by Rob Hosking
Rashbrooke did not renew his contract with the government in 2001 after publicly criticising the current status and role of the Government Actuary.The behind-the-scenes documentation on the issue shows Rashbrooke was even more critical in the bureaucratic war.
Most notably, he described New Zealand’s prudential regulation, in particular of life insurance, as being “viewed with derision” by the international community and “falling well short of the standards promulgated by the international regulatory body.”
With the International Monetary Fund due to visit next month to examine New Zealand’s financial regulatory regime, Rashbrooke's criticism could be heard again.
One of the recommendations of the Saving New Zealand forum in July was that there be a body within government devoted to advising on superannuation and other savings issues.
It is clear from the blizzard of papers and e-mails that flew in 2001 – when Rashbrooke raised his concerns – that he saw the Government Actuary as fulfilling at least part of that role.
"Government is missing out on pro-active input from what one could consider its most experienced and practical people in the area of financing retirement savings. The office could be giving good, sound pragmatic advice on matters like the reshaping of the present superannuation regime, including considerations of the viability of the present tax basis, and the regulatory implications of such changes.
In particular, he was critical of keeping the Government Actuary within the Ministry of Economic Development. In a letter he wrote at the time of the row to Prime Minister Helen Clark, Rashbrooke said the ministry kept his office out of any policy issues at all – despite the large amount of superannuation issues being tackled by the government.
Another concern was lack of solvency standards for employer-based superannuation schemes.
He also said the ministry's strong emphasis on reducing compliance costs meant other officials were “rather unlikely to encourage internal debate which might lead to any increase in prudential supervision.” Rashbrooke suggested other locations for the office, including the Treasury, the Reserve Bank, the Minister of Finance’s office, a standalone entity within the Ministry of Economic Development (similar to the Ministry of Consumer Affairs) or as a Parliamentary Commission.
Rashbrooke told the Prime Minister his concerns had hit a brick wall.
“It would have to be said my boss appears not overly concerned: his view is that the government isn’t interested in the practical matters that I care about…and won’t be until some disaster strikes. He may of course be right.”
The State Services Commission reviewed the location of the office - and recommended keeping it where it was.
Rob Hosking is a Wellington-based freelance writer specialising in political, economic and IT related issues.
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