$230m/yr of potential savings

April 14th, 2011 at 11:00 am by David Farrar

Tracy Watkins reports:

A new Treasury report says government agencies could save more than $230 million a year from back office functions.

The report, which follows a review of costs across the public service on things including property management, human resources, finance and ICT and found that they were higher in New Zealand than international bench marks, Finance Minister Bill English said.

“For example, the average office space per person in our public service is about 21 square metres compared with best practice in some New Zealand agencies of about 15 sq m. This is one of many areas where we believe there is room for improvement.”

That would also take some of the pressure off commercial rents in Wellington.

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Not pricey

April 12th, 2011 at 9:11 am by David Farrar

The Herald reports:

Treasury boss John Whitehead took World Bank and International Monetary Fund officials out for pricey dinners just a few months after State Service Commissioner Iain Rennie warned top public servants against doing just that.

Dr Whitehead’s credit card expenses were published this week and show that last month he spent $292 on dinner for three at Wellington waterfront eatery Foxglove with World Bank executive director Jim Hagan.

I’m sorry but this is almost embarrassing. I’m all for responsible use of credit cards, but running a story about spending $95/head at dinner entertaining the Executive Director of the World Bank is ridicolous.

Foxglove is a medium priced restaurant. Far from the most expensive. Should we take the World Bank Executive Director to Uncle Chang’s instead?

Or alternatively have him out for dinner, and then when you get to desserts, tell him “I’m sorry but NZ is so poor, we can’t pay for dessert”.

$95 doesn’t mean there were bottles of expensive wine drunk. $20 for an entree, $40 for a man and $15 for a dessert is $75 so  arguably they had one bottle of $60 wine. I doubt the World Bank executive Dinner is going to regale colleagues in Washington about the awesome night out in Wellington – yeah we had five courses, two bottles of port plus a couple of strippers – all for $95 – it was better than Vegas.

It is good to have scrutiny of public sector spending. In fact I support having all Government payments listed online. But I don’t regard $95/head for the Executive Director of the World Bank as inappropriate or even newsworthy.

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The plastic waka

April 6th, 2011 at 10:15 am by David Farrar

Martin Kay at the Dom Post reports:

Labour MP Shane Jones has hit out at plans for a giant $2 million taxpayer-funded plastic waka to promote Maori during the Rugby World Cup.

Ngati Whatua o Orakei is getting $1.8m of Government funding to create the giant waka as part of Auckland’s world cup celebrations.

The canoe will be 60 metres long and almost 15 metres high.

The hapu will contribute $100,000 for the project, which was estimated to cost $1,988,000, and will then own it after it is built. The waka would be used to promote “brand Maori” during the Rugby World Cup and other international events, hapu trustee Ngarimu Blair said.

Jones said the ”blow-up waka” risked exposing Maori to ridicule and smacked of last-minute desperation to get Maori involved in the tournament’s celebrations.

Jones, who is contesting Maori Party co-leader and Maori Affairs Minister Pita Sharples’ Tamaki Makaurau seat this year, said the only thing Maori wanted to see from the world cup was All Blacks Piri Weepu and Hosea Gear holding the trophy aloft.

I have to say I’m with Shane Jones on this one.

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Press Gallery to be charged rent

April 1st, 2011 at 9:00 am by David Farrar

Expects howls of outrage from the press gallery, when they learn that their free rent is going to end in the budget, as part of Government moves to trim the cost of Parliament.

The gallery currently enjoy free office space in the Beehive Annex, totalling around 600 square metres. With wellington office spare exceeding $300/square metre, this could reduce the cost of Parliament by $180,000 a year.

What is unusual, is that the Greens are supporting this move. Russel Norman has pointed out Fairfax made a A$165m profit last year, APN made A$103m and Mediaworks A$50m, and that it is outrageous for struggling Kiwi families to subsidise these Australian corporates.

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Two good trends

March 30th, 2011 at 7:49 am by David Farrar

Tracy Watkins in the Dom Post reports:

The figures, to be issued by State Services Minister Tony Ryall, largely relate to the core public service and will show numbers have dropped to about 35,900 from about 38,800 in 2008.

But some parts of the public service are excluded because they are considered frontline. There has been a rise in some occupations, including 1400 more teachers, 1000 more nurses, 500 doctors, and police.

If those numbers are correct, I can’t see Labour getting much traction with their campaign against the changes the Government has made.

Public Service Association national secretary Brenda Pilott said there was no way the Government could cut spending further without cutting services.

The PSA might be correct (obviously at some point, services would be impacted), but the problem for them is that they have made the same claim for the last two years.

He would not say what might fall into the “nice to have” category, but the Government had already chopped things such as community education classes

Oh I had forgotten about those. Remember all the fuss the Oppoosition made about the basket weaving courses no longer being free.

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Spending restraint

March 22nd, 2011 at 10:00 am by David Farrar

The Government has sensibly announced there will be even tighter spending restraint in this year’s budget, due to the impact of the earthquake. It’s not going to be slash and burn, just very tight fiscal discipline.

This should be no surprise. But what is interesting is that Labour still are 1000% opposed to any spending restraint. You have to wonder what could cause them to actually adopt fiscal restraint.

The 2008 recession wasn’t enough.

The global credit crisis wasn’t enough

The first earthquake wasn’t enough

The double dip recession wasn’t enough

The second earthquake wasn’t enough

I have this vision of a meteor hitting New Zealand and wiping out 90% of NZ, and still Labour’s response will be you can’t cut spending.

Even worse is Labour’s preferred coalition partner – Winston. He’s just come out promising it will cost no more than $10 to visit the doctor for oldies. National has ruled Winston out, but Labour would be forced to agree to his demands as the price of forming a Government. So you can add hundreds of millions of extra spending to the deficit.

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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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More on BMWs

February 16th, 2011 at 1:36 pm by David Farrar

Maggie Tait at NZPA reports:

The Internal Affairs Department is responsible for a decision to provide the Government with brand new BMWs when the old ones were only three years-old, Prime Minister John Key says.

