Adrian Orr has been reappointed as Reserve Bank Governor for another five years in a move that has inflamed the opposition parties, with the National Party saying it is "appalled".
Finance Minister Grant Robertson announced the reappointment on Tuesday, saying he was "pleased to appoint Adrian for another five-year term" effective from March 27, 2023 following the "unanimous" recommendation of the RBNZ board. His current five year term expires in March.
"Adrian has demonstrated the skills, knowledge and experience to help steer the financial system through the 1-in-100 year economic shock of the pandemic. I am happy to endorse the recommendation of the board. I have full confidence that he will continue to display the same integrity and leadership in performing his duties as Governor in what is still a challenging environment," Robertson said.
It is fair to say that Orr has been a polarising presence since starting in the role in 2018.
The timing of the reappointment announcement will likely irk the National Party - coming as it does just two days before a major five year review of the RBNZ's handling of monetary policy is due to be released.
This review, the first since changes to the Reserve Bank Act in 2018, will look at various contentious issues, such as how the RBNZ handled the onset of Covid, with the massive monetary policy stimulus that was applied in 2020, including the buying of $53 billion of government bonds and the funding for lending (FLP) programme offering billions of dollars of cheap loans to banks.
There has been the strong criticism levelled that such actions have helped to lead to New Zealand's current 7.2% inflation, the extreme house price rises of 2020-21 and now rising interest rates - with the RBNZ having raised the Official Cash Rate by 275 basis points (to 3.5%) so far in 2022 and with another 75 basis-point rise largely expected later this month.
National had earlier suggested a separate "independent" review of the RBNZ's actions.
And on Tuesday National Party Finance spokesperson Nicola Willis said the party was "appalled" by Robertson’s decision to re-appoint Orr without first completing an independent review of the central bank’s performance.
"We have repeatedly urged the Government to conduct an independent review of the Reserve Bank’s performance before endorsing the Governor for another five years. Re-appointing him without first completing such an inquiry is a serious mistake.
"In recent years, Adrian Orr as the Chair of the [RBNZ] Monetary Policy Committee signed off on an extraordinary programme of money printing and cheap lending that pumped tens of billions of dollars into the economy. That programme directly contributed to house prices rising 28% in one year, inflation rising to a 32-year high, and record bank profits.
"New Zealanders now suffering through a cost of living crisis are owed some answers. Was a more careful monetary policy approach warranted? Has the Bank fulfilled its mandate? Did Orr get it wrong?
It seems entirely likely the National Party would have sought to use the release of this review to further lobby against Orr's reappointment. Robertson's announcement appears timed to head that off.
Recently National's leader Chris Luxon stated a preference for Orr to be given a 12-month extension to his term till after the 2023 election.
That would then give a new government the opportunity to appoint the the next governor. Luxon had said he would be unhappy to become prime minister with Orr in place for another five years.
ACT Party leader David Seymour said despite "a term of poor leadership, poor focus and poor outcomes", Adrian Orr has "somehow" been reappointed.
"In September I sent Finance Minister Grant Robertson an extensive letter outlining the many reasons we can’t afford another term of Adrian Orr in the role.
"He has shown poor leadership throughout his term, punctuated by high staff turnover and a failure to accept any responsibility for these issues.
"ACT has made it clear it has no confidence in Adrian Orr, and with polls showing we are on track to play a big role in the next Government, Grant Robertson should not have appointed him for a full term."
This is the statement from Finance Minister Grant Robertson:
Adrian Orr has been reappointed as Reserve Bank Governor.
"Following the Reserve Bank Board’s unanimous recommendation to me, I am pleased to reappoint Adrian for another five-year term, effective from 27 March 2023," Grant Robertson said.
"The Reserve Bank has been undergoing a considerable period of change since Adrian’s appointment in 2018. The Reserve Bank of New Zealand Act 2021 came into force in July this year and has changed how the Bank operates and is governed. This has led to considerable change in the Bank’s strategy, people and culture.
"As the Governor, Mr Orr has been instrumental in leading this change and his reappointment will allow him to carry on and ensure these changes are bedded in.
"In light of global conditions, this is also a time when stability and continuity are paramount for the Bank."
