My colleagues at the Reserve Bank and I have spoken at length on previous occasions about the key elements here. Having a flexible exchange rate has been one of the great stabilising forces in the Australian economy over the past 30 years. Labour market flexibility is also important.
To provide you with some context on the New Zealand framework, and to introduce some aspects of the framework that remain as critical today as they were in 1989, and some that are about to change. But I will come back to that shortly. 10 Graham and Smith (2012) provide a history of Reserve Bank of New Zealand independence.