Explaining is Losing

February 18th, 2011 at 12:00 pm by David Farrar

There’s an old saying in politics – that explaining is losing. This seems to apply to the saga of the new BMWs. It does appear that no Minister was told of this until after the contract was signed, and even that the decision saved money, but explaining this means that the story stays alive for another day. At this stage one is in a lose/lose situation. If you explain you lose, and if you don’t explain you lose.

The Government isn’t able to release the contract that Labour signed in 2008, but what they have been able to say is:

DIA had advised that the cost savings from a three-year replacement versus a five-year replacement, are considerable.

 “Based on a fleet of 35 cars, if the existing fleet is kept for five years, the total cost of ownership  over the five years would be $4,697,175. If we keep the cycle of replacing every 3 years, the total cost over five years of the existing fleet held for three years plus two years of the new fleet, would be $2,612,365. So, the savings over five years would be $2,084,810 .”

So the contract signed by Labour in 2008 had an option for a renewal in 2011. And while it was not compulsory to renew in 2011, it would cost you more over the long term if you did not renew. This is presumably why DIA decided to renew. Purely on fiscal grounds, it saves money. But they over-looked the political aspect which I’ll come to.

Next we have the issue of whether DIA were entitled to sign off the replacement cars without ministerial authority or even notification. The delegation to the Chief Executive of Internal Affairs is for capital expenditure of up to $15, so he was legally entitled to renew the fleet without ministerial approval.

However I beleive DIA made a very bad mistake by not seeking at least an opinion from their Minister or Ministers. The reason they should have done so is because the Ministers are seen to be the recepients of the benefits of having a new fleet. This should absolutely have been notified under the no surprises policy.  I hope and trust DIA have been left under no misunderstanding that in future this should occur.

It is possible of course that DIA made a deliberate decision not to tell Ministers. They possibly concluded (correctly) that if they had told Ministers in advance, the Ministers would try and delay the upgrade. And if it really was cheaper to upgrade in 2011, then DIA could well have an incentive to sign the deal before telling Ministers, in case the Ministers were not happy.

Trevor Mallard is going on about how Ministers should have known in advance because there was a reference made to it in a select committee report. That’s absurd – Mallard knows that Ministers don’t read select committee reports – hell they have several boxes of reading every night as it is.

After the contract was signed, the Internal Affairs Minister was told, and he in turn told the Finance Minister. While the contract was already signed, if I had been one of thise Ministers my first reaction would have been to ask can the contract be rescinded, and if so how much would it cost. The answer might have been that it was too late, but the Government would have possibly have had that as an option if they had moved quickly. It’s easier to cancel a contract a week after it is signed compared to three months later.

The other fair criticism of the Government is its response to the story. They were effectively given a hospital pass on this issue, but having had knowledge of the purchases before the story broke, they should have been ready with a response (stating the savings, the fact Labour signed the contract, the fact they were only told afterwards) to go out within minutes of the story breaking.

Instead the facts have only come out over a period of three to four days, ensuring it stays in the news for 3 to 4 days. So while there was always going to be some damage from a hospital pass, the damage has been compounded a bit by the way the story has been kept alive.

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31 Responses to “Explaining is Losing”

  1. Falafulu Fisi (2,179 comments) says:

    They can try and adopt a Parrondo’s Paradox in order to win (ie, 2 losing strategies each on their own can be combined to achieve a winning one).

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  2. Redbaiter (13,197 comments) says:

    The problem always was that they were seven series beamers. Anybody with a milligram of political nous should understand that. They should have been standard cars, not luxury models no matter if the purchase was economically justified. (which IMHO it was not). The BMW’s should have been replaced with Fords or Holdens. Great opportunity missed by political incompetents.

    BTW, if it was up to me, they’d all be issued with their own personal set of roller skates.

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  3. Nick R (507 comments) says:

    The real issue with this story is not whether the Govt handled it well or badly – rather I reckon it is the perception of putting “Government” and “35 7-series BMWs” in the same sentence. Even if the cars are the best for the job, and it was financially responsible to replace them now, it is a bad look, particularly coming on top of the PM’s rather silly “let them eat cake” moment on foodbanks a couple of days ago and the fiasco concerning the notorious Community Max pumpkin etc.

    The fact is the country is in the crap economically and probably back in recession. When the likes of Michael Barnett are telling the Govt that the pause button is on, you have a real problem. And the Government is struggling to articulate a credible response. Five media releases this morning looks like panic. And worse, Bill English is telling the media that the economy will get a boost through Canterbury earthquake reconstruction and the RWC. Neither of which can really be held up as an example of economic planning by the current Government.

    Overall, I have no idea what the Govt’s position on the economy is. On the one hand they seem determined to argue that it is terrible, we must tighten our belts, etc. On the other they are saying it’s not that bad, we are creating lots of jobs, and people don’t really need foodbanks. This is not convincing. The only thing less convincing is to keep blaming the last Government when you are into your third year in power.

