It has been revealed just how unimpressed Treasury was with the Reserve Bank for pitching for a 50% funding increase shortly before Adrian Orr resigned as governor.
Treasury raised “other concerns” with the bank’s funding bid.
It noted that it assumed funding would need to be adjusted to account for annual inflation of 3.6% – a rate above that which the Reserve Bank itself expected inflation to sit at, given one of its main jobs is to keep inflation between 1% and 3%.
This is pretty appalling. The Reserve Bank argued for extra funding on an argument that it would fail to keep inflation under the top of the target range.
Treasury said the Reserve Bank was “not sufficiently considering reprioritisation opportunities, such as downscaling non-legislative functions”.
It said “a disproportionate number of resources” had been concentrated at the upper echelons of management as well as within the non-legislative teams.
In other words trim the bloat and focus on your core job of monetary policy and bank supervision. You’re not the Ministry for the Environment or Te Puni Kokiri.
David Farrar runs Curia Market Research, a specialist opinion polling and research agency, and the popular Kiwiblog where this article was sourced. He previously worked in the Parliament for eight years, serving two National Party Prime Ministers and three Opposition Leaders
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