Reserve Bank and Adrian Orr agreed not to bad mouth each other as part of exit deal

Tuesday, 7 October 2025

The Reserve Bank and Adrian Orr agreed not to bad mouth one another as part of an exit deal for the former governor negotiated on March 5.

The terms of the agreement were originally intended to be confidential but the bank released them late this afternoon in response to media queries, acknowledging that doing so was in the public interest and that Orr had given his consent.

The agreement appears to explain apparent pussy-footing around by former Reserve Bank chairperson Neil Quigley in March over the circumstances of Orr’s departure.

Quigley initially said there were no “policy, conduct or performance issues” behind Orr’s resignation.

But it later emerged that Orr had walked out of the bank after a breakdown in relations with the board over its response to Budget cuts, and on the same day the board wrote to him setting out “various concerns”, including in regard to his tenor at two meetings.

“The RBNZ (including board and its individual members) will not disparage Mr Orr, and Mr Orr will not disparage the RBNZ, its board, individual members of the board, the Treasury, the Minister of Finance or the Government generally,” a clause in his exit agreement read.

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It emerged on Tuesday that Orr had received a $416,000 “restraint of trade payment” after abruptly quitting the Reserve Bank.

A spokesperson said the clause under which that payment was made was agreed at the time of Orr’s appointment as governor and amounted to six months’ pay, with any income he earned during the period offset against that.

The purpose of the clause under which the money was paid was to “protect confidential information he was privy to as governor”, the spokesperson said.

The Reserve Bank indicated the bank’s board had had the discretion to impose the restraint of trade conditions on departing governors in return for such payments since at least 2012.

However, the bank has so far been unable to confirm whether the clause had previously been activated and whether any similar payments were paid to previous governors, or whether Orr might have been the first to receive such a pay-out.

The bank said the request for that information would be treated as a request under the Official Information Act and a response would be provided “as soon as possible under this process”.

The two-page exit agreement released today also makes clear Orr was paid two months’ salary in lieu of notice, in addition to his salary up to March 31, until when he was technically on leave after walking out of the bank on February 27 and advising Christian Hawkesby would be acting governor.

“Mr Orr wishes to finish his term early, and the RBNZ agrees to accommodate this,” the exit agreement read, noting Orr would resign with effect from March 31.

“RBNZ and Mr Orr have agreed on the wording for a public statement to advise of his resignation and to acknowledge Mr Orr’s achievements and service,” it said.