Debate on Crown Entities, Public Organisations, and State Enterprises — Reserve Bank of New Zealand

I wish to rise to speak on the Reserve Bank of New Zealand financial review, undertaken by the Finance and Expenditure Committee, the extremely hard-working and diligent committee that it is. I want to make a couple of general comments around the work of the Reserve Bank, particularly the focus the Government has had over the last 3½ years, but particularly what has happened since the election and, in particular, also, I would also like to make mention of the current Governor of the Reserve Bank and the announcement made by the Minister of Finance today about the future appointment.

What has happened since the election, and what work has the Reserve Bank been focusing on? Well, the Government is getting its books back into order and setting a path back toward surplus. This is extremely important for the Government. We campaigned on this. But, more so than that, it is important for everyday New Zealanders. You see, not so long ago the Governor of the Reserve Bank made an announcement that he would be keeping the interest rates in New Zealand at a steady rate—one of the lowest we have seen in many, many years. This is great news for New Zealanders, as we look around the world at the many challenges that countries are facing with their economies, and with Governments that are not as single-mindedly focused as this Government is on doing the right thing for New Zealanders and the economy, while there is great havoc being wreaked all over the place. We see it every day in Greece and other parts of Europe and so on.

But the good news about where our interests rates sit at the moment is that mum and dad New Zealanders are paying much less for the money they have borrowed to invest in property and other things than they were 3½ to 4 years ago. I remember at the time returning to New Zealand, having spent some time overseas, as many Kiwis do, and deciding to come back here and stand up and do my part on behalf of other New Zealanders because I was so very concerned at the direction New Zealand was heading in after 9 years of a Labour Government. The first thing I did with my wife and my family was to go and look to purchase a property. We went to the bank to find out what the interest rate would be, and it was over 9 percent—over 9 percent. The member opposite has said “What about jobs?”. Well, when hard-working Kiwis have to pay mortgages, and their interest rates are over 9 percent, actually it is no wonder it is so difficult for them and they find it so tough to get by. Today, the interest rates are set around 5 percent if you want to go and borrow, and what a great difference that makes. So, very much, reducing debt, focusing on Government spending, and making sure that the money that the Government spends on behalf of taxpayers is spent productively and for the very best return for those taxpayers is something that the Government is focused on

Of course we know that the Government books are set to move back towards surplus in 2014-15. This is going to be a very difficult job for us to deliver on. The reason for that is that there are all sorts of uncertainties in other parts of the world, which, of course, will have an impact upon us as a trading nation. But the most important thing we can do here is to continue the work that we have done over the last 3 years, so that New Zealanders, so that businesses, so that the Governor of the Reserve Bank, and so that our country can have confidence that the Government is on the right track, is moving forward, and is taking sound financial management practices extremely seriously in the economy, and so that they, too, can have confidence in the direction that we are moving in.

We had an announcement last week around some of these statistics, and it took many by surprise—increased growth rates. The quarter’s increase of the gross domestic product was 1.1 percent. It took the annual growth to 2.4 percent compared with March 2011. It is very difficult for the world’s economy at the moment. In fact, I think we are probably second, maybe third, in the world when it comes to growth, at the moment. Although that is modest growth, it is better than what was forecast, and, again, I think this shows that New Zealand is slowly but surely moving towards a stronger footing. I would say that I think that this could be patchy as we move forward, because these things do go up and down a little bit. But, certainly, this is to be welcomed, it is welcome news, and I encourage other members of the House to get out and encourage New Zealanders to get on with their lives, to do their jobs, to run their businesses, and together we can slowly move forward.

So what I want to say here is that I want to recognise the Reserve Bank governor, Alan Bollard, for doing a fantastic job for a number of years. He can be very proud of some of the decisions he has taken, and the way that we have been able to work as a Government in line with him. He has a done a very good job in these areas—

Report noted.

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