    I actually think the Government has a good story to tell. A lot of our economic problems are outside its control, but it is managing those that it can control. But the communication needs to get a lot better, and fast.

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  4. David Farrar (1,894 comments) says:

    Redbaiter: I agree. When the BMws were first ordered in 2008 I commented along the lines that any other model should have been chosen, because NZers do associate BMWs with luxury.

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  5. Manolo (13,753 comments) says:

    Key and his ministers fucked this up, either by being misled by their officials or by their own incompetence, and are left with considerable egg on their faces.

    I suspect the treasonous hand of Double Dipton English could be behind this affair.

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  6. davidp (3,581 comments) says:

    Ministerial Services should buy a few more cars, SUVs, vans, motorcycles, and trucks so that John Key can travel around like this:

    http://www.youtube.com/watch?v=w2KrTouYkp0

    Why? The carbon emitted would piss off Greens. And the amount of luxury would piss off Labour. But neither would be able to complain because it is all stimulus spending and it would provide jobs for about 200 unionised public servants.

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  7. Cunningham (844 comments) says:

    I am not to sure when the cars will arrive but even if it dies down now it will flare up again when they start travelling in them. Pretty bad mistake by the government. The good thing is though Labour were the ones that ordered them in the first place so they can’t really take full advantage of this fuck up. As other posters have mentioned, what were they thinking ordering BMW’s in the first place???

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  8. minto57 (197 comments) says:

    Do iwi have first right of purchase

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  9. Viking2 (11,467 comments) says:

    Like most things this Govt is or has done.
    A total fuckup.

    I don’t careabout the cars. Its the inepetude with which this lot operate.
    Too busy pandering to the racists and the fringe lunatics to pay attention to the real nitty gritty.

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  10. V (719 comments) says:

    They could always pass the ‘Jonathan Hunt’ act and force him to drive ministers around for free in his retirement. A kind gesture for him to pay back the hundreds of thousands spent on taxis over the years.

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  11. jaba (2,141 comments) says:

    I heard a rumour that as the Leader of the Opposition, Phil Gaffe is entitled to use the BMW’s but he has chosen not to take up the offer as a protest to the massive expenditure during times where his voter support base is starving .. well done Phil.

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  12. Inventory2 (10,337 comments) says:

    @ jaba – no; he’s hiring a bus instead :-)

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  13. jaba (2,141 comments) says:

    mm .. did they hire those buses I2 or buy them?

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  14. BeaB (2,123 comments) says:

    And he really fancies himself in his leathers. Like all nerds trying to be real blokes.

    His so-called sacrifice hardly measures up to John Key giving his whole salary to charity even though it costs him more in tax to do so. Let’s see Phil man up to that! After all, he’s a rich man too.

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  15. gravedodger (1,566 comments) says:

    Hey jaba the broken arse bunch of socialists would struggle to buy a 10 yo people mover let alone register it and put fuel in it.
    You and I bought the bloody buses and painted them, something about parliamentary services or leaders budget wasn’t it.

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  16. GPT1 (2,121 comments) says:

    I agree. When the BMws were first ordered in 2008 I commented along the lines that any other model should have been chosen, because NZers do associate BMWs with luxury.
    I understand police were offered BMWs under quite a good deal a number of years ago but went with a “standard” model (Holdens?) even although the package was dearer because of perception.

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  17. GPT1 (2,121 comments) says:

    I heard a rumour that as the Leader of the Opposition, Phil Gaffe is entitled to use the BMW’s but he has chosen not to take up the offer as a protest to the massive expenditure during times where his voter support base is starving .. well done Phil.
    I think he is posturing by using taxpayers money to travel by taxi rather than using the service provided to him. Of course this actually costs the taxpayer more as the fixed costs of the limo service remain but what’s a few taxpayers’ dollars in terms of political gain?

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  18. NX (504 comments) says:

    Meanwhile, The Standard thinks this is the ‘decline & fall’ of John Key. My gawd, talk about over egging.

    For my 2 cents – I supported Labour’s decision to buy them & I support the decision to renew them.

    The 730d is a good car & I think ministerial cars need to be prestigious.

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  19. RightNow (6,994 comments) says:

    Goff might try some posturing by not using the BMW, it’s the best opportunity he’s had handed to him for a while.
    Problem is his investment property, the one he’s still holding on to (and still getting an allowance for) until he can get a better price for it.

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  20. BeaB (2,123 comments) says:

    All those Kiwis who are constantly cringing in embarrassment should surely be rejoicing that we can put our leaders in a decent car and can pick up world leaders in something more than a horrible old Holden.

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  21. Black with a Vengeance (1,861 comments) says:

    His so-called sacrifice hardly measures up to John Key giving his whole salary to charity even though it costs him more in tax to do so.

    I’ve seen this meme bandied about a bit lately. So unless it’s hyperstitional, perhaps you could provide us with incontrovertible proof that Key does just as you say or conversely STFU !

