OIA

The OIA, the RB, and the MPC

Michael Reddell MPC, OIA, Reserve Bank, Rodger Finlay

One comes to take for granted the gross inadequacies of the Official Information Act, including the systematic under-resourcing of the Ombudsman’s office, which just reinforces the incentives on officials to play fast and loose with the spirit of the law, banking on the fact that if their agency ever loses at the Ombudsman it will be so far down the track that most people – possibly including the requester- will have lost interest in whatever it was the agency didn’t want to release.

But just occasionally it still gets to one. No doubt many requesters have this sort of experience.

I had an email this afternoon from the Ombudsman’s office

It didn’t sound like much of an update – “we are writing to tell you that we have still done nothing about your complaint and have no idea when we will”. I couldn’t even remember what I’d made a complaint about or when. On checking, I found that my complaint was lodged on 3 February. This was the complaint

The original request had been lodged with the Reserve Bank on 10 November 2022

10 November was the day the Reserve Bank released its first five-yearly review of the conduct of monetary policy. They took the best part of three months themselves to withhold almost everything deemed relevant. They did release three documents, which contained almost nothing of substance (that being the point), including this one

which doesn’t really appear to be in scope at all.

As a reminder of the context, this five-yearly report came out amidst inflation having burst well beyond the target range, the MPC having lost taxpayers the best part of $10 billion on the LSAP, and as the MPC was racing to raise the OCR to get inflation back in check.

As I noted in my complaint, one of the oddities of the five-yearly review provision in the Act is that the Bank (management, and I suppose the Board) get to do the review, and yet the MPC is the entity that sets monetary policy, and the MPC includes the three external members who don’t formally answer to the Governor. We know from the finished report what the Governor thinks of the MPC’s stewardship – and as a reminder management has the majority of the votes – but we know almost nothing at all about what the external MPC members thought. Did they reflect differently on the Covid period than management did? Or did they perhaps not reflect very seriously at all? Did their views or input (if any) have any impact on the substance of management’s report?

You might have thought that disclosing MPC members’ views, or input to the report, might be the very least sort of effective public accountability for the considerable power they helped wield, the considerable and hugely costly the mistakes they helped make.

Perhaps one day we will get an answer. But the Reserve Bank – like so many government agencies around town – knows that it only needs to say no, and if the requester can even be bothered complaining that it could be 12-18 months or more before there is any hope of the Ombudsman getting round to addressing the complaint. Meanwhile, the external MPC members (and management) go on wielding their power and collecting their salaries.

But it does remind me that I had overlooked lodging a complaint with the Ombudsman about the Bank’s bare-faced obstructionism in the matter of the appointment of the chair of the majority owner of a large bank being appointed to the board of the Reserve Bank, an appointment almost certainly done with the acquiescence (or worse) of the Governor.

Rodger Finlay and OIA obstructionism

Michael Reddell OIA, Rodger Finlay

It is sometimes hard to tell when Reserve Bank actions are concerted, when somewhat chaotic, and quite what mix applies in any particular case.

Earlier this week I wrote about MPC member Peter Harris’s “interview” – responses to an initial series of emailed questions – with Stuff’s Tom Pullar-Strecker. I assumed it was coordinated and managed by the Bank – though on reflection who could possibly have advised Harris to answer as he did – but it appears the trainwreck, which reflects poorly on both him and the institution, may have been almost all of his own doing.

And then there is the saga of Rodger Finlay, appointed last year as part of the Bank’s “transition board” and as a full Board mmbers from 1 July this year while he was – and intended to continue as – chair of the board of NZ Post, the majority owner of Kiwibank, an entity subject to the Reserve Bank’s prudential regulation and supervision. It was a staggering conflict of interest, almost inconceivable in any well-governed country, that the Reserve Bank itself (Governor and outgoing Board) seem to have had no problem with. Ever since I noticed this appointment in June, I have been trying to get to the bottom of what went on.

Both The Treasury and the Minister of Finance have answered OIA requests in a fairly timely, and apparently fairly open, way. Not so the Reserve Bank. The text below is from a post dated 27 October.

I replied to that apology thus

And I few days later I had this from the Bank, with specific suggestions – from them – on framing the request

I responded the next day

And within a couple of hours she responded

Note that “next couple of days” in the first paragraph.

I heard nothing more until Tuesday, which must have been almost the last of the 20 working days the Bank had to respond. Then I received an email from the same staffer advising me – no great surprise, and I wasn’t greatly bothered – that they were extending the request and giving themselves another 14 working days. But, as I noted to myself, at least I’d have results by Christmas.

Note that the reason given for the extension was “This is in accordance with section 15A(1)(b) of the OIA, where the consultations necessary to make a decision on the request are such that a proper response to the request cannot reasonably be made within the original time limit.”

But late the next day I had a lengthy letter from one Adrienne Martin, Manager Government and Industry Relations, and apparently Ruth’s boss, threatening to refuse my request altogether on the grounds that it would – she claimed – take an estimated 67 working days to respond to it, an estimate itself (she claimed) based on a narrower request than the one the Bank had suggested (see above), as refined (see above). After rehearsing the options open to the Bank she concluded thus

All of which has already bought the Governor 5 months of delay in getting any clarity on how he, his senior managers, and/or the old Board thought it could possibly have been appropriate to have appointed the chair of the majority owner of a registered bank, supervised by the Reserve Bank, to the board which would take full legal responsibility for all the Bank’s supervisory and regulatory functions.

I’m not yet sure how I will respond. I simply do not buy the “67 working day” line, and it is particularly incredible when they offer that they will provide a substantive summary of the relevant emails (presumably they don’t take the affected parties 67 working days to find, let alone summarise). Moreover, the Bank’s General Counsel has form as an aggressive and very motivated player, championing the Bank’s corner, and (more specifically) earlier releases suggest that he and his staff were themselves key participants in these discussions, so how much confidence should I have in the integrity of the process? I’m also not just interested in the “conflict of interest management” but how the Bank came to take the view that this conflict could ever be manageable (substantively and reputationally) when few/no other serious bank regulators would have.

On the other hand, the alternative may be ending up with nothing at all.

As a reminder, the Bank regularly claims it is very open and transparent. As I have pointed out for years – predating Orr – they tend to be fairly transparent about things that advance their interests (who isn’t?) but not otherwise, and real transparency and accountability encompasses both. The Bank falls a long way short and this is just the latest example. Serious questions have been raised about the Bank’s involvement with a major public appointment. An open and transparent central bank, once serious questions were being raised, would have been pro-active in identifying and releasing all the relevant papers, making a public statement, and perhaps opening themselves up for serious questioning.

But this is the Orr/Quigley Reserve Bank.

The public deserves better.

UPDATE (5/12): I gave up, and sent this response this morning

Still avoiding scrutiny and accountability

Michael Reddell OIA, pandemic, Reserve Bank

I’m not one of those inclined to join the new Leader of the Opposition in describing the government’s handling of the coronavirus situation as “impressive”, but sometimes other people are just determined the make the Cabinet and core government departments (notably Health, Treasury, DPMC) look not bad at all.

Transparency is one of those issues.  I was critical –  and still am –  about how slowly the government released key official documents relevant to the crucial decisions taken at various stages in March and April.    Difficult decisions made, inevitably, with partial information, and with consequences (either way) that are huge by the standards of any typical government decision should have been accompanied by the near-immediate release of all the significant relevant analysis and advice.

Nonetheless, and to their credit, the government is slowly getting there.  There was a big proactive release a couple of weeks ago of all sorts of central government documents (mostly advice to ministers and Cabinet papers) – individually important or not – on the coronavirus situation from the start of the year until mid-April, and there is a promise of another batch presumbly sometime next month.   What is done is now done, but the release of those papers –  many of them written to very short deadlines and in the fog of war – helps us, as citizens and voters, assess the quality of the central government advice and decisionmaking process.  And since Covid hasn’t gone away, it may even help clarify where improvements might be made –  even demanded –  in government contingency planning against the risks of further problems.

