that big banks and central banks might not always look after the public interest and instead might collude in order to put their own objectives first is identified as a ‘conspiracy theorist’. In other words, the “economic research” produced by central banks is usually of a kind that at best looks like political PR to objective observers, if not outright propaganda. Link

I do wonder, if these consultation papers were written today, rather than at the beginning of the year, if the RB would still insist the target band remains 1 - 3% or if they would consider it to be allowed to move  higher?

Inflation under 3% is looking pretty aspirational at the moment.

I'm skeptical that a target of 0% should be considered bad. I'd quite like to not expect my savings to eventually compound into worthlessness.

House prices being incorporated into calculations around inflation - jeez that'd blow the budget!!

No wonder it's called a target. Purely aspirational with no consequences for missing them.

At the moment the inflation targets seem very academic given it's been nowhere near for 18 months.

RB want avoid owning a crash in a housing bubble they created

It's the employment mandate that cooked our goose in 2020. Grant Robertson wanted to palm off the job of fiscal policy onto a handy scapegoat. Monetary policy is a very very broad brush and employment is not a good fit to be managed this way, especially when needs are industry specific such as hospo and tourism as it was then. Specific targeted fiscal support for these industries would have allowed the OCR to remain higher were RBNZ not required to consider this mandate, that's a simple fact. As for the wage subsidy, corporate welfare that once again was way too accessible and spendthrift despite me personally benefiting. Like most business owners we simply could not believe our good fortune from a labour govt. That money is still washing arround the economy like little piggy going to market.

Something for future textbooks to ponder over for sure. 

The RB wants "Robertsons housing interference" bullshit clause removed because...

​​​​​​1. He can see how rooting kiwis major asset/investment base (thier home)will ruin the economy and slow the spending as kiwis feel poorer 

2. Having the GR " screw the hard working Kiwis by killing their biggest asset in order to appease the losers and street sleepers" clause 2.2 completely compromises the RBs ability to drive monetary policy properly.

3. They want to put the responsibility for the housing cluster fu%K back on fatty boy GR.

4. The RB can see, with slowing house sales and a huge amount of new housing in the pipeline, that there is going to be a huuuge housing market crash starting around March 2023.

5. THe experts at RB are also no longer prepared to play God with housing

​​​​​​Now all Adrian Orr has to do is remove the racist Maori clause from his Jahitler induced mandate.

What, no mention of the financial stability mandate? Booms and busts caused by financial speculation and financial institutions too big to fail? Monetary policy will continue to fail if we don't address this elephant in the room.