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Phase 1 of the Reserve Bank Act Review

Phase 1 is focused on adding employment to the price stability objective of the Bank and providing for a committee decision-making model for monetary policy decisions.

Changes to New Zealand’s monetary policy framework that were recommended during Phase 1 are now before Parliament.

Progress of Phase 1 of the Review

Progress of Phase 1 of the Review

Reserve Bank of New Zealand (Monetary Policy) Amendment Bill

On 23 July 2018 the Government introduced the Reserve Bank of New Zealand (Monetary Policy) Amendment Bill.

The Bill implements policy decisions on phase 1 of the Review announced on 26 March 2018 (refer below). It also implements a number of detailed decisions necessary to give effect to these previously announced changes.

Policy decisions announced on 26 March 2018

Policy decisions on phase 1 of the Review were announced on 26 March 2018 alongside the signing of the Policy Targets Agreement (PTA) by Hon Grant Robertson and Adrian Orr. Advice on the 2018 PTA can be found at Policy Targets Agreements Information Release.

The key decisions that have been made by Cabinet under phase 1 are:

  • To include supporting maximum sustainable employment alongside price stability as an objective of monetary policy in the Act.
  • To require that monetary policy decisions be made by a Monetary Policy Committee (MPC) of 5-7 members that includes a minority of external members.
  • The MPC will take decisions by consensus where possible, but publish records of meetings that outline differences when they exist and the balance of votes where consensus is not reached
  • Members of the MPC will be appointed by the Minister of Finance following a nomination of the Reserve Bank Board, with the Reserve Bank Governor and Deputy Chief Executive being members by virtue of their positions in the Bank. The Governor will be the chair of the MPC.
  • The Reserve Bank will retain operational independence.

A number of consequential amendments are necessitated by these changes, including some changes to the duties of the Reserve Bank Board, the role of the Governor, and the mechanism to set the policy target for monetary policy.

A graphic summary of the phase 1 decisions can be found at Modernising New Zealand’s Monetary Policy Framework: Phase One Cabinet Decisions

The documents relating to policy decisions on phase 1 of the Review include:

Public consultation

Phase 1 written submissions and summary of stakeholder engagement document are below.

The Reserve Bank is an important economic institution. As such, the Review of the Reserve Bank of New Zealand Act 1989 is of public interest and may affect a range of stakeholders. The Review is being managed in an open and transparent manner, with multiple opportunities for public input.

The Treasury received a number of submissions and held a targeted series of industry and stakeholder round tables on phase 1 matters prior to Cabinet decisions being made.  

A summary of the views expressed in these meetings and in the written submissions can be found at below, along with all written submissions. 


There will be further opportunities to have your say, including during the select committee process for the Reserve Bank Amendment Bill. The Bill has now been referred to the Finance and Expenditure Committee.

Proactive release of information

The Treasury has made public a number of documents relating to phase 1 of the Review including background papers that were provided to the Independent Expert Advisory Panel (IEAP) to inform their discussion; agendas, minutes and papers from meetings 1 and 2 of the IEAP; officials’ advice; cabinet papers; and public submissions. 


For general enquiries about Phase 1 of the Reserve Bank of New Zealand Act Review, please email  The Treasury will respond to enquiries made through this channel as part of its role as the secretariat for the Review.

All media enquiries should be directed to

Last updated: 
Thursday, 1 November 2018