But, of course, there are other public sector agencies operating at arms-length from ministers, exercising a great deal of discretionary power (including through the Covid crisis), and not covered by the government’s own pro-active release.   I’m thinking most notably of the Reserve Bank and, these day, the Monetary Policy Committee, a statutory body –  members each appointed by the Minister of Finance –  charged with the conduct of monetary policy.

Without any great optimism about a positive response, and fully expecting the request would simply be the first step on the path to an appeal to the Ombudsman I lodged an Official Information Act request on 20 April.

I am writing to request copies all papers prepared by or for staff or
management of the Reserve Bank for the Monetary Policy Committee in
2020.

I am, of course, well aware of the Bank’s typically obstructive
approach to releasing such official information in normal times.
However, given the scale of the events the Committee has been
grappling with this year, the magnitude and unusual/unprecedented
nature of many of the interventions (and decisions on occasion not to
act), the scale of the economic and financial risks the wider public
and the taxpayers are being exposed to, there is a clear and strong
public interest in the release of these particular papers, without
necessarily creating a precedent for more-general release of MPC
papers.  In addition, I would note that the succession of meetings
this year, and the fast-moving nature of events, means that papers
written even a month ago are already likely to have aged beyond the
point of immediate market sensitivity much more quickly than would
normally be the case.

Public accountability demands much greater transparency.

“Typically obstructive approach” refers to the Bank’s adamant refusal to release any papers relating to monetary policy decisions, at least unless they are perhaps 10 years old (they did once release a set of those, and I haven’t tested whether the effective threshold is 3, 5, 7 or 10 years past).

“Public interest” is in reference to the provision of the Official Information Act which states that for many of the possible withholding grounds

Where this section applies, good reason for withholding official information exists, for the purpose of section 5, unless, in the circumstances of the particular case, the withholding of that information is outweighed by other considerations which render it desirable, in the public interest, to make that information available.

I had a reply on Thursday. In fairness, at least it was only a day or two beyond the 20 working day deadline, although I doubt it took the Bank any time at all to decide its response.  The substance didn’t really surprise me at all, even if it was a disappointing reflection on the continued refusal of the Reserve Bank to accept that the principles of open government, the principles of the Official Information Act, apply to them and to the Monetary Policy Committee as well.

They pointed to the various press releases and Monetary Policy Statements (which, personally, I wouldn’t have thought were in scope, although that is beside the point) and went on

We are withholding all remaining information within scope of your request under the following grounds:
 section 9 (2)(d) – in order to “avoid prejudice to the substantial economic interests of New Zealand.”
 section 9 (2)(g)(i) – to “maintain the effective conduct of public affairs through the free and frank expression of opinions by…members of an organisation or officers and employees of [an] organisation in the course of their duty.”

We have considered your views regarding the need for the information to be released including, the scale of the events the Monetary Policy Committee has been grappling with this year and potentially, strong public interest in the release of these particular papers.

The Reserve Bank is currently conducting monetary policy in an environment of great uncertainty and market volatility. In these circumstances it is especially important that the MPC has the space to assess all the available information, select monetary policy tools, convey clear messaging through its Monetary Policy Statements, and evaluate its actions as it proceeds. The release of such recent MPC papers would be likely to interfere with the effective implementation of monetary policy.

As you are aware the Reserve Bank has a statutory duty to make official information
available unless there is good reason for withholding it. In this instance the Reserve Bank believes that there is good reason for withholding the requested information and that the public interest in releasing it does not outweigh the reasons for withholding we have listed above.

Note that the request was not for every casual email staff and management might have loosely exchanged over the months, it was for the papers prepared for the Monetary Policy Committee, a statutory body that the Governor (who also sits on the Committee) and staff advise and service.

There is a close parallel to the way (a) government departments advise individual ministers, and (b) the way an individual Minister’s Cabinet paper seeks the approval of his/her colleagues.  Advice and recommendations and analysis flow to decisionmakers, and decisionmakers decide.  Sometimes that advice is poor, sometimes good, sometimes necessarily rushed, sometimes not.  But to their credit, the government has released the significant bits of advice/recommendations –  whether or not each of those pieces of advice make advisers or decisionmakers look good, whether or not decisionmakers accepted that advice or not, whether or not the advisers might now wish they’d advised something different?

What make the Reserve Bank –  the Governor as chief executive, or the statutory MPC he chairs –  think it should be exempt from that sort of scrutiny and transparency, through one of the most dramatic periods of modern times (including as regards monetary policy)?

One of the excuses the Bank has sometimes advanced for withholding monetary policy materials is that releasing them might give away information about future strategy.  Even if that were true, it is really grounds for selective redaction, not broadbrush refusal, but at present it is a particularly absurd argument.  For example, my request encompassed papers relevant to the February MPS –  you’ll recall that that was the one in which they played down coronavirus and were rather optimistic about the rest of the year, adopting a very slight tightening bias.  Whether or not those were reasonable views at the time, they were long since overtaken by events. Nothing in the advice and analysis provided to the MPC for that MPS has any possible bearing on actions the Bank or market is taking now.

But take more recent events.  The MPC issued, and has since reaffirmed, their pledge to not cut the OCR for a year.  They provided no supporting argumentation or analysis for that stance, but presumably there must have been some analysis and advice, perhaps around these mysteroius “operational obstacles” that the Governor, as the MPC’s spokesman, keeps referring to.

Or the LSAP programme?  Surely there must be staff analysis and advice, provided to MPC under the imprimatur of the Governor, on the likely effects of such a programme?  What possible grounds can there be for simply refusing to release any of it (as distinct perhaps from withholding specific paragraphs touching on the implementation plans for example)?

All the excuses about

In these circumstances it is especially important that the MPC has the space to assess all the available information, select monetary policy tools, convey clear messaging through its Monetary Policy Statements, and evaluate its actions as it proceeds. The release of such recent MPC papers would be likely to interfere with the effective implementation of monetary policy.

could no doubt equally be argued by officials in Health and Treasury etc, or by Ministers.  But to their credit, ministers have recognised the importance of openness and put the advice out there – rushed and perhaps inadequate, rapidly overtaken by events, as sometimes it inevitably was.   And at least Ministers have to face the electorate in September, but the only effective accountability for the Governor and his MPC (many of whom refuse even to be interviewed) is the sort of openness and transparency that the OIA has long envisaged.

The Bank likes to claim that it is very transparent, but solely on its own terms and its own definitions. Transparency does not mean telling people what you want them to hear when you want them to hear it –  everyone does that, in their own self-interest.  Transparency is about the stuff you sometimes find uncomfortable, even embarrassing, or just very detailed, but which you put out anyway.   Had she wanted to the Prime Minister could have run the sorts of excuses the Bank did –  claiming that she held a press conference every day and ran full page adverts in newspapers every day telling people what she thought they needed to know then –  but to her credit she is better than that, and recognised the very strong public interest in much greater transparency –  some of which might put her or her officials in a good light, some not.  It is what open government is about.

I’ll be referring this to the Ombudsman, and perhaps seeking from the Bank all material relevant to their consideration of this particular request, but if the government is serious about its commitment to openness and transparency, it is past time for the Minister of FInance to have a word with the Governor and with the others he himself appointed to the MPC, and with the chair of the Bank’s Board –  whom he appointed –  and strongly urge, come as close to insisting as he can, that extraordinary times, extraordinary monetary experiments, call for a much greater degree of openness that the Bank has, hitherto, been willing to display.

If The Treasury’s advice to the Minster of Finance on these matters is open to scrutiny in these exceptional fast-moving circumstances, why not the Reserve Bank’s advice to their decisionmaking body?  As it happens, the Secretary to the Treasury is now a non-voting member of the MPC, so perhaps she might have a word with her colleagues and draw attention to what transparency and accountability are supposed to mean in New Zealand.

