New Zealand International Finance Agreements Act Amendment Bill 2013

New Zealand International Finance Agreements Act Amendment Bill 
In 2013 the New Zealand Parliament passed an amendment bill into law, making any regulation changes of the International Monetary Fund(IMF) from then on become automatic New Zealand financial system regulation, without having to any longer pass through the New Zealand House of Representatives - as irrefutably evidenced here;

Web link http://www.parliament.nz/en-nz/pb/legislation/bills/00DBHOH_BILL11131_1/international-finance-agreements-amendment-bill List of all parliamentary debates on lower right hand side.

New Zealand Minister of Finance the Hon BILL ENGLISH said in debate; 
 “I intend to move that the bill be referred to the Finance and Expenditure Committee. Our commitments to the IMF are effectively premiums to an insurance policy against damage to our economy from an unstable world....... New Zealand has already agreed to these changes, and adopting the International Finance Agreements Amendment Bill simply puts that agreement into practice......The bill also creates a regulation-making power in the principal Act so that further updates to the articles can be made by regulation. This power will simplify the process by which New Zealand meets its obligations. Once changes to the articles are agreed to by the requisite majority of members of the international financial institutions, New Zealand will be bound by the amendments, which means that we are required to bring our domestic legislation into line with our international obligations.”

New Zealand opposition party finance spokesperson Hon DAVID PARKER (Labour) said in debate;
 “I rise to speak to this bill, the International Finance Agreements Amendment Bill, on behalf of the Labour Party. The Labour Party will be supporting this bill to the Finance and Expenditure Committee. The Labour Party supports the function of the International Monetary Fund and the International Bank for Reconstruction and Development, and broadly agrees with the Minister of Finance that these are good institutions that assist the conduct of international economic affairs in a way that benefits New Zealand as well as other countries......I think New Zealanders will have more confidence in our participation in these international fora if they think that Governments are being transparent about changes to those international agreements and the effect of those changes on New Zealand. There is already enough suspicion out there as to the effect of international agreements. We breed further suspicion if we are not open and transparent about changes to those rules......For those reasons, amongst others, the Labour Party opposes future changes to this legislation by way of the statutory regulation-making power that this amendment Act creates. We believe that future amendments ought to come back to this Parliament. If we look back in the history, it has not been an onerous task for New Zealand to amend this legislation through annual amendments or anything like that. It is relatively rare that we have amendments to this International Finance Agreements Act, which dates back to 1975. “
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In the description of the bill it was said that indepth discussion of New Zealand money system structures were not needed because apparently a 'majority' of New Zealand people already know how it works as said here;
"The Act does not mention monetary policy. The majority of us understand that in doing so, the bill aims to ensure that governments take explicit note of the fact that fiscal policy and monetary policy are interdependent; and that different fiscal strategies can prompt different monetary policy responses."
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New Zealand Green Party Co-Leader - Russel Norman - having displayed a sense of growing environmental and social injustice - had “come out” - asking hard questions of the current money system orthodoxy after his 21 Feb 2013 International Finance Agreement Amendment Bill third reading - in which Russel Norman admitted to having only recently gained an understanding of just how New Zealand money supply originates and under what terms and conditions;

