'Intervention required': Treasury slams commission of inquiry into abuse costs blow-out

Former Internal Affairs Minister Tracey Martin and former New Zealand First MP Tracey Martin. Photo / Mark Mitchell

Former Minister of Internal Affairs Tracey Martin requested a huge increase in funding for the Royal Commission of Inquiry into Abuse in Care with little justification for the increase and before the commission assessed its future workload, according to Treasury.

The revelation is in a Treasury report from November 2020 that was released today as part of a dump of official documents related to Budget 2021.

In a number of documents, Treasury criticised the commission for its inability to stay within its funding means, using an operating model that expected future funding, and saying it could stay within its allocated funding allowance by taking money from other departments.

The commission is investigating abuse in state and faith-based care between 1950 and 1999, and was initially given $56 million in operating funding.

But funding strains started to unravel, with operating costs blowing out by 82 per cent in 2020/21 from the previous year.

NZ First MP Tracey Martin, Internal Affairs Minister at the time, asked for more money - the amount is redacted in the documents - in Budget 2020, but "little explanation was provided to justify the costs and the Commission was yet to assess its likely workload for the next phase of its work", Treasury said.

Cabinet agreed to an additional $8m to keep the commission afloat until Budget 2021 decisions could be made.

Minister of Internal Affairs Jan Tinetti. Photo / Mark Mitchell

Jan Tinetti, who took over the Internal Affairs portfolio at the end of 2020, then asked for even more money: a total of $21m in three transfers from other departments contributing to the commission.

Treasury then took the commission to task for its interpretation of the funding request.

The commission believed the initial funding was not enough and its interim report in December 2020 would provide a chance to see how much money would be needed in total "at a later time".

"Treasury's view is that it is inappropriate for the Commission/DIA to pre-judge future Cabinet funding decisions, and the Commission's operating model should be based on the available funding, rather than proceeding with its preferred operating model in the expectation it will receive additional funding."

The DIA also thought the request for $21m was "consistent with the Commission operating within its allocated funding", but Treasury said it would clearly deprive other departments of that money.

"If agreed, only $6.147m will remain in the non-departmental appropriations to cover future years' costs for commissioners' fees and victims' legal assistance and counselling," Treasury said.

Agreeing to the request for $21m would "likely 'lock in' the Commission's current spending rate", Treasury warned.

"We consider some level of intervention is required to set clear expectations for DIA and the Commission regarding managing within allocated funding."

It suggested to Finance Minister Grant Robertson that he "express disappointment", but Robertson declined to do so in his written response to Tinetti's request.

He did, however, agree with Treasury and denied the request for $21m, saying it would deprive other departments of funding, and that the request itself was against Cabinet expectations that the commission would operate within its means at least until it delivered its interim report.

He signed off a $6m contingency so the interim report could still be delivered.

"The Commission does not appear to be aligning its costs with available funding, and that costs appear to be increasing significantly," Robertson said.

He asked Tinetti to tell the commission to review its costs and to work with Treasury in providing scaling options for future funding needs.

In its December interim report, the commission asked for its final report date to be pushed back from January 2023 by two and a half years, and asked for an additional $344.5 million in operating funding.

Four months later, Treasury told Robertson the commission could reduce costs in a number of ways including "rationalising the number of investigations being undertaken and reviewing the use of public hearings, reconsidering salary assumptions and staff mix, reducing its reliance on legal advice, reducing its use of consultants, and reconsidering travel assumptions".

Treasury noted that Tinetti's bid for Budget 2021 included two scaling options, "neither of which provides material savings".

One was to use artificial intelligence to analyse potentially highly sensitive documents, while another was to ask faith-based institutions to help cover costs.

Cabinet agreed in April to remove the royal commission's ability to investigate modern care practices, saving an estimated $5m to $15m, and to extend its deadline by five months.

Budget 2021 allocated $90m over the next two years to the commission.