9 May 2000

RESERVE BANK REVIEW A CLAYTONS EFFORT SAYS DUNNE

The review of the Reserve Bank announced today by the Minister of Finance is so narrow it is almost meaningless.

“I fully understand Dr Cullen’s fear of the reaction of overseas investors to a more-ranging review given their perception of the generally flaky nature of his economic policies, but that does not justify establishing what is essentially a Claytons review of monetary policy.”

“It is now over ten years since the Reserve Bank Act was passed, and given changes in the domestic and international economic environment in that time it would be appropriate for a wide-ranging review to take place.”

“In normal cirmcumstances that should not be seen as a threat to economic stability, but an opportunity to build on what has been achieved to date.”

“However, it is a shocking commentary on the extent to which the international economic community sees New Zealand has lost the plot under the Labour/Alliance Government that Dr Cullen has had to tailor his long-promised review to alleviate their anxieties.”

“Giving New Zealand’s pioneering role in the area of central bank autonomy, this country of all countries should be able to conduct a thorough review of all aspects of monetary and central bank policy without the accompanying fear that it will send adverse signals to the international community,” he says.

Mr Dunne says that the limited review Dr Cullen has set up will fail on all counts.

“It will neither satisfy the Reserve Bank’s critics who will feel that their real issues of concern have been pushed to one side.”

“Nor it will satisfy the Bank’s supporters who will see it as nothing more than a sop to the Alliance and a mischievous smokescreen for conveying messages to the Reserve Bank about its performance that Dr Cullen is unwilling to convey in person.”

“Either way it will confirm this Government’s steady retreat from the economic policy fundamentals of the last decade or so,” Mr Dunne says.

ENDS

New Zealand’s Liberal Party

MEDIA STATEMENT
HON PETER DUNNE, MP
LEADER UNITED NEW ZEALAND
Parliament Buildings, Wellington 1.
Ph(04)471 9410 or (025) 469 808. Fax (04)499 7266.
e-mail: peter.dunne@parliament.govt.nz. Internet Address: http://www.united.org.nz

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