3 March 2009

MEDIA STATEMENT

Immediate Release

Treasury accepts findings of Inquiry into ACC shortfall

The Treasury accepts the findings and recommendations of the Ministerial Inquiry Into Disclosure of Funding Shortfall in ACC Non-earners’ Account, Treasury Secretary John Whitehead said today.

The Inquiry released today concluded that the ACC funding shortfall should have been disclosed in the 2008 Pre-election Economic and Fiscal Update (PREFU) in terms of what is required by the Public Finance Act 1989.

“The Treasury takes responsibility for this error, and I have expressed my apologies and regret to the Minister of Finance. I accept the conclusions of the Inquiry and commit to acting speedily on the Inquiry’s recommendations. The Minister of Finance will be kept informed of the Treasury’s progress in taking action on this matter,” Mr Whitehead said.

The Treasury will pick up the recommendations made by the Inquiry as part of a review of the rules and processes used to guide judgements about what should be included in the PREFU and other Economic and Fiscal Updates, to fully meet the requirements and spirit of the Public Finance Act. This will be tested with an independent reviewer and be in place for Budget 2009.

These revised rules and changes to processes will be reflected in the guidance and training that Treasury staff receive about the Public Finance Act.

Mr Whitehead said improvements were already underway.

“Some process changes had already been made before the 2008 December Economic and Fiscal Update to fully capture all specific fiscal risks. We have also made some initial changes to Public Finance Act training for our staff.

“The Treasury knows the importance of the Public Finance Act requirements for fiscal stability and good government. Our processes and judgement fell short in this instance. I am confident these steps will prevent similar occurrences in the future.”

ENDS

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