Submission on the Five-Yearly Review of the Remit that Guides Monetary Policy Decisions

Federated Farmers of New Zealand welcomes the opportunity to submit to the Reserve Bank on the five-yearly review of the Remit that guides monetary policy decisions.
Federated Farmers has a keen interest in promoting responsible economic policy and it has been a longstanding submitter and commentator on economic policy, including monetary policy. We submitted in 2018 on the Review of the Reserve Bank Act and on the resulting Reserve Bank of New Zealand (Monetary Policy) Amendment Bill. 

Federated Farmers strongly supports the Reserve Bank’s monetary policy objective of ‘achieving and maintaining stability in the general level of prices over the medium term’. We did not support the addition of an additional objective of ‘supporting maximum sustainable employment’ and we continue to think it an unnecessary and potentially harmful distraction to the price stability objective.  This also applies to other areas the Reserve Bank has been dabbling in, including distributional outcomes, climate change, and other environmental, social, and cultural issues. These are worthy issues but they are best left to other parts of government.  

Monetary policy should be focused firmly on price stability, which is the best way for the Reserve Bank to contribute to wellbeing. Current high inflation is harming wellbeing by driving up the cost of living and eroding living standards (i.e., real incomes), especially for those on low-to-middle levels of income and wealth. Federated Farmers’ position continues to be for the Reserve Bank to have a single mandate focusing on achieving and maintaining price stability as the best way it can contribute to wellbeing.
Our full submission can be reviewed on the right. 

For further enquires or queries, please contact:
Nick Clark 
Manager General Policy
027 217 6731
[email protected]