Ralston on public service
Bill Ralston makes easy work of the PSA and Labour:
Erect a stake, pile wood around it as a pyre, tie Treasury Head John Whitehead to it and throw in a match.
The man has committed heresy. He said the public service needed to rethink its approach, trim its fat, move out of its comfort zone and generally get its act together or someone else will come and do it.
Shocking. Dreadful. Appalling.
Next he’ll be advocating that the world is not flat and that the Earth revolves around the sun.
The reactions to that sensible speech were so predictably knee-jerk mid-numbingly stupid.
Of course.
“The groundwork is being laid here for privatisation and further deeper job cuts”, says Labour’s State Services spokesman Grant Robertson.
No it isn’t. Whitehead talked of contracting out some services if it made sense. If a department could get say cheaper legal or accounting services from the private sector, why wouldn’t it look at that option rather than retain or expand its in-house services?
Heresy.
The PSA’s Brenda Pilott chimes in, “We’re amazed Mr Whitehead says we should be privatising public services when bad management in the private sector has created the worst global recession since the Great Depression.”
If this is the PSA’s grasp of economics and world finance then God help its members.
Ms Pilott might be interested to know the recession arose out of the credit crunch brought on by the failure of the US subprime mortgage market. Basically a relatively small group of bankers went greedily mad in a largely unregulated market.
To condemn the entire private sector for the failure of one small part of the capitalist system is nuts.
So primary producers, manufacturers, the services sector and any other part of the private sector nationally and internationally must all beat the blame for the recession?
Would we condemn the entire public service because of the single failure of, say, the Corrections Department? Tempting but unfair.
A good example of the stupidity of those who rant against the private sector and think this means all of capitalism has failed.
A horrified Grant Robertson claimed it signalled the resurgence of Treasury’s influence over the public sector.
Hang on. “Resurgence of Treasury’s influence?” Hadn’t his previous Labour government somehow banished Treasury to a corner where it could not exercise any influence over the financial performance of the public service?
Yes.
July 22nd, 2009 at 1:05 pm
In the words of jeremy Clarkson Brenda Pilott and Grant Roberston are LOSERS
July 22nd, 2009 at 1:24 pm
Was not the US Sub Prime property market created by legislation by one President Clinton, being pushed hard by one Illinois Senator to ensure that the basically Chicago Afro-American had mortgages from sources, that in the normal course of events, they could not obtain.
What the Senators name Barack somebody?
Was not Kiwi Bank designed with taxpayer’s money to something similar – gives mortgages to those who could not get one in the normal course of events? Time will tell if they were right, but don’t worry taxpayers will pick up the bill here.
July 22nd, 2009 at 1:39 pm
“Ms Pilott might be interested to know the recession arose out of the credit crunch brought on by the failure of the US subprime mortgage market. Basically a relatively small group of bankers went greedily mad in a largely unregulated market.”
While on this rare occasion I agree with a lot of what Ralston has to say, on this particular issue he is full of left wing mainstream media bullshit.
Here is the best explanation of what occurred you will ever read-
http://www.kiwiblog.co.nz/2009/07/cactus_kate_on_obama.html#comment-585910
It was actually very little to do with “capitalism”, and everything to do with capitalists being forced into imprudent financial transactions by greed driven Democrats in combination with doctrine driven socialists.
July 22nd, 2009 at 1:52 pm
I’m not surprised they’re pooing their pants, it’ll be like lifting up a rock and seeing all the insects running for cover.
July 22nd, 2009 at 1:53 pm
Gordon Cambell nails it
http://gordoncampbell.scoop.co.nz/2009/07/22/gordon-campbell-treasury-and-don-brashs-revival/
July 22nd, 2009 at 2:04 pm
Gordon Cambell has never known which way is up.
But interesting that he wants to privatise Treasury. Now he just needs to take off his blinkers to see the rest of our bureaucracy’s failures and privatise them too.
July 22nd, 2009 at 2:05 pm
Kapital, no he doesnt, Campbel spills forth idealogical bile.
July 22nd, 2009 at 2:14 pm
Do you mean like this ?
Seems about right to me
July 22nd, 2009 at 2:16 pm
>Whitehead talked of contracting out some services if it made sense.
I demand that the outsourcing that already takes place be reversed! Why should departments reduce public service employment by purchasing electricity from private companies when they could run their own diesel generators, maintained and operated by public servants? Why should the government contract out cleaning to cleaning contractors, when a Ministry of Building Cleanliness, staffed by thousands of cleaners and Sanitation Policy Officers would boost the membership of the PSA? Especially if the Ministry had a department involved in the formulation and manufacture of disinfectant, rather than purchasing commercial products from multinational companies that probably donated money to George Bush. And why should agencies purchase computers from Dell, HP, and IBM, when computers designed and built by KiwiComputer (Michael Cullen, Chairman) would be world leaders full of innovations not seen overseas?
July 22nd, 2009 at 2:16 pm
the express intent was to release the death grip of the unions from nz industry.
