Finance Minister Nicola Willis Photo: RNZ / Samuel Rillstone
Parliament has passed a bill to remove the Reserve Bank's mandate to also consider employment levels in monetary policy.
Politicians began debating the Reserve Bank of New Zealand (Economic Objective) Amendment Bill under urgency on Tuesday.
It is the first piece of legislation under the new government.
Urgency means the House sits for extra hours, and the debate carried on until 10pm last night, beginning again at 9am, interrupted only by meal breaks and Wednesday's Question Time.
Opposition parties said the change was pointless and a backwards step, but National and ACT campaigned on scrapping the dual mandate for New Zealand's central bank during the election saying this would allow it to focus solely on tackling inflation.
The secondary mandate required the Bank to aim for maximum sustainable employment levels, alongside its other mandate of keeping inflation in the target range of between 1 and 3 percent.
The dual mandate was established in 2018 by the Labour-led coalition.
In her speech at the third reading, Finance Minister Nicola Willis said if inflation remained out of control, New Zealanders would continue to suffer.
"This bill gives the Reserve Bank and its monetary policy committee absolute clarity about its role in our economy. It needs to focus on the principal objective of price stability," she said.
Labour's Finance spokesperson Grant Robertson Photo: RNZ / Angus Dreaver
Labour's finance spokesperson Grant Robertson - the previous finance minister, who brought the dual mandate in - said it was clear the government's focus was to take away the focus on jobs by one of the most important actors in the New Zealand economy.
"What you do when you've got no ideas whatsoever is you fall back to some kind of Milton Friedman style dream that actually we're living back in the 1980s, well we're not," he said. "No evidence has been presented that this legislation is necessary."
The removal of the dual mandate now waits only for royal assent.