Immediate Release: Friday March 11, 2005

Govt Cooking the Books to Hide Surplus

The Finance Minister Michael Cullen has unilaterally torn up an understanding between rival political parties that has enabled New Zealand to have the best and most transparent Government financial reporting in the world, ACT finance spokesman Richard Prebble said today.

“Ruth Richardson’s Fiscal Responsibility Act has made it impossible for finance ministers to hide deficits or surpluses,” Mr Prebble said.

“Successive ministers from three parties - National, New Zealand First and Labour - have all accepted the discipline of transparent reporting and the additional discipline of reporting in the same style. The last point is vital. By reporting in the same way, it is possible to compare today’s performance with last year’s.“

Mr Prebble said the warning signs were when Dr Cullen repealed the Fiscal Responsibility Act, claiming that its provisions would be preserved within the Public Finance Act, despite publicly pledging and committing to transparent reporting.

“The Crown Financial Accounts published this year enable Dr Cullen to claim he does not have a huge surplus,” Mr Prebble said. “This is politically convenient to him, but is a cooking of the books and a break with the way Government accounts were presented.

“This is also very damaging to the credibility of the Treasury. Here we have civil servants in election year, presenting books to make a party political point, and in no way can it be claimed that these accounts are more accurate. What it does show is that public fears that the repeal of the Fiscal Responsibility Act would enable politicians to cook the books for political advantage have all turned out to be true.”

Mr Prebble said the long term damage to New Zealand’s fiscal reputation of today’s actions would be considerable.

“Whatever advantage Dr Cullen thinks he has achieved is outweighed by the loss of credibility both he and the Treasury have suffered from those who understand the importance of integrity in financial reporting,” Mr Prebble said.

ENDS

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