New Zealand Slashes Reserve Bank Budget by 25%

The New Zealand government has announced a significant 25% cut to the Reserve Bank's operational budget over the next five years, reducing funding from an initial request of $1.03 billion to $750 million. This decision, agreed upon by both the government and the bank, follows an increase in staff numbers at the Reserve Bank, which rose from 255 in 2017 to 660 by January of this year. Finance Minister Nicola Willis emphasized that the cuts were necessary to ensure value for money and address what Treasury deemed overstaffing in certain areas. Critics, including Fleur Fitzsimons of the Public Service Association, argue that these cuts undermine the bank's capacity to effectively manage economic challenges and could lead to job losses among skilled personnel. The funding change follows the recent resignation of the Reserve Bank's governor, Adrian Orr. The new budget is set to take effect from July 1, 2025, and aims to optimize the bank's resources while fulfilling its legal responsibilities.