Some countries have also built on the disclosure exemptions allowed under
international accounting standards. For instance, New Zealand’s Public Finance Act
exempts from disclosure information that is likely to: (i) prejudice substantial economic
interests of the country; (ii) prejudice the security or defence of the country or the
international relationships of its government; (iii) compromise the government in a material
way in negotiation, litigation, or commercial activity, or (iv) result in material loss of value to
the government. It also exempts from disclosure those obligations that do not meet the
reasonable certainty criterion (i.e., their fiscal impact and timing cannot be estimated with
reasonable certainty) and the active consideration criterion (i.e., risks associated with
decisions that are not being actively considered by the government). It should be noted,
however, that the large number of exemptions in the case of New Zealand should be
understood in the context of its broad definition of fiscal risks (which includes policy risks),
its strong public finance institutions and culture that prevent abuse of the exemptions, and the
required provisioning for quantifiable contingent liabilities that are likely to materialize. In
practice, therefore, the exclusions are primarily applied to policy risks, and infrequently to
non-quantification of contingent liabilities (whose existence is disclosed nevertheless).
Responsibility for disclosing all material information should be an important part of
the legislation. In New Zealand, for example, legislation requires that the minister of finance
sign a Statement of Responsibility to the effect that he/she has communicated all policy
decisions and circumstances with material fiscal implications to the treasury, and that the
secretary of the treasury sign a statement that, on the basis of the economic and fiscal
information available to it, the treasury has used its best professional judgment in putting the
budget together.
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