Request for minutes and any report of meeting of Reserve Bank Board of Directors—Uncertainty and confusion could be created in the financial markets if private positions recorded on Bank files, which may not match the official position, were released—integral part of the development of monetary policy forecasts and judgments is the encouragement of vigorous internal debate—good reason to withhold under ss 9(2)(d) and 9(2)(g)(i)
The information at issue in this request by a journalist comprised the minutes of a meeting of the Board of Directors of the Reserve Bank held on 14 December 1995 and a paper containing comments on the December 1995 Monetary Policy Statement. The information was withheld on the basis of sections 9(2)(d) and 9(2)(g)(i) of the OIA.
In his report on this decision, the Governor of the Reserve Bank identified certain key factors relating to his and the Bank’s role:
- under the Reserve Bank Act 1989 the Bank has operational independence for the conduct of monetary policy.
- the Government has no statutory right to be involved in the day to day conduct of that policy.
- the Government sets the policy objectives either through agreeing policy targets with the Governor, or by initiating a new objective as provided in the Reserve Bank Act.
- the Governor is responsible for determining the monetary policy settings and has a duty to liaise with others who can affect the outcome of monetary policy.
- the operational autonomy is counter-balanced by a regime of accountability, including public reporting. The Bank must report publicly at least every six months by publishing a monetary policy statement which is prospective as well as retrospective and must produce an annual report. These documents are tabled in Parliament and scrutinised by a Select Committee.
- the Board of Directors does not play a traditional Board’s role and has very few decision-making responsibilities (see section 53 Reserve Bank Act)
- relevantly, the Board must determine whether policy statements are consistent with the Bank’s primary function and the policy targets agreed with the Minister.
- the Board may also give advice to the Governor on any matter relating to the performance of the Bank’s functions.
As with the information at issue in case W33518, the Governor’s concerns related to the effects of release on the financial markets. The financial sector trades on the basis of its perception of the Bank’s view of market conditions and the Bank is therefore very careful about how it conveys its information to the markets. Uncertainty and confusion could be created in the financial markets if private positions recorded on Bank files, which may not match the official position, were released. Speculation based on these factors could lead to an adverse impact on monetary conditions and the rate of inflation and this would in turn damage the economy of New Zealand. Even if the information on this occasion could be said to be innocuous, its release would create an expectation that similar information would be released in future. However, if, on a future occasion, it was necessary to withhold information, this would heighten the level of speculation in the financial markets and the adverse impacts referred to above.
The Bank also argued that disclosure of the information at issue would be likely to inhibit the free and frank expression of opinions amongst Bank officials and this would adversely affect the conduct of public affairs. The Governor said that an integral part of the development of monetary policy forecasts and judgments is the encouragement of vigorous internal debate. This debate occurs during the formulation process and the critical review of outcomes. From these discussions, policy positions are built up and tested until ultimately the Bank policy is reached and explained in public statements. If the contents of the internal debates and reviews were disclosed, staff and directors would be less likely to provide free and frank views and this would impact adversely on the quality of the debates and ultimately of the advice available to the Governor in discharging his role.
Accordingly, disclosure of the information requested would, in the Governor’s view, both prejudice the substantial economic interests of New Zealand and inhibit in future the free and frank expression of opinions among Bank officials and Directors relating to the formulation and implementation of monetary policy.
Having considered the Governor’s comments, it was clear that sections 9(2)(d) and 9(2)(g)(i) were the relevant withholding provisions to consider. Section 9(2)(d) applies if the withholding of the information is necessary to avoid prejudice to the substantial economic interests of New Zealand.
Having regard to the Governor’s comments about the effects of release of the information, it was accepted that disclosure of the information would likely prejudice that interest.
Similarly, it was accepted that disclosure of the information at issue would inhibit the robust debates and discussions among Bank officials and that section 9(2)(g)(i) applied to the information at issue.
However, an assessment had then to be made in terms of section 9(1) as to whether there were any countervailing public interest considerations favouring disclosure.
There is a public interest in sufficient information being made available to the public about monetary policy both to ensure the Reserve Bank is accountable for its decisions in this respect, and to enable the public to participate in the future development of policy in this area. However, as noted in case W33518, the special statutory regime under which the Reserve Bank operates appears to be designed to ensure that the objectives and targets of the Bank are transparent. Accordingly, if, on the face of the information at issue, there were real inconsistencies between the published targets and objectives and what was recorded, there may be a public interest in that information being made available, notwithstanding the established prejudice which would arise from its disclosure. However, the information under review did not disclose such inconsistencies and no other public interest factors favouring release of the information were identified.
Comment
Although in this instance it was concluded that the information was properly withheld, it does not mean that the information can never be released. It is always open to the Governor, or to any other holder of official information, to decide to release information at a later date. Timing is often a significant factor. From an historical perspective, release of information into the public domain may lead to a better understanding of the role and functions of an organisation subject to the OIA.
This case note is published under the authority of the Ombudsmen Rules 1989 opens page in this tab. It sets out an Ombudsman’s view on the facts of a particular case. It should not be taken as establishing any legal precedent that would bind an Ombudsman in future.