I just received from The Treasury the response to my OIA request about Budget (and similar) lock-ups. Not quite as fast a response as that from Statistics New Zealand, which I commented on last week, but well within the 20 working days, and thus most welcome.
No doubt they will put the response on their website in due course, but here is the document.
As I’ve noted from the start, I’m less bothered about pre-release lock-ups for Budgets than for OCR announcements or the release of key macroeconomic data. Most of the time, most of what is in the Budget is not that market-sensitive – and what is headline-grabbing has often been well-foreshadowed by Ministers and their staff. And Budgets often have a large range of complex material, straddling numerous portfolios areas. When new initiatives are announced often the details can be tricky, and important. But I don’t think Treasury can be complacent about these lock-ups – there is sometimes material there that is market-sensitive. Advance news about the bond programme would, at times, be very valuable. There is a difficult balancing act, since Budgets are a mix of political management and other, perhaps market sensitive, material.
Like the Reserve Bank in the past, and SNZ still, the Treasury seems to rely mostly on trust for the security of the lock-ups. Attendees are not even required to surrender phones or mobile devices, just required not to transmit with them. Apparently “compliance is monitored throughout”, but presumably by wandering around. I imagine the Reserve Bank staff did that in their lock-ups.
I had asked about any reviews undertaken in light of the Reserve Bank’s experience. As is already known, after “discussions” the Secretary to the Treasury has decided to go ahead with this year’s lock-up. There is no suggestion that those discussions included any effort to identify whether leaks had occurred in the past, along the lines of what happened at the Reserve Bank. The Deloitte report gave no suggestion that the MediaWorks breach was accidental, and there are even suggestions afoot that the journalist involved may have been under management instructions to send draft stories from the lock-up (see John Drinnan’s comment at the end of this post). If a story was deliberately sent from the OCR lock-ups, might the same practice have occurred, with the same people, at previous Budget/HYEFU lock-ups? I don’t know, but then neither – it would appear – does The Treasury.
Treasury is probably quite safe this year, since everyone (no doubt including MediaWorks) will be hyper-sensitive to the Reserve Bank experience. But weak systems create a high risk that there will eventually be breaches.