“Considerable public interest”?

As I noted yesterday, the Minister of Finance and Grant Spencer have signed a document purporting to be a Policy Targets Agreement, to cover the management of monetary policy between the end of Graeme Wheeler’s term and 26 March 2018.   I also noted that I had lodged OIA requests with the Bank and Treasury for the documents relevant to the pseudo-PTA.

As it happens, Treasury had already beaten me to it, and they rang this morning to point me to the obscure corner of their website where they had yesterday pro-actively released the one substantive relevant document.   Pro-active release of papers by minister and public servants is to be strongly encouraged, and welcomed when it occurs.  Not only is it consistent with the principles that underpin the Official Information Act, but it is also cheaper and easier for the agency concerned.    I probably wouldn’t have bothered with this post if I hadn’t wanted to commend Treasury.

Just occasionally one gets a sense of having made a very slight difference.   In recommending pro-active release Treasury noted

There is considerable public interest in Mr Spencer’s appointment, and a proactive release would pre-empt an expected OIA request.

It (more or less) did that, but to be honest I’ve not seen any one much other than me writing about the Spencer appointment.   Treasury went on

We also consider the proactive release of this report desirable as it would help to ensure that future public commentary on Mr Spencer’s appointment is well-informed. This is because some commentary about Mr Spencer’s appointment has questioned whether the appointment is legal, based on an inappropriate interpretation of the Act and an erroneous assumption that you would not be signing a PTA with Mr Spencer.

I had certainly misunderstood the implication of earlier statements from the Minister about the PTA.  I remain convinced that both the appointment is illegal, and that there is no statutory provision for a PTA with an acting Governor.  My interpretation of the Act may well be erroneous, but the best way to clear that up would be for the Minister, the Treasury, or the Bank’s Board to explain –  or provide –  their own legal advice and interpretation of the relevant provisions.  They continue to refuse to do that (although I will refer this paper to the Ombudsman’s office, for consideration in reviewing whether it would be in the public interest for the relevant legal advice, or a summary of it, to be released).

What else do we learn from the Treasury’s advice to the Minister?


A PTA is required for the appointment of both a permanent and an interim Governor.

It is clearly Treasury’s interpretation, but they provide no justification for that interpretation.  There is, after all, no mention of an interim or acting Governor in any of the provisions of the Act dealing with PTAs.   Again, a summary of the legal advice would help clarify the matter.


The Board recommends that Mr Spencer be appointed on the same terms and conditions as the current Governor. This is also the basis upon which Mr Spencer has accepted the appointment.

I don’t have any real problem with that, but…..an acting appointee doesn’t really have the same responsibilities as a substantive Governor (medium-term planning and positioning of the institution etc), and has no effective accountability (monetary policy, for example, works with a lag of more than six months, and Spencer will be long gone before the impact of any of his choices are apparent.  But I guess Spencer was doing them a favour in taking the job.

The Treasury appears to be relying on a creative interpretation of the Act in which every reference to the Governor is somehow construed to also mean an acting Governor.  But they aren’t even consistent about that.   They note that

The process of agreeing the conditions of employment is complicated by the Act requiring you to agree the conditions of employment, including remuneration, with the Governor. As Mr Spencer will not be the Governor until after assuming the office of Governor, the conditions of employment should not be formally signed until Mr Spencer’s appointment takes effect.

In fact, of course, Mr Spencer will never be Governor, only acting Governor.   But it seems a rather literal interpretation of the relevant section of the Act to suppose that the terms and conditions can’t be agreed until a person (acting or substantive) has actually taken office.  I wonder if the same approach was applied when Messrs Bollard and Wheeler were appointed?  If it really is a correct interpretation, it looks like a case for a minor amendment to the Act (joining a long list of necessary reforms).

To repeat, kudos to Treasury for the pro-active release.  I do hope they will adopt the same approach next year when a new longer-term PTA is signed with the new permanent Governor, and would encourage the Reserve Bank to consider following Treasury’s lead.  In the meantime, as they are no doubt aware, Treasury is still to respond to a request for the papers relevant to the 2012 PTA.  Pro-active release at the time would have been much simpler.




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