Suggestion to ‘sue bank’ derided

Press, 27 June 1989, Page 8

Suggestion to ‘sue bank’ derided

Political reporter

Derision was heaped from several quarters yesterday on suggestions by the leader of the New Labour Party, Mr Jim Anderton, that business people should sue the Reserve Bank for New Zealand’s poor economic performance. Mr Anderton suggested such court action would be successful, claiming the bank had breached the Reserve Bank Act, 1964, by not following policies to maximise economic growth and employment. The Prime Minister, Mr Lange, said the suggestion was an appeal to the Social Credit vote, and to all people who regarded the financial system as “oppressive and conspiratorial. He’s talking nonsense; he’s going to make a career out of it.”

Mr Lange asked who would make such claims, which Mr Anderton suggested would be worth billions of dollars.

“Is the dairy on the corner of Randolph Street and Jellicoe Street in Gore going to sue them for thousands of millions of dollars?”

And if so, would the dairy also be subject to counter-claims “for all the good years,” he asked. Whether the bank had kept to the letter of its law was a matter for political debate, not settlement in “the Magistrate’s Court at Waipukurau,” said Mr Lange. The Reserve Bank appeared to agree, but was less light-hearted.

“The Reserve Bank of New Zealand has always carried out the monetary policy of successive Governments and has continued to do so over the

last five years as the Government’s Budgets and Reserve Bank annual reports make clear,” said the Governor, Dr Don Brash, in a two-sentence statement. The Minister of Finance, Mr Caygill, said the bank had not strayed outside the 1964 act, because the economic policies of the last five years had been aimed at restoring long-term growth and employment. “Far from dumping full employment, highest levels of production, and trade goals, the Government and the Reserve Bank have been concerned with reorienting the past economic policies which falsely assured people of protected jobs, to ensure future jobs are soundly based.” The Opposition spokeswoman on finance, Miss Ruth Richardson, said Mr Anderton’s "highly political move” would do nothing to solve New Zealand’s economic problems. The answer to curing unemployment was to stop excessive reliance on monetary policy, and to deregulate the labour market.