3Remit and monetary policy committee Empowered by ss 109, 124
1MPC remit
2Bank’s advice on MPC remit
The Bank must, at least every 5 years, give the Minister advice about the MPC remit (remit advice).
The Bank must, as soon as practicable, update remit advice that it has previously given if the Minister requests the Bank to update the advice.
A failure by the Bank to comply with this clause does not prevent the Minister from replacing or amending the MPC remit at any time.
3Minister must consider remit advice
The Minister must, as soon as practicable after receiving the remit advice,—
- have regard to that advice; and
- decide whether the MPC remit should be amended, replaced, or remain in force without amendment.
As soon as practicable after acting under subclause (1), the Minister must—
- publish a notice in the Gazette of what the Minister has decided; and
- present a copy of that notice to the House of Representatives.
4Bank must publish remit advice
The Bank must publish a copy of its remit advice on an Internet site maintained by, or on behalf of, the Bank as soon as practicable after the Minister has published a notice under clause 3(2)(a) in relation to that advice.
Compare
- 1989 No 157 Schedule 2 cl 2(3)
5Process for developing advice
The Bank must, before the remit advice is given, consult the MPC.
The Bank must, before the remit advice is given,—
- seek the views of members of the public on the matters that the Bank considers would assist it to prepare the advice; and
- have regard to the comments that are provided by those members of the public within the time and in the manner specified by the Bank; and
- consult the Minister on the scope of the remit advice.
See section 104, which provides for the Bank to seek the views of members of the public on a replacement charter.
Compare
- 1989 No 157 Schedule 2 cl 3
6MPC remit continues in force until replaced
An MPC remit continues in force until it is replaced.
7Publication and presentation of remit
The Minister must, as soon as practicable after an MPC remit is issued under section 122,—
- notify the issue of the remit in the Gazette; and
- present a copy of the remit to the House of Representatives.
If an MPC remit is issued under section 122, the Bank must publish a copy of the remit on an Internet site maintained by, or on behalf of, the Bank.
Compare
- 1989 No 157 Schedule 2 cl 5
8Minister’s duty to consult before issuing MPC remit
The Minister must consult the Bank before issuing an MPC remit.
2MPC and its members
Appointment of members
9Appointment of internal and external members
The Minister must appoint the internal and external members on the recommendation of the board.
Compare
- 1989 No 157 Schedule 2 cl 8
10Board must consult chairperson
The board must consult the chairperson before making a recommendation under clause 9 in respect of an internal member.
Compare
- 1989 No 157 Schedule 2 cl 9
11Validity of members’ acts
The acts of a person as a member or chairperson are valid even though—
- a defect existed in the appointment of the person; or
- the person is or was disqualified from being a member; or
- the occasion for the person acting, or for their appointment, had not arisen or had ended.
12Validity of appointments
The appointment of a person as an internal or external member is not invalid only because a defect existed in the appointment of the person.
This clause does not apply to a defect in the qualifications for appointment of an internal or external member.
13Vacancies in membership of MPC
The powers and functions of the MPC are not affected by any vacancy in the membership of the MPC.
Compare
- 1989 No 157 Schedule 2 cl 10(2)(a)
- 2004 No 115 s 77
14Qualifications of internal and external members
A natural person who is not disqualified by this clause may be an internal or external member.
The following persons are disqualified from being an internal or external member:
- a person who is a director or an employee of a regulated entity:
- a member of the board:
- a person who is an undischarged bankrupt:
- a person who is prohibited from being a director or promoter of, or being concerned or taking part in the management of, an incorporated or unincorporated body under the Companies Act 1993, the Financial Markets Conduct Act 2013, or the Takeovers Act 1993:
- a person who is subject to a property order under the Protection of Personal and Property Rights Act 1988:
- a person in respect of whom a personal order has been made under that Act that reflects adversely on the person’s—
- competence to manage their own affairs in relation to their property; or
- capacity to make or to communicate decisions relating to any particular aspect or aspects of their personal care and welfare:
- competence to manage their own affairs in relation to their property; or
- a person who has been convicted of a crime involving dishonesty as defined in section 2(1) of the Crimes Act 1961 within the past 5 years:
- a person who has been convicted within the past 5 years, in a country other than New Zealand, of an offence that is substantially similar to an offence specified in paragraph (g):
- a person who has been convicted of an offence punishable by imprisonment for a term of 2 years or more, or who has been sentenced to imprisonment for any other offence, unless that person has obtained a pardon, served the sentence, or otherwise suffered the penalty imposed on the person:
- a person who is a chief executive of a department or an employee of a department.