Under the Reserve Bank Act, the Bank’s main objectives are to achieve and maintain stability in the general level of prices over the medium term, support maximum sustainable employment, protect and promote the stability of New Zealand’s financial system.
"Adrian has demonstrated the skills, knowledge and experience to help steer the financial system through the 1-in-100 year economic shock of the pandemic. I am happy to endorse the recommendation of the Board. I have full confidence that he will continue to display the same integrity and leadership in performing his duties as Governor in what is still a challenging environment." Grant Robertson said.
This is the statement from Nicola Willis:
The National Party is appalled by Finance Minister Grant Robertson’s decision to re-appoint Reserve Bank Governor Adrian Orr without first completing an independent review of the Bank’s performance, says National’s Finance spokesperson Nicola Willis.
"We have repeatedly urged the Government to conduct an independent review of the Reserve Bank’s performance before endorsing the Governor for another five years. Re-appointing him without first completing such an inquiry is a serious mistake.
"In recent years, Adrian Orr as the Chair of the Monetary Policy Committee signed off on an extraordinary programme of money printing and cheap lending that pumped tens of billions of dollars into the economy. That programme directly contributed to house prices rising 28 per cent in one year, inflation rising to a 32-year high, and record bank profits.
"New Zealanders now suffering through a cost of living crisis are owed some answers. Was a more careful monetary policy approach warranted? Has the Bank fulfilled its mandate? Did Orr get it wrong?
"The Government’s refusal to even ask these questions shows contempt for the New Zealand public. It’s not enough for the Minister of Finance to lean on the endorsement of the board he helped appoint. He should have kicked-off a thorough external review to satisfy himself and New Zealanders that the Bank did the best it could have. Instead, he has directly shied away from any semblance of accountability. The ‘ask no questions’ approach is unacceptable.
"It’s completely insufficient for the Bank to mark its own homework with an internal review verified by its own hand-picked favourites.
"“New Zealanders suffering through a cost of living crisis deserve more than a cosy re-appointment process with no accountability.
"National would immediately initiate an independent inquiry into monetary policy decision making over the past two years, including its contribution to the cost of living crisis, unsustainable house price rises, co-ordination with fiscal policy, losses on bond purchases and its contribution to bank profits."
This is the statement from David Seymour:
"Despite a term of poor leadership, poor focus and poor outcomes, Adrian Orr has somehow been reappointed for another term as Reserve Bank Governor,” says ACT Leader David Seymour.
"In September I sent Finance Minister Grant Robertson an extensive letter outlining the many reasons we can’t afford another term of Adrian Orr in the role.
"He has shown poor leadership throughout his term, punctuated by high staff turnover and a failure to accept any responsibility for these issues.
"A failure to accept responsibility is possibly the defining feature of Orr. When appearing in front of the Finance and Expenditure Committee last week he refused to accept the Reserve Bank has gotten anything wrong, despite massively overstimulating the economy, causing consumer price inflation, asset price inflation, inequality, and now higher interest rates.
"He also carried out an extensive and expensive review into New Zealand banks’ conduct and found nothing of note but refuses to admit as much and claims changes are still necessary. He is incapable of accepting a mistake.
"The Governor at his best can be described as colourful, but might be more accurately described as indulgent and unfocused. His analogies where the financial system is a forest and his organisation happens to be Tane Mahuta, the god of the forest, are an excellent example of this.
"Giving a speech to the Central Banking Global Summer Meetings entitled Why we embraced te ao Māori during a cost of living crisis that hits Māori hardest. Failing to mention the Reserve Bank’s failure to contain inflation shows that he is not focussed on issues that the Reserve Bank should be.
"ACT has made it clear it has no confidence in Adrian Orr, and with polls showing we are on track to play a big role in the next Government, Grant Robertson should not have appointed him for a full term.
"The good news is that a Government with ACT in it will keep Adrian Orr on a tight leash. There will be no more loose monetary targets that allow targets to be met in the ‘medium term’, a timeframe that even the Prime Minister couldn’t define.
