National 'shocked' by Adrian Orr's reappointment to head of Reserve Bank

Tuesday, 8 November 2022

Adrian Orr is governor of the Reserve Bank of New Zealand.

National Party leader Christopher Luxon is “shocked” Adrian Orr has been reappointed as governor of the Reserve Bank.

Finance Minister Grant Robertson reappointed Orr for another five-year term on Tuesday, effective from March 27, following a unanimous recommendation from the Reserve Bank board.

But Luxon said the party, which has called for an independent inquiry into the Reserve Bank’s monetary policy response from March 2020 until late 2021, was surprised at the news.

“We're quite shocked by it to be honest with you because our view has been very clear,” he said.

Reserve Bank governor Adrian Orr speaks with Stuff a day after raising the official cash rate in August. (Video first published August 18, 2022)

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National’s finance spokesperson Nicola Willis wrote a letter to Robertson, saying the appropriate convention would be to appoint the new governor for a year, “so we can get through the election period”, Luxon said.

Robertson said the bank had been undergoing a considerable amount of change since Orr’s appointment in 2018.

“The Reserve Bank of New Zealand Act 2021 came into force in July this year and has changed how the bank operates and is governed. This has led to considerable change in the bank’s strategy, people and culture,” he said.

“As the Governor, Orr has been instrumental in leading this change and his reappointment will allow him to carry on and ensure these changes are bedded in. In light of global conditions, this is also a time when stability and continuity are paramount for the bank.”

Orr has been the subject of some criticism during his time at the helm.

Some critics said he had shifted his focus from the bank’s core focus on to things like climate change and te ao Māori.

Former governor Graeme Wheeler criticised New Zealand’s Reserve Bank alongside other central banks for their “hubris” during the pandemic, and errors of judgement in overdoing rate cuts.

Under the Reserve Bank Act, the bank’s main objectives are to achieve and maintain stability in the general level of prices over the medium term, support maximum sustainable employment, protect and promote the stability of New Zealand’s financial system.

“Adrian has demonstrated the skills, knowledge and experience to help steer the financial system through the 1-in-100 year economic shock of the pandemic. I am happy to endorse the recommendation of the Board. I have full confidence that he will continue to display the same integrity and leadership in performing his duties as Governor in what is still a challenging environment,” Robertson said.

ACT leader David Seymour said he wrote to Robertson in September outlining the reasons why Orr should not be given a second term.

“He has shown poor leadership throughout his term, punctuated by high staff turnover and a failure to accept any responsibility for these issues.

“When appearing in front of the Finance and Expenditure Committee last week he refused to accept the Reserve Bank has got anything wrong, despite massively overstimulating the economy, causing consumer price inflation, asset price inflation, inequality, and now higher interest rates.

“He also carried out an extensive and expensive review into New Zealand banks’ conduct and found nothing of note but refuses to admit as much and claims changes are still necessary. He is incapable of accepting a mistake.”