Finance Minister Nicola Willis will not say why New Zealand's Reserve Bank Governor Adrian Orr has resigned after seven years of service.
Willis announced today that Deputy Governor Christian Hawkesby would be Acting Governor until March 31.
Reserve Bank Governors typically serve five-year terms. Orr was first appointed in 2018, and reappointed in March 2023. His second term was due to end in 2028.
Willis said she was not going to "characterise the reasons" for his resignation, saying she had been "aware for the past few days that discussions have been occurring" between the Reserve Bank Board and Orr about a "possible resignation."
When asked if the board had confidence in Orr, Willis said: "That's a question for the board." She confirmed the board would front on the matter.
Willis said she was confident the Reserve Bank was a "strong financial institution" and that Hawkesby was "experienced".
"We have continuity and stability in the membership of the Reserve Bank Board, and the membership of the Monetary Policy Committee - so there will be continuity."
The minister would not answer whether she would still have confidence in Orr if he had remained as governor.
"I'm not going to answer hypothetical questions."
When asked why Orr resigned, Willis said it was a matter for him to "characterise".
Her own characterisation was that "he decided to resign" because he viewed it as "an appropriate juncture at which to do so".
"Questions about the nature of the resignation are for the Reserve Bank Board."
When asked if he was leaving on good terms, Willis said: "Look - yes, the resignation has occurred, the Reserve Bank board has accepted it."
"I have acknowledged the governor's seven years in the service in the role, and I wish him well for the future."
Prime Minister Christopher Luxon said he had only found out about the decision today - something he was comfortable with - and would not be commenting further.
"Let's be clear, the Reserve Bank Governor and the Reserve Bank of New Zealand is an independent role and an independent organisation.
"The Reserve Bank Governor has resigned. I appreciate there'll be lots of commentary about it, I'm not going to climb in on that. As Prime Minister I've respected the independence of the governor and the Reserve Bank and I'll continue to do so."
He said he had worked "as constructively as I can with the Reserve Bank Governor" by focusing on fiscal policy to get the economy working.
"Typically I've met with him before different announcements that he might have made, and in my meetings been very constructive."
ACT leader David Seymour, a frequent critic of Orr, took a parting shot at the governor.
"I've heard people say 'farewell and thanks for the inflation,' but ultimately this is a guy who had a really important job to do."
"He's now moved on, and I think what's really important that we get a really good person in the position, because if the last five years have shown anything it's how important the Reserve Bank Governor role is.
"The pain people have felt through the cost of living crisis over the last five years shows we need to get a great Reserve Bank Governor and that's up the board."
Seymour said he could not remember who had told him "farewell and thanks for the inflation" in the short window between the announcement of Orr's resignation and Seymour's arrival on Parliament's tiles.
"It's amazing how many people you can meet in that short space of time," he said.
Labour leader Chris Hipkins acknowledged Orr's departure, saying he had led the Reserve Bank through an incredibly tough time.
"I think people doing those jobs around the world through the global pandemic found that a really, really difficult time. We saw the spike in inflation around the world which the Reserve Bank then had to fight. That was tough going, and so I want to acknowledge his ongoing dedication and commitment during that time."
Asked whether the government wanted Orr out, Hipkins said he would leave politics aside.
"It's a tough gig, it's a job you get a lot of scrutiny in. I think history of course will form a better judgement on the period that we've just been through than perhaps is immediately apparent."
Orr leaves part-way through second term
Orr has been a pivotal figure, dealing with rising inflation and disruptions to the economy caused by the Covid-19 pandemic.
Interest rates rose in response but have fallen from more than 5% last year to 3.75% this month.
In a statement, Orr said New Zealand's central bank had built its capability and credibility to face what he called an "increasingly complex and challenging global environment".
He said he was departing with inflation on target and the economy in a recovery after Covid.
Orr said he leaves "with consumer price inflation at target, and an economy in a cyclical recovery following the long period of Covid-related disruption.
"The financial system remains sound. However, there is much work left to do on the major multi-year strategies RBNZ is following. Ongoing focus and funding will be critical to these projects' success."
He said he was proud of the people at Reserve Bank who had modernised and strengthened the institution and the financial system.
He singled out strategies for the future of cash, climate change policies, Māori access to capital and future of payments for special mention.
From April 1, Willis - taking advice from the RBNZ Board, would appoint a temporary Governor for up to six months.
"I wish him well for the future," Willis said.
RBNZ board chair Professor Neil Quigley thanked Orr for his leadership.
"Adrian has been critical to leading the institutional reforms needed to implement the new Reserve Bank Act, Deposit Takers Act, and Depositor Compensation Scheme," he said.
"He has also driven a significant uplift in leadership and capability across the Bank, and modernised its culture to reflect contemporary New Zealand society."
Not before time - union
But in a statement this afternoon, the Taxpayers’ Union said Orr's resignation "is not before time".
"Orr’s work caused the single worst economic downturn in New Zealand in over three decades," union spokesman James Ross said.
"He was far too slow to react as inflation increased, and far too slow to lower interest rates as inflation fell.
"With more than two and a-half times as many staff at the Reserve Bank now as in 2018, the Governor spent his time in the top seat empire-building rather than focusing on his core responsibilities."
Ross said there was now the opportunity to take a thorough look at the Reserve Bank’s actions over the last few years, "to ensure this never happens again".
"The replacement Governor needs to be absolutely laser-focused on keeping inflation within the target range, and we can’t see repeats of Orr’s money-printing spree."
- additional reporting APL