Compare
- 1989 No 157 Schedule 2 cl 11
15Requirements before appointment
Before a person is appointed under clause 9, the person must—
- consent in writing to being a member; and
- certify that the person is not disqualified from being a member; and
- disclose to the Minister the nature and extent (including monetary value, if quantifiable) of all interests that the person has at that time, or is likely to have, in matters relating to the MPC.
The board must notify the Minister of a failure to comply with subclause (1)(c) as soon as practicable after becoming aware of the failure.
Compare
- 1989 No 157 Schedule 2 cl 12
16Appointment procedure for internal or external members
The appointment of an internal or external member of the MPC must be made by written notice to the appointee (with a copy to the board and to the chairperson).
The notice must state—
- the date on which the appointment takes effect, which must not be earlier than the date on which the notice is received; and
- the term of the appointment; and
- the conditions of appointment.
The Minister must ensure that the following are notified in the Gazette as soon as practicable after an appointment is made:
- the name of the appointee; and
- the date on which the appointment takes effect; and
- the term of the appointment.
Compare
- 1989 No 157 s 63N
17Term of appointment
An internal member must be appointed for a term of up to 5 years and may be reappointed for 2 further terms as an internal member of up to 5 years each.
An external member must be appointed for a term of up to 4 years and may be reappointed for 1 further term as an external member of up to 4 years.
-
This clause does not prevent a person who has served as a member in a particular capacity from being appointed, or holding office, as a member in a different capacity.
Example
A, as an employee of the Bank, has been an internal member of the MPC for 3 terms.
If A ceases to be an employee of the Bank, A may be appointed as an external member for 1 or 2 further terms.
Compare
- 1989 No 157 Schedule 2 cl 13
18Extension of term
The Minister may, by written notice to an internal or external member (with a copy to the chairperson and the board), extend the member’s term of appointment by up to 6 months.
If a member’s term is extended and the member is reappointed for a further term in the same capacity (for example, as an employee of the Bank), the length of the further term must be reduced by the length of the extension.
Subclause (2) does not prevent the further term from being extended under subclause (1).
Compare
- 1989 No 157 Schedule 2 cl 14(1)–(3)
19Minister must notify extension
The Minister must ensure that the following are notified in the Gazette as soon as practicable after an extension under clause 18 is made:
- the name of the member; and
- the period of the extension.
Compare
- 1989 No 157 Schedule 2 cl 14(4)
20Criteria for appointment of internal or external members
The Minister may only appoint as an internal or external member a person who, in the Minister’s opinion, has the appropriate knowledge, skills, and experience to assist the MPC to perform its functions (for example, in economics, banking, or public policy).
A person must not be appointed on the basis that the person represents a particular industry sector.
Compare
- 1989 No 157 Schedule 2 cl 15
When members cease to hold office
21Internal or external member ceasing to hold office
An internal or external member ceases to hold office if the member—
- dies; or
- resigns in accordance with clause 23; or
- is removed from office in accordance with clause 24; or
- becomes disqualified from being a member under clause 14; or
- otherwise ceases to hold office under this Act.
An internal member ceases to hold office if they cease to be an employee of the Bank (but this does not prevent the person from being subsequently appointed as an external member).
22Internal or external member may continue in office at end of term
An internal or external member continues in office despite the expiry of the member’s term of office until—
- the member is reappointed; or
- the member’s successor is appointed; or
- the Minister informs the member by written notice (with a copy to the chairperson and the board) that the member is not to be reappointed and no successor is to be appointed at that time.