My first response to reading this is that sure DIA made the decision, but they must have got sign off from at least their Minister – or at least notified him. So I thought this was just trying to avoid blame.

Mr Key said a six-year deal for the cars was signed by Labour with a three-year rollover clause.

“That decision to invoke that rollover and bring new cars in was made by the Department of Internal Affairs without reference either to their minister or to me,” he told reporters.

However reading on, the PM says that the decision was made without reference to the Minister or PM at all. That indicates that not only did they not approve of it, they were not even told of it.

If this is the case, then DIA should get a bit of a bollocking for this. Departments are meant to operate a no surprises policy with Ministers, and 34 new BMWs should definitely qualify as meeting the threshold for no surprises.

Mr Key found out about the new cars when one of the drivers told him.

That is not the way the Minister for Ministerial Services should find out.

“It’s not a situation where we as the Government have decided to do that, the department just made that decision.”

The department did not think it had to check as it had authority from the former Labour Government.

The Department was wrong. They should have checked.

Earlier, Finance Minister Bill English was critical of Labour’s original contract and Green Party criticism of the Government spending in tight financial times.

“It’s a bit rich from the Greens because one of the reasons the Labour Government bought the BMWs was because they were meant to reduce carbon emissions, they were meant to be the most fuel efficient cars even though their capital cost might have been higher than other options,” he told Radio New Zealand.

“I think it does show that being driven by a fad, which at the time was to have lower carbon emissions, means that you can make decisions — which were made by the previous Government — turn out more expensive than they expected.”

Mr English said when the contract came up for renewal the Government would see if there was a better deal and probably a “more mainstream model of car”.

“I don’t think a Government in the current recession would decide to pick a luxury brand car with all those extra bits…whatever the value for money.”

If no Minister was even informed of the new BMWs, then blaming them is a bit unfair. But the damage has probably already been done in terms of perceptions.

I still think DIA should be given a bollocking for not having the common sense to check with the current Government whether they wanted brand new BMWs to be turning up a few months befiore the election.

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A stupid blunder

February 16th, 2011 at 7:40 am by David Farrar

Tom Hunt at Stuff reports:

The Government has splashed out on 34 new top-of-the-line BMWs that sell for more than $200,000 each.

The Green Party has called the ordering of the cars a disgrace.

But the Internal Affairs Department says it has been three years since the Government bought its last fleet, which will be sold when the new cars start to arrive later this year. …

A spokesman for Prime Minister John Key said this was the same process that had happened for years. “It is standard for a progressive upgrade of the VIP fleet to happen every three years or when the vehicle reaches 90,000 kilometres.”

What’s standard is how unpopular this is. I give the Government a big fail for this move. When Labour did the same in 2008 I put it down to advanced third termitis (when you no longer sense what may be unpopular), but this is even worse as National is in their first term.

It does not matter what the contract said about upgrades, or what level of discount the Government gets upgrading in year three – the only thing the public will remember is a Government saying times are tight having money to buy new BMWs for Ministers. An incredibly stupid blunder.

Someone should have intervened and ensured that any fleet replacement does not take place in election year. Unless one actually wants to lose votes.

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Key signals less debt while Goff promises more debt

January 26th, 2011 at 11:48 am by David Farrar

Over two days we’ve seen two dramatically different paths outlines for the Government. Yesterday Phil Goff promised more borrowing and more debt. Today John Key announced the opposite – that National would reduce future spending to reduce debt – and also flagged allowing the private sector to invest in four current SOEs (which will also reduce debt).

This is excellent – both the reduced spending cap, and the flagging of an election policy to allow minority shareholdings in some energy companies.

Some extracts from Key’s speech:

Growth over the last decade was built on all the wrong things – debt, consumption, and government spending.

People borrowed heavily to buy houses and farms, property prices soared and New Zealanders felt wealthier as a result. They spent a lot on consumer goods, which led to a bubble of economic activity.

 The Labour Government thought this bubble, and the tax revenue it generated, would go on forever and spent up large on permanent new spending programmes. The Government’s spending increased by more than 50 per cent in just six years.

Labour literally had to keep thinking up new ways to spend money, as their refusal to drop tax rates led to fiscal drag and large surpluses. Rather than have modest spending growth, and lower taxes, they did nothing except huge spending increases.

The internationally-competitive sectors of the economy actually went into recession in 2004, and experienced a 10 per cent drop in output over the next five years.

A five year recession for the competitive sector of the economy.

By the time the National-led Government came into office at the end of 2008 the economy was deep in recession, and inflation was the highest it had been in 18 years.

The Government’s books had been left in a mess, with Treasury projecting no end to budget deficits and government debt spiralling out of control.

This is worth remembering – the official forecasts were for deficits and debt to be so big, that we would never ever return to surplus.

As an incoming government, we moved quickly to steady the ship, help the economy through the recession and set a credible path back to surplus.

 Even so, when we tally up everything the Government is spending this year, we still need to borrow $300 million a week on average to pay the bills.

 In the worst of the recession, running a budget deficit was the right thing to do, as it gave much-needed support to the economy.

 Now, as the economy recovers, borrowing $300 million a week is unaffordable and is holding the economy back.

 It is crowding out our internationally-competitive sectors of the economy, keeping the exchange rate high, and tying up resources that could be better used elsewhere in the economy.

And this borrowing will, of course, have to be repaid in future years, with interest.

Annual interest payments on our debt will, in four years time, cost more than spending on the Police, defence and early childhood education combined.

Which is why we need policies to reduce the growth in debt and lead us back to surplus.

When we are borrowing $300 million a week, have an overvalued exchange rate, and face the prospect of a credit rating downgrade, the Government believes it should be spending less and therefore borrowing less.

I have therefore challenged my Ministers to balance the books more quickly.