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  22. Johnboy (16,516 comments) says:

    The only fleet manager that would purchase a BMW would be a sad little socialist wanker who thought he could emulate his betters and get a pat on the back from the scum that ruled at the time. (Liarbour).

    They are typical European trash. Overhyped, overpriced, unreliable and cost a bloody fortune to maintain.

    They would only be bought under a socialist regime who love to pose.

    A sensible fleet manager would have bought Japper.

    Cheap to run.

    Cheap to maintain.

    Go better.

    Cost less.

    The way Jonkeys going as Liarbour light I expect the Beemers will be replaced by Audi’s next time round. :)

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  23. Johnboy (16,516 comments) says:

    The trans fail in them on a regular basis and cost a bloody fortune to repair/replace.

    Still it’s important to be seen pushing your Audi/Beemer instead of your Toyota.

    Makes you stand out from the common people. What! :)

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  24. NX (504 comments) says:

    BeaB says:
    All those Kiwis who are constantly cringing in embarrassment should surely be rejoicing that we can put our leaders in a decent car and can pick up world leaders in something more than a horrible old Holden

    Agreed.

    Johnboy says: They are typical European trash. Overhyped, overpriced, unreliable and cost a bloody fortune to maintain.

    Are you kidding… the BMW’s 3.0L diesel engine is generally regarded as being in the top ten engines in the world!
    http://en.wikipedia.org/wiki/Ward%27s_10_Best_Engines

    You clearly know nothing.

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  25. kiwi in america (2,445 comments) says:

    Im with Red on this. As soon as I heard that Labour ordered BMWs I thought this will not be a good look – because most NZers see BMWs as an elite weathy person’s car. Even if the cost benefit analysis showed the Beemers were half the total price than the Fairlanes I’d still go with the Fairlanes. The top end Fords have been Crown cars for yonks so nobody thinks twice about them and only the most churlish of the Greens would object to Ministers using them.

    National could’ve earmarked this issue for a review noting the inappropriateness of this model of car and used the renewal as a time to publicly change back to the Fairlanes and front foot this issue thus taking it out of the hands of the bureaucrats who only looked at the bottom line and were likely oblivious to the poor political optics. Sure the Greens and Labour would’ve bleated about the extra cost but Key could’ve looked into the camera and said “I think ordinary NZers are more comfortable with us reverting to the Aussie cars that we’ve always used than poncing around in a fancy European car.” This admittedly populist line could’ve quickly neutralised the extra cost of the Aussie limos.

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  26. kiwi in america (2,445 comments) says:

    I should actually say Holden Caprice rather than Ford Fairlane as Ford Australia no longer make the Fairlane. A nice car, not as nice as these BMWs, but good enough for the job.

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  27. Johnboy (16,516 comments) says:

    “You clearly know nothing.”

    Well you clearly read all the motoring stuff NX.

    All I can say is at work we have an six year old Mitsubishi Diamante that has just hit 350,000 km and is still going strong.

    My daughter has a 94 Civic that has hit 290,000 and still goes like a sewing machine.

    Service on these is minimal just oil and cam belts.

    I know of an Audi that needed a new trans at 60,000 km at a cost of $11,000.

    Beemer oilseals crap out early and cost a bloody fortune.

    European cars are trash. Most people that buy them do so because they like to pose/feel good/have shit loads of cash.

    Our Politicians have the first two attributes. :)

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  28. NX (504 comments) says:

    Well, I clearly like European cars.

    And they’re definitely not trash. I dunno why you keep saying that.

    ‘JD Power’ does a large survey of car owners to measure owner satisfaction.

    Here’s the league table for car brands.

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  29. Trevor Mallard (248 comments) says:

    David I read Select Committee reports from estimates and review hearings for agencies I had Ministerial responsibility for – just about always something useful in them, was sometimes questioned in the house and it was also sort of polite to have a look at what MPs from both parties thought was important.

    Key’s predecessor certainly read the reports – I’ve seen the handwritten comments in the margins.

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  30. kiwi in america (2,445 comments) says:

    I guess Trevor thinks that criticising National over a contract that Labour signed will be their H Fee style electoral strategy for 2011

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  31. Bobbie black (507 comments) says:

    Jesus Kiwis, get over it.

    It was signed before they took power.

    The PM didn’t know about it.

    It is commercially viable and will save the country money in the long run.

    It is signed, sealed and delivered.

    Be proud that our leaders and visting dignatories can travel in style.

    Aussie would be the first to make fun of us if they were in Skodas or Ladas.

    Get over it for Christ’s sake.

    Do you think it would matter if it was Labour, Winston, the Maori party or National?

    They are politicians for christ’s sake.

    They get paid a lot of money, get treated well, mmmkay?

    Hence the word, “Leaders.”

    Actually, I made a slight error, of course if it was the Maori party it would be new Ferraris.

    Bleat! Bleat! Baaaaaahhh! New BMWs! Bleat. Not good! Baaaad!Baaaaahhh!

    Sheep!!!

    Baaaaaaahhhh!!!

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