"The other thing that comes out of, I think, the IMF that surprises a lot of people is when the IMF says things like most of the money that is generated is generated by the private banks. Most of us, I think—and I was certainly one of these people, until reading IMF papers—always assume that the Government created the money. That is just because I actually did not follow it closely enough, whereas the IMF is very clear that it is the private banks that create most of the money. What the IMF—or, at least, some of the researchers within the IMF—is now saying is that the Government should use its ability to create money, so that there is some publicly created money as well as the privately created money, most of which is created by the private banks.
This, of course, is a pretty radical proposition, and the IMF, in putting forward this proposition, has certainly been shaking the policy debates around monetary policy all over the world, except in New Zealand, of course, where we are kind of locked into some weird backwater where the Government does not want to have a debate around any of this kind of stuff. But if you read the international literature, it is pretty good."
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Russel Norman made clear his views again - and clearly had not yet buckled - in this 27 May 2013 article;
"In the debate around monetary policy, it is often forgotten that the default position is that the private banks create most of the money and lead the increase in the monetary supply. They then charge interest to the users of the money that they have created......The debate should be: what constraints should apply to the private creation of money given the banks’ irresponsible behaviour in the past; and should the public institutions be expanding money supply as a policy tool, to what extent, and to what purpose? Should the state be allowed to also increase the money supply for public purposes such as refilling the Natural Disaster Fund and to see what effect it can have on reducing the very damaging high NZ dollar?
The answers to these questions aren’t black and white but for my pick I think we need to restrain the banks lending into the housing bubble and use a trial public creation of money to restock the Natural Disaster Fund – both to be prepared for future disasters and to see what impact it would have on the dollar.
It is of course difficult to have a rational conversation around these issues in the current political context (ie Key’s scaremongering) but it is an important conversation for rational adults to have. We do have an out of control current account deficit and if we want to be masters of our own destiny we need to change policy settings as under Key’s plan our deficit and debt increase dramatically."
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What is made clear from Russel Norman's musings of our current money supply being 'partly funded offshore' is that he does not yet fully comprehend just how it works - and is very poor at being able to articulate the various forms of monetary easing - those that only favour the private bankers and those that dont.

New Zealand mainstream media senior editors have let New Zealand down no less than Russel Norman who they set out to ridicule.

TV3 Patrick Gower & TV1 Corin Dann just might be the highest paid clowns in New Zealand's economic circus! Radio New Zealand Jim Mora - I am quessing one of the lowest paid clowns - knows who the ring master is - but chooses to sweep it under the carpet?

New Zealand Prime Minister and former international investment banker John Key 17 November 2012;
“Our (Govt) debt to GDP levels by then will top at just under 30 percent, in other words, um, we'll be relatively lowly indebted compared to countries like America and Europe, but I put it to you we are a small open economy, we have high levels of private sector debt, we, mum and dad have borrowed that debt effectively from foreigners because their local bank has sourced that from foreigners.”

TV3 Patrick Gower;
"The Prime Minister lost use of one of his favourite political weapons today, thanks to a policy U-turn by the Greens over printing money to improve the exchange rate."
"Known as 'quantitative easing', it's been done by some of the world's big economies."
http://www.3news.co.nz/Greens-U-turn-wont-quiet-Key/tabid/1607/articleID/302045/Default.aspx

TV1 Corin Dann;
"It is after all exactly the policy that's been used by the US Central bank for the last couple of years to prevent deflation and keep the US economy afloat."
http://tvnz.co.nz/politics-news/corin-dann-greens-had-drop-money-printing-5469780

RNZ Jim Mora;
"Banks have ended up in the position, as Bernard Hickey has said a time or two on the panel, where they have the franchise on the creation of money"
http://publiccreditorbust.blogspot.co.nz/2013/03/westpac-new-zealand-senior-economist.html

You lazy fools - its not 'exactly' the same at all - you have the same problem in reporting on this matter as Russel Norman did trying to sell it as policy - you have not done you research - because if you had you would discover the truth is not hard to find - as documented beyond any reasonable doubt in my research here;
http://publiccreditorbust.blogspot.co.nz/2013/04/universal-public-credit-public-policy.html

What dictates if Quantitative Easing benefits your nation or only private bankers - is if the money trail of your central bank traces back to your public institutions being the lender of last resort or if your public institutions have contracted out that privilege and become just a conduit of the international private banking network.
QE occurs when even if interest rates are heading to zero the economy remains flat because society has no more compacity to borrow money into circulation - so the lender of last resort then simply gets to type some money into their computer and start directly buying distressed assets of all kinds out in the market as direct stimulus. If your central bank - as is the case in New Zealand - has just become a conduit for private banking institutions - the private banking institutions gain heaps for nothing - but if your money issuance trial leads to a public institution - such as in the case of Japan who's government is typing the money into their account and buying up distressed assets - it will internally re-balance your economy.

