"Enquiries this afternoon have revealed that the Subaru was stolen," she said.
"At about 1.30pm an officer saw the wanted Subaru being driven on Monrad St.
"Police signalled for the vehicle to pull over and the driver failed to stop.
"The Subaru continued driving, travelling onto Pioneer Highway and crashed into a ditch hitting a power pole at the intersection of Shirriffs Rd.
"Sadly the 15-year-old driver died later this afternoon in hospital. His passenger, believed to be a 12-year-girl, died at the scene.
"A second passenger, a 15-year-old female, who was the back seat passenger, remains in Palmerston North Hospital in a serious condition."
Schwalger said it was "an incredibly sad time for the families of the two young people who have died".
"Family liaison officers are working closely with the families and Victim Support has been offered," she said.
"Our staff always assess the risk of whether or not to pursue a driver who fails to stop for Police, and continue to monitor risk factors throughout.
"We take these decisions very seriously, and need to maintain a balance between ensuring public safety, and upholding the law."
Schwalger said the last thing any police officer wanted when they went to work was for an incident to end in a fatality.
"These incidents are devastating for all those involved. The officer involved is receiving support."
Three investigations would now take place, the Serious Crash Unit, an internal police investigation and an investigation carried out by the Independent Police Conduct Authority.
O'Leary Engineering owner Dean Sandbrook said he had just hung up his phone when the speeding car went flying past his office window.
"I heard the noise and turned and I saw the car sliding ... it all went very quickly like a flash and the next thing I know it's hit the power pole.
"The car was in the air and ended up in the ditch and then the power pole came back down landing on top of the car with all three people still in the car," Sandbrook said.
The car had hit a main line so the power was out, he said.
Fire and Emergency also attended the crash scene. The road was closed and diversions were in place.
Today's tragedy is the eighth death involving police pursuit crashes this year.
Four other people have died this month as a result of police pursuits.
Bailey Patmore, 15, died in a crash during a pursuit on May 19.
Bailey, from Cannons Creek in Porirua, was travelling with five other passengers in a small hatchback and had squeezed into the boot.
The car, which had been reported stolen, crashed on State Highway 1 south of the Tawa off-ramp, killing Bailey.
Phillip Allan Taylor, 32, was killed after a police chase in New Plymouth on May 7.
A 25-year-old driver died after crashing into a tree after a short police pursuit on May 11
In March three people were killed following a police chase in Nelson - one was an innocent motorist driving the other direction.
Johnathan Tairakena, 25, and Phillip Jamie Stretch, 33, died in the crash as they fled police, with 53-year-old Carmen Marie Yanko also losing her life in the incident.
Yanko was believed to be travelling to a Sunday market, where she operated a stall, when she was killed.
The rising toll has sparked calls for a hastened review on police pursuit policy and a potential outright ban on chases.
The Independent Police Conduct Authority is currently undertaking a review of the policy, but it is not expected to release a report until October or November. The review is the seventh on the policy in 20 years.
Police Minister Stuart Nash told Radio New Zealand earlier this month that he supported the review but did not believe a ban on police pursuits was the right answer.
"I am of the belief that we don't end police chases. To say to police to never chase I think is the wrong thing to do," he said.
"Then there would be a whole lot of people who would know they just need to put their foot down and they're away scot-free. I don't think that is the right approach."
National road policing manager Superintendent Steve Greally said fleeing drivers put themselves, staff, and the public at risk.
"Police have to balance protecting the public from dangerous driving behaviour and the potential for the offending driver to take greater risks.
"Every situation is different and our staff have to make split-second decisions in demanding circumstances," he said.
He said the review would give police the opportunity to examine common themes and issues collectively, rather than looking at incidents in isolation.
"The one thing we want everybody to understand is if they're signalled to stop by police, they should pull over and stop.
"It is not worth putting your life, your passenger's life, or anyone else's life at risk."
