Does the law prohibit the Reserve Bank releasing submissions?

After my post earlier this afternoon someone mentioned the possibility of getting copies of the submissions on the investor finance restrictions under the OIA.  You might have thought so too.  At the time submissions closed, I did.  But no.

A few weeks ago I posted briefly about the response I had received from the Reserve Bank to my request for copies of each of the submissions they had received on the (then) proposed investor finance restrictions.

The Bank refused my request,  arguing that it would be met by the then-forthcoming “summary of submissions” which they would prepare.   Moreover they argued that while the OIA obliges the Bank to provide documents in the form sought by the requester, there was an exception if to do so would “impair efficient administration” or “be contrary to any legal duty of the …organisation in respect of the document”.

The Bank argues that it would “impair efficient administration” to provide me copies of the documents, with appropriate redactions, and that providing a summary of the submissions will fulfil its statutory requirements.  That is clearly not so.   I requested copies of all the submissions, which includes the ability to look at them individually.  When it produces summaries of submissions the Bank attempts to distill themes or representative arguments, on which it then comments.  If it were providing summaries of each of the submissions individually, I might be content, but a self-selected summary across a whole range of submissions is simply no substitute.   As I have pointed out previously, the contrast with submissions to select committees of Parliament is striking. The submissions on the legislation relating to offshore buyers’ and tax numbers are on the website in full.    Submitters include some of the same people who submitted on the Governor’s proposals ( eg one bank, and the Bankers’ Association).

And, as I noted this afternoon, the actual response to submissions that the Bank released did not contain, even remotely, a representative sense of the nature of the issues raised in my own submission (the only one I have a copy of).

In its response to my OIA request the Reserve Bank also noted that “much of the information contained in the submissions that you requested must be withheld in order to comply with the confidentiality provisions of section 105 of the Reserve Bank of New Zealand Act”.  And it seems that this provision is probably at the heart of the issue.

What does it say?  Here are the key provisions

105 Confidentiality of information

  • (1) This section applies to—
    • (a) information, data, and forecasts supplied or disclosed to, or obtained by,—
      • (i) the Bank:
      • (ii) a person appointed under section 99(2)(b), section 101, or section 119
      • under, or for the purposes of, or in connection with the exercise of powers conferred by, this Part:
    • (b) information and data derived from or based upon information, data, and forecasts referred to in paragraph (a):
    • (c) information relating to the exercise, or possible exercise, of the powers conferred by this Part.
    • 2) Information, data, and forecasts to which this section applies shall not be published or disclosed by the Bank, any officer or employee of the Bank, or a person appointed under section 99(2)(b), section 101, or section 119, except—
    • (a) with the consent of the person to whom the information relates:
    • (b) to the extent that the information is available to the public under any Act, other than the Official Information Act 1982, or is otherwise publicly available information:
    • (c) in statistical or summary form arranged in such a manner as to prevent any information published or disclosed from being identified by any person as relating to any particular person:
    • (d) for the purposes of, or in connection with, the exercise of powers conferred by this Part:
    • (e) in connection with any proceedings for an offence against this Act:
    • (f) to any central bank, authority, or body in any other country which exercises functions corresponding to or similar to those conferred on the Bank under this Part for the purposes of the exercise by that central bank, authority, or body of those functions.
There are lots of words, but if public submissions on proposed new regulatory controls could be considered as “information, data and forecasts” supplied to the Bank then it would appear, under 105(2)(c), that the Bank cannot release any information about individual submissions, except in summary form. Even when policies, like the LVR restrictions, are to be applied generally (as distinct from supervisory intervention that might affect only one banks) we cannot know the substance of the submissions made on those proposed restrictions.

This seems like a travesty of democracy. Submissions –  on major new public policy initiatives – can be disclosed to foreign central banks or supervisors, but not to the New Zealand public. Any views banks or members of the public might submit to the Reserve Bank on monetary policy would typically be discoverable under the OIA, but those on prudential matters are apparently not. And this is so, even though for monetary policy there is a relatively specific objective for which the Governor can be held to account, while there is nothing remotely specific about how the statutory objectives for prudential policy should be measured.

Probably no one has any real problem with keeping confidential some private information about individual businesses.  But opinions and material supplied as part of a law-making process, which is what these consultative processes are, should be a quite different matter.  Submissions to Parliament’s select committees are published, and yet select committees are not even the final decision-maker on anything.  On proposed new statutes the whole House has a final vote, and on proposals that came initially from a Minister and Cabinet.  By contrast, when (unelected) Graeme Wheeler makes laws  –  having proposed them himself  – citizens are apparently not entitled to see the evidence, and submissions, he receives before making these decisions.

Like so much about the Reserve Bank Act, it is past time to reform these provisions.  Good access to official information is vital if we are to ensure that such a powerful institution is to be robustly accountable.  At present, there is far too little effective accountability and scrutiny.  A system in which the Governor can tell us as much, or as little, and then with his own slant, on the submissions he receives should be seen as simply unacceptable.  In this case, quite a simple amendment to the Reserve Bank Act would rectify the situation, making explicit that submissions on proposed changes to conditions of registration, or any other restrictions that affect all institutions, are not covered by the section 105 exemption, and should routinely be published on the Reserve Bank’s website.

Of course, if anyone else wants to request copies of the submissions, the Bank should presumably respond immediately declining their request and explaining why.  Unless they want to reconsider and change their interpretation of section 105, any delay would itself be a breach of the Official Information Act.

5 thoughts on “Does the law prohibit the Reserve Bank releasing submissions?

  1. Michael….. this is why the general pubic dislike and often have little to no trust of the mechanisms and officers of government in NZ.

    That the RBNZ has such fundamental impacts on citizens lifes e.g. how much disposable income they have after paying the necessities like mortgages, but can hide how they came to a policy position behind a section in their empowering act in this manner is very frustrating.

    If they haven’t addressed any of your submission points how do we know if they have addressed the majority of the other submitters points either? How do we form an impression about the rigour and quality of the submission analysis when they choose what they will reveal of the submissions and what their thoughts on the points raised in the submissions are.

    For good reasons, I think at least, we took the powers of setting monetary policy out of the hands of Ministers and gave them to a statutorily independent body. But it seems we have create a bit of tinpot dictator not comfortable with open questioning and transparency.

    Public Policy of such far reaching impact should be done in a calm, measured and transparent manner. Seems the Guv’nor has sensitive skin which dislikes sunlight

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  2. I believe we should just adopt a neutral interest rate policy that is reviewed annually or bi annually and replace that with a variable superannuation contribution rate. The speed in which monetary policy is introduced is creating havoc for businesses in dealing with the volatile exchange rate issues and in also dealing with sudden cost explosions. A variable super contribution rate that rises would dampen spending and be a more effective tool to control inflation and increase savings at the same time.

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  3. I’m more sceptical about the potential for a VSR (of the sort Labour proposed last year). Work that was done it similar ideas previously suggests you would need quite big swings in the VSR to get the same effect as from an interest rate, and because it would be quite disruptive to low income people (with v small weekly cash buffers) you’d inevitably end up with large carve-outs (from fairness, but also thus carving out the people the policy would work most effectively on).

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  4. Singapore has certainly used Variable Super effectively rising to a high of 15.7% company contribution and 15.3% employee contribution and then dropping to 8% company contribution and employee contribution after the GFC whilst maintaining a consistently low interest rate and low tax rate environment

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  5. Yes, it is an interesting case, but not really an example of the sort of higher frequency adjustment labour seemed to have in mind. Total savings rates are v high in Singapore, which is the basis for persistently low interest rates (even in face of rapid population growth)

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