The minutes say Reserve Bank board chairman Neil Quigley then said the board’s view of the amount of funding required was closer to that of the Treasury than the Reserve Bank’s management.
They say Quigley clarified the board had a “positive relationship and good communication with the Treasury”.
Treasury reconsiders releasing information
Last week, the Treasury released an email Quigley sent to a principal Treasury adviser, apologising on the Reserve Bank’s behalf for Orr’s behaviour during another meeting on February 20.
“I am sorry Adrian lost his cool with you this afternoon. Your question was not surprising, and [he] should have been able to give you a more dispassionate answer,” Quigley told the adviser.
The Treasury released copies of the email and the meeting minutes after receiving inquiries about an allegation that there was an element of Orr being pushed to resign.
The official line from Quigley was that Orr chose to resign because he disagreed with the board over the amount of government funding to pitch for.
Indeed, Orr explained his concerns over funding in an email he sent to the board on February 14.
He noted the tension between submitting a funding proposal that the Government wanted to hear, versus one that supported the bank’s goals.
“The importance and clarity of operational independence for central banks is judged by global financial markets now and in the future. Not by any current Government,” Orr said.
The point of contention is that Quigley didn’t provide a reason for Orr’s departure on the day he resigned, saying it was a “personal decision”. This was despite the Herald specifically asking whether the problem was a disagreement over funding.
It took until June for the bank to release a statement with an explanation for the resignation. The Reserve Bank also made a limited stack of documents public, rather than responding to individual Official Information Act (OIA) requests for information related to Orr’s resignation.
The Treasury has since conceded that copies of the email and minutes were in scope of the OIA request the Herald made on March 6.
“Although this material had previously been withheld under the OIA, the Treasury have reassessed the withholding and have determined that with the passage of time, the public interest in release outweighs the public interest in withholding the information,” the Treasury said.
The Treasury told the Herald it would provide a fuller response to its March 6 request “in due course”.
The Reserve Bank last week said its legal obligations were different to those of the Treasury, and it stood by the information it released.
It noted the Ombudsman was investigating complaints over its handling of information requests.
Quigley awaits Ombudsman’s ruling
The situation has prompted the likes of the Taxpayers’ Union and Geof Mortlock – a consultant who used to work at the Reserve Bank – to call for Quigley to resign.
Mortlock questioned Quigley’s credibility in recommending who Willis appoints as governor.
On Monday, Willis said she had confidence in Quigley, saying he had the right skills and experience for the job.
“The Reserve Bank has been through a number of significant changes. It is in the midst of appointing a new governor. At this critical juncture, I think stability is helpful,” Willis said.
However, she expressed her disappointment over the handling of Orr’s resignation to the Reserve Bank board at a meeting on Thursday last week.
Speaking to the Herald after that meeting, Quigley said the board also confirmed it had confidence in him.
He expected to hear back from the Ombudsman soon.
“[I] feel that I’ve done the right thing up to this point, and based on the advice that I’ve had,” Quigley said.
“But if that advice changes, or there’s new information that comes in, then obviously I’ll need to rethink how the bank proceeds.
“For now, to say I’m comfortable wouldn’t be quite right, but I think, from my end, I feel like I’ve been well advised … and we’ve done our best.”
Asked whether cumulatively he believed Orr’s behaviour was problematic, Quigley recognised his role required him to give Orr feedback on his performance.
“I stand by the fact that the board did that. But I don’t feel it’s appropriate to move into the territory where I’m elaborating on the details of my, or the board’s, managing of that relationship in the public domain because it’s just not what I’d ever do with someone who worked with me or for me.”
Orr hasn’t spoken publicly about his resignation.
Jenée Tibshraeny is the Herald’s Wellington business editor, based in the parliamentary press gallery. She specialises in government and Reserve Bank policymaking, economics and banking.