July 22nd, 2009 at 2:21 pm
“Campbel spills forth idealogical bile.”
Damn right.
An extreme left whack job who just brings the already critically injured trade of journalism closer to its death bed with every word he writes.
July 22nd, 2009 at 2:39 pm
The ‘death grip of the unions from nz industry’ is keeping wages down? is that why we have an income gap? How about the death grip of having an lowly trained workforce using low levels of technology. Low wages=over investment in personal and under investment in labour saving devices. Whose fault is that?
July 22nd, 2009 at 3:12 pm
“the express purpose of which was to drive down wages, for the short term benefit of New Zealand employers”
Hogwash. The purpose was to allow employers to run their own businesses instead of having unions running them. It also allowed good employees to be paid more than poor employees and it allowed employees to escape the clutches of unions for the first time. Hundreds of thousands did so and have never voluntarily returned.
July 22nd, 2009 at 3:16 pm
> Basically a relatively small group of bankers went greedily mad in a largely unregulated market.
Really? So a relatively small group of bankers has caused this recession? Not only is Bill Ralston an expert on Winston Peters but he’s also an economist.
July 22nd, 2009 at 3:18 pm
“Not only is Bill Ralston an expert on Winston Peters but he’s also an economist.”
In fact he studied commerce including economics papers I understand.
July 22nd, 2009 at 3:35 pm
Perhaps though if you consider Freddie and Fannie as a relatively small group of bankers then he isn’t far off the mark.
Isn’t the collective noun for bankers a wunch?
July 22nd, 2009 at 3:38 pm
yea those greedy bankers!
a left wing president tells them to give sub prime loans! go nuts! and if it goes wrong we will write a cheque!
what did they think was going to happen?
July 22nd, 2009 at 3:40 pm
The Treasury is the only Government Department looking after the interests of the taxpayer. It gets the pick of the graduates, the quality of its work is head and shoulders above all other Government Departments. I regard all the other Government Departments as merely toomstones for some political problem and in the main an utter waste of money.
July 22nd, 2009 at 3:49 pm
Negative karma is so pleasurable.
It allows clueless lefties bereft of facts or logic in defence of their prejudices to splutter their indignation wordlessly.
A joy to watch.
July 22nd, 2009 at 3:54 pm
“It allows clueless lefties bereft of facts or logic in defence of their prejudices to splutter their indignation wordlessly.”
Perhaps Alan, somewhat better than if we had any more of them here than we already have, spewing their mainstream media sourced clueless bigotry ignorance and bile.
July 22nd, 2009 at 4:01 pm
One of the biggest catalysts for the Economic crisis was not actually a lack of regulation but a change in regulation. Admittedly this change was pushed for by the banks but also supported by Government, (and inter government) agencies and regulatorial bodies.
Changing the Accounting Rules from Historical Cost basis to Mark to Market meant that firms were able to over leverage their capital based on a rising market. When the inevitable correction happened it compounded the cash flow crisis of firms stuck on the wrong side of trades.
Coupled with the almost pathological desire of Central Banks to avoid recession throughout the late 1990′s and early years of this decade meant that the downturn was much worse than it would otherwise have been.
The lesson from the Global economic crisis is not that unfetted capitalism failed but butt headed regulation can exaserbate the traditional and inevitable down cycle in the economy.
July 22nd, 2009 at 4:08 pm
“spewing their mainstream media sourced” – a certain irony in this expression of anger at the dreaded “main stream media” when 90% of this post is quoted from Stuff
If Labour hadn’t spent nine years increasing the size of the core public service by 44% then National wouldn’t need to slash it now. With access to virtually unlimited funds Labour managed to bid up public service salaries to 20% above the private sector and deprive the private sector of valuable human resource. All these clever people could have been boosting our exports rather than frustrating them with red tape.
July 22nd, 2009 at 4:12 pm
well said Gosman
I would also add there was a distinct lack of good ethical and moral behaviour driven off the back of over generous(cough) renumeration packages that tempted the unscrupulous .
One of the factors that needs to be addressed in order to prevent a repeat is an adjustment in the rem policies and disclosure.
Australia is moving slowly towards a more transperant model but alas NZ as usual is way behind the 8 ball in rem policies and disclosures.
as a shareholder I dont care if the Board CEO and senior management get well rewarded provided they follow good governance principles and in particular good CSR and ESR policies and of course return a reasonable added value to me as a shareholder
What I have always been pissed off about was anyone anywhere who did a shit job and good a gold plated reward and then laughed in my face.
Thats the behaviour we ned to get rid of Legilsation and Regulation is only a part of the answer.
The best way is to name and shame the bad bastard ndividuals and ensure noone hires them and if they do then they suffer the consquences.
Disclosure and a fully infromed market is the key,
Note the Mark Weldon The 20 minute Rule does not a fully informed market make.
In fact its institutionalised insider trading as you well know.
