I wrote then
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It would be an arbitrary bank tax, even if Willis amended the Reserve Bank Act to mandate such an approach
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I ended the post noting that I had lodged an Official Information Act request with the Minister for all the advice etc she had received on the matter. You will note (above) that Grant Robertson had been pretty responsive to OIA requests on this issue a couple of years ago (and appropriately so, given the OIA’s presumption in favour of disclosure.
The current Minister of Finance’s response came back this morning (and yes, I just noticed that her office dated it 9 August rather than 9 September)
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It is pretty remarkable that she is withholding absolutely everything (down to and including titles of papers etc, or initial briefings from many months ago). Not the approach of a Minister with any sort of interest in or commitment to open and transparent government, let alone either the letter of spirit of the OIA (perhaps this is why the annual pro-active disclosure of official papers relating to the Budget has still not happened, more than three months on).
Some weeks ago, after I wrote my post, Jenee Tibshraeny kindly offered me the opportunity to listen to the full interview she’d done with Willis. There were a number of interesting aspects that hadn’t really come out in the article (space constraints and all that), but what really caught my attention was that she mentioned almost in passing that she’d be keen to see the advice on this issue, to which the Minister’s response was that she couldn’t do that as the matter was “under active consideration”.
Section 9(2)(f)(iv) – the clause the Minister cited – is generally interpreted as providing some protection when matters are under active consideration (Ombudsman’s guidance note), in which case we are left to conclude that not only was the matter still being considered when Tibshraeny did the initial interview more than a month ago, but that it is still under active consideration now. She seems to be seriously toying with a law change to allow an arbitrary distortionary and inefficient tax on banks. It is quite extraordinary (or perhaps would be if this were not the Minister of Finance who has already increased taxes on business – removing depreciation provisions on buildings – and whose government last week imposed an arbitrary export tax (on overseas tourism), in what seems to be a pure revenue grab so flagrant that even Steven Joyce – no free market purist – was prompted to attack the move in his Herald column).
One can only hope that there is a less-bad interpretation, but the Minister herself has chosen to go public with the comment to Tibshraeny that she could consider legislative intervention, and the Minister herself is now refusing to release any material on the issue.
Any such “tax” would be a seriously retrograde step and would be a signal that the government was much more interested in populist bank-bashing (Green Party style, worse than Grant Robertson) than in serious policymaking. It would be a pure revenue grab, that might even garner a few cheers from the cheap seats, but would command not a shred of respect (for her or for New Zealand policymaking more generally) from serious observers, here or abroad.
If, for example, the high level of settlement cash balances troubles her – and it should, as a reflection of past mistakes – perhaps she should have done something about (eg) replacing the Board chair and filling the Board vacancies, with people who are serious about holding Orr to account, and getting a more rigorous approach to policymaking at the Bank. There has been quite enough bad policymaking in recent years without Willis and Luxon adding to it.
Michael Reddell spent most of his career at the Reserve Bank of New Zealand, where he was heavily involved with monetary policy formulation, and in financial markets and financial regulatory policy, serving for a time as Head of Financial Markets. Michael blogs at Croaking Cassandra - where this article was sourced.
Click to view
It would be an arbitrary bank tax, even if Willis amended the Reserve Bank Act to mandate such an approach
Click to view
I ended the post noting that I had lodged an Official Information Act request with the Minister for all the advice etc she had received on the matter. You will note (above) that Grant Robertson had been pretty responsive to OIA requests on this issue a couple of years ago (and appropriately so, given the OIA’s presumption in favour of disclosure.
The current Minister of Finance’s response came back this morning (and yes, I just noticed that her office dated it 9 August rather than 9 September)
Click to view
It is pretty remarkable that she is withholding absolutely everything (down to and including titles of papers etc, or initial briefings from many months ago). Not the approach of a Minister with any sort of interest in or commitment to open and transparent government, let alone either the letter of spirit of the OIA (perhaps this is why the annual pro-active disclosure of official papers relating to the Budget has still not happened, more than three months on).
Some weeks ago, after I wrote my post, Jenee Tibshraeny kindly offered me the opportunity to listen to the full interview she’d done with Willis. There were a number of interesting aspects that hadn’t really come out in the article (space constraints and all that), but what really caught my attention was that she mentioned almost in passing that she’d be keen to see the advice on this issue, to which the Minister’s response was that she couldn’t do that as the matter was “under active consideration”.
Section 9(2)(f)(iv) – the clause the Minister cited – is generally interpreted as providing some protection when matters are under active consideration (Ombudsman’s guidance note), in which case we are left to conclude that not only was the matter still being considered when Tibshraeny did the initial interview more than a month ago, but that it is still under active consideration now. She seems to be seriously toying with a law change to allow an arbitrary distortionary and inefficient tax on banks. It is quite extraordinary (or perhaps would be if this were not the Minister of Finance who has already increased taxes on business – removing depreciation provisions on buildings – and whose government last week imposed an arbitrary export tax (on overseas tourism), in what seems to be a pure revenue grab so flagrant that even Steven Joyce – no free market purist – was prompted to attack the move in his Herald column).
One can only hope that there is a less-bad interpretation, but the Minister herself has chosen to go public with the comment to Tibshraeny that she could consider legislative intervention, and the Minister herself is now refusing to release any material on the issue.
Any such “tax” would be a seriously retrograde step and would be a signal that the government was much more interested in populist bank-bashing (Green Party style, worse than Grant Robertson) than in serious policymaking. It would be a pure revenue grab, that might even garner a few cheers from the cheap seats, but would command not a shred of respect (for her or for New Zealand policymaking more generally) from serious observers, here or abroad.
If, for example, the high level of settlement cash balances troubles her – and it should, as a reflection of past mistakes – perhaps she should have done something about (eg) replacing the Board chair and filling the Board vacancies, with people who are serious about holding Orr to account, and getting a more rigorous approach to policymaking at the Bank. There has been quite enough bad policymaking in recent years without Willis and Luxon adding to it.
Michael Reddell spent most of his career at the Reserve Bank of New Zealand, where he was heavily involved with monetary policy formulation, and in financial markets and financial regulatory policy, serving for a time as Head of Financial Markets. Michael blogs at Croaking Cassandra - where this article was sourced.
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