 

 

 

Holding the Bank to account: OIA requests

Michael Reddell OIA, Reserve Bank

I was looking for something this morning on the Reserve Bank website and was surprised to find a very long list of Official Information Act responses this year.   When I counted, there were 50 for year to date, and it is only mid-October.

Here is the number of responses the Bank has on the website for each year since they started publishing.

RB OIA responses.png

I’m pretty sure it isn’t a consistent series.  Back in the earlier years, they seem to have only published the odd high-profile release (eg papers on South Canterbury Finance, or a joint one with The Treasury on the earthquakes).   They will, almost certainly have had more requests than were recorded here (even abstracting from the technical point that any request for information from a public agency –  be it ever so small a statistical query – is covered by the Official Information Act).

My interest is mainly in the years from 2015.  As it happens, I left the Bank in early 2015 and lodged a number of requests that year, perhaps a third of those shown.  I’ve remained a moderately active user of the Act –  which is what it is there for –  in requesting information from the Bank and the Board.  But the sharp increase in the number of responses shown  in the last couple of years has nothing directly to do with me.

I’m still a bit sceptical as to whether there is really a consistent series. I know that some of the responses I’ve had from the Bank have been published on the website and some not (ones to the Board seem to have been less likely to be published).  And this specific response –  to a National Party request asking for the number of requests the Bank had handled in a particular quarter –  confirms, by implication, that they are not publishing all the responses.  But a minimum of 50 requests over the course of this year to date is many more than the Bank was facing just a few years ago.

For such a powerful agency, making controversial policy and organisational changes, and subject to a review of its legislation, it doesn’t seem an unduly large number.  A few years ago, the Bank got very upset about the (then) rising number of OIA requests (this was 2015/16) suggesting that they were facing unreasonable burdens, threatening to charge etc etc.  As I pointed out at the time, there was no evidence they were facing as large a burden as (say) The Treasury –  which has 87 responses published so far this year – and I hope it has been something of a salutary lesson for them that the number of requests has only increased over the last few years.

The Reserve Bank Board may choose to do no serious scrutiny, to do little about holding successive Governors to account, but Parliament long ago provided for citizen scrutiny, through the (much abused and avoided) mechanisms of the OIA.  It is good to see people using those provisions.

Better still, of course, would be if the Board and the Minister of Finance were adequately doing their job, holding the Governor and the Bank to account on process, substance, and conduct.

 

 

Cavalier lawlessness

Michael Reddell OIA, Reserve Bank, Reserve Bank Act reforms

There does seem to be a growing sense among far too many public agencies that laws don’t really apply to them, only to other people.    This is particular so in respect of the Official Information Act.

A TVNZ journalist nicely illustrated this sort of contempt for the law in a tweet the other day

In similar vein, I had an experience a couple of months back in which the Police simply ignored the statutory deadline (“no later than 20 working days”).  Since they were the Police – ideally, examplars of upholding the law –  I lodged a complaint with the Ombudsman.  The Ombudsman actually dealt with the complaint reasonably promptly and I had a letter from them basically saying “we pointed this out to the Police, who accepted that they had missed the deadline”,  and “and now there is nothing more we can do”.  There are no sanctions in the Act, and not even the pretence of an apology from Police.

The Ombudsman also dealt reasonably promptly with a similar complaint about the Reserve Bank.    They had delayed and slow-walked (using the formal extension provisions in the OIA) the release of material supporting their position on the bank capital proposals –  material which, when finally released, turned out to be quite limited, and which had been given to other members of the public long before.     The extension looked to have been pure delaying tactics, deliberately obstructive, and so I complained to the Ombudsman.  And, much to my surprise, I had a letter earlier this week from a new Assistant Governor at the Bank

rb apology

That was a first.

Sadly, it doesn’t seem to be a marker of a genuine change of approach, just that they are a bit more bothered (than Police, say) of falling foul of the Ombudsman.  They tend to delay until the Ombudsman belatedly determines there is a problem, and then suddenly play nice.

In late March, the Minister of Finance announced the appointment of the members of the new Monetary Policy Committee. On 29 March (three months ago tomorrow) I lodged Official Information Act requests with the Minister of Finance and with the Reserve Bank Board (responsible for determining the names the Minister could accept or reject).   Given that, on paper at least, this was a powerful new body, it seemed not unreasonable to ask questions, including about any back channels through which (say) the Minister might have sought to get his preferred people onto the Board’s list (in most countries, the Minister of Finance can simply appoint directly the people conducting monetary policy).

Both the Minister and the Board initially extended my request.  I didn’t have much problem with that (plausibly there was quite a bit of paperwork to sift through etc) and the issue wasn’t overly urgent.   The Minister of Finance complied with the law and released a set of papers to me a few weeks ago.

Not so the Board (or the Bank handling the processing for them).  They initially extended my request to the same date as the Minister had done.  That didn’t seem unreasonable, even if the delay was quite long, and I’d envisaged there might need to be consultation between the two offices.  But deadline day arrived.  The Minister responded, and sent the requested material.  But the Reserve Bank Board (staff on their behalf) sent me an email saying they were further extending the deadline to 26 June (Wednesday this week)

“because of the consultations necessary to make a decision on the request such that a proper response to the request cannot be made within the original time period”

And so time passed. I fully expected a response on Wednesday –  it was, after all, almost three months they’d had by then.  But midnight came and went and there was nothing.

And so, having had that nice letter from the Bank’s Assistant Governor early in week, I sent her an email yesterday morning, reminding her that the extended deadline, set by the Bank itself, had passed.  I ended

I hope this further delay is pure oversight and that I will have a response very very shortly.

But no.  I didn’t actually get a reply to that email, but it clearly sparked action because much later in the day I had an email from someone down the line.

rb delay.png

Well, that’s nice isn’t it.  Not even a new deadline, just an indication.

So this is the third extension on a single request.  The first was made (well) within the orginal 20 days, the second was made on the final day of the extended period, and the third quasi-extension, well it came after the second deadline had already expired, and it looks as if it might not have made at all if I hadn’t approached the Assistant Governor.

But there is this thing called the law, under which agencies are required to operate. It is not voluntary, or just a nice idea, it is the law.   And here is what the Ombudsman’s office has to say about agencies extending request (the document is their guidance to government agencies on handling OIA requests).

Nothing in the OIA prevents multiple extensions being made, providing any extensions are made within the original 20 working day time period after receiving the request. For example, if an agency notifies the requester of a one week extension, and then later realises that a two week extension is actually necessary, a second extension may be notified as long as the original 20 working day time period has not yet passed.

You simply can’t extend a request again once the initial 20 day period has passed (in this case, that date would have been in late April).  That isn’t my reading of the Act, my opinion, it is the determination of the Ombudsman, who is responsible for enforcing the Official Information Act and holding agencies to account.  As it happens, the State Services Commission has also issued OIA guidance to agencies, and their text on extensions repeats the Ombudsman’s stance, without question or challenge.

Perhaps the Reserve Bank’s lawyers have a different interpretation (untested in the courts, the only way the Ombudsman’s view could be overturned). Or perhaps the Bank just doesn’t care.  Laws are for other people.

The Ombudsman even offers some suggestions for agencies (I guess unexpected obstacles do come up from time to time).  It is commonsense really, the sort of thing any decent public-spirited person would want to do anyway (but not apparently the Bank).

If it looks like it will not be possible to meet either the original or an extended maximum time limit, the agency should consider contacting the requester to let them know the current state of play and reasons for the delay. Requesters will appreciate being kept informed, and may be more understanding if the agency ends up in breach of the timeframe requirements.

Agencies should be aware, however, that a failure to comply with a time limit may be the subject of a complaint to the Ombudsman.

