By Michael Reddell

Today is the last day in office for the Governor of the Reserve Bank, Adrian Orr. Of course, he hasn’t been in the office since 5 March when, on the eve of his major international conference, his resignation was announced and he stormed off with no (effective) notice and no explanation.

I’m not going to waste my time or bore readers with a retrospective assessment of Orr’s overall tenure. I recently reread the couple of substantive posts I wrote on prospects at the time he was appointed, and although I was probably more openly sceptical than most, I wasn’t nearly pessimistic enough. But if the initial appointment was (perhaps) pardonable, he should never have been reappointed, and his departure now is both welcome and long overdue.

When Orr’s resignation was announced, we were told that his deputy would be acting Governor for the rest of the month and were led to believe that from 1 April a formal “temporary Governor” (explicitly provided for in the Act) would be in place. Here is the extract from the Bank’s statement

and this is from the Minister’s statement

But then this appeared in The Post this morning

It may be legal (although the RB spokesperson appears to have the details wrong as the Act does not seem to impose a deadline on the Minister, only on the Board, and – if Orr’s resignation really is effective only from today – they’d appear to have another 28 days even to make a recommendation)

but it certainly isn’t what we were led to expect on 5 March in either announcement (see above). There doesn’t seem to be any good reason for the Bank’s Board not yet to have made a recommendation to the Minister. They’d had more than three weeks already.

As per earlier posts, I think it is quite inappropriate that board chair Quigley is still in office. The government should have prevailed him to do the decent thing and step aside so that someone new can lead the search for a new permanent Governor. But even if the government were so minded, it isn’t a good reason for not getting a proper temporary Governor in place, and for not having a recommendation on the Minister’s desk already. Probably most people expect Hawkesby to be appointed as temporary Governor, and if that was the Board’s inclination it should have been quick and easy to decide on that recommendation. Of course, it is always possible that the Minister has in mind something different and is in back-channels and unofficial conversation with the Board about just who they might nominate (“back-channels and unofficial” since the Act is clear that the onus is on the Board to nominate and on the Minister only to accept or reject).

It all seems rather sloppy and lackadaisical (dating right back to those 5 March press releases, which perhaps had to be churned out in a hurry). And one reason countries typically give long (and fixed) terms to central bank Governors is precisely so that Ministers of Finance cannot do what the Stuff journalist suggests and make decisions about short terms based on whether someone makes monetary policy decisions to the Minister’s satisfaction (not that I am suggesting Willis will). And if this process is sloppy and lackadaisical it only compounds the bad impression made about a country and its central bank when the incumbent Governor resigned with no notice and not a word of explanation.

Originally published on CroakingCassandra.