New Zealand Central Bank Announces 25% Budget Cut for Next Year

By Lucy Craymer

WELLINGTON (WELLNESSINVESTIGATOR) - The New Zealand central bank's operating budget will be cut by roughly 25% in the coming fiscal year and set at roughly NZ$150 million ($88.50 million) for each of the next five years, New Zealand's Finance Minister Nicola Willis said on Wednesday.

As per the Reserve Bank of New Zealand’s funding agreement, the institution will be provided with an aggregate operational expenditure of NZ$750 million ($443 million) over the five-year period concluding on June 30, 2030.

Willis said in a statement the allocation equates to an average annual operating budget of NZ$150 million, down from a budget of NZ$200 million in the current fiscal year.

The total five year operating spending of NZ$750 million is above the previous five year operating budget of NZ$718.8 million. However, the RBNZ's annual report shows that annual spending grew nearly 70% in the four years to June 30, 2024.

In total, the government has set aside NZ$25.6 million in capital expenditures for the five-year period concluding on June 30, 2030, which represents a decrease from approximately NZ$29 million during the previous five-year span ending on June 30, 2025.

“The new agreement will ensure that the Reserve Bank has adequate resources to fulfil its legal responsibilities while promoting heightened cost efficiency," Willis said.

“The board of the Reserve Bank along with the Treasury believe that the newly established spending caps are suitable.”

The conservative government has implemented significant cuts across the public sector since it was elected at the end of 2023, as part of its drive to return the government's accounts to surplus. A cabinet paper released alongside the announcement said the Treasury had reviewed the central bank's funding request of NZ$1.03 billion for the five year period and found it "did not provide good value for money."

Since 2018, the central bank has expanded considerably, with its workforce almost doubling to reach 660 employees as of January this year. This growth can be attributed partly to the central bank’s enhanced regulatory responsibilities and the requirement for additional personnel to carry out multiple reform initiatives.

Chair Neil Quigley of the central bank board stated that over the next several months, the organization will collaborate with its team to revamp their workflow processes. This initiative aims to maximize resource utilization while ensuring ongoing fulfillment of their assigned responsibilities.

($1 equals 1.6949 New Zealand dollars)

(Reporting by Lucy Craymer; Editing by Himani Sarkar and Kate Mayberry)

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