Loose change
No amount of virtue signalling will make up for the RBNZ’s loose monetary policy. By Oliver Hartwich.
This month, Central Banking, the journal for the world’s monetary policy experts, hosted its virtual Summers Meetings.
With inflation returning, the onset of a new European debt crisis, and the implications of geopolitical conflicts, central bankers have enough reasons to be worried right now.
So the first keynote address of the event would have surprised participants. Rather than discussing any of the issues affecting the global economy, New Zealand’s Reserve Bank Governor Adrian Orr spoke on the topic, “Why we embraced Te Ao Māori.”
The world’s central bankers may not even have been familiar with the term Te Ao Māori, which denotes the Māori worldview.
They’ve probably never heard a pepeha either, which is the traditional way of introducing oneself in Māori. Orr delivered this and explained in this way where he was coming from: his mountain, his island, his lake (“Ko Tongariro te Maunga / Ko Taupo te Moana / Ko Atiu te motu.”)
What followed was a potted history of New Zealand and the Reserve Bank’s strategy to remake itself along Te Ao Māori lines.
If there were any historians in the audience, they might have quibbled with Orr’s account of New Zealand history. Not because it was wrong, but because it was one-sided.
In Orr’s presentation, the story of colonisation is one characterised solely by loss and deprivation.
“There existed no concepts of property ownership prior to the arrival of the European,” he explained. “In losing land, Māori lost their homes, their ability to grow food and trade, and their connections to their tipuna (ancestors).”
From there, Orr quickly moved on to the present-day statistic according to which Māori make up 17 per cent of New Zealand’s population but earn less than 9 per cent of its income. This discrepancy, and the richness of Māori culture, were behind the Reserve Bank’s embrace of the Māori worldview, the Governor stated.
There can be no question that economic and social discrepancies between Māori and non-Māori New Zealanders persist. And it is not just in income that Māori are below the New Zealand average but in education, health or life expectancy as well.
Where Orr’s account was incomplete, however, was in his account of British settlement. “Soon after the Treaty of Waitangi was signed, colonisation proceeded on a substantial scale and, with it, a British-style economy and institutions evolved,” was all he said about the development of the New Zealand economy since the signing of the Treaty in 1840.
These British institutions, it should be remembered, propelled New Zealand’s economy, at one time giving it the highest per capita income in the world. It would have also been worth mentioning that other Pacific nations lacking such British-style institutions never got close to reaching New Zealand’s economic levels.
Yet in Orr’s account of New Zealand history, none of this featured. That does not diminish his justified lament of Māori inequality, but it leaves it somewhat unbalanced.
An in-depth look into these inequality matters would have also revealed they have little to do with monetary policy. If there is any root cause of inequity at all, it is far more likely to be found in education. The last census showed Māori trailing the population average in every group of age and qualification. The only good news is that the gap is narrowing among younger populations.
The Reserve Bank cannot realistically aspire to close this ethnic economic gap. It simply lacks the tools to do so. It does not run the country’s schools. It does not administer the welfare state. It is a central bank after all.
The remainder of Governor Orr’s speech thus only spruiked Māori virtues, but there was no way any of his speech would have any positive consequences for the Māori economy.
In that sense, it was pure virtue signalling. But it was also a cultural appropriation of good and noble Māori values.
The Governor thus celebrated wānanga (innovation), tauira (integrity) and taura (inclusion). Orr spoke of matangirua ki matangireia (working in unison). He highlighted the Bank’s outreach as an example of whanaungatanga (advocacy building).
All that is all very well, except the RBNZ’s outcomes are less positive. Especially for Māori. And it is that which leaves a sour aftertaste to Orr’s speech.
The recent bout of inflation hit Māori particularly hard as David Seymour, the leader of the opposition ACT party, explained.
“Māori home ownership is 47 per cent, compared to 71 per cent for European New Zealanders,” Seymour pointed out. “That is in part because Māori are younger, with a median age of 26 versus 37 for the whole population.”
In part due to the RBNZ’s loose monetary policy, which caused house prices to increase massively, young Māori would have become relatively poorer. To them, the RBNZ’s profession of Te Ao Māori would ring hollow.
The RBNZ has one main job: to provide stability. Everything else is a nice-to-have.
No amount of virtue signalling and cultural appropriation can be a substitute for good policy-making.
Oliver Hartwich is Executive Director of The New Zealand Initiative. This op ed was first published in The Australian and has been republished with the author’s permission.