Government spending will continue to increase each year in dollar terms, but at a slower pace than the rest of the economy.

As the first step in reducing spending growth, we will run a tighter Budget this year than was indicated in the Budget Policy Statement in December.

Currently we have a new spending allowance of $1.1 billion each year, compared to Labour’s average of $2.8 billion a year over its last five budgets.

Our plan is to reduce that new spending allowance in Budget 2011 even further, to around $800 to $900 million.

Nonetheless, this year’s Budget will continue to prioritise new spending to health and education in particular, and to initiatives that promote economic growth.

 This would be a good time for the PPTA to reconsider the wisdom of ongoing strike action for their 4% pay claim.

Key says that Treasury project this reduction in future spending will see NZ get back into surplus in 2014/15 instead of 2015/16. This of course will only occur if the 2011 – 2014 Government has tight fiscal discipline.

Now onto the capital side:

The Investment Statement shows that the government, on behalf of taxpayers, owns $220 billion of assets across a whole range of social, financial and commercial investments – everything from hospitals, roads, prisons, schools and Police stations to the Super Fund, electricity companies and coal mining operations.

We also expect to acquire $33 billion of net new assets over the next five years, including new schools, operating theatres, ultra-fast broadband and major investments in our state highways and other transport infrastructure. That is a considerable spend by any reckoning.

At the margin there are two ways we can acquire new assets – either we can borrow more or we can change the mix of assets we own.

Indeed, and it is stupidity to insist that our current mix of assets is perfect, and in no way can any existing asset be sold or even sold down.

The greatest scope to change the mix of assets lies with the government’s portfolio of commercial assets.

In particular, the sort of mixed-ownership model under which Air New Zealand operates – where the government owns most of the company but there is a minority of outside equity – gives the best of both worlds.

Under this model, the government has a controlling stake in what is a crucial piece of transport infrastructure and guarantees that it will be majority New Zealand owned. But by not owning 100 percent of the airline, the government also has capital free to invest in other assets.

This model could be extended to more of the government’s commercial assets.

As well as freeing up capital, there are three other potential benefits of a mixed ownership model.

The first is that it broadens the pool of investments for New Zealand savers, either directly themselves, or through investment funds such as KiwiSaver.

New, quality listings on the stock exchange would give “mum and dad” investors the option of putting their savings into large and proven companies, rather than relying, as is so often the case, on property investments.

The second is that the company reaps the benefits of sharper commercial disciplines, more transparency and greater external oversight.

Under the mixed ownership model Air New Zealand has been a creative and innovative company and a model corporate citizen. It has also offered some very competitive prices for air travel.

I am convinced that Air New Zealand would not be run as well, nor provide as good a service to customers, if it was owned 100 percent by the government.

And the third potential benefit is the opportunity for the companies involved to obtain more capital to grow further, without depending entirely on a cash-strapped government to support them.

Having some SOEs able to access capital, without the taxpayers having to borrow more will be good for them, and allow them to grow.

And NZ investors would love having some solid companies to be able to invest in – which will help boost savings.

For all these reasons, the Government has asked Treasury for advice on the merits and viability of extending the mixed ownership model to four other state-owned companies – Mighty River Power, Meridian, Genesis and Solid Energy.

In each case, the government would retain majority ownership and control, and the freed-up capital would be used to purchase other public assets, thereby reducing the government’s need to borrow.

The Government has also asked Treasury for advice on the merits and viability of reducing the government’s shareholding in Air New Zealand, again while retaining a majority stake.

Only the companies I have just mentioned will be considered for a mixed ownership model.

For all these reasons, the Government has asked Treasury for advice on the merits and viability of extending the mixed ownership model to four other state-owned companies – Mighty River Power, Meridian, Genesis and Solid Energy.

In each case, the government would retain majority ownership and control, and the freed-up capital would be used to purchase other public assets, thereby reducing the government’s need to borrow.

The Government has also asked Treasury for advice on the merits and viability of reducing the government’s shareholding in Air New Zealand, again while retaining a majority stake.

Only the companies I have just mentioned will be considered for a mixed ownership model.

Yay. We are currently the only country in the OECD that has a policy based on pure ideology of banning any private sector investment in current state assets. This probable policy is a step in the right direction.

It is subject to finalisation and approval from voters at the 2011 election. It will maintain Government control of the five companies, but allow for Kiwi mums and dads to invest in those companies, providing the companies with capital, and the investors with good returns.

Kiwis will have some clear choices for the 2011 election – policies which boost savings, reduce future spending and reduce debt vs policies to tax rich pricks more and borrow more.

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$300m a week

December 15th, 2010 at 9:00 am by David Farrar

The Government is now borrowing $300m a week. This level of borrowing is simply not sustainable. The answer is not to tax and spend as Labour has promised (they have indicated they will increase at least the top tax rate) but to restrain or even reduce spending.

The OBEGAL (Operating Balance Excluding Gains and Losses) is forecast to just his surplus in 2015. To achieve that will require massive fiscal discipline – no spending sprees in both the 2011 and the 2014 election years. And even after 2015, massive restraint will be needed to give us a cushion going forward.

By 2015 core expenses are forecast to be 31.7% of GDP, down from 34.9% this year. That is going in the right direction but still too high in my opinion. I’d like to see both National and Labour indicate what their desired level of spending as a % of the overall economy is. These would not be legal straitjackets, but targets they can be measured against.

I think a realistic long-term goal is in the mid 20s – maybe as high as 28% but no higher. If we keep spending down, then the average economic growth will be significantly higher – and that is how we create jobs, grow wages, and close the gap with Australia.

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Prosperity creates spending, not vice-versa

September 17th, 2010 at 7:20 am by David Farrar

Roger Kerr blogs:

Roberts uses a neat analogy to describe US stimulus package policy later in his post:

Think of having a lot of wet wood and trying to get it going by lighting newspaper as kindling. There’s a fire for a while, while the newspaper is burning. But once the newspaper is consumed, the wood hasn’t caught. Even burning a lot more newspaper (bigger stimulus package) isn’t going to get the wood dry enough to catch fire.

