Bill English

20 February 2009 - The Government has today issued its response to the Finance and Expenditure Committee's report on the future monetary policy framework.

"In essence, the committee found that the existing monetary policy framework is sound," Finance Minister Bill English said today.

"We agree that to have a world class economy, monetary policy needs to be well supported by complementary government policies. Monetary policy cannot itself deliver a growing, open and competitive economy that will produce permanently higher incomes and living standards.

"We consider that price stability remains the right objective for monetary policy and this Government is committed to the existing monetary policy framework."

Mr English signed a new Policy Targets Agreement with Reserve Bank Governor Alan Bollard in December. The only change was a statement of the government's economic objectives, as a backdrop to the operation of monetary policy.

A number of Government initiatives are consistent with the Committee's recommendations. They include measures to boost productivity and cut red tape.

"In the short term, we have put in place a range of stimulatory policies, by putting more money in people's pocket through tax cuts, providing support for small business, boosting infrastructure spending, and ensuring banks have greater surety over funding so they can continue to lend," Mr English said.