"ACT would set a strict Monetary Policy Remit with specific targets in specific timeframes. We will restore monetary policy credibility to the Reserve Bank by returning its mandate to solely taming inflation, allowing the appointment of monetary policy experts from New Zealand and abroad, and applying stricter scrutiny in future before granting Crown indemnities.
"This just shows the low standards Labour is setting for New Zealand. Reappointing Orr says that that it is ok to have a Governor with questionable leadership skills, a diffuse focus, and terrible outcomes. The Minister should have aimed higher, it’s what New Zealanders deserve so they are not the victim of monetary incompetence that amounts to a thief in their pocket."
129 Comments
Heard some RB economist on the radio reject the premise that NZ is no longer a first world country. His defense was that the poverty and crime we are witnessing at record levels will soon sort itself out because of strong economic fundamentals such as low unemployment and large wage increases.
Communications Minister David Clark might see “no reason New Zealand can’t be the Silicon Valley of the Southern Hemisphere”
I doubt he was talking about emulating the success of the tech sector here and instead was referring to all the problems we have around drugs in our communities, increasing crime rate, higher rates of wealth inequality, overpriced housing, high living costs, virtue-signaling government that can't get anything done, etc.
We need not worry. Because Police wages align so well to house prices we'll have no shortage of volunteers for Police jobs...or nursing...or teaching...
High house prices have been wonderful for New Zealand. So glad we based our economic policy of the last two decades on pumping house prices and tax-free property speculation rather than encouraging people to build productive businesses and live within their means.
THE BANKRUPTCY PRAYER
Forgive me Father for I have Sinned.
I chose to believe the Government and MSM when they said "Interest Rates will stay Low for a very Long Time". I ignored the bad gut feeling from the Holy Spirit that this was a well orchestrated Lie from the enemy to Deceive and Destroy.
I was Fearful of missing out, (FOMO), I never put my faith in you Lord. Now I can see I was led by Greed and Pride.
I should have Waited like you said, like others said, like my inner wisdom said, yet I gave into Temptation and Peer Pressure.
Property Prices are now Crashing, I cannot afford the new Ridiculously High Interest Rates, there is no relief in sight, I cannot trust what the Government and MSM tell me, I have done all that I can do, the Darkness, Weight and Pain of it all has taken its toll, and now I'm scared for my Mental Health and Safety. I now know it's time to surrender the Keys and feel your peace and joy again. For your Word says “Come to me, all you who are weary and burdened, and I will give you rest."
I fully acknowledge my mistake and understand my actions will ultimately affect others .
Please Forgive Me, In Jesus Name, Amen.
Now it's Time to make it The Banks Problem.
File for Bankruptcy. Give Back The Keys.
Walk Away, and do NOT look back.
You Are Forgiven !
The Prophet.
... apparently the size of the salary you get is related to how big the tree you consult is ... Tane Mahuta is the forest king , hence a generous $ 890 000 package for Adrian ...
Jacinda gets only $ 479 000 , because she talks to a gnarly old macrocarpa .... though some folk say it's rude of me to refer to Helen Clark in that way ...
Extraordinary and so too was the unprecedented motive of previous governors expressing their concerns publicly about the policy and decisions of the incumbent. This is reminiscent of the Cullen declaration that he would spend the lot in the face of the incoming Key National government. Here this government is making a deliberately provocative move which seems to be born more out of spite than the long term interests of the nation.
And so the corruption is laid bare for the entire country to see. Kaumata Orr with his whopping and overcompensating salary laughs in the face of logical decision making for the benefit of the nation, while the majority of citizens and residents struggle under the incoming tsunami of failing debt and higher costs of living. This government has been rotten from the core and the rot has reached the skin of the fruit and we the public will not buy it.
Pray for a snap election this christmas as this would be the best thing for New Zealand, out with the old stale and rotten beehive, it needs a spring clean and a fresh new lot to do something that is actually useful for the NZ public.
Oh, but he dosen't just talk to the tree.
He actually creates and manages the roots, oversees the movement of sap through the trunk, and regulates the leaves.
