I know they shouldn’t, but the Reserve Bank still seems to have endless capacity to surprise, and not in a good way. Another example turned up yesterday, when someone sent me a link to a Bloomberg story about a speech the chair of the board of the Reserve Bank, Neil Quigley, is giving today.
This is how the Waikato Institute of Directors bills the speech
Governance and decision-making at the Reserve Bank of New Zealand
The government has announced a review of the Reserve Bank Act focussing on governance and decision-making issues. Key decisions in Phase 1 of the review have been announced, and Phase 2 is about to begin. The key issues in the review relate to the move from the current “single decision-maker” model to a committee structure, and to changes in the role of the board of directors resulting from this. The presentation will outline the unique role of the Reserve Bank Board under the current Act, the challenges of operating in this framework, and the ways in which the board’s role and powers are likely to change following the review of the Act.
Significant reforms are coming, which we haven’t seen the text of yet, and nor do we know anything about how those holding statutory positions expect to operate in the new world.
If you stump up $65 you could attend and find out more, unless that is you were part of the media.
Quigley declined a request for media to attend, an institute spokeswoman said.
There is also no sign that the Bank or the Board plans to release the text of Quigley’s speech. And this time I largely agree with comments quoted in the article from Shamubeel Eaqub.
“There’s this great promise from Adrian Orr that things will change, and certainly he has been more engaged and more open, but in terms of the culture of the board and the organization it seems like very slow progress,” said Shamubeel Eaqub… “When it’s an issue as important as this, we would expect at least a speech to be available to the media.”
But he is probably going a bit easy on the Governor. The Governor can’t actually tell the Board chair what to do, but there can be little doubt that this particular speaking engagement and the (non)communications strategy around it will have been agreed jointly by the Governor and the Board chair. After all, it is par for the course; pretty standard practice in all but one respect.
That one respect is that it is highly unusual for the chair of the Reserve Bank Board to be giving a speech in his capacity as chair at all. Perhaps it has happened before, but I’m not aware of such occasions. In fact, it was concern that chairs would want to speak publicly that led to the misguided decision in 1989 to legislate to make the Governor chair of the Board, even though the Board’s primary role was to hold the Governor to account. It took almost 15 years to fix that mistake.
The Board chair generally doesn’t speak at all – and successive ones have repeatedly refused media comment on all sorts of issues – except through the bland Governor-covering Board Annual Reports. In the 15 years these reports have been published, there has never been a single critical word about the Bank or the Governor: either they walk on water and simply never ever make mistakes, or the Board itself is essentially useless. As I’ve argued previously, my interpretation is the latter one. This same Board couldn’t bring itself even to criticise Graeme Wheeler for his wildly inappropriate attempts to silence the BNZ’s chief economist, and Quigley’s predecessor was positively egging Wheeler on in his public denunciation of a person who drew attention to what was shown to be a leak of an OCR announcement.
In this case, it appears that Quigely would not even front up himself and explain why he won’t (a) allow media to attend and report his speech, and (b) release his text or any relevant slides. Instead, the acting head of communications at the Reserve Bank was wheeled out to defend the Board chair. He didn’t do a particularly compelling job.
“Members of the Institute of Directors and their paying guests will not be privy to information from Professor Quigley that is not already in the public sphere,” said Angus Barclay, acting head of communications at the RBNZ. The bank gives presentations to private audiences because “the presence of news media at an event alters the nature of the discussion” and may dissuade guests from participating “in a two-way experience,” he said, speaking on Quigley’s behalf.
It seems highly unlikely that Quigley will say nothing that is not already public. He is billed as talking about
the challenges of operating in this framework, and the ways in which the board’s role and powers are likely to change following the review of the Act.
Well, we’ve never heard anything from the Board or the chair about the challenges in the existing framework (as it affects the Board and its role), there is very little in the material released so far on how the Board expects things might change in future, and anything that is in the public domain isn’t from the horse’s mouth – the people actually paid to do the monitoring, accountability, and reporting role.
