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Tuesday
Mar032009

Should Cullen be Charged?

In my opinion Michael Cullen - who released the Pre-election Fiscal Update as Labour's Finance Minister before the election last November - should be charged with breaching the Public Finance Act.

Consideration should also be given to also charging other previous Labour ministers who knew, and possibly the relevant senior government officials.

"The previous Labour-led government should have revealed a $1.5 billion ACC funding gap in the run-up to last year's election, a ministerial inquiry concludes. The report found the shortfall in the Non-Earner’s Account was known to ACC, the Department of Labour, Treasury, ACC Minister Maryan Street and Finance Minister Michael Cullen in time for it to be disclosed as a fiscal risk in the Pre-election Fiscal Update."
The above quote is from a press release issued earlier today by National's Finance Minister Bill English. Labour, of course, contends that the "report shows [their] former ministers [have been] exonerated".

This has been a matter of much speculation since the election and considerable debate in the blogosphere and on forums like Twitter - including today, which is not to be unexpected.

The Public Finance Act is one of our most important pieces of legislation - it is almost constitutional in stature. It governs how public money is managed. One of it's most critical elements is a requirement for an "opening of the books" prior to each election - known as thePre-election Fiscal Update ("PREFU"). This requirement is supposed to ensure that parties contesting the election, and voters assessing the policies of those parties, do so with full knowledge of the country's financial position.

It is ludicrous that Labour Ministers did not include the ACC shortfall in the 2008 PREFU. A court of law is the place to determine if they are liable under the Public Finance Act.If they are not liable then that is a serious gap in the Act which will need to be closed.

Labour thinks it has nothing to hide - let them prove that in a court of law, before an impartial jury or judge (I am not sure which would apply).

I find it somewhat ironic that Labour - who pushed through the now largely repealed Electoral Finance Act in order to supposedly increase transparency in elections - now try to hide behind a technical interpretation of the Public Finance Act which enabled them to (maybe) get away with not declaring a significant liability they had incurred on behalf of the voters of New Zealand.

As a final thought - this is not just a political debate. If it were, then in my opinion the election closed the debate even though almost all of the facts did not become public until after the election. It would not be helpful for the stability of our democracy for a new government to be able to take it's predecessors to court for political matters which are better settled by the voters. However, this situation is so egregious I believe it should be settled in an independent forum. Given that we are talking about what might have been a breach of one of our most significant laws that independent forum can only be a courtoom.

Update History:
Tue-4-Mar-09: added image courtesy ODT

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