The Minister must, before acting under subclause (1)(c), be satisfied that there is a good reason for not appointing a successor at that time.
This clause is subject to clause 21.
Compare
- 1989 No 157 Schedule 2 cl 17
23Resignation of internal or external member
An internal or external member may resign from office by written notice to the Minister (with a copy to the chairperson and the board) signed by the member.
The resignation is effective on receipt by the Minister of the notice or at any later time specified in the notice.
Compare
- 1989 No 157 Schedule 2 cl 18
24Removal of internal or external member
The Governor-General may, at any time, on the advice of the Minister given after consultation with the Attorney-General, remove an internal or external member from office.
Compare
- 1989 No 157 Schedule 2 cl 19(1)
25When Minister may give advice for removal
The Minister may only give the advice under clause 24 in relation to a member (M) if the Minister is satisfied that—
- the MPC has breached a collective duty (but see subclause (2)); or
- M has breached an individual duty; or
- M has been absent from 3 or more meetings within a term of appointment without the consent of the chairperson; or
- M has been guilty of misconduct (including a breach of the code of conduct); or
- M has obstructed, hindered, or prevented the MPC or the board from discharging responsibilities under this Act.
Subclause (1)(a) applies to M only if the Minister is satisfied that M has agreed or consented to 1 or more decisions or acts of the MPC that have materially contributed to the breach of the collective duty.
The Minister may tender advice under this clause whether or not the board has made a recommendation under clause 26 that the member be removed from office.
Compare
- 1989 No 157 Schedule 2 cl 19(2)–(4)
26Board must advise Minister of grounds for removal and may recommend removal
If the board is satisfied of any matter referred to in clause 25(1)(a) to (e) in relation to a member of the MPC, the board—
- must advise the Minister in writing; and
- may recommend that the member be removed from office.
Compare
- 1989 No 157 s 53(5)
27Other provisions relating to removal
The Minister may advise the removal of an internal or external member with as little formality and technicality, and as much expedition, as is permitted by—
- the principles of natural justice; and
- a proper consideration of the matter.
The Minister may have regard to the process undertaken by the board under clause 26 in considering what is required for the purposes of subclause (1)(a) and (b).
Compare
- 1989 No 157 Schedule 2 cl 20
28No compensation for loss of office
An internal or external member is not entitled to any compensation or other payment or benefit relating to the member ceasing, for any reason, to hold office as a member.
Compare
- 1989 No 157 Schedule 2 cl 21
29Effect of removal on other positions
An employee of the Bank who is removed as a member under clause 24 is not, because of that removal, removed from their position as an employee.
Compare
- 1989 No 157 Schedule 2 cl 22
Treasury observer
30Treasury observer
The Secretary to the Treasury must ensure that the Secretary, a Deputy Secretary to the Treasury, or any other Treasury officer or employee is nominated to be a Treasury observer.
The Treasury observer has the same rights to attend and speak at a meeting of the MPC as a member but has no right to vote on any question before the MPC and is not subject to the duties that apply to members.
The nomination must be made by written notice to the chairperson (with a copy to the officer or employee if it is a person other than the Secretary to the Treasury).
Compare
- 1989 No 157 Schedule 2 cl 23
31Conditions of performing role as Treasury observer
The Treasury observer must perform that role subject to any conditions that are agreed by the Secretary to the Treasury and the chairperson.
Those conditions must include matters relating to confidentiality and avoiding conflicts of interest.
Those conditions remain in effect until the Secretary to the Treasury and the chairperson agree to amend the conditions (regardless of changes to the person who holds any office or role).
Compare
- 1989 No 157 Schedule 2 cl 24
32Replacing Treasury observer
The Secretary to the Treasury may, at any time and entirely at the Secretary’s discretion, replace the Treasury observer by giving written notice to the chairperson.
Compare
- 1989 No 157 Schedule 2 cl 25
33Function of Treasury observer
The function of the Treasury observer is to—
- support decision making by the MPC (for example, by sharing information on fiscal policy); and
- facilitate the co-ordination of monetary and fiscal policy; and
- carry out any other function agreed between the chairperson and the Secretary to the Treasury.