His power is practically pagan god-like. Far beyond the power of any mere mortal. A legend in his own mind.
https://www.rbnz.govt.nz/about-us/tane-mahuta-and-our-financial-system
"Finance Minister Grant Robertson says he's 'pleased' to reappoint Adrian Orr as Governor of the Reserve Bank for another term, effective from March next year"
This confirms that Mr Orr is being obedient to Jacinda Arden/ Robertson and also ready to take the blame (Who would not with the salary/package).
Also now Labour government cannot blame RBNZ for the situation as they are giving positive certificate of excellence to Mr Orr.
What happened to Transitory Inflation narrative that has lead us to where we are today and no excuse that world followed it, so we (rbnz) to followed, if the world is jumping from the cliff, will they too jump besides are they not being paid to do a job not just copy paste other central bank policies and action where it suits their biased vested interest.
The inflation reasoning was wrong then.
The inflation rate is still hugely over the target window.
The dollar has plunged because there's no confidence RBNZ will hike by the amounts they need to.
The forecasts - even the revised ones - continue to be way out.
I cannot imagine the consequences for me professionally if I failed in literally every aspect of my job.
Wellington is like a different planet.
Quite right on all fronts.
But failure can be a subjective noun.
I think we've all had an occasion where Head Office has told us "This is what we are all going to do" and had no choice but to comply, whether we agree with it or not, and following that instruction was, itself, success.
The Central Banking cartel decided what they were all going to do, and they did. Pretty much as they are still doing today.
Actually, the interest rate increases have very much been as needed. The last thing the country's finances need is sudden and dramatic change like what recently happened in the UK. A stead as she goes gradual change avoids panic and retains stability. That counts for a lot in an economy based on a fiat currency.
Presumably all the numbers will eventually turn up in the Crown accounts, but for now it seems safe to assume that Orr and his colleagues (facilitated by the Minister of Finance) have cost taxpayers around $9.5 billion dollars – getting on for 2.5% of New Zealand’s annual GDP (or about 7 per cent of this year’s government spending).
These are really huge losses, and to now the Governor’s defence seems to amount to little more than “trust us, we knew what we were doing”, accompanied by vague claims that he is confident that the economic benefits were “multiples” of the costs. But there is no contemporary documentation in support of the former claim (eg a proper risk analysis rigorously examined and reviewed before they launched into this huge punt with our money), and nothing at all yet in support of the latter claim. Link
Adrian has demonstrated the skills, knowledge and experience to help steer the financial system through the 1-in-100 year economic shock of the pandemic.
I guess steering the bus off the road technically qualifies as 'steering skills'. *tick*
This has led to considerable change in the Bank’s strategy, people and culture.
And I guess gutting the expertise of the bank and creating a yes-man culture counts as considerable change. *tick*
Two ticks! All good!
I have woken up in a parallel universe for sure. Its a laugh a minute. We reward failure, elect people who lie their way into power and no longer protest or revolt, we let them take money from the poor and middle class and hand it to the elite (bank profits, house prices, covid payments, supermarket duopolies, tax bracket creep, EV subsidies, landlord handouts, money printing.... the list grows). Let alone the lack of any regard for kids living in cars, motel housing, healthcare wait lists, drugs not approved for cancer and failed centralisation projects and kiwibuild)
The funniest part (in a sick way) is that they dont even bother to hide it anymore as whoever is in power carries on with the same project - its like a huge elephant in the middle of all we do and we, the media and governments all pretend like its not there.
I think you will find that in societies where people do not revolt and protest, and where media are completely in the pocket of the elites, you get a ruling structure that does as it pleases. The decision to reward Orr is completely incomprehensible, and unjustifiable by any means you try to dream up. The only people happy with this are banks and their shareholders, and even that will be short term when they reap the whirlwind of an unsustainable property market.
I would love to know what the greens think. I would like to see a parliamentary walkout of all opposition parties. We re still giving banks discounted money via the FLP, you really cannot make this stuff up. The taxpayer of New Zealand is borrowing money on international markets at 5% giving it to foreign banks at 3.5% so they can lend it back to NZ tax payers at 6%. This is a swindle, a fraud, a corruption. Yet Robertson rewards the architect of this scam with another 5 years.
