Letters: Why the Reserve Bank should not be independent of democratic will

The Reserve Bank of New Zealand should never be independent, writes Heather Marion Smith. Photo / File

Liam Dann (Chronicle, May 4) asks: "Is the central bank independence under attack?" What independence?

The Reserve Bank Act (1989) was designed to oppose "political interference" but not oppose outside influences from bodies like the Bank for International Settlements and Wall Street's credit-rating agencies.

No coincidence that the legislation followed soon after the 1987 financial crash scared investors away from risky blue-chip stock and toward the easy, if unspectacular, returns yielded by public utilities and government debt securities.

Any objections expressed by democratically elected MPs not welcome.

What is so fascinating about Finance Minister Robertson's bid for more ministerial input re RBNZ policy is how it echoes to a small degree the Reserve Bank of New Zealand Amendment Bill put before the House of Representatives back in September 1978 by Rangitīkei MP and Social Credit leader Bruce Beetham.

Unlike the basis for the 1989 act, his bill was to "curb, check and control executive power", then under the virtual dictatorship of the Rt Hon. Robert Muldoon. Bruce insisted that the bank should "give effect to every resolution of the House of Representatives..."

Indeed the first Labour government had demonstrated how the power of Parliament could be used responsibly by requiring the newly nationalised RBNZ to fund the building of 33,000 state houses at a service charge averaging just over 1 per cent.

The Reserve Bank of New Zealand is owned by all of us. It should never be independent of our democratic will.

HEATHER MARION SMITH
Gonville

Biden's speech

US Senator Ted Cruz, according to today's editorial (Chronicle, May 4), described President Biden's speech to Congress as "boring but radical". The editorial appeared to suggest that was a good thing.

Senator Cruz's words are worth paying attention to. He clarified the "boring but radical" by saying, "This was a frightening speech, and it was a frightening speech masquerading in really boring tones."

"Frightening", because Biden's speech "was all about trillions of dollars in spending, massive job-killing regulations, trillions of dollars in taxes, and it was an unapologetic partisan speech", despite Biden's previous claims of wanting unity.

Biden said, Senator Cruz tells us, "number one we're raising taxes, we're raising every tax. If you pay taxes in America, your taxes are going up."

Senator Cruz especially pointed out what Biden did not say. "He didn't say we're opening up small businesses, he didn't say we're getting people back to work.

"He didn't say we're getting kids back in school, completely missing from his remarks tonight was the outrage that more than half of the kids in America are not in person in school five days a week.

"He provided zero solutions to the crisis at the border that he caused, he pretended it didn't exist."

Yes, President Biden has reached the end of his first 100 days in office. A period full of disasters, like the humanitarian crisis on the southern US border, one created by Biden and not being fixed by him or his administration.

A period with some claimed successes, like the Covid vaccines that Biden claims all the credit for, saying there were no vaccines when he took office - after he had been vaccinated…

As Senator Cruz summed it up, "This is the most radical first 100 days of any president in the history of this country."

K A BENFELL
Gonville

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