July 22nd, 2009 at 4:22 pm
I agree that more transparent and coherent disclosure practices should be implemented. However I don’t think renumeration was ever a problem for the Australasian trading banks. The problem with renumeration in other places was that it encouraged short term thinking at the cost of the long term stability of the financial institution. Again that is not necessarily a problem if the firms involved have good risk managment and disclosure practices. The trouble was that these system on the whole have not been up to the job recently.
July 22nd, 2009 at 4:24 pm
DPF – what’s interesting is if you read this in light of what the Cheif Justice had to say. Yeah – different brach of goverment but still rings true:
The man has committed heresy. He said the public service needed to rethink its approach, trim its fat, move out of its comfort zone and generally get its act together or someone else will come and do it.
Shocking. Dreadful. Appalling.
Next he’ll be advocating that the world is not flat and that the Earth revolves around the sun.
The reactions to that sensible speech were so predictably knee-jerk mid-numbingly stupid.
July 22nd, 2009 at 4:26 pm
What I can’t stand at the moment is the armchair leftist pundits who are want to quote articles written by various economic commentators who are banging on about the threat posed by financial derivatives like CDS’s.
It is blatently obvious from the comments they make that they are only regurgitating what they have read about the subject and don’t understand the nature of what it is they are talking or writing about.
Talking about the Nominal values of Derivative markets are largely irrelevant. While they do cause issues,( in terms of Credit ratings of the firms that hold these instruments ), noone in their right mind would think that all firms would have to settle all their outstanding obligations in the market at the same time, let alone at their face value.
July 22nd, 2009 at 4:59 pm
Agree Gosman I would also point you to the Annual Reports of the companies listed on the NZX Pathetic is the only way to decribe their disclosure
Most barely cover the mandatory stuff and only those also listed on the ASX or other bourses have anything approaching a reasonable and comprehendible disclosure.
And forget the IFIRIS disclosures Hell most CAs including myself struggle to make any worthwhile comparisons between companies and companies within sectors due to the overly complex reporting
The big problem is bad Boards and CEOs and CFOs will use complex reporting requirements to cover their tracks changing their accounting policies so its difficult to make comparisons between reporting periods,
And guess what IFIRIS has given them the greatest tools they ever needed to bamboozle the markets.
July 22nd, 2009 at 5:07 pm
The problem with public service is the burden it places on taxpayers: http://www.interest.co.nz/images/TaxFreedomDay.gif
July 22nd, 2009 at 5:31 pm
When Whitehead leads by example and asks for a pay cut of 10%, I will take him seriously. But he won’t because he doesn’t know the meanining of accountability. Pay cuts are for others, not for him.
July 22nd, 2009 at 6:28 pm
gd – Too many I’s I think. Isn’t it IFRS? International Financial Reporting Standards?
July 22nd, 2009 at 9:38 pm
gd & ross
You ain’t seen nothing yet!
From 30sep09 (for the few 31mar09 reporting companies) and then in a deluge in about feb-10 investors, the media, CAs and analysts will face a new NZIFRS ‘bottom line’ – Comprehensive Income – but it’s treatment is optional at the discretion of the Entity concerned.
Either as a component of the the traditional Income Statement or as a new Statement never seen before.
Expect potentially some spectacular reported ‘bottom line’ mixed real & paper profits – and losses – as revaluation entries are available to be reported as a component of bottom-line Net Surplus….from about August next year…..if not earlier (already for Property NZIAS40 & Agricultural NZIAS41 Companies).
Where is the FRSB, or the Securities Commission, educating the market generally about what this all means?….and the essential difference (rationale) between the traditional GAAP P&L reported results vs. the new IFRS ‘Balance Sheet’ accounting effect on the Income Statement?
At a guess now barely 10% of shareholders obtain hard copies of Annual Reports.
One Reason: they’re virtually unintelligible.
Admittedly they are posted on websites but by personal request to selected companies only about 10% of the shareholder base appear to ‘hit’ on the Financials pages on company websites.
There’s a huge information void.
You dont need “bad Boards & CEO+CFOs”….it’s potentially ready-made for mischief.
But 99% are in fact grappling with what all this really means & how best to present some sense in their financials!
The MSM (eg David Hargreaves yesterday on Stuff) reveals they’re ‘missing in action’ on interpreting what is actually occurring with various mark-to-market entries!! [Clue - they reverse the next day & they're not cash-based]
July 22nd, 2009 at 9:51 pm
“spewing their mainstream media sourced” – a certain irony in this expression of anger at the dreaded “main stream media” when 90% of this post is quoted from Stuff
Oh gawd, here’s the witless Spondre with yet another posting name (how many is that? A dozen?) once again demonstrating what a peculiarly dense bastard he is in failing to recognise Stuff (a Fairfax publication) as part of the mainstream media. Get back to “producing” blogs for clueless losers you odious halfwit.
July 22nd, 2009 at 11:34 pm
Ralston is a reasonable writer but totally lazy in making sure his facts are correct – and has been like that for years. Of course he got the cause of sub-prime meltdown wrong as all he did was write down his impression from hearing a few news stories in the MSM!