2010 Supplementary Validation Budget may not be valid

The Times understands that a report by the Audit Office in which it reviews the controversial circumstances surrounding the passing in August 2010 of the “Appropriation Amendment and Validation Act”, has been completed and circulated to specified parties for comment.
The Times has learnt the findings appear to vindicate concerns about constitutional procedures raised at the time by John Scott a former civil servant though not an expert in constitutional legalities and the Cook Islands Party.
A bone of contention was that Article 70(3A) which relates to the Audit Office reporting to parliament on excess and unauthorized expenditure by government had not been complied with therefore a breach had occurred.
It appears that among all the commotion at the time, no legal opinion was sought on this issue by then Finance Minister Hon Wilkie Rasmussen, only the retrospective issue. It seems this may have been because there is no provision or mechanism in the constitution setting any procedure out for looking into a breach of Article 70 (3A).
Unless Article 70 (3A) is amended, future governments may continue to repeat such actions especially where no-one is alert. What would have happened if Mr Scott had not been alert to the matter?
The Times understands the Audit Office will be suggesting a legal review in light of the fact such a review sits outside the scope of its office.
The fuss started when the Appropriation Amendment (Supplementary Budget),was tabled in parliament on 22 July 2010 by the then Finance Minister Hon Wilkie Rasmussen. The Supplementary Budget was supposed to account for un-appropriated expenditure which had occurred since the July 2009 Budget. Bearing in mind that parliament had not sat for some considerable time given the delicate political situation at that time and the fear of a motion of no confidence being put.
The Supplementary went through the first two readings before concerns began to be publicly expressed by Mr Scott about the retrospective nature of the Bill and whether it complied with the constitution.
The Finance Minister, in his capacity as Attorney General, sought legal advice on the retrospective aspect from the Solicitor General and two NZ based constitutional legal experts including Dr Alex Frame.
Following this advice, the name of the Bill was changed on 9 August 2010 to incorporate the words “and Validation Bill.” This was to validate the earlier expenditure.
The Bill became law on 11 August and assented to by the QR on 17 August.
It was because of the ongoing public concerns that Audit Office began a review.

By Charles Pitt

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