Latest / Best of Business / Jenee Tibshraeny: NZ Herald Wellington business editor on Nicola Willis revealing legal advice was sought over RBNZ funding

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Jenee Tibshraeny: NZ Herald Wellington business editor on Nicola Willis revealing legal advice was sought over RBNZ funding · Best of Business

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  Speaker 2: The Finance Minister has revealed that there was some top
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  Speaker 2: level legal advice that was sought over the Reserve Bank's
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  Speaker 2: battle with Treasury, and this was overfunding. Nikola Willis revealed
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  Speaker 2: it this morning. She found some of the bank's accounting
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  Speaker 2: methods questionable. I became aware that the Reserve Bank had
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  Speaker 2: engaged in a practice where it was bringing forward under
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  Speaker 2: spins which had the effect of ramping up its effect
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  Speaker 2: of budget. Janatib Trainey is The Herald's Wellington Business editor
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  Speaker 2: and with us Hey Jana Hey, he seems like a
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  Speaker 2: reasonably significant step to get that legal advice and doesn't.
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  Speaker 3: It Well, I guess there was a pretty big debate
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  Speaker 3: that went on at the Reserve Bank and with the Treasury.
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  Speaker 3: The Reserve Bank gets an envelope of funding every five
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  Speaker 3: years from the government effectively, and you know, there are
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  Speaker 3: a couple of ways you can look at that. Look
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  Speaker 3: at that. You can say, well, it can spend that
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  Speaker 3: envelope over the five years as it wishes, or you
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  Speaker 3: can divvy up that envelope year by year and then
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  Speaker 3: if you know, if it underspends one year, it can
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  Speaker 3: carry that underspend forward to the next year and spend
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  Speaker 3: more that year. So that's what the Reserve Bank had
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  Speaker 3: done and Nikola Willis didn't like that. And now under
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  Speaker 3: the new funding agreement that takes effect next month, they
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  Speaker 3: can't carry forward underspends.
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  Speaker 2: Okay, So yeah, now did she get any questions about
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  Speaker 2: Neil Quigley.
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  Speaker 3: She did, And actually, I would just go back to
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  Speaker 3: this funding thing. I thought it was interesting she appeared
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  Speaker 3: before Select Committee and Labor's Barbara Edmonds decided to focus
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  Speaker 3: on this underspend issue. She sounded like she, you know,
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  Speaker 3: was empathetic to the perspective that Adrian or had around this.
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  Speaker 3: And you know, his big argument was that the government
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  Speaker 3: shouldn't get so involved with the Reserve Bank and that
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  Speaker 3: the independence of the Reserve Bank was really important. And
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  Speaker 3: you know, Adrian authought that the government was you know,
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  Speaker 3: flexing a bit too much by trying to troll how
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  Speaker 3: it used its funding. So it was interesting that that
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  Speaker 3: Barbara Edmonds kind of, you know, it seemed like she
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  Speaker 3: was sort of had had some empathy for that perspective.
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  Speaker 3: I'm not sure how well that that that view would
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  Speaker 3: resonate politically, you know, in terms of politicians always try
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  Speaker 3: to get a few hits in these committees. But yes,
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  Speaker 3: she did also ask about Neil Quigley, that's the chair
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  Speaker 3: of the Reserve Bank Board. You know here that you've
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  Speaker 3: talked about this a lot on your show. The way
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  Speaker 3: he handled, you know, communication around Adrianaw's resignation was pretty terrible.
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  Speaker 3: Nicola Willis has continued to say that she thinks the
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  Speaker 3: Reserve Bank should have talked about, you know, not withheld
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  Speaker 3: information about Oh's resignation for as long as it did.
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  Speaker 3: But she hasn't gone so fast to say she doesn't
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  Speaker 3: have confidence in Neil Quigley. She sees she still has
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  Speaker 3: confidence in him, and you know, he's got an important
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  Speaker 3: job to do because they need to appoint a new governor.
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  Speaker 2: Totally and so obviously you need a little bit of stability.
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  Speaker 2: So there is a case for him to stick around
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  Speaker 2: for a little bit. I can see that. But the
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  Speaker 2: Reserve Bank itself doesn't appear to have learned anything about
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  Speaker 2: being more transparent, hasn't because it's still being weird and cagey.
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  Speaker 3: Well, you know, this is the thing. It sort of
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  Speaker 3: shot itself on the foot because of the way it
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  Speaker 3: handled Adrianaw's resignation. It didn't just tell us on the day,
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  Speaker 3: look this is what happened, or it didn't tell us
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  Speaker 3: soon after, look this is what happened. It's not that
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  Speaker 3: this is not some big scandal. Because of that, you know,
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  Speaker 3: we are now paying more attention to everything the Reserve
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  Speaker 3: Bank does. And one of the members of its Monetary
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  Speaker 3: Policy Committee, that's the committee that sets the OCR Prisana Guy,
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  Speaker 3: he did a speech at an Auckland Chamber of Commerce
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  Speaker 3: event a week ago. This speech was newsworthy in my
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  Speaker 3: perspective because it was only the second time that an
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  Speaker 3: external member of that committee gave a speech. It's also
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  Speaker 3: newsworthy because Prosana Guy is someone who some people think
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  Speaker 3: might be the next governor of the Reserve Bank. We
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  Speaker 3: wanted to go along to listen to what he had
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  Speaker 3: to say, and the Reserve Bank said no, They said no.
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  Speaker 3: Media they published some slides that showed what Prisana talked about,
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  Speaker 3: but the speech wasn't live streamed or broadcast. So you know,
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  Speaker 3: that has raised a few eyebrows because whatever anyone on
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  Speaker 3: that committee says can be market sensitive. You know, they
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  Speaker 3: might give insight into you know, what the committee might
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  Speaker 3: do next with the ocr It is good practice for
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  Speaker 3: that information to be widely available.
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  Speaker 1: Now.
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  Speaker 3: I have no reason to believe Prosana said something that
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  Speaker 3: was you know, that would give some people information they
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  Speaker 3: could trade on. But it all just does amount to
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  Speaker 3: this sort of picture of the Reserve Bank being particularly
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  Speaker 3: cagy unnecessarily KG.
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  Speaker 2: Perhaps it's weird in cag Jena. Thanks very much, appreciate it,
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  Speaker 2: Jane to Chirini, The Herald's Wellington Business editor.
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