And so, in the spirit of sweating the small stuff –  how are public agencies to be held to account if we don’t make a fuss and use the avenues that are open to us? – but with a somewhat heavy heart (couldn’t they just obey the law instead?), I will be lodging another complaint with the Ombudsman later this morning.

The request was made to the Board of the Reserve Bank.  They don’t work for the Governor or the staff, rather the staff provides secretarial and adminstrative support to the Board.  Neil Quigley, vice-chancellor of Waikato University, is chair of the Board, and he and the Governor between them need to take responsibility for this lawless obstructionism.  “Culture and conduct” is one of the Bank’s trendy mantras.  It really needs to start close to home.

UPDATE: The Governor recently told an acquaintance of mine that he doesn’t read this blog, but clearly someone at the Bank does.  I finished the post, went off to clean the house, and came back to find this.

RB OIA

Again, that’s nice, and slightly better than nothing.  But, the law…….  As the law is written, and applied by the Ombudsman, the response was finally due on 11 June.

The law.

 

 

 

As obstructive as ever

Michael Reddell Adrian Orr, OIA

Late last week I suggested that Pattrick Smellie of BusinessDesk was being more than a little generous to the Reserve Bank when he suggested that, even though the Governor was now displaying some of the same bunker mentality as was on display late in the Wheeler years, more generally

The RBNZ is now more open and transparent.

There was no evidence then for that proposition.  As I noted

it just isn’t so –  the capital review is only the latest example, but nothing material has changed about monetary policy, we’ve had no serious speeeches from the Governor on his core responsibilities, and they play OIA games just as much as ever

And today I’ve had another couple of fresh examples illustrating my point, and a reminder of a third.

The reminder?  Contact from the Ombudsman’s office about a complaint I lodged some time ago when the Bank took a grossly excessive amount of time to release material I’d requested –  relevant to bank capital review – all of which, in turned out, had already been given to other people (and thus should have been able to be released almost immediately).

And the new examples?    More than two months ago I asked both the Bank’s Board and the Minister of Finance for papers relevant to the appointment of members of the new Monetary Policy Committee.    After a while, both parties extended my request.  I wasn’t unduly bothered, although even then the notion ran around in my head that a pro-active release might have been a good idea, around the first appointments to a powerful new body.    Today, the Minister of Finance did release a fair amount of material (I haven’t read it yet), but what about the Bank’s Board?   Well, they just sent me a note extending the request yet again, using as their justification –  after having had 2.5 months already

because of the consultations necessary to make a decision on the request such that a proper response to the request cannot be made within the original time period.

And this is what Pattrick Smellie thinks is a “more open and transparent bank” (bear in mind that the Governor sits on the Board, and the Governor’s staff will do doing all the actual work).

Quite possibly the request for information around the MPC appointments could have taken a bit of effort.   But my other example of the Bank continuing on as ever, playing games outside both the letter and the spirit of the OIA, is one where they could easily have responded fully and openly within a day or two of the original request.

On 11 May, I lodged the following request

nzi oia

I was pretty sure he would have been speaking without notes or slides (but if there had been any they’d have been easy to send on –  after all, the material had already been provided to private sector people).   And since the request was made just a day after the presentation, it should have been very easy for the Governor to have jotted down a quick summary of what he had said, and how he had answered questions on two specific topics.

But 20 working days have now passed –  and recall that under the law the requirement is to respond “as soon as reasonably practicable, but no later than 20 working days” –  and this afternoon this request was also extended for another couple of weeks, again allegedly because the consultations necessary to make a decision could not be made within the original timeframe.  Yeah right.   (In fact, there shouldn’t need to be any consultations at all.  I asked only for the Governor’s words, which are official information.)

Why did I frame the request around those specific points?  It was easy to anticipate that the Governor would get lots of questions about his bank capital proposals, probably not (from that audience, which includes both private businesses and banks) sympathetic ones.  And about the Bank’s research capability?  That reflected a post here on the morning the Governor was to meet the New Zealand Initiative over lunch.

On which note, one hears that the Reserve Bank’s research function has been  substantially gutted, with several recent resignations in recent months from among their best-regarded and most productive researchers (and the manager of the team left this week and is reportedly not being replaced).    The Bank’s research function once played a very influential part in policy and related thinking, but that is going back decades now.   Even with a Chief Economist who himself had a strong research background, the research team never quite found a sustained and valuable niche in recent years, even as some individual researchers have generated some interesting papers, often on topics of little direct relevance to New Zealand.  One of the most notable gaps is that the Bank has become increasingly focused on financial stability and financial regulation, and yet little or no serious research has been published in those areas of responsibility (a senior management choice).  That weakness has been evident in the recent consultation document(s) on bank capital.

One can always question the marginal value of any individual research paper, but we should be seriously concerned if the Reserve Bank under the new wave of management is further degrading the emphasis on high quality and rigorous analysis.  Apart from anything else, a good grounding in research has often been the path through which major long-term contributors to the Bank have emerged, including former chief economists (and roles more eminent still) Arthur Grimes and Grant Spencer.   I see that the Governor is delivering an (off the record) talk at the New Zealand Initiative today: perhaps someone there might like to ask just what is going on, and what place the Governor sees for a research function in a strongly-performing advanced country central bank.  Not even he, surely, can count on Tane Mahuta for all the answers.

So I was interested to see if anyone with the opportunity had asked the question.

(As it is, I heard on the grapevine that at this event the Governor may have attempted to fend off any criticisms of his tree god nonsense with the allegation that criticism was simply “racist”.)

I’m more amused than outraged.  Because the Bank’s –  the Governor’s –  conduct is simply par for the course: obstructive whenever they can get away with it, as they have been for a very long time.   There is no sign –  none –  that in this regard the Orr regime is any better than what went before.  You might now get cartoons with your MPS or FSR, but what you won’t get is an open, transparent, and accountable Reserve Bank, seriously interested in substantive engagement or searching scrutiny.  That’s a shame.  And it is something the Board and the Minister should take a lot more seriously, including when the Minister exercises his new statutory power to appoint the chair and deputy chair of the Bank’s Board –  finally making it clear that the Board work for the Minister and the public, not for the Governor or their own quiet lives.

UPDATE: A commenter points out that a second extension, made outside the initial 20 day window, is itself in breach of the OIA.  Even the SSC agrees with that interpretation.

MULTIPLE EXTENSIONS You can extend the time limits for a request more than once, providing all extensions are made within the original 20 working day time period after receiving the request (see section 15A(3)).

 

 

Encouraging transparency and accountability

Michael Reddell OIA, Reserve Bank, Transparency

I’m travelling today and tomorrow, so just something brief now, and perhaps nothing tomorrow.

The government announced a couple of days ago that

From January, all Government ministers will have to release details of their internal and external meetings.

Minister for State Services (Open Government) Chris Hipkins said Cabinet had agreed to the release of summary information from their ministerial diaries from January 2019 onwards, with the first publication in February 2019.

To be specific

For each meeting in scope, the summary would list: date, time (start and finish), brief description, location, who the meeting was with, and the portfolio. The monthly summary will be published on the Beehive website within 15 business days following the end of each month.

It is a significant step forward, and will (or should) strengthen scrutiny and accountability of ministers.  There are some exceptions, and potential scope for the rules to be bent, but it goes beyond the publications practice for ministers in the UK and in New South Wales.   Together with the decision to pro-actively release Cabinet papers, it is another step towards delivering on the commitment to greater openness and transparency in government.

The (largely taxpayer-funded) lobby group Transparency International –  the ones who nonetheless host senior public servants giving secret speeches – has put out a statement welcoming the move.

“We are pleased that the Government acknowledges the need for transparency from its Ministers. Transparency is the antidote for corruption, every action they take makes New Zealand a better home for her citizens and reinforces New Zealand’s leadership in the global fight against corruption,” stated TINZ Chief Executive Officer Julie Haggie.