The same applies to government spending in New Zealand. The role of the government should be to provide a framework that allows the economy to prosper. Cutting government spending is a sure way to heat up a damp economy.

Cutting government spending will generate higher growth. Growth generates prosperity. Prosperity creates spending: a roaring fire using dry wood without wasting stacks of paper getting it going.

It is worth remembering that the US had a giant fiscal stimulus and their unemployment rate is 9.6%. They spent $800 billion on fiscal stimulus and claimed it would yield $1.50 in growth for every $1 spent.

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Parliamentary Service Amendment Bill 2010 Submission

August 23rd, 2010 at 10:00 am by David Farrar

SUBMISSION OF DAVID FARRAR
TO THE ELECTORAL LEGISLATION SELECT COMMITTEE
ON THE PARLIAMENTARY SERVICE AMENDMENT BILL 2010

About the Submitter

  1. This submission is made by David Farrar in a personal capacity. I would like to appear before the Committee to speak to my submission.

Executive Summary

  1. I support the Parliamentary Service Amendment Bill 2010 as it provides a necessary limitation on what advertisements can be funded by the taxpayer during an election campaign.
  2. The history of this issue goes back to the 2005 election, when the Auditor-General found much of the parliamentary spending was illegal and outside the law.
  3. Parliament’s response was to legislate an interim definition of what was allowable that was wide – anything that did not explicitly call for votes, money or members was okay.
  4. The problem with the interim definition is that it would have allowed a repeat of 2005, when you could have taxpayer funded election pledge cards being paid for by Parliament, just weeks or days before an election.
  5. One solution is to adopt a more narrow definition during the entire parliamentary term – banning any publications that promote a political party or MP. The problem with this solution is that in practice it could never work. Almost all parliamentary publications involve a degree of party and MP promotion. One can not easily draw a fine line between parliamentary and political publications. The Opposition should be able to campaign against (for example) the Government’s budget, from their parliamentary budget. Otherwise the Government will be too powerful.
  6. The solution adopted in this bill, is to have a wide definition of what is allowable for two years and nine months (approx), and to have a much tighter definition during the three month regulated period.
  7. I support this solution, and in fact have publicly urged such a solution since 2006. It doesn’t unduly restrict the operations of Parliament during most of the parliamentary term, but makes the election period fairer by preventing parliamentary parties and incumbent MPs from being able to spend taxpayer money on their advertising materials.
  8. The ability to get an advisory opinion from the Electoral Commission as to whether a proposed publication is an election advertisement will, I am sure, be welcomed by MPs and staff of the Parliamentary Service.
  9. One issue I would raise is whether s3A(2)((a)(i) and (ii) should also exclude communications that explicitly call on people not to elect a particular person or party vote for a particular party. This would seem desirable to me, as I don’t think (for example) taxpayer funded pamphlets should ever explicitly refer to how people should vote.

In summary I urge the Electoral Legislation Committee to recommend the Parliamentary Service Amendment Bill 2010 be passed.

David Farrar

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Fiscal Discipline pays off

April 22nd, 2010 at 1:11 pm by David Farrar

Bill English has just announced:

In the Budget last year, we identified $2 billion of lower quality spending over the subsequent four years to redirect into higher priority areas.

In this year’s Budget, we will find another $1.8 billion of low quality spending between now and 2014 for reprioritising into higher priority initiatives.

$3.8 billion of savings is not bad. That is around $3.799 billion more than what would have happened under Labour.

I said in last year’s Budget that most Government agencies will receive no budget increases over the next few years. And in this Budget, I will say the same thing again.

Not because they don’t deliver worthwhile services, but simply because we cannot allow debt to escalate further.

And the private sector has had to cope with falling revenue. Staying constant is relatively a better position to be in.

And in the release:

“The Government will continue to weed out low quality spending. We will live within the $1.1 billion annual operating allowance for new spending we have set ourselves, and restrict annual increases in this figure to 2 per cent from 2011/12.”

Mr English repeated that most Government agencies would receive no budget increases over the next three or four years, as the Government moved to get back to Budget surplus as soon as possible.

This fiscal discipline is necessary so we can stop borrowing, and start paying off debt. Borrowing $240 million a week is not sustainable.

“I want to get the Government back into budget surplus as quickly as possible, because surpluses give us choices.

“For example, surpluses give us choices to invest more in public services; to pay down public debt; to resume contributions to the New Zealand Super Fund – or to do any number of other things.

“As long as we run deficits, we don’t have those choices,”

Exactly.

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A spending cap

April 20th, 2010 at 6:41 am by David Farrar

The Herald reports:

Prime Minister John Key has swiftly shot down speculation that next month’s Budget would include an announcement on some form of legislated cap on Government spending.

This is a pity. I am definitely fan of a cap on spending as a percentage of GDP.

“We have our own self-imposed cap,” he said referring to the $1.1 billion limit on new spending announced last year.

And that is a useful discipline, but I think there is a difference between a cap on new spending and a target for how large the state’s portion of the economy should be.

The Act Party favours a legislated cap which would freeze government spending in real per capita terms, that is, only allow spending to increase in line with inflation and population growth unless over-ridden by a public referendum.

Again I think this is a worthwhile policy. Only allowing inflation and population adjustments might be a bit too restrictive, but one could set it as a maximum increase in real per capita terms of 1% a year for example.

The 2025 taskforce chaired by Don Brash recommended legislation requiring the Government to set a medium-term target for its operating spending either in real per capita terms or as a share of GDP.

And such a requirement would force transparency from parties on their spending plans. I want to have parties tell us their desired share of GDP for the state. National might say 30%, Labour 35% and ACT 25%, and one can make an informed choice about which policy you prefer.

Key said he did not support measures limiting something to a specified share of GDP.

