Taxpayers are to remain in the dark over how much members of the Reserve Bank’s new monetary policy committee will be paid for being on the powerful decision-making board.
But, in a letter from Finance Minister Grant Robertson to State Services Minister Chris Hipkins, Robertson made the case for an “exceptional fee” to be paid to the three new external members.
He admitted that unless the fee was hiked, the Reserve Bank would struggle to attract the right applicants for the job.
“While I do not normally support setting exceptional fees at this level, they are necessary for the Monetary Policy Committee (MPC given the vital role they will play in economic decision making,” Robertson said.
The amount the members would be paid was redacted from the letter but it could be upwards of $1500 per day, based on the pay of people in similar positions.
According to the letter, the MPC members would have been paid the maximum fee the Government is able to offer; up to $800 a day.
But Robertson said even that was not enough.
“To meet the expectations of the role, MPC members will need a significant amount of experience in exercising sound judgment under high levels of uncertainty.”
Robertson said there would be only a small number of people who fit this category and, to attract them, they would need to be paid more.
“MPC members will not be able to hold some potentially lucrative financial sector jobs due to potential conflicts of interest,” Robertson said.
Asked how much the members would be paid, a spokesman for Hipkins said specific amounts were “sensitive information” and, as such, would not be disclosed.
“This is on the basis that it could weaken the Government’s ability to negotiate fee levels by creating an environment where the exceptional fee becomes the norm.”
The letter also said the most comparable role within the state sector would be a member of the Commerce Commission, who earns a salary equivalent to a daily fee of $1565.
It also noted MPC members at the Bank of England receive around $1900 in New Zealand dollars.
“Reserve Bank of New Zealand external MPC members will require similar economic and analytical skills, although their role is likely to be less public facing,” Robertson said in the letter.
He said the expectation is that external MPC members would dedicate around 50 days per year to the role.
A spokesman for Hipkins said in 2017/18, the Government approved 43 “exceptional fee” proposals.
That number was 90 in 2016/17 and 42 in 2016/15.
In late March, Robertson announced the appointment of Caroline Saunders, Bob Buckle and Peter Harris as the external members of the MPC.