They suggest this should only be a first step

“We hope it is not long before all Parliamentarians are required to release their diaries and this requirement is codified in law so that it cannot be undone in the future by politicians fearful of transparency,” [chair Suzanne] Snively adds.

Not to disagree with that, but in many respects we have less to fear –  in our sort of political system –  from backbench members of Parliament than from senior officials (and even judges) exercising in some cases huge amounts of discretionary power.  Sometimes that is the ability to regulate directly, but even if they don’t have that particular power then the enforcement (or otherwise) of laws and rules made elsewhere opens up the potential for inappropriate influence, or even corruption.

The specific case I’m most interested in is the Governor of the Reserve Bank.  He will shortly lose his exclusive power to set and adjust the OCR himself, although he will still be hugely influential in monetary policy (and people will be keen to bend his ear or get the inside word).  But even once the new legislation is passed the Governor will retain his, largely untrammelled, powers as individual decisionmaker in regulating banks, and in enforcing (or not) a wide range of regulatory provisions affecting banks, non-banks, and insurers.  There is a great deal of money at stake in many of these decisions.

I’m not suggesting that anything very untoward goes on –  although successive Governors have each been involved in some questionable episodes.  But we (a) need to keep it that way, and (b) gain confidence in the way an institution is being run partly by means of transparency.   And what is good enough for elected Ministers of the Crown (who face scrutiny in Parliament every day) is surely a standard that should also be met by powerful unelected, largely unaccountable, officials.   I’d encourage the Governor to take the lead and announce that he will adopt the same standard, and if he doesn’t do so the Board and the Minister should prevail on him to reconsider.  If such transparency is good enough for ministers, it should be a standard expectation for the top tier of public officials.

Hope springs eternal, but I’m not very optimistic that the Governor will see such transparency as a positive virtue.  Readers will recall that the Ombudsman recently ruled in the Governor’s favour, allowing the Bank to withhold internal analysis and advice prepared for a Monetary Policy Statement at which the then (acting) Governor announced what the Bank was assuming about the impact of some major policy initiatives of the new government (including the now mired in controversy Kiwibuild), with no supporting detail or analysis.   Among the Ombudsman’s justifications was that, although his decision wasn’t made until almost a year after the request, his decision had to relate to the date on which my request had been made (ie very shortly after the relevant MPS).  To test this standard, I then re-lodged the request, so that a new decisions would have to be made about this analysis and information but on the basis that it is now a year old.

Absolutely not to my surprise, the Bank again rejected the request.  They do this even though, across the road, very similar sorts of background notes and briefing papers prepared for the Minister of Finance by Treasury staff as part of the Budget process are routinely, and pro-actively, released.

The Bank does condescend to observe that

In considering how long it is reasonable to withhold information of this nature, the Reserve Bank recognises that as time passes then release is less likely to have an inhibiting effect.

but concludes that a lag of more like five to ten years might be appropriate.  It would be laughable if it weren’t so serious.  According to the Bank, citizens are not entitled to see background papers on such matters ( and in the end the Bank’s analysis of Kiwibuild probably didn’t change the OCR decision materially) even a year after they were written (using taxpayer resources).  It makes a mockery of the principles of the Official Information Act, further undermining the already limited accountability of an already over-mighty public official.

Ministers have set an encouraging lead. The Treasury sets a good example around papers feeding into the Budget process. It is surely time for the Governor –  encouraged by the Board, soon to be more directly answerable to the Minister through a directly-appointed chair – to get with 21st century standards of transparency and accountability.

 

 

Central bank minutes released: a small victory for transparency

Michael Reddell OIA, Reserve Bank, Transparency

Regular readers will recall that the Reserve Bank has long been deeply resistant to releasing any information relating to OCR decisions or Monetary Policy Statements, other than what they themselves chose to release, whether in the published documents or in subsequent interviews.  That has never been very satisfactory, but the Bank has attempted to carve out for itself a special place, more or less above the provisions of the Official Information Act.

One of the things they’ve consistently refused to release is minutes of the Governing Committee, the body set up by the previous Governor, in which the Governor takes his final OCR decision (and other major decisions, including ones around LVRs).  They had long taken the same stance to the minutes of the predecessor Official Cash Rate Advisory Group, even when the requests related to decisions some time in the past. Often enough, it seemed that there were no written minutes at all (which was probably in breach of the Public Records Act).

I had largely given up on making any progress on this issue (and, anyway, the new statutory Monetary Policy Committee, which will have its own charter on such matters, is coming next year). But for some reason, which I now forget, I had lodged one more request six months ago seeking

1. the minutes of any meetings of the Governing Committee relating to the May MPS,
including minutes of the meeting where the OCR decision was taken;

When the Bank refused to release anything (not even date of meeting, list of attendees, headings –  even if all the substantive content was redacted) I complained to the Ombudsman, noting that (among other things) the Bank quite often released minutes of Board meetings (even with some content withheld).

The Bank regularly releases minutes of the meetings of its own Board (in response to OIA requests), with individual deletions as appropriate.  It seems inconceivable, for example, that the date, time, place of the meeting, the list of attendees, the confirmation of past minutes, and the final decisions of any meetings (themselves reflected in a later published document) could pass a “free and frank”: withholding test, even if (again) it is plausible that if there is any substantial account of the nature of contentious discussion at the meeting that specific element of the material might.

And then I forgot all about the request until a short time ago when an email from the Reserve Bank turned up.

We refer to your complaint to the Office of the Ombudsman (ref: 480453) relating to your request for: “minutes of any meetings of the Governing Committee relating to the May MPS, including minutes of the meeting where the OCR decision was taken.”

The Reserve Bank has reconsidered its initial position and is now releasing with redactions, a copy of the only document within the scope of your request – the Governing Committee minutes in May. The document is attached to this correspondence.

And it has only take six months, which is progress.  Credit to the Ombudsman.

For anyone interested, the minutes themselves are here

Governing Cttee minutes May 2018 OCR

One day perhaps we might even have released –  with a suitable lag – the background papers the Governor (and his new MPC) receive, and upon which they base their decision

I’m not sure there is any new information in the particular minutes released, but having released Governing Committee minutes in this form –  against a request made almost immediately after the relevant OCR decision was released – a small but helpful precedent has been established.   Some material is still withheld on the highly questionable ground of avoiding damage to the substantial economic interests of New Zealand.  One day, the Ombudsman is going to have to provide some substantive guidance on that provision, but for now both he and the Bank seem keen to avoid the Ombudsman having to draw the appropriate line between national economic interests and those of a particular public agency.

 

 

Show your workings: KiwiBuild, the Reserve Bank, and the Ombudsman

Michael Reddell OIA, Reserve Bank

The Reserve Bank is a powerful public agency, whose views receive a lot of coverage, and some respect in some quarters. The views taken by the Bank affect where interest rates are set, and thus the short-medium term path of the economy itself.  They aren’t just commentators –  they are players too –  but they aren’t less than commentators.  They use a lot of public money to undertake analysis that is supposed to underpin their commentary and decisions.   It should be pretty much Open Government 101 that citizens –  who pay for the analysis and are directly affected by how the Bank uses it –  should be able to see that analysis.     The Reserve Bank has never seen it that way.  Over decades –  when I was closely involved, and still now –  they’ve taken the view that the Bank is different, and special, and that all we should be entitled to see is what they choose to tell us.   Even Xi Jinping reaches that low bar.

Sadly, the Bank has had the Ombudsman –  supposedly the watchdog for citizens to ensure, specifically, that the Official Information Act is complied with (in letter, but ideally also in spirit) –  wrapped around its little finger for decades now.  Through successive Chief Ombudsmen and successive Governors, the Ombudsman’s office has provided cover for one of the most powerful agencies of government, one still (for a few more months) run as one man’s fiefdom (single decisionmaker regime).