Many governments had responded to the global financial crisis over the past 12 to 18 months by increasing their spending as a percentage of the economy. “If they are talking about something different, we could look at that.”

The PM’s concern seems to be that such a legislated cap would remove the ability of a Government to respond to a recession. But I think one can deal with that issue by having the cap as a medium term target, with the legislative requirement being to report progress against it – not to be illegal to ever exceed it.

Key does not seem to have ruled out a cap, if it leaves the Government with some flexibility. I think that is achievable and would encourage National to work towards that.

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Spending Cuts in the UK

April 9th, 2010 at 11:00 am by David Farrar

My weekly column at NBR 24/7 takes a look at the UK elections. An extract and a proposal:

Both Labour and the Conservatives are promising to cut public spending faster than Margaret Thatcher did in her first term. Labour has pledged to cut the deficit in half within four years. The Conservatives are promising a further £8 billion of spending cuts beyond that.

And one good proposal:

One welcome manifesto pledge from the Conservatives is to publish online all items of government spending over £25,000. For the size of their economy, this is equivalent to publishing all items of spending in New Zealand over $1,000.

I suggest:

Think of how popular Bill English would become if he ordered every Government department, ministry and agency to list every payment that make, online in a searchable database?

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Editorials 8 April 2010

April 8th, 2010 at 2:00 pm by David Farrar

The Herald calls for transparency over MPs legal expenses:

Taxpayers have a right to know how their dollars are being spent. That includes the allowances paid to the country’s parliamentarians for accommodation or travel, as some MPs have learned to their discomfort over the past year or so. It should also include the use of public money to cover legal costs when parliamentarians are sued. …

Clearly, there are occasions when it is legitimate for MPs’ legal bills to be paid with public money. Parliamentarians should act vigorously on behalf of their constituents. …

Yet but for the publication of documents by the New Zealand Herald and an admission by Dr Smith of the use of some public funding, taxpayers would have been none the wiser about either of the requests for reimbursement or their granting or denial.

The Prime Minister, John Key, said yesterday that taxpayers were entitled to know that money from the public kitty was being used for MPs’ legal costs, and that he would be open to such information being made public. That is a refreshing outlook, and one that indicates Mr Key is fully aware of the harsh spotlight on MPs’ expenses and allowances, both here and in Britain.

As I blogged, I’d include it in the six monthly expense reports.

The Dominion Post also wants more transparency, but around a health spending scandal:

Unacceptable. There is no other word for the situation that police claim has developed with Waikanae’s Te Runanga O Te Ati Awa Ki Whakarongotai, its health-provider arm Hora Te Pai and Capital & Coast District Health Board.

Stripped to its essentials, the police allege that money that was meant to be spent improving health has been siphoned off into other areas.

Regardless of the final outcome of the police inquiries, that is no way to manage $590,000 of taxpayers’ money. It is public money, and the handling of it should be transparent, with the details of where it is or what it has been spent on readily available.

I agree. Phil Kitchin does an invaluable job in expsoing their spending scandals. But we should not have to rely on him.

As I have said previously, I’d do what some US states do and have the entire cheque register for the Government put online. People could then file OIAs about spending that looks dodgy.

The Press says the dam decision is a close call:

The benefits from building a hydro dam on the Mokihinui River, north of Westport, are obvious.

It would, by using a resource that on the West Coast is endlessly renewable, give the region enough electricity to power 45,000 homes.

The dam would not only supply most of the region’s electricity needs in an undeniably carbon-zero way, it would also end the reliance on a long and vulnerable transmission line that brings the area’s present power supply from the Waitaki. Supply would not only be more secure, it would be more efficient and West Coast electricity prices, at present some of the highest in the country, would be lower.

Which is why many locals support it.

The proposal would require a 85-metre high, 300m wide dam across the river that would create a narrow, 14 kilometre long lake covering 340 hectares. Meridian says that the impact would be minor and it has made a considerable effort to make sure they are kept to a minimum. No endangered species are threatened, it says. In addition, the resource consents Meridian has received have more than 200 conditions attached to them to further reduce the impact. Nonetheless, according to the objectors, a precious, irreplaceable part of the landscape will be irretrievably changed. …

But the country cannot afford to have decisions like this one made on emotion and sentiment. Electricity demand is growing by 2 per cent a year, equivalent to the needs of a city the size of Dunedin. The two-to-one vote on this scheme shows that the commissioners’ approval was not easily arrived at but it was made, as it must be under the Resource Management Act, after rigorously detached consideration of all the arguments. In this case the commissioners decided the development’s impact on the environment are not bad enough to block the project.

I’ve blogged on this separately also.

And the ODT looks at Easter trading:

Parliament, as it so often does, tried to design a horse with its legislative provisions controlling private enterprise during Easter, and instead produced a camel.

A particulary stupid camel, that has a limp.

There is nothing about the regulations that can in 2010 be considered just and necessary, let alone reflective of contemporary society.

The creation of geographic exemptions to trading on Good Friday and Easter Sunday, meaning some places can open their doors while others must close – backed by farcically small penalties – is simply unjustly partial. …

The Muldoon National government passed the legislation in 1980 which provided for shops to be open on Saturdays, and also broadened the range of heavily restricted goods able to be sold on Sundays.

The world did not come to a halt as a result; indeed, apart from the predictable complaints from the unions, the public in general welcomed the measure, which also signalled the decade’s major social change – the end of the five-day, 40-hour working week.

And one day when we have sensible laws around Easter, we will look back with bemusement over how long it took us to do it.

It is time for the matter to be settled and the only way that will happen is to abandon the so-called “personal vote” in Parliament and achieve suitable legislation by way of a Government Bill.

Whether John Key’s administration has the fortitude to do so, or is prepared to risk the undoubted wrath of church and union, is arguable: Mr Key agrees the present regulations are a shambles and would like them to be liberalised, and he has voted accordingly in the past.

