Labour leader Phil Goff told Federated Farmers' annual conference that exporters were being slammed every time the Reserve Bank increased the official cash rate, hamstringing any chance of an export-led economy.
Price stability would remain a crucial bank target, but the proposed Bill would also look at the bank's supervisory tools, such as regulating banks' capital adequacy.
Mr Goff said in the past the bank had used this power only to control risks to loan books and it had not regulated banks' overall lending with respect to wider economic risks.
With the official cash rate likely to rise in coming months, Mr Goff said there was a risk the associated rising exchange and interest rates would turn the economic recovery to one driven by domestic consumption and not exports.
Asked in an interview how New Zealand could get a sustainable export-led recovery, instead of an unsustainable consumption-led recovery, Mr Goff said he acknowledged the need for price stability and the Reserve Bank Act had succeeded in doing that.
But economies around the world, including Australia's, were broadening similar Acts to encompass issues such as currency, employment and economic prosperity and wellbeing.
That was very practical. New Zealand had been very purist.
Asked why he was looking at this amendment now and not during the nine years in government, Mr Goff said as with this Government, the Labour-led administration took a conservative approach.
Mr Goff's embracing a of monetary policy rethink did not find flavour with Shareholders' Association chairman Bruce Sheppard, who told the conference the Labour Government did not act when it held a select committee review on the topic. He called New Zealand's currency an overvalued basket case.