KiwiBuild is a case in point.  As I noted, the Reserve Bank is a powerful public agency.  KiwiBuild is a major element in the current government’s policy, and one very relevant to the Reserve Bank given the role fluctuations in residential investment often play in business cycles.   What the Reserve Bank thinks about the impact of KiwiBuild matters for monetary policy.  It can matter also to the government, especially now that its flagship programme appears to have run into political difficulties.

The Reserve Bank first opined on KiwiBuild in its November Monetary Policy Statement last year.  That document was finalised shortly after the new government took office, and in it the Bank reported –  in highly summary form –  the assumptions it had made about four strands of the new government’s programme minimum wages, fiscal policy, immigration, and Kiwibuild).   Here is what they had to say about KiwiBuild (emphasis added).

The Government has announced an intention to build 100,000 houses in the next decade. Our working assumption is that the programme gradually scales up over time to a pace of 10,000 houses per year by the end of the projection horizon. Given existing pressure on resources in the construction sector, the aggregate boost to construction activity from this policy will depend on how resources are allocated across public and private sector activities. The Government intends to introduce a ‘KiwiBuild visa’ to support the supply of labour to high-need constructionrelated trades. While accompanying policy initiatives may alleviate capacity constraints to some extent, our working assumption is that around half of the proposed increase will be offset by a reduction in private sector activity.

It wasn’t necessarily an unreasonable working assumption, but it was very early days for the new government.  Presumably the Bank had had the benefit of perspectives from, say, MBIE and Treasury that the public were not privy to, and they must have applied their own (considerable) analytical resources to thinking hard about how, at any economywide level, crowding out would work.  It didn’t seem unreasonable that if the central bank was going to weigh in like this, and make policy on the basis of such assumptions, we should be able to see a little more of their supporting analysis.  After all, if the correct number wasn’t a 50 per cent crowding out, but (say) 25 per cent, 75 per cent or even 100 per cent, it could have material implications for monetary policy.

And so, a few days after the Monetary Policy Statement was released, I lodged a request for

copies of any analysis or other background papers prepared by Bank staff that were used in the formulation of the assumptions about the impact of four specific policies of the new government minimum wages, fiscal policy, immigration, and Kiwibuild), as published in the November 2017 Monetary Policy Statement.

Somewhat predictably, the Bank refused and I appealed the matter to the Ombudsman.

The Bank justified its refusal on two conventional grounds, and one on which the Ombudsman has never provided substantive guidance.

The Reserve Bank is withholding the information for the following reasons, and under the following provisions, of the Official Information Act (the OIA):

  • section 9(2)(d) – to avoid prejudice to the substantial economic interests of New Zealand;
  • section 9(2)(g)(i) – to maintain the effective conduct of public affairs through the free and frank expression of opinions by or between officers and employees of the Reserve Bank in the course of their duty; and
  • section 9(2)(f)(iv) –  to maintain the constitutional convention for the time being which protects the confidentiality of advice provided by officials.

Anyone with a modicum of interest in open government, and even the slightest familiarity with the Reserve Bank, financial markets etc, would recognise that the claim that releasing such background supporting analysis would prejudice the “substantial economic interests of New Zealand” is laughable.

The Reserve Bank continues to comment on KiwiBuild, and the implications of that programme for the overall outlook for residential investment and for economic activity.   The views taken by the Bank still matter, both substantively (monetary policy) and in terms of the growing political controversy over the programme.     And they continue to provide almost no substantive analytical underpinnings for their views.  Here is the relevant extract from last week’s MPS. 

The Government’s KiwiBuild programme is expected to contribute to residential investment over the second half of the projection.

and

The KiwiBuild programme is assumed to add to the rate of house building from the second half of 2019.

And that’s it. No description of any analysis they (presumably) must have undertaken.

The issue came out in the press conference, where it was even enough to win the government a favourable news story, Reserve Bank backs KiwiBuild targets… mostly.  Here is some of that story

But the Reserve Bank’s quarterly Monetary Policy Statement noted that the “KiwiBuild programme is assumed to add to the rate of house building from the second half of 2019”.

That’s big news. The Bank puts extensive resourcing into coming up with its economic forecasts, and it’s essential that it does so. The Bank’s forecasts guide it’s setting of the official cash rate which is one of the main levers that sets the pace of the economy. Get it wrong, and the consequences can be severe.

That’s why it’s worth noting that the RBNZ now appears to back the view that most of the KiwiBuild homes built will be in addition to the current housing supply, which is roughly 30,000 houses delivered on the private market.

Critics have assumed that all or most of the 12,000 houses KiwiBuild will deliver each year, once fully deployed, will come by sucking resources from the 30,000 builds currently taking place. New Zealand will still build 30,000 houses a year, but 12,000 of them will be KiwiBuild, they say.

But the Bank disagrees, saying its forecasts have “assumed some minor set off”, but that KiwiBuild is overall likely to increase housing supply.

This is a change from the Bank’s MPS from last November. At the time, RNZ reported the Bank’s preliminary calculation was that as many as half of KiwiBuild’s projected 100,000 homes would have been built anyway.

Housing Minister Phil Twyford responded then that “there may be some offset but I doubt it will amount to very much”.

It now seems the Reserve Bank largely agrees, although as an independent entity it is duty bound to stay out of politics.

It doesn’t totally back the Government’s aspiration to deliver all the KiwiBuild homes in addition to existing supply.

Reserve Bank Chief Economist John McDermott said there would still likely be some “crowding out” as KiwiBuild sapped workers and resources from the private sector.

“You can imagine when one part of the economy starts to increase demand it will crowd out some other parts but overall we will start to see quite a lot of activity over the next few years in residential construction,” he said.

This stuff matters, Orr and McDermott are opining on it, Orr is making monetary policy on it, but they can’t or won’t supply any supporting analysis.  Not a year ago, and not now.     Perhaps they are right, but what confidence should we have in their views when they won’t show us, so to speak, their workings.  Old exam question used to specify that if you wanted credit for your answer (to, say, some maths problem) you needed to show your workings.  It isn’t obvious why the bar should be so much lower for a powerful public agency like the Reserve Bank.

Sadly, they have persuaded the Ombudsman to agree with them.  In my post on Thursday, I included some text from a submission I had made a few months ago to the Ombudsman on his provisional determination on this issue.  On Friday I received a letter from Peter Boshier, the chief ombudsman, conveying his final decision.  In it, he fully backed the Reserve Bank’s stance of refusing to release any of the background papers.

In my submission I had attempted to draw a parallel between background papers provided to the Governor on matters relating to MPSs and OCR decisions, and material provided to the Minister of Finance in respect of, notably, the Budget.  Each year a huge amount of that latter material is pro-actively released.  I noted

Thus, Cabinet papers underpinning key government announcements are frequently released, sometimes in response to OIA requests and at other times pro-actively.  But so too is advice to a Cabinet minister from his or her department.  That is so even when, as is often the case, officials have a different view on some or all of the matters for decision from the stance taken by the minister.   A classic example, of course, is the pro-active release of a great deal of background material, memos, aide-memoires etc compiled and submitted as part of the Budget formulation process.  Many of the working papers in that case may never even have been seen the Secretary to the Treasury but will have been signed out to the office or minister at the level of perhaps a relatively junior manager.  Many will have been done in a rush, and be at least as provisional as analysis the Governor receives in preparing for his OCR decision.  I’ve been personally involved in both processes.

Is it sometimes awkward for the Minister of Finance that his own officials disagreed with some choice the minister made?  No doubt.  Do ministers sometimes feel called upon to justify their decisions, relative to that official alternative advice? No doubt.  But it doesn’t stop either the provision of such dissenting (often quite provisional) analysis and advice, or the release of those background documents.

The sorts of arguments the Reserve Bank makes, and which Mr Boshier appears to have accepted, could well be advanced by Cabinet ministers (eg clear messaging about this or that aspect of budgetary or tax policy –  all of which are substantial economic interests of the NZ government).  If they have advanced such arguments, they have generally not succeeded.  And nor should they.  Doing so would undermine effective accountability or scrutiny, even though the Minister’s formal accountability might be to Parliament (he has to get his Budget passed).

