Mike's Minute: We need more transparency around the Reserve Bank

We should all thank Kelly Eckhold, a some-time participant on this show and most-of-the-time economist at Westpac, for his thinking around the future of the Reserve Bank. 

As I have said many times, if one good thing came out of Covid, it put the Reserve Bank, its role, and its influence front and centre for many more of us that may never really have paid attention to its workings and its ability to shape everyday aspects of our lives. 

Eckhold suggests the new governor put the inflation target a little higher than 1-3%. Historically we sit at about 2.5%, so chasing less than that can have a lot of effects you may, or may not, want. 

Do remember some inflation is good. You want inflation, you just don’t want the amount we have had, and you want it produced from growth, not just cost-plus-accounting from councils and power companies. 

More importantly for me is the public accountability. The Quigley/Orr debacle shows you what can go on when public disclosure is not as fulsome as it could be. 

Eckhold wants the Monetary Committee vote made public. Good idea, so it should be. 

It's not often there is a divergence, but there has been lately. In fact, the last statement involved a 4-2 vote, which has never happened before. 

So why don’t we know who they were and what they said? 

The rules as they stand mean a person on the committee can out themselves. But you will notice from last time that no one has. Why not? 

Next idea: a press conference should be held after each meeting, not just the ones that produce a cash rate call. 

I know I'm a wonk, but I cannot press enough the value of watching these things live. Not just the Reserve Bank, but opticians who these days, thanks to digital coverage of places like the Herald, run them in full routinely. 

The irony of that is you would be amazed what you learn, as opposed to what you may or may not learn from a news bulletin edited and often curtailed to a point of nonsense later in the day in a news bulletin. 

The best example is the Prime Minister's press conference on a Monday after Cabinet. 

So, more pressers, more transparency, which is more detail, more sunlight, more inquisition and more knowledge. 

What possibly could the Reserve Bank argue is wrong with that? 

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Episode Transcript

Speaker 1 (00:00):
To tell you what I like to think. In fact,
we should all thank Kelly Echold, sometime participant on the
show most of the time economists at Westpac, for as
thinking around the future of the Reserve Bank. As I've
said many many times, if one good thing came out
of COVID, it put the Reserve Bank its role and
influence front and center for many more of us that
may never really have paid attention to its workings and
its ability to shape every day aspects of our lives.

(00:22):
Ekold suggests the new governor put the inflation target a
little bit higher than the one point three percent. Historically
we sit at about two and a half percent, so
chasing less than that can have a lot of effects.
You may or may not want do. Remember, some inflation's good.
You actually want inflation, You just don't want the amount
we've had, and you want it produced from growth, not
just the cost plus accounting from councils and power companies.

(00:42):
More importantly for me is the public accountability he speaks of.
The quickly or debarcle shows you what can go on
if public disclosure is not as fulsome as it could be.
Echold wants the Monetary Committee vote made public good idea,
so it should be. It's not often this is a divergence.
There has been lately. In fact, in the last statement
and involved the vote of four to two. They've never

(01:03):
had that happen before four to two. So why don't
we know who they were and what they said? Well,
the rules as they stand mean a person on the
committee can indeed out themselves. But you will notice from
last time no one did. Why not next time? A
press conference should be held after each meeting, not just
the ones that produce a cash rat call good idea.
I cannot and I know I'm a wonk, but I

(01:24):
cannot press enough the value of watching these things live,
not just the Reserve Bank, but politicians who these days,
thanks to digital coverage of places like The Herald, run
them in full routine them I mean Peter's over the
weekend spoke for an excess of an hour. It was
an interesting watch. The irony of that is you would
be amazed what you learn, as opposed to what you
may or may not learn from a news bullet and

(01:44):
edited and often curtailed to a point of nonsense later
in the day. The best example on an ongame basis
is the Prime ministerial press conference on a Monday after
cabinet yesterday was a good example, went for about forty
five to fifty minutes. It was interesting. So more press
is more transparency, which is more detail, more sunlike, more
and position, more knowledge. What possibly could the Reserve Bank
argue is wrong with that? For more from the mic

(02:06):
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