Age of Orr

Reserve Bank’s new governor

The appointment of Adrian Orr as New Zealand’s next Reserve Bank Governor was met with a surge in the kiwi dollar — indicating markets see the current chief executive of the NZ Superannuation Fund as a sensible and stable choice.

Orr certainly has the experience for the job and had been tipped early on as a likely candidate.

The kiwi currency rose almost a quarter of a cent against the US dollar after the announcement by Finance Minister Grant Robertson.

Orr is a former Deputy Governor of the Reserve Bank where he headed up the economics division and he worked as an Economist at the Organisation for Economic Cooperation and Development (OECD) in the mid1990s.

He has also worked in senior management as a chief economist for both the National Bank and more recently Westpac.

“He is a very well-known quantity and he is someone who will be viewed as very competent,” said ASB chief economist Nick Tuffley.

Orr comes into the Reserve Bank at a time when it is facing a significant policy review.

Robertson, who had the final call on recommendation from the Reserve Bank board, said he had ensured the board was aware that whoever was appointed would accept the new government’s policy of targeting not only inflation but also the level of unemployment when setting monetary policy.

The changes proposed by the new Government will also see decisionmaking on interest rates done by committee. However, the focus would still remain very much on the Governor and Orr had proven himself to be a very good communicator, Tuffley said.

Orr is likely to take a pay cut when he switches to the Reserve Bank.

As chief executive of the Superannuation Fund he was the highest paid public servant in the country.

His remuneration, of more than $1 million, attracted controversy when a pay rise awarded by his board was criticised by then-Prime Minister Bill English earlier this year.

In contrast, the previous Reserve Bank Governor Graeme Wheeler reportedly had a salary of $660,000.

Wheeler stepped down after one five-year term in September — with deputy governor Grant Spencer stepping into the role for six months to provide continuity through the election period.

Orr was born and grew up in Taupo — with one grandparent born in Ireland, another in the Cook Islands. He still has strong links to the Pacific Island nation.

In his role as NZ Superannuation CEO he has overseen average annual growth of 10.5 per cent since 2007.

Westpac chief economist Dominick Stephens described him as a “balanced choice”.

“He is well known as a strong communicator and is no stranger to the media, which bodes well for the clarity of communications with financial markets.”