The relationship between the Minister and his or her department officials is closely parallel to that between the Governor of the Reserve Bank –  the sole legal decisionmaker (who doesn’t even have to get parliamentary approval of his decisions) –  and the staff of (in this case) the Economics and Financial Markets departments of the Bank.  One group are advisers, and the other individual is the decisionmaker.  The fact that they happen to both part of the same organisation, doesn’t affect the substantive nature of that relationship.   Managers and senior managers in the relevant departments are responsible for the quality of the advice given to the Governor, in much the same way that the Secretary is responsible for Treasury’s advice to minister (and at his discretion can allow lower level staff to provide analysis/advice directly to the Minister or his office)   I would urge you to substantively reflect on the parallel before reaching your final decision, including reflecting on how (if at all) official advice on input to the OCR is different than official advice (including supporting analysis) on any other aspect of economic policy.

Remarkably, in his determination to protect the Reserve Bank,  Boshier simply ignores the parallel to Treasury budget advice altogether.  Perhaps it isn’t altogether the appropriate parallel (although I think the situations are extremely analagous), but instead of engaging and identifying relevant similarities and differences, the Chief Ombudsman simply ignores the argumentation.  He seems to think it is okay for powerful public agencies to make policy based on critical assumptions, and opine on matters of political sensitivity, and yet to be under no obligation to show any of their workings, even when (as in this case) such material clearly exists (the responses make that clear).

If that weren’t bad enough, the Ombudsman plumbs new depths with this paragraph from his letter

You contend that the formal accountability of the Governor is relatively weak and that public scrutiny and challenge is the most effective form of accountability. However, that view would seem conflict with your previous stated view that it was the Reserve Bank Board, rather than market commentators, who was best placed to hold the Governor to account.2 Your paper makes a very strong case for the merits of the formal accountability mechanism, the disadvantages of market commentators, and the legitimate variance of views that can arise.

I was initially a bit puzzled about what he was going on about, until I looked at footnote 2.  It was a link to this paper on monetary policy accountability and monitoring, which I had written for the Bank, as a Bank employee, in about 2005 or 2006, making a defensive descriptive case for the Bank, including highlighting how open and accountable it was.  The article has actually been amended slightly in recent years, but even at the time it wasn’t my own view –  it was the official Bank line.  That is what public servants are paid to write.  (Heck, I’ve given presentations making the case for OCR decisions I strongly disagreed with –  it is what public servants do.)     As I recall it, the article had been intended for publication in the Reserve Bank Bulletin, and my own bosses had been reasonably comfortable, but the Bank’s Board was most definitely not comfortable, and insisted both that it not appear in the Bulletin and that before it appeared anywhere it be amended to play up the importance of the Board’s monitoring and accountability (relative to the way things were presented in the draft).

I couldn’t believe that a serious person –  and Peter Boshier used to be a senior judge, and as Ombudsman is entrusted by Parliament with protecting citizen’s interests –  was actually going to run so feeble an argument.   Perhaps it seemed like a “gotcha” argument to some junior person in his office, but review processes are supposed to winnow out such lines. I’m still sitting here shaking my head in disbelief.  The Ombudsman seriously wants us to believe that because a Bank official, writing for the Bank –  a decade or more ago –  says it is highly accountable via the Board, it is in fact so.  Only someone determined to provide cover for the Bank could even think to take such a line seriously.  But that seems to be a description of the Ombudsman.

As tiny sliver of hope, the Ombudsman did point out that his decision had to be made as at the time I initially lodged the request,  ie was it reasonable for the Bank to have withheld the information last November/December, a few weeks after the relevant MPS. As a year has now passed, I have submitted a new request to the Bank, for exactly the same information from last November. I fully expect the Bank to decline that request, and then the Ombudsman can determine whether even after a year citizens should be entitled to see the working analysis powerful public agencies use when they opine on, for example, controversial government policies.  The Official Information Act is well overdue for an overhaul, but decisions like these simply reinforce the case, with more evidence of how ineffective the administration of the Act (including by the Ombudsman) often is in delivering on the purpose statement in the Act itself.

Meanwhile, Orr and McDermott opine on KiwiBuild and (apparently) make policy on their opinions, but refuse to provide anything of the analysis that underpins their views.  That simply isn’t good enough.

ADDENDUM

For anyone interested in another small example of how the Reserve Bank has the Ombudsman wrapped around their little finger,  consider the release last Thursday in the Monetary Policy Statement of this chart.

OCR advice

When I’d first seen it I offered a little bit of praise to the Governor for publishing it.  It happened to be quite similar to information I had requested more than 2.5 years ago, and which the Bank had refused to release.

As I noted in the post on Thursday, I learned a few minutes after publishing that praise of the Governor that, in fact, they had published the material only because –  after a mere 2.5 years –  the Ombudsman had got round to asking them to reconsider.   But it got worse when I got the formal letter from the Ombudsman on Friday.  They did actually apologise for taking 2.5 years and noted

As you may appreciate, this investigation has involved several meetings and much correspondence with the Reserve Bank concerning the use of a rarely-used withholding ground.

(From memory this is the “substantial economic interests” ground, which the Ombudsman thus again avoids formally ruling on.)

But this was the bit that really caught my eye

To preserve market neutrality, the Reserve Bank asked me not to inform you of its decision to release this information until after the November MPS.

This simply confirms that the Ombudsman and his staff have no concept of what might, or might not, be market sensitive.   Anyone with the slightest familiarity with the issue will recognise what actually happened.  The Bank decided to put the information in the MPS so that it might perhaps attract a little praise (for new interesting information) –  and it even managed to get some from me – while avoiding a situation where, having released the information to me –  me having requested it 2.5 years ago – I could have put it out first here, with some digs about the process, the obstruction, and the interests of transparency.

As it happens, I have no problem at all with the Bank putting the material in the MPS. It gave the material more visibility than it would get here –  and there was even a question at the press conference –  but no one, but no one (other than presumably the Ombudsman’s office, which appear not to know what it doesn’t know) would have bought the line about this old information being in any way market sensitive, or hence the alleged need for “market neutrality” about its release.  The Ombudsman’s office, again, allowed itself to be used by the Bank.  Relevant Bank staff will no doubt have been quite pleased with themselves.  But if anyone from the Ombudsman’s office is reading this –  and perhaps I’ll send them a copy –  they might use it as a prompt to begin to rethink the extreme deference they’ve displayed towards the Bank over the years.

 

 

OIA obstructionism – yet more evidence for RB reform

Michael Reddell OIA, Reserve Bank, Reserve Bank Act reforms, Uncategorized

Working my way through things that turned up while I was away, I stumbled on an impressive piece of public sector diligence.  At 3.44pm on the last working before Christmas – a time by which surely most office-bound workers had already left work for the holidays –  Angus Barclay, from the Communications Department of the Reserve Bank, responded to an Official Information Act request I’d lodged with the Bank’s Board several weeks earlier.   I was impressed that Angus had still been at work, but was less impressed with the substance of the response.

I’d asked the Board for copies of the minutes of meetings of the full Board and any Board committees in the second half of last year (specifically 1 July to 30 November).  It didn’t seem likely to be an onerous request: there would probably only have been four or five full Board meetings, and perhaps some committee minutes, all of which will have been readily accessible (in other words virtually no time all in search or compilation).    Perhaps the Board would have wanted to withhold some material, and (subject to the statutory grounds) that would have been fine.  But again, doing so shouldn’t have been onerous.   The Board, after all, exists mostly to monitor the performance of the Governor, on behalf of the public.   In an open society, it isn’t naturally the sort of material one should expect to be kept secret.

