Public want a 'right' to use cash, says Reserve Bank governor Adrian Orr

Friday, 21 February 2020

People use cash for all sorts of things, though it is less and less used as a means of payment.

The public has sent a clear message to the Reserve Bank that people would not tolerate moves to make New Zealand a cashless society.

'We're certain it's going to be less cash, but not cashless,' said Reserve Bank governor Adrian Orr, in a speech at Auckland's waterfront Hilton Hotel late last week.

The Reserve Bank asked for public feedback on the future of cash, and the response was huge, said Orr.

Reserve Bank governor Adrian Orr says New Zealand will not be a cashless society.

'It really touched the heart and soul of an enormous amount of people. They really wanted the right … to have access to, and or, to use cash,' he said.

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Cash was one of the final common denominators of people remaining included in the financial system, he said.

'If you can't get a bank account, or a credit card, or access to power, or anything, you are excluded.

'We got over 2000 submissions,' he said, adding New Zealand would not be doing its traditional 'bungy jump into the new world' and going cashless.

Orr said the Reserve Bank was expanding its Auckland operation to be closer to the financial services companies it regulates.

Reserve Bank Governor Adrian Orr sees cash as essential to ensure everyone gets to be included in the financial system.

After the failure of $750 million insurer CBL, Orr spoke of the need for the Reserve Bank to invest in improving its capacity.

Orr said the Auckland expansion would also increase the Reserve Bank's ability to listen, and learn, and not only from financial services companies based in the city.

'I will continue to tell our story in different ways, to talk to different audiences,' said Orr, who has been criticised for his testy reaction to criticism, and adoption of Māori iconography and language.

'I'm not here to talk to a few narrow specialists. I'm not here to talk to just the institutions we regulate.

'We are the central bank of everyone here in New Zealand, present and future, and we have been too narrow and too lax in our engagement with you all, and it is not going to happen again.'

Orr spoke about the importance of economic and social inclusion in response to a question from Jackie Clark, founder of The Aunties whanau support movement, who complained New Zealand was a low-wage economy.

'The owners of capital have been doing a great job over and above the owners of labour,' Orr said.

'It's been extreme, unprecedented, over the last 40 or 50 years of that ongoing return to the owners of capital, and labour has become a global commodity, where production goes to the lowest common denominator.'

'We want low and stable inflation, but that does not mean we want low wages,' he said. 'We've been celebrating the fact that nominal and real wages have been growing recently.

'That's how we roll. That's how we have to roll, otherwise create yourself a gated community. Enjoy yourselves, but don't leave.'

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