Compare
- 1989 No 157 Schedule 2 cl 26
Chairperson of MPC
35Duties of chairperson
The chairperson must—
- preside at meetings of the MPC; and
- perform all other duties imposed on the chairperson by this Act or the charter.
Compare
- 1989 No 157 Schedule 2 cl 28
36Who may act as chairperson if Governor is absent or incapacitated or office is vacant
If the Governor is absent or incapacitated or the office of Governor is vacant, an internal member appointed by the board must act as chairperson of the MPC (and that person has all the duties, responsibilities, functions, and powers of the chairperson).
Compare
- 1989 No 157 Schedule 2 cl 29
Accountability for duties
37Accountability of members to Minister
Members of the MPC must comply with—
- the MPC’s collective duties; and
- their individual duties as members.
Members are accountable to the Minister for performing their duties as members.
Compare
- 1989 No 157 Schedule 2 cl 30
Collective duties
38Formulating monetary policy
The MPC must formulate monetary policy in accordance with section 118.
The MPC must perform or exercise its functions or powers in a manner that is consistent with this Act.
Compare
- 1989 No 157 Schedule 2 cl 31
39Compliance with charter
The MPC must ensure that it complies with the charter.
Compare
- 1989 No 157 Schedule 2 cl 32
Individual duties of members
40Member must act consistently with MPC remit, charter, code, and Act
A member must act in a manner that is consistent with—
- the MPC remit; and
- the charter; and
- the code of conduct; and
- this Act.
Compare
- 1989 No 157 Schedule 2 cl 33
41Member must act with honesty and integrity
A member must, when acting as a member, act with honesty and integrity.
Compare
- 1989 No 157 Schedule 2 cl 34
42Member must act in good faith
A member, when acting as a member, must act in good faith and without regard to the member’s own interests.
Compare
- 1989 No 157 Schedule 2 cl 35
43Member must act with reasonable care, diligence, and skill
A member must, when acting as a member, exercise the care, diligence, and skill that a reasonable member would exercise in the same circumstances, taking into account (without limitation)—
- the nature of the functions of the MPC; and
- the nature of the action; and
- the position of the member and the nature of the responsibilities undertaken by the member.
Compare
- 1989 No 157 Schedule 2 cl 36
44Member must disclose if member is likely to become disqualified
If an internal or external member becomes aware that the member is likely to become disqualified under clause 14, the member must, as soon as practicable, disclose that fact to—
- the chairperson (unless the member is the chairperson); and
- the board; and
- the Minister.
Compare
- 1989 No 157 Schedule 2 cl 37
45Use of information by external member
An external member who has information in the member’s capacity as a member, being information that would not otherwise be available to the member, must not disclose that information to any person, or make use of or act on the information, except—
- for the purposes of the performance or exercise of the functions or powers of the MPC; or
- as permitted or required by the charter; or
- to comply with the provisions of the code of conduct that relate to the disclosure of interests; or
- as otherwise required by law.
Compare
- 1989 No 157 Schedule 2 cl 38
46Other individual duties of chairperson
The duties imposed under this schedule on the chairperson are individual duties of the Governor (and of a person acting under clause 36).
Compare
- 1989 No 157 Schedule 2 cl 39
Meeting procedures
47Regular meetings
The MPC must hold a meeting at least 4 times a year.
Compare
- 1989 No 157 Schedule 2 cl 40
48Methods of holding meetings
A meeting of the MPC may be held—
- by a quorum of the members, being assembled together at the time and place appointed for the meeting; or
- by means of audio, audio and visual, or electronic communication, provided that—
- all of the members who wish to participate in the meeting have access to the technology needed to participate in the meeting; and
- a quorum of members can simultaneously communicate with each other throughout the meeting.
- all of the members who wish to participate in the meeting have access to the technology needed to participate in the meeting; and
This clause is subject to clause 51.
Compare
- 1989 No 157 Schedule 2 cl 41
49Quorum
A quorum for a meeting of the MPC is the number that is a majority of the members.
However, the quorum must include—
- the Governor; and
- at least 1 internal member; and
- at least 1 external member.