In fact, in the 22 December response I received I was informed that there were only five documents.  But I couldn’t have them.  Instead, the request was extended for almost another two months, with a new deadline of 19 February.   Oh, and they foreshadowed that they would probably want to charge me for whatever they might eventually choose to release.

Why was I asking?     After an earlier request to the Board, around the appointment of an “acting Governor”, it had come to light that there was no documentation at all around the process for the appointment of a new Governor (that had been underway in 2016, before Steven Joyce told them to stop), which in turn appeared to be a clear violation of the Public Records Act.    The process of selecting a candidate to be the new Governor is one of the Board’s single most important powers.   And yet the records showed that nothing had been documented –  to be clear (see earlier post), it wasn’t that material was withheld (for which there might well have been an arguable case), it just didn’t exist.   Following that post in May, I was interested to see whether the Board had sharpened up its act, and come into compliance with its statutory obligations.

I had some other interests, of course.   For example, in the five months covered by my request, Graeme Wheeler had finished his term, and I also wondered if there might be some insight in the minutes on the still-secret Rennie review on the governance of the Reserve Bank.

But instead I met obstruction.

There are two things that interest me about the response.  The first is that, although the request was explicitly made of the Reserve Bank Board –  which has a separate statutory existence, and whose prime function is to hold the Bank/Governor to account –  the response came from Reserve Bank staff, referencing only Reserve Bank policies and practices.  It is consistent with my longstanding claim that the Board has allowed itself to simply serve the interests of, and identify with, the Bank –  rather than, say, the Minister who appointed them, or they public whom they (ultimately) serve.

Thus, in respect of the charging threat, I received this line

The Ombudsman states on page 4 of the guidelines on charging that: “It may also be relevant to consider the requester’s recent conduct. If the requester has previously made a large volume of time-consuming requests to an agency, it may be reasonable to start charging in order to recover some of the costs associated with meeting further requests.”

I’m not precisely sure how many OIA requests I lodged with the Board last year, but I’m pretty sure it was no more than four (and one of those was to secure material that was in fact covered by, but ignored in the answer to, an earlier request).   Three of the four I can recall were simply requests for copies of minutes – with no substantial search or collation costs.  Given the uncertainty around the legality of the appointment of the “acting Governor”, major events during the year such as the Rennie review, questions around compliance with the Public Records Act, and the process of selecting a new Governor, it didn’t seem like an undue burden on the Board.

As the Ombudsman’s charging guidelines also note

Note, however, that some requesters (for example, MPs and members of the news media), may have good reasons for making frequent requests for official information, and they should not be penalised for doing so.

Since this blog is one of the main vehicles through which a powerful public agency –  Bank and/or Board –  is challenged and scrutinised, I’d say I was on pretty strong ground in my request for straightforward Board minutes.  (And just to check that the Board itself isn’t being overwhelmed with other requests, I lodged a simple further request this morning asking how many OIA requests the Board has received in each of the last two years, and copies of the Board’s procedures of handling OIA requests made of it.)

I can only assume that the Bank itself, which seems to be controllling the handling of requests made even to the Board, has gotten rather annoyed with me again, and decided to use the threat of charging as some sort of penalty or deterrent.  Longstanding readers may recall that we have been this way once before.  About two years ago, the Bank got very annoyed with me (and some other requesters) and started talking of charging left, right and centre.   Reaction wasn’t very favourable, and Deputy Governor Geoff Bascand even took to the newspapers with an op-ed defending the Bank’s stance.   There was talk of a “mushrooming” number of requests, but on closer examination even that didn’t really stack up –  the number of OIA requests the Bank received was much smaller than, say, those The Treasury received.     Explaining is (often) losing, and as I noted at the time, the Bank didn’t come out of the episode well.   As a refresher, the Bank released responses to 20 OIA requests in 2017.  The Treasury, by contrast, released responses to more than 80 OIA requests (in both agencies there will be have responses not posted on the respective websites).

But even in their defence a couple of years ago, Bascand asserted that the Bank –  no mention of the Board –  would be charging only when the requests were “large, complex or frequent”.  My latest request of the Board is neither large nor complex, and neither were the earlier requests.

Even though the Bank and the Board are not the same entities, they are clearly trying to conflate my requests to both entities.   But over the course of last year, my records suggest I lodged no requests at all with the Reserve Bank itself in the first five months of last year.    Between June and the end of the year, there seem to have been quite a few, but on topics as diverse as:

  • the new “PTA” signed by Steven Joyce and Grant Spencer,
  • the Toplis suppression affair,
  • assumptions about new government policies the Bank referred to in its latest MPS,
  • some data from an expectations survey that the Bank had not published
  • three old papers, each clearly-identified in the request,
  • a specific paper on RB governance issues explicitly mentioned in the Bank’s BIM, and
  • work on digital currencies that the Bank explicitly highlighted in a recent research paper.

All still seem like reasonable requests, of a powerful agency which has a wide range of functions.  It seems unlikely that many of them should have involved any material amount of time to search for, or collate (in fact, in response to several requests the Bank responded quite quickly and in full, prompting notes of thanks from me).   There are no requests that can reasonably be described as “fishing expeditions”, and no pattern of repeated requests for much the same information.  They seem like the sort of requests those who devised the Official Information Act might have had in mind.

Finally, it is worth noting what the Ombudsman’s guidelines suggest can and can’t be charged for (bearing in mind that very few agencies charge at all).    Agencies can, in appropriate circumstances, charge for things like

Search and retrieval 

Collation (bringing together the information at issue) 

Research (reading and reviewing to identify the information at issue) 

Editing (the physical task of excising or redacting withheld information) 

Scanning or copying

Five nicely-filed documents (Board minutes) will have taken mere minutes to retrieve, no time to copy (since they will exist in electronic form already) and no time to research.  It is conceivable that the physical task of redacting withheld information might take a little time –  but very little.

And what can’t agencies charge for at all?

Work required to decide whether to grant the request in whole or part, including:
– reading and reviewing to decide on withholding or release;

– seeking legal advice to decide on withholding or release;

– consultation to decide on withholding or release; and – peer review of the decision to withhold or release. 

Work required to decide whether to charge and if so, how much, including estimating the charge.

If the Reserve Bank or the Board think that trying to charge for five simple, easily accessible, documents is consistent with the principles of the Official Information Act, or of the sort of transparency they often like to boast of, things are even worse than I’d supposed.   And in the attempt, they will again damage their own image and reputation more than they inconvenience me.

If anything, it is further evidence of why a full overall of the Reserve Bank Act –  and of the institution –  is required.  You might have supposed that, with a review underway, the Bank and the Board would have wanted to go out of their way to attempt to demonstrate that there were no problems, no issues, in an attempt to convince the Minister to make only minimal changes, leaving incumbents with as much power and control over information as possible.  But no, instead by the words and actions they simply reinforce the case for reform, and indicate that they have little concept of what genuine public accountability means.   We should be looking for openness, not obtuseness and obstructiveness from the Bank –  whether the Governor (“acting” or permanent) or the Board, supposedly operating on our behalf to keep the Bank in check.  Once again, we don’t see what we should have the right to expect.

Perhaps, on reflection, the Bank or the Board will reconsider their wish to charge for some simple documents –  the sort of documents that should probably be pro-actively released as a matter of course.  If not, one can only assume they have something to hide.   The “good governance” former public servant in me is sufficiently disquieted about the evidence of weak or non-existent recordkeeping that I am thinking of taking further the apparent breach of the Public Records Act.  Options might include:

  • a letter to the chair of the Board, asking how the Board is assured that it is operating in compliance with the Act,
  • a letter to the Minister of Finance, asking whether (and how) he can be sure that his appointees (the Board) are operating in compliance, given past evidence of major gaps,
  • a letter to the minister responsible for the Public Records Act itself,
  • a letter to the Auditor-General expressing concerns about the evidence suggesting that the Board of the Reserve Bank is not meeting its statutory obligations under the Public Records Act.