Olivier Blanchard the current IMF Chief Economist on the record admits the shortcomings of the private central banking network administration of money systems in its area of influence in this article;
Five Lessons for Economists From the Financial Crisis
By David Wessel of Wall Street Journal re;

London School of Economics and Political Science
What should economists and policymakers learn from the financial crisis?
Monday 25 March 2013

What did the worst financial crisis and deepest recession in 75 years teach academic economists and policymakers on whose watch it happened? At a recent London School of Economics forum, convened to honor Bank of England Governor Mervyn King,Olivier Blanchard offered some answers.

Mr. Blanchard, 64 years old, is well positioned to offer such reconsideration. An internationally prominent macroeconomist, he spent 25 years on the MIT faculty before becoming chief economist at the International Monetary Fund in September 2008, just before the collapse of Lehman Brothers.
Here are Mr. Blanchard¹s five lessons in his own words, lightly edited by The Wall Street Journal’s David Wessel:

#1: Humility is in order.
The Great Moderation [the economically tranquil period from 1987 to 2007] convinced too many of us that the large-economy crisis -­ a financial crisis, a banking crisis ­- was a thing of the past. It wasn’t going to happen again, except maybe in emerging markets. History was marching on.
My generation, which was born after World War II, lived with the notion that the world was getting to be a better and better place. We knew how to do things better, not only in economics but in other fields as well. What we have learned is that¹s not true. History repeats itself. We should have known.
#2: The financial system matters — a lot.
It’s not the first time that we¹re confronted with [former U.S. Defense Secretary Donald] Rumsfeld called “unknown unknowns,” things that happened that we hadn’t thought about. There is another example in macro-economics:
The oil shocks of the 1970s during which we were students and we hadn’t thought about it. It took a few years, more than a few years, for economists to understand what was going on. After a few years, we concluded that we could think of the oil shock as yet another macroeconomic shock. We did not need to understand the plumbing. We didn’t need to understand the details of the oil market. When there’s an increase in the price of energy or materials, we can just integrate it into our macro models -­ the implications of energy prices on inflation and so on.
This is different. What we have learned about the financial system is that the problem is in the plumbing and that we have to understand the plumbing. Before I came to the Fund, I thought of the financial system as a set of arbitrage equations. Basically the Federal Reserve would chose one interest rate, and then the expectations hypothesis would give all the rates everywhere else with premia which might vary, but not very much. It was really easy. I thought of people on Wall Street as basically doing this for me so I didn¹t have to think about it.
What we have learned is that that’s not the case. In the financial system, a myriad of distortions or small shocks build on each other. When there are enough small shocks, enough distortions, things can go very bad. This has fundamental implications for macro-economics. We do macro on the assumption that we can look at aggregates in some way and then just have them interact in simple models. I still think that¹s the way to go, but this shows the limits of that approach. When it comes to the financial system, it¹s very clear that the details of the plumbing matter.
#3 Interconnectedness matters.
This crisis started in the U.S. and across the ocean in a matter of days and weeks. Each crisis, even in small islands, potentially has effects on the rest of the world. The complexity of the cross border claims by creditors and by debtors clearly is something that many of us had not fully realized: the cross border movements triggered by the risk-on/risk-off movements, which countries are safe havens, and when and why? Understanding this has become absolutely essential. What happens in the part of the world cannot be ignored by the rest of the world. The fact that we all spend so much time thinking about Cyprus in the last few days is an example of that.
It’s also true in trade side. We used to think if one country was doing badly, then exports to that country would do badly and therefore the exporting countries would do badly. In our models, the effect was relatively small. One absolutely striking fact of the crisis is the collapse of trade in 2009. Output went down. Trade collapsed. Countries which felt they were not terribly exposed through trade turned out to be enormously exposed.
#4 We don’t know if macro-prudential tools work.
It’s very clear that the traditional monetary and fiscal tools are just not good enough to deal with the very specific problems in the financial system. This has led to the development of macro-prudential tools, which what may or may not become the third leg of macroeconomic policies.
[Macroprudential tools allow a central bank to restrain lending in specific sectors without raising interest rates for the whole economy, such as increasing the minimum down payment required to get a mortgage, which reduces the loan-to-value ratio.] In principle, they can address specific issues in the financial sector. If there is a problem somewhere you can target the tool at the problem and not use the policy interest rate, which basically is kind of an atomic bomb without any precision.
The big question here is: How reliable are these tools? How much can they be used? The answer — from some experiments before the crisis with loan-to-value ratios and during crisis with variations in cyclical bank capital ratios or loan-to-value ratios or capital controls, such as in Brazil — is this: They work but they don’t work great. People and institutions find ways around them. In the process of reducing the problem somewhere you tend to create distortions elsewhere.
#5 Central bank independence wasn’t designed for what central banks are now asked to do.
There is two-way interaction between monetary policy and macro prudential tools. When Ben Bernanke does expansionary monetary policy, quantitative easing, and interest rates on many assets are close to zero, there’s a tendency by many players to take risks to increase their rate of return Some of this risk actually we want them to take. Some we don¹t want them to take. That is the interaction of monetary policy on the financial system.
You also have it the other way around. If you use macro prudential tools to, say, slow down the building in the housing sector but you have an effect on aggregate demand, which is going to decrease output.
The question is: How do you organize the use of these tools? It makes sense to have them under the same roof. In practice means the central bank. But that poses questions not only about coordination between the two functions, but also about central bank independence.
One of the major achievements of the last 20 years is that most central banks have become independent of elected governments. Independence was given because the mandate and the tools were very clear. The mandate was primarily inflation, which can be observed over time. The tool was some short-term interest rate that could be used by the central bank to try to achieve the inflation target. In this case, you can give some independence to the institution in charge of this because the objective is perfectly well defined, and everybody can basically observe how well the central bank does..
If you think now of central banks as having a much larger set of responsibilities and a much larger set of tools, then the issue of central bank independence becomes much more difficult. Do you actually want to give the central bank the independence to choose loan-to-value ratios without any supervision from the political process. Isn’t this going to lead to a democratic deficit in a way in which the central bank becomes too powerful? I¹m sure there are ways out. Perhaps there could be independence with respect to some dimensions of monetary policy -­ the traditional ones — and some supervision for the rest or some interaction with a political process.
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In July of 2014 the New Zealand TV1 news ran a completely inaccurate misleading article about the structures of the New Zealand banking system. The following week it is the turn of New Zealand TV3 news who ridiculed a New Zealand First MP for saying that the Reserve Bank of New Zealand is foreign controlled in this video link below;
http://www.3news.co.nz/NZ-First-MP-confused-over-bank-ownership/tabid/1607/articleID/353729/Default.aspx

