The week in politics: Adrian Orr’s resignation and the school lunch debate – On the Tiles

Reserve Bank Governor Adrian Orr quit his job this week, but the reason remains unclear. Photo / Mark Mitchell

A busy week in politics saw a major resignation, the firing of a high commissioner, a reshuffle for Labour – and a new twist in the school lunch debate.

To discuss it all, this week on On the Tiles, the Herald’s politics podcast, deputy political editor Thomas Coughlan is joined by Newstalk ZB political editor Jason Walls and NZ Herald Wellington business editor Jenee Tibshraeny.

The biggest story was the sudden resignation of Reserve Bank Governor Adrian Orr, only two years into his second five-year term.

Orr has not addressed media yet since his resignation, leaving the reasons for his departure unclear.

And even though Orr is on the payroll until the end of the month, his current location is not public knowledge.

“I asked them [on Thursday] whether he was still in the country, whether he was in the country this week,” Coughlan said. “They wouldn’t confirm that.”

Tibshraeny said she has two theories on why Orr resigned, both involving clashes with Finance Minister Nicola Willis.

One is over how the Reserve Bank regulates banks.

“One of the Reserve Bank’s main jobs is to make sure that banks are strong and stable, they have enough capital, so that if there’s a big crisis, they can withstand it.

“Now, a huge source of contention since about 2018-19 has been whether the Reserve Bank is making banks hold too much capital, so that’s costing them a lot.

“The other issue is that the way these rules work, it could potentially disadvantage the little banks versus the big ones. I talked to Nicola Willis this week and she categorically said she is seeking advice on whether and how to potentially override the Reserve Bank so that it allows banks to hold less capital, that makes them weaker, and also change the risk weighting, so the way those rules work.”

The other reason could be how much funding the bank receives.

“The Government gives the Reserve Bank an envelope of money every five years, and there are negotiations under way at the moment over how much should be in there,” Tibshraeny said.

“And the Reserve Bank seemingly wants more. Nicola Willis wants to give it less.”

Listen to the full episode of the On the Tiles podcast for more on Orr’s resignation and where he and Willis potentially clashed. Plus, why has Christopher Luxon been so outspoken about school lunches this week? And did Phil Goff deserve to go as UK High Commissioner?

On the Tiles is available on iHeartRadio, Apple Podcasts, Spotify or wherever you get your podcasts. New episodes are available on Fridays.

The podcast is hosted by NZ Herald deputy political editor Thomas Coughlan, who is based at Parliament. He has worked for the Herald since 2021 and has worked in the press gallery since 2018.