"The Government has cross-party support for a series of minor changes to the Reserve Bank Act arising out of the Svensson Review of the Operation of Monetary Policy," Finance Minister Michael Cullen said today.

"I welcome that as political consensus and stability are important in this area," he said.

The proposed amendments were:
- the Bank's Board to be chaired by a non-executive director rather than the Reserve Bank Governor
- the chairperson to be appointed by the non-executive directors
- the Governor to remain a member of the Board but the two deputy governors to be removed.

Dr Cullen said the changes, which were supported by all parties in the House, would be included in the Reserve Bank Amendment Bill set down in the government's legislative programme for passage if possible this year.

"As I made clear in my initial response to the Review, the Governor will retain sole responsibility for monetary policy. But I believe there are benefits in exposing the Governor to a wider range of views when decisions are taken and have invited the Bank to consider how this might be done.

"The Bank is currently advertising to appoint one or two part-time external advisers, chosen for their broad knowledge of the New Zealand economy, to provide input into the decision-making process."

Other initiatives which did not require legislation but were being introduced to raise both the transparency of the Bank's activities and the Governor's accountability included:
- publication by the Board of an annual assessment of the Bank's performance
- consideration by the Finance and Expenditure Select Committee of the appointment of monetary policy experts to lift the committee's ability to monitor the Bank
- hosting by the Bank of a conference for the evaluation of monetary policy to be held either at the request of the Board or at intervals of about two years.

In tandem with this, the Bank was pursuing a number of technical recommendations designed to improve its macro-economic and forecasting tools and the quality of the information it was able to produce about the financial system.

"The Review found monetary policy in New Zealand already compared well with international best practice. These changes should improve it further and should reinforce public confidence in the robustness and integrity of the regime," Dr Cullen said.

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