And Barclay (for Quigley) undermines his own argument in the second part of that extract. If selected members of a favoured audience are able to ask questions of a public official, and get answers from them, about pending reforms it seems almost certain that they will receive angles or emphases that aren’t available to the rest of us. Even the argument that the presence of the media changes the character of the forum seems flawed. The event could, for example, have been run on Chatham House rules grounds – common enough in many fora, dealing with many, often sensitive, issues – allowing the reporting of Quigley’s comments, and the reporting of questions from the floor, but not the identification of the questioner. (It was, for example, how the consultation session I attended at Treasury a few months ago on Reserve Bank reform issues operated – one at which, as I’ve reported before, none of the attendees had any time for the Bank’s Board). It is hard to see how the nature of the function would be changed – certainly not for the worse – by adopting that sort of model. Perhaps as importantly, despite the talk of a “two-way experience”, this isn’t billed as some sort of consultative session, but as an address from a public official holding a statutory office. But even if it was such a “consultation”, (a) this is a powerful public agency we are dealing with, and (b) it is still no excuse for not releasing the text (it isn’t as if this is material the speaker has covered in similar addresses 100 times previously).
Barclay/Quigley then proceed to dig an even deeper hole for themselves.
Asked how banning media from tomorrow’s event squares with the bank’s stated communication aims, Barclay said: “Professor Quigley will communicate directly with a group of people who will be better informed after the event than they were at the start. That fits very well with our strategy to communicate more widely.”
The word ‘smart aleck” springs to mind. Even more people would be better informed if Neil Quigley’s text was released, and if media representatives could attend and report his speech. As it is, I’ve now lodged an Official Information Act request for the text, any slides, and in event that he is speaking without text or slides a summary of his presentation. Since the material is being provided to some members of the public, there can be no credible grounds for withholding it from others.
One announced change coming in the new legislation is that in future the Board chair will be appointed directly by the Minister, to help make clearer that the Board works for the Minister and the public, not for the Governor, the Bank, or a quiet life for themselves. Changing the chair would be a good and salutary step for the Minister of Finance to take, if that is he is at all serious about a more open and accountable central bank. Better still would be to rethink, and dump the Board from its current role completely.
I guess shouldn’t really be surprised at this attitude from the Reserve Bank Board. This is an entity that doesn’t even do the basics of its job tolerably well. There is no serious scrutiny of the Governor – certainly none that ever sees the light of day – there was complicitly in what was almost certainly an unlawful appointment of an “acting Governor” last year, there are no conflict of interest provisions in the Board’s code of conduct, and – as I’ve documented previously – the Board has been in flagrant breach of the requirements of the Public Records Act. Oh, and they aid and abet some pretty egregious financial sector misconduct (of which this particular case is only one example) – appointing (and being able to remove at will) half the trustees of the Bank’s troubled superannuation scheme, and being required to approve any rule changes. The Board members are probably all individually decent people (and I used to have a good relationship with Quigley) but they have taken far too many wrong turnings, and no longer serve a useful public purpose (protecting and promoting the Governor isn’t such a purpose).
Finally, as a reminder of how better, more open, central banks do things, here is a screenshot from the Reserve Bank of Australia’s 2018 speeches page.
A range of speakers, and where possible provision not just of the text but of a webcast, so that audiences can see where the speaker may have departed from the text, but can also see and hear questions and answers – new material which, in New Zealand terms, is official information. It just seems to be a standard condition of having an RBA speaker. There is no reason why a similar approach could not be adopted here, both for the Bank itself (eg the potentially market sensitive post-MPS addresses, to which only favoured invitees among bank customers have access) and by the Board. When senior officials speak, the default standard expectations should be public access, and open reporting.
If they are vaguely serious about being a government known for “open government” – and there is little real sign of it so far – it must about time the Minister of Finance and the Minister responsible for open government to have a word with the Governor and the Board chair about what it means. One can debate the merits of (say) pro-active release of Cabinet papers (something I generally favour) but there should be no debate about speeches by officials being made routinely available. The Bank, and the Board, are falling well short of any sort of open government standard. Perhaps some journalist could ask one or other Minister about this case, if only to get them on record washing their hands of any responsibility.