It is time for a national solution: declaring Easter Sunday to be a public holiday would protect workers’ wage levels, and sending a Bill to a select committee would ensure public opinion – more accurately reflecting the times in which we live rather than electorate pressure on individual MPs – could be canvassed.

I’m a big supporter of change, and have myself mooted a trade off of making all of Easter public holidays in exchange for removign the trading restrictions.

But I am reluctant to have this become a party whipped issue. I think MPs should have freedom of choice on this.

Having said that, I note that Labour have almost adoped a party line on the issue, so maybe in time National will also.

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Housing NZ’s IT

April 5th, 2010 at 2:00 pm by David Farrar

The Dom Post reports:

A spokeswoman for newly reinstated Housing Minister Phil Heatley says he does not believe he will have a final say on plans by Housing New Zealand to spend $43 million replacing its software systems.

A pity, as there are some real questions about it.

The board of the Crown-owned corporation approved the business case for its Enterprise Transformation Programme last week. The spokeswoman says the project is an operational matter.

Two whistleblowers, two former managers and Roger Phare, operating officer at existing software supplier Technology One, have questioned aspects of the project, for which a bevy of consulting firms has been paid more than $6m for advice.

Yep that is $6 million just for advice on its IT.

Housing New Zealand has so far refused to detail projected annual savings of $70 million that have been called into question by opposition housing spokeswoman Moana Mackey, or comment on claims that it paid consultants up to $600 an hour and created a potential conflict of interest for strategic adviser Deloitte.

Now the very top lawyers in NZ do charge $600 an hour, but I’ve never heard of that level of charging on an IT project. You might pay it for top commercial lawyers in billion dollar deals, but rare for IT projects.

An earlier story in the Dom Post reported:

A whistleblower has claimed Housing New Zealand may have created a potential conflict of interest for a consulting firm that is providing advice for a $43.6 million information technology project. …

Housing New Zealand would not say whether Deloitte’s contract as strategic adviser precluded the consulting firm from securing any work implementing software that would be purchased as a result of the project.

Computer Society chief executive Paul Matthews says organisations need not preclude consultants that provide them with strategic advice from also having a role in implementing any solution, but it would be unusual and “not particularly good practice”.

“It really depends on the circumstances. With most conflict-of- interest situations, if the terms in the conflict of interest are clear and they are open and transparent and all parties are aware of it, then in some circumstances they may not be precluded, but you would expect in a larger project they would be.”

Housing New Zealand last month acknowledged a steering group comprised of senior executives had over- ruled a recommendation by an evaluation panel in appointing Deloitte. It said the panel had over- stepped its brief in recommending a rival firm do the job.

So the evaluation panel recommended another firm, and this was over-ruled by executives? This is the point as which you get nervous also.

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Taxpayer funded rugby celebrations

March 30th, 2010 at 10:00 am by David Farrar

The Herald reports:

The Ministry of Maori Development is putting up $200,000 of taxpayers’ money to help pay for the Rugby Union’s centenary celebration of Maori rugby. …

Former All Black Billy Bush, who also captained the Maori team, said it smacked of cheapness that the union, which received millions from corporate sponsors, could not foot the bill for the centenary celebrations.

This is basically corporate welfare. It just happens to be TPK money in this case. It just shows that if you have taxpayer money available, corporates will find ways to grab it.

I don’t mind the contribution to the RWC as that has huge tourism benefits. But I can think of many more worthy causes for TPK, than subsidising the NZRFU.

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A great waste of money

March 22nd, 2010 at 1:00 pm by David Farrar

Phil Kitchin keeps up his good work in exposing government wrongdoing and waste. His latest is on a $3 million TPK contract:

The sloppiness of a $3 million contract to help Maori businesses earn export dollars is revealed in documents showing consultants received hundreds of thousands of dollars of taxpayer money – for targets they couldn’t prove they had met. Phil Kitchin reports.

The debacle over the suspended Tekau Plus project has drawn an admission from Te Puni Kokiri chief executive Leith Comer that the government agency has a “big lesson” to learn.

The project has been frozen and Mr Comer now concedes the contract was extraordinarily loose and wishy washy.

Project bosses repeatedly relied on management cliches about “outputs”, “establishing soft network clusters” and “bigger picture value propositions” when they were pressed for proof that goals were being achieved.

That should ring warning bells.

At one stage those running the Tekau project refused to provide details, claiming commercial sensitivity – even though they were spending taxpayer money and the government department that gave it to them wanted to know how it was being used.

And that should have rung even bigger warning bells.

A report by PricewaterhouseCoopers, obtained by The Dominion Post, shows that in one three-month period taxpayers forked out $60,000 for project consultants to analyse seven media stories, eight economic updates, a business awards list, a 13-page essay and reports on an education programme.

Now repeat after me – there is no waste in Government. Yeah Right.

In another three-month period consultants received $33,000 for analysis and research including “developing a strategy for a clear strategy forward” and “ensuring offshore studies add value”.

Developing a strategy for a strategy – they must have been pissing themselves with laughter when they wrote that response.

THE leadup to the Tekau project being suspended began in October last year – two years after it began and after two-thirds of the $3 million in funds had been spent.

So it begin in October 2007.

The one bright light there is that TPK at least realised they were being fobbed off and kept going back asking for proof of outputs. However they should have acted far more quickly in terminating funding, in my opinion.

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Editorials 22 March 2010

March 22nd, 2010 at 11:00 am by David Farrar

The Herald focuses on the environment in Auckland:

Stormwater pipes and sewers, many of them old and not sufficiently separated, overflowed 2500 times in 2008, fouling beaches and leaving them unsuitable for swimming. Aucklanders have been hearing about this disgrace for a lifetime, and paying for it to be fixed for almost as long. Yet progress seems not to be keeping pace with population growth.