Orr behaved no differently to most of the other central banks. What I wonder would things be any different if it was Graeme Wheeler and Mr eleven billion dollar fiscal hole running things. I think not.
If you want to blame someone then their consulate is on the Great South Road Ellerslie.
A kid gets in trouble and uses the excuse 'everyone else was doing it'. We dont let him off.
No way a RB leader on 800k per annum is allowed the same excuse. He messed up . Dropped rates too far too long gave too many handouts and and printed too much money.
He had one job.. keep inflation in check. He failed miserably. Lots of peoples lives are a misery in a large part because he failed. He should fall onhis sword. No excuses. He failed.
I have been calling for Orr's sacking for two years now. And this government has just reconfirmed him for another term.
This is by far the worst government in NZ history. I am counting the weeks until we finally kick this bunch of woke morons out of government next year.
The Hamilton West bi-election in December will be a reflection on how the public feel about this government ...
... I turned feral on Ardern back in 2017/18 the moment she banned issuing further licences for offshore natural gas & oil exploration ... that was the beginning of the end for me ... thickest bunch of ideologically driven twits ever ...
Was Orr's RBNZ captured and ditched justified caution?
Powell was there, ready to buy any and all debt that Congress created. It kept going on and on, for more than $10 trillion by the time things settled down. Powell was good for $6.5 trillion of that, with the rate of money expansion reaching 27% at the height.
Rates follow nominal growth, which was boosted dramatically & artificially by massive money creation for consumption in 2020, on purpose, by policy makers, causing the present massive inflation. Rates follow, they aren't leading indicator. For latter, need to see credit creation. Link
What Adrian Orr did, or didn't do, is now largely immaterial. Do I think he (they) made some disastrous mistakes? Yes.
But all that matters now is "What does the RBNZ do from here?".
Perhaps the way forward is a little clearer now than it was 2 years ago? Perhaps not.
We may be entering that stage of proceedings where it's "Every economy for itself" - or as we know The Fed sees it "Our dollar, Your problem" - and in that case Orr's job may be as unhindered as it's ever going to be.
We all know there are fundamental issues to be addressed here. Maybe we've started on that, and if a 5-year term is needed to give some sort of certainty to that, then so be it.
That comment sums up the problem in one - Politics.
There's no way we can get out of the economic bind we are in, given the partisan bickering that is about to arrive. Irresponsible, but popular, bribes are about to come forth from all Parties. That's all they can do. None of them would get (re)elected if they put the necessary options before us - none.
We shouldn't have to leave it to the RBNZ to run our economy, but regardless of who gets in next years, that's what we've done.
And under those circumstances, a 5-year term makes sense, regardless of whoever might want to take a turn at fiscal 'responsibility'.
This actually makes me sick. Labour are completely out of control. Completely. My poor country is being mismanaged by the worst kind of woke ideologically demented nastiness that it’s nauseating!
One day I’ll visit with my kids, show them the boarded shop fronts and bollards protecting what’s left of the last remaining bottle stores while bowing my head in shame; why did I allow this to happen rot to set!
Blatant corruption Is now rife in NZ politicos!
Well, once the shitstorm strikes and the captain goes down with the ship we want the best guy to replace him kept in reserve to captain the liferaft for the rest of us.
This ships course is largely set (doesn't matter that the compas is wonky), the eye of the storm is beginning to take shape directly ahead, and the ships boilers have a full head of steam. Grab your lifejackets and hold on tight.
Half a pound of Tuppenny Rice, Half a pound of treacle , Thats the way the money goes.... Pop goes the shirt off your back.......lol Can you feel it burn ...yep strange times ahead....not sure we have enough pandemic QE circulating to cover whats ahead... Not sure folk would be so fired up though if house prices were still headed to Mt Everest...lol
Whatever you think about him as an individual, I believe that the CPI/OCR mandate that drives RB is very flawed as I have expounded at length in the past. It will always produce an endless series of booms and busts, un productive capital speculation and low productivity. It absolutely forbids the population from benefiting from higher productivity through lower prices and instead responds by spewing money into capital speculation and propping up un productive and un-competitive companies. There are also some basic flaws of the high inflation side of the equation.