when the foreign control of the RBNZ is something former RBNZ Governor Alan Bollard made very clear in 2010 book he wrote titled – Crisis – excerpts below;
http://publiccreditorbust.blogspot.co.nz/2013/11/book-excerpts-crisis-by-new-zealand.html
*Pg 19-20 - “Banking practices differ around the world, but we ensure ours meet international standards. These are set by a somewhat shadowy group called the Basel Committee on Banking Supervision. Comprised of representatives of large countries( not including New Zealand ), the group meets in Switzerland at the Bank of International Settlements (BIS).”

*pg 98 - Agreed convention at the Bank of International Settlement means that what is said in the room stays in the room.

*pg 69 - We had lived through the biggest shock to the financial system since the Great Depression. But a financial shock of this magnitude was clearly also going to cause significant economic damage. This effect first showed in the large, northern, developed economies with the biggest financial sectors. The festering finance problems were flowing into the non-financial sectors, what we call the “real economy”.

*pg 186 - The worlds financial system and the worlds economy are inextricably linked; a banking crisis hurts growth in the “real economy”.

*pg 145 - For the first time as an economist, I started seriously to wonder about just how tenuous our Western market-based world might be.
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New Zealand really is presently very poorly served by its public service and media who in pursuit of the quickest way to pay day are to quick to swallow and regurgitate second hand summarised information without researching the veracity of it.