For all that, this ARC report, the council’s third since 1999, suggests coastal water is cleaner than it used to be, beaches are usually safe for swimming and streams, though still polluted, are not as bad as before. While car use is rising, so is patronage of public transport. And though we have become fairly diligent at separating household rubbish for recycling, the amount sent to landfills is growing faster than the population.

The Dominion Post calls for more transparency in spending:

Today The Dominion Post reveals that funding for a $3 million taxpayer-funded project to turn domestic Maori businesses into export earners was abruptly suspended last November by Te Puni Kokiri because of concerns about the way public money was being spent.

Among the issues of specific concern to the Maori Development Ministry were: perceived conflicts of interest, value for money and contract compliance.

Documents obtained by the paper under the Official Information Act show the ministry was right to act as it did. But they do not explain why TPK signed off in the first place on a project that its chief executive Leith Comer now concedes was loose and wishy washy.

She is on the right track. Private organisations in receipt of public money have an obligation to account for the way it is spent. Government organisations dishing out public money have an obligation to put proper controls and benchmarks in place. Auditor-General Lyn Provost should be asked to conduct a thorough inquiry into both Tekau Plus’s use of the money and Te Puni Kokiri’s stewardship of it.

I like what some US states have done – every single payment is published on the Internet.

The Press looks at local transport:

The Christchurch City Council shows welcome determination in sticking to its plans to build the new bus exchange under ground.

Christchurch will benefit in the long and short term, even if the NZ Transport Agency regards the plan as not benefiting the nation.

The agency has to live within tight budgetary margins and contribute to projects throughout New Zealand, so it is bound to take a conservative view of the exchange. That is especially the case when the undergrounding is expensive, costing $212 million more than the above-ground option. Also, the Christchurch bus system could operate with the cheaper facility.

But the city council is right to take a longer-term view, and one that will give the city the safest and most efficient exchange with the maximum potential.

Undergrounding would do that. It would mean passengers would not have to negotiate entering and exiting vehicles and more buses could be accommodated. Also, the area above could be turned into a park – in the meantime.

Underground, overground, wombling free, the Wombles of Wimbledown Common are we.

Sorry that song just stuck in my head as I read the editorial on overground vs underground.

The ODT looks at water pollution:

Some assurance can be taken by the public from the latest survey of the efforts by dairy farmers to comply with both the law and the 2003 Dairying and Clean Streams Accord, but the results also show there is still a great deal to be done.

Indeed, the level of national non-compliance with effluent discharge consents is still a disgrace, although the situation has improved in Otago – and not before time. …

Public anger against dairy farmers who continue to flout the requirements – along with the damage being done to New Zealand’s carefully cultivated, if misleading, “clean, green” publicity – has grown to the stage where now politicians at cabinet level are taking an interest.

Claims by farmers’ organisations that “most [dairy] farmers” care about the impact their businesses have on the environment simply do not stand up to scrutiny if the survey statistics for the 2008-09 season are to be believed.

On a national scale, only 60% of dairy farms are complying with resource consents and regional plans in the discharge of their dairy effluent, although the figures for Otago and Southland farmers, at 75% and 69% respectively, are above average.

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The nervous wait

March 20th, 2010 at 2:34 pm by David Farrar

The Herald reports:

Government staff are not yet halfway through the “mammoth task” of compiling the previous Government’s credit card records for release to the media and public, an exercise which is expected to cost about $50,000 and take a further two months.

The Department of Internal Affairs is compiling about 7000 documents detailing spending by Helen Clark’s ministers on their taxpayer-funded credit cards after receiving more than a dozen requests from media for the information under the Official Information Act.

Oh this will be interesting.

Former ministers, including those who are no longer MPs, will get to see the information before it is released to the media, but they have no ability to have content removed. “There’s no get-out clause.”

I suspect we will see some voluntary disclosures once that happens, to try and lessen the impact of the official disclosures.

A spokesman for Labour leader Phil Goff said he “has made it clear that if there are any cases of inappropriate spending he expects it to be repaid”.

Hey, this might even help reduce the $240 million a week we are borrowing :-)

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Editorials 12 March 2010

March 12th, 2010 at 2:12 pm by David Farrar

The Herald talks government funding cuts:

Predictably enough, Labour has tried to make a mountain out of the Government’s announcement of funding cuts in the Education Ministry. According to its education spokesman, Trevor Mallard, these will harm education quality because there will be less research and less teacher and curriculum development.

In reality, he is talking about a molehill. The ministry has been asked to make just $25 million in savings by 2012-13. That is a surprisingly small amount, which is being sought in the right area, rather than at what used to be called the chalkface.

All government-funded organisations are being told to cut costs because of the tough economic climate. Cue cries of anguish and alarm.

The key to achieving the savings without fulfilling the grim forecasts of these critics lies in targeting areas that will not disrupt a sector’s core responsibilities. Commendably, this is what the Government is seeking to achieve in both education and health, two of the leading recipients of its spending.

Labour has never met a spending cut they didn’t oppose.

The Dominion Post swipes at NZUSA:

The University Students Association is to be applauded for its egalitarian instincts. They accord with the New Zealand ethos.

However, the association, long a training ground for Labour Party apparatchiks, would enhance its credibility if it spent less time bleating about the cost of university studies and more focusing on the quality of the education on offer.

It makes a habit of engaging its mouth before its brain. The most recent instance occurred on Tuesday when co-presidents David Do and Pene Delaney issued a statement condemning new Tertiary Education Minister Steven Joyce, the Government’s tyre-kicker-in-chief, for saying that from 2012 a percentage of the state funding provided to tertiary institutions will be linked to their academic performance and for adding that he’d also like to restrict student loans to students who pass their courses.

David Do is a former Chair of Princes St Labour.

Here is a newsflash for the association: the quality of the education available to its members, and students at other tertiary institutions, has gradually been eroded over the past couple of decades by underfunding and a bums-on seats-policy that rewards institutions according to the number of students enrolled rather than their performance.