We desperately need a clean sheet review of what we are actually trying to achieve with this control regime and what is the best way to do this.
The best way to do it is to enact a law that requires all politicians wear tinfoil hats when making press statements...that way the rest of the world will know we have gone completely bonkers in NZ... I pray for the tourists that figure Rotorua is a thermal wonderland....lol . I guess measuring inflation more broadly might help...but im not sure much would change given you have the FED influencing so profoundly. Clearing debt and efficient use of taxes and rates .... too hard for many...fact is nobody wants to crawl before they walk these days...and therein lay the problem...CREDIT
Yeah. And why do we need central planners anyway? There are plenty of money tokens in computers already - can't they just flow around and find a price without the RBNZ being involved.
The RBNZ is in charge of printing cash (for now) - I say leave little admin jobs like that to them and sack the rest.
Quite predictable but cynical at the same time. At the end of the day, the NZ public should realize that the govt doesn't give a rats about anything but themselves. The backing of Kaumatua Orr is a superb illustration of that. It should also show to people that central banking is indeed political.
Are you suggesting a National Party imposed RB Govenor would err on setting rates to the higher side than Orr who seems to err towards the lower side?
Or are you simply suggesting the term of appointment is too long? I see they appoint for up to 7 years in Australia.
I don't think Robertson has any say unless its a nod nod wink wink. Its the RBNZ board who appoints the governor. Orr is also on the board.
Look carefully at the board, the brief resumes and when they were appointed. Says a lot.
https://www.rbnz.govt.nz/about-us/our-people/our-board-members
hahahahahahahahahahahahahahahaha...... Nicola Willis or candidate number 23 for the National Muppet Party list of Finance Spokesman....... bring back Te Goldsmith, or you could go and see if Stephen Joyce has found his 11 billion dollar hole. The best thing about the latest poll is National don't even know all the votes the government lost have gone to New Zealand's highest-paid beneficiary....D Seymour.
It is unbelievable that Grant Robertson has appointed Adrian Orr for another 5 years. NZ has suffered enough from poor decision making by Orr & Robertson. Between them they have made the banks rich & New Zealanders much poorer.
Today the government has been trying to divert attention by criticising the massive profits banks have earned over this last financial year but they are at fault because they Robertson set up the rules for the Reserve Bank.
Excessive government spending over the last 2 years has also contributed significantly to bank profits.
The reality is that the Reserve Bank under Orr’s leadership has allowed banks to get access to so much cheap money through its Funding For Lending (FLP) programme where banks can lend at the OCR.
The reserve bank's money-printing programme has now cost taxpayers $9.49 billion. That's the amount, covered by a government indemnity, that the Reserve Bank of New Zealand (RBNZ) has lost on its large-scale asset purchase (LSAP) programme as at 30 Sep 22.
On 15 Nov 21, I commented on interest.co.nz, “Fantastic for the Aussi owned NZ banks. RBNZ lend at 0.5%. NZ banks earn 4% on a 2 year loan. Best game in town. Profit sent back to Australia. NZ banking system is just subsidising Australia & NZ becomes a lot poorer because of this incompetence.”
In July 2021, previous RBNZ chair, Arthur Grimes warned that NZ was heading for a well-being disaster & said NZ government needs to ditch the maximum sustainable employment target when setting the OCR as this has created excessive house price inflation.
https://www.newstalkzb.co.nz/on-air/heather-du-plessis-allan-drive/audi…
Maximising sustainable employment has been a complete failure & is the fault of Robertson for introducing it in 2017. The Reserve Bank has taken its eye off the ball by keeping OCR too low for too long in order to keep unemployment low but let inflation get away. Now the Reserve Bank says unemployment is too low & is not sustainable.
NZ like Britain is a nation that now runs what are known as “twin deficits” — that is, NZ imports more than it exports ($27 billion for year ending 30 Jun 22 or $5k per person) and our government borrowed $9.7 billion to keep our country functioning (ie for year ending 30 Jun 22).
An independent inquiry is now needed to show how poorly Grant Robertson & Adrian Orr have carried out their respective roles. Without them NZ would be in a much better place to weather the storm that is now hitting NZ.
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