If an internal member is acting as chairperson under clause 36,—
- subclause (2)(a) does not apply; and
- the quorum must include the internal member who is acting as chairperson and at least 1 other internal member under subclause (2)(b).
Compare
- 1989 No 157 Schedule 2 cl 42(1), (2)
50No business may be transacted without quorum
No business may be transacted at a meeting of the MPC if a quorum is not present.
This clause is subject to clause 51.
Compare
- 1989 No 157 Schedule 2 cl 42(3), (4)
51Emergency procedures
Despite the lack of a quorum, the chairperson and other members of the MPC that are available (if any) may make any decision on behalf of the MPC or perform or exercise any other function, power, or duty of the MPC if the chairperson is satisfied that—
- exceptional circumstances exist; and
- an urgent action is necessary to prevent, correct, or mitigate harm to the economy; and
- despite the use of all reasonable means available, other members of the MPC have not been able to be contacted on the matter or are unable to fully participate in dealing with the matter; and
- action on the matter is required before a quorum will be able to be obtained.
If a decision is made or other thing is done under this clause,—
- the chairperson must make a record of—
- the chairperson’s reasons for being satisfied of the matters referred to in subclause (1); and
- the decision or thing; and
- the chairperson’s reasons for being satisfied of the matters referred to in subclause (1); and
- the chairperson must, as soon as practicable, provide a copy of that record to—
- the Minister; and
- the board; and
- the members of the MPC that were not available when the decision was made or the other thing was done.
- the Minister; and
Compare
- 1989 No 157 Schedule 2 cl 43
52Voting at meetings
Each member has 1 vote.
In addition to the chairperson’s general vote, the chairperson at a meeting has, in the case of an equality of votes, a casting vote.
A resolution of the MPC is passed if it is agreed to by all members present without dissent or if a majority of the votes cast on it are in favour of it.
Compare
- 1989 No 157 Schedule 2 cl 44(1)–(3)
53When member presumed to have agreed and voted in favour
A member present at a meeting of the MPC is presumed to have agreed to, and to have voted in favour of, a resolution of the MPC unless the member expressly dissents from or votes against the resolution at the meeting.
Subclause (1) is subject to the charter (which may vary or disapply the matter referred to in that subclause or provide for an alternative matter).
Compare
- 1989 No 157 Schedule 2 cl 44(4), (5)
54Unanimous written resolutions
A resolution signed or assented to in writing (whether sent by delivery or electronic communication) by all members who are entitled to vote on the matter is as valid and effectual as if it had been passed at a meeting of the MPC duly called and constituted.
The resolution may consist of several documents containing the same resolution, each signed or assented to in writing by 1 or more members.
Compare
- 1989 No 157 Schedule 2 cl 45
55Meeting record
The Bank must publish a summary record of each meeting of the MPC on an Internet site maintained by, or on behalf of, the Bank.
The summary record must include the information required by the charter.
Compare
- 1989 No 157 Schedule 2 cl 46
Procedure generally
56Procedure generally
The MPC may regulate its own procedure except as provided in this Act and in the charter and code of conduct.
Compare
- 1989 No 157 Schedule 2 cl 47
Remuneration of external members
57Remuneration of external members
An external member is entitled to be—
- paid remuneration by the Bank for services as an external member at a rate and of a kind determined by the Minister in accordance with the fees framework; and
- reimbursed by the Bank for actual and reasonable travelling and other expenses incurred in carrying out the member’s duties as a member in accordance with the fees framework.
Compare
- 1989 No 157 Schedule 2 cl 48
1Interpretation
In this schedule,—
chairperson—
- means the chairperson of the MPC; and
- includes a person acting as chairperson under clause 36
collective duty means a duty under clause 38 or 39
external member means a member of the MPC who is not an employee of the Bank (but does not include the Governor)
individual duty means a duty under clauses 40 to 46
internal member means a member of the MPC who is an employee of the Bank
member means a member of the MPC.
- means the chairperson of the MPC; and
Compare
- 1989 No 157 Schedule 2 cl 1