Debate on Financial Review of Crown Entities, Public Organisations and State Enterprises, 2006 [Reserve Bank of New Zealand]

Dr Pita R Sharples, Co-leader, Maori Party

Tuesday 16 May 2006

The commitment that the Reserve Bank Governor, Dr Alan Bollard, makes to New Zealanders in his 2004-2005 Annual Report, is that as New Zealand's central bank, they will do everything in their power, to build national and international confidence - by promoting the maintenance of a sound and efficient financial system.

And yet yesterday, a survey by Bloomberg News found that the New Zealand dollar has just been named the worst performer out of sixteen major currencies.

ANZ National Bank Chief Economist Cameron Bagrie, adds further gloom to doom, stating that people were finding investment opportunities elsewhere, and forecasting the New Zealand dollar to hit below US fifty cents in 2007.

So let's add it up –
-the Reserve Bank wants to promote a sound and efficient financial system,
-the New Zealand Dollar is named the worst performer,
-and to top it all off, the UMR research omnibus survey identified that the unfavourability rating for the Reserve Bank has increased to 14%; and that 38% of all surveyed were unsure or had never heard of the Reserve Bank.

One of the key reasons given for the unfavourability stakes was:

"thinking that the Reserve Bank is out of touch with the people, and a general dislike for the policies".

In plain numbers, the majority (52%) of those surveyed had either never heard of this Bank or gave it an unfavourable rating.

It's a bit like, if you don't know where you're going, any road will get you there - and as the Government draws up the Road Map for the Reserve Bank, this is an indication that it has lost its economic way.

One of the comments that absolutely struck home from the UMR survey was the following comment describing the Reserve Bank as out of touch with people because it is:

"concerned only with inflation, much too narrow, concerned with GDP, should be concerned with quality of life, should go and measure qualitative rather than quantity".

Madam Chair, these are serious issues. They are issues of major concern to all Members of this House. What is more they are issues of absolute priority to all people of this nation.

As if it couldn't get any worse, the Reserve Bank Annual report, 'Change with the times'; states that it will "Strive to inspire public confidence" and yet there is nothing which goes anywhere near responding to the criticism described in the UMR Research.

We are at a critical turning point, we can choose whether to fail or to survive, in measuring the economic accomplishment of the Nation.

The Maori Party is here to say to the nation that GDP will never be enough in making positive advancement as a nation - advancement which is comprehensive, sustainable and inclusive.

All that GDP was ever intended to do - and can do - is to report on activity; not progress.

The Maori Party is committed to a new ideal, the Genuine Progress Index which is an innovative new way of sustaining all aspects of our wealth, human and other, through investment.

If the Reserve Bank really wants to Change with the times it needs to rethink development; and prove that economists can be in touch with reality. The GPI basically tracks all the flows of income that are not in the cash economy - the widest range of measures that affect the health of the economy.

The Genuine Progress Index offers us an exciting alternative to account for the whole value of human, social and natural capital alongside standard measures.

With the conventional measurement of GDP, the assumption is always that 'more' is better. With GPI we realize the assessment is always value based, and indeed as with the case of pollution, ill health, crime, building of prisons, it may be that less is best.

Tangata whenua have always understood that social, economic and environmental prosperity is inextricably linked. In caring for the health of our environment, as well as caring for our physical and spiritual health, we can achieve an indicator of net advancement and progress. An indicator which expresses the values of Aotearoa, including kaupapa Maori. An indicator which is based on the concept that if we preserve and protect our social and environmental assets, we will ensure a rich legacy is left for our descendants.

Our history, our language of communication is embellished with constant reference to sustainable development. The proverb, "Toitu te marae a Tane, Toitu te marae a Tangaroa, Toitu te iwi", emphasises the inter-dependence people have with natural resources to ensure well-being - long-term prosperity is dependent on the land and all natural things; protection of the realm of the seas and oceans; and strengthening of the people.

Madam Chair, the Maori Party will put on record, our commitment to measuring quality along with quantity; to strive for a quality of life which is good for the economy; to measure real and genuine progress. For not to do so would be to perpetuate financial insecurity, a deteriorating environment, rising crime and sentencing rates, increasing poverty, and continuing inequalities.

ENDS

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