The Government does not have a magic pool of money into which it can dip to make up the shortfall. It is effectively borrowing $200 million a week to maintain existing levels of public services, debt that will eventually have to be made good by the the association’s members and generations yet unborn.

If improvements are to be made to the system, the money has to come from within the existing tertiary education budget. Mr Joyce is doing exactly what the association should be imploring him to do – looking for poor-quality institutions and courses so that money can be redirected from them to institutions and courses that provide value for money.

He is proposing to do the same with students. Good on him. Every student who is not turning up to class, repeatedly failing or using a student allowance or loan to subsidise a lifestyle that has nothing to do with study is wasting money that could otherwise be used to provide a better education for students motivated to make the most of their opportunities.

The association should forget about trying to score political points and focus on advancing its members’ real interests. Students should ask themselves whether they would rather buy a clapped-out jalopy with a wound-back odometer for $25,000 or a modern, reliable warranted vehicle for $35,000.

Mr Joyce knows the answer to that question. It is to buy a quality vehicle that will stand the test of time. The same holds true for education. Forget cheap; think quality.

A wonderful editorial.

The Press talks immigration:

Graven on a tablet within the pedestal of the Statue of Liberty in New York is the poem with the famous words “give me your tired, your poor, your huddled masses”. The latest immigration policy development in New Zealand is somewhat different to this. The new temporary retirement immigration category is more a case of New Zealand being given and welcoming elderly migrants, provided they have enough money to invest here.

Under this scheme foreigners aged at least 66 years can move to New Zealand on an initial two-year permit if they have good health and character, agree to invest $750,000 here, have an income of $60,000 and $500,000 worth of assets.

By international standards the financial criteria for coming here are not huge, which might encourage a reasonable uptake. But even if this did occur the amount which must be invested is also comparatively modest, which suggests that the scheme might not make the contribution to economic growth which the Government hopes would occur.

Rather than encouraging the wealthy elderly to come to our shores, the focus should be on promoting New Zealand as a migration destination for younger people with skills. This would help address this nation’s serious skills shortage and contribute more meaningfully to economic growth.

I don’t think it is an either-or. One can encourage both.

And the ODT focuses on regional rates:

A rare piece of good news emerged for beleaguered ratepayers this week: the Otago Regional Council draft annual plan shows no increase in the general rate. The ORC chairman points out it is a draft budget only, but nevertheless, how refreshing. Why can’t other councils do the same?

Indeed. Most businesses have had to contain costs, as have most households. Even the central Government is doing so. Local Government should follow.

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Editorials 11 March 2010

March 11th, 2010 at 12:00 pm by David Farrar

The Herald approves of mooted KiwiSaver changes:

Commerce Minister Simon Power deserves praise for his decision to fast-track tougher reporting requirements for all KiwiSaver providers.

Not so David Ireland, the chairman of superannuation industry body Workplace Savings, who described the move as a “knee-jerk reaction”.

Like some other near-sighted individuals in the funds management industry, Mr Ireland seems to be struggling to come to terms with the idea that investors’ interests must come first.

When the subject is the integrity of KiwiSaver, which holds the investments of 1.3 million New Zealanders, there is every reason to move quickly to plug any gaps in regulation.

What scares me is the poll showing around half of KiwiSaver investors think their fund is government guaranteed.

The Dominion Post wants the public service reined in further:

The public service is a dollar-devouring behemoth that has thwarted many attempts to rein it in.

Prime Minister John Key will need to do better than he has so far, if he is going to succeed in slipping on the halter. It is vital that he does. …

Now the Government is treading so carefully it risks making no progress. Mr Key, through a spokeswoman, has denied there is any proposal that might be described as “radical reform”. Instead, all indications are of a process that smacks of the ad hoc, and of being driven by fear of public reaction as much as by any coherent strategy.

That is not good enough. Despite improvements in government finances, the Treasury is still forecasting deficits will continue to 2016. Finance Minister Bill English rightly wants the focus to remain on getting out of deficit as quickly as possible.

Once we are out of deficit, then we get far more palatable choices. We get to decide whether surpluses are spent on reducing debt, cutting taxes or increasing spending. But until we get back into surplus, it is all fairly unpalatable.

The Press looks at the progress in Iraq:

With so much attention focused on the violence in Afghanistan, there is a risk of downplaying significant events in Iraq, notably its recent election.

The result of this election, in terms of the shape of the coalition which will govern the nation, is likely to take weeks or even months of deal-making.

But the manner in which the election was conducted is one of the most positive developments in Iraq since the United States and its “coalition of the willing” allies toppled Saddam Hussein in 2003. US President Barack Obama could ultimately be proved correct when he declared that the election was an important milestone in Iraq’s history.

The most notable feature of the election was the turnout which defied many observers’ expectations by reaching 62 per cent. This figure might not seem high by New Zealand standards, but it is worth reflecting that it is comparable to the most recent US election.

In a decade or so, Iraq may be doing relatively well.

And the ODT commemorates International Women’s Day:

New Zealand has much to be proud of in its gender equality record, and with the marking on Monday this week of International Women’s Day, there is cause for celebration.

In the most recent Global Gender Gap Report of the Geneva-based non-profit World Economic Forum, New Zealand is ranked fifth out of 134 countries in an index that assesses countries on how well they are dividing their resources and opportunities among their male and female populations – regardless of the overall levels of these resources and opportunities. …

But not so good:

In New Zealand, one in five women will be subjected to violence in their lifetime, compared to one in 20 men.”

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Editorials 10 March 2010

March 10th, 2010 at 2:00 pm by David Farrar

The NZ Herald talks charity:

At the heart of John Key’s approach are the concepts that the Government should not be providing everything in social welfare, that, indeed, it may not be the best judge of what is needed, and that charity is a good thing. He has sought to further these ideas by building on work done by the previous Government, most notably in abolishing the $1890 cap on rebates for charitable donations.

Most recently, legislation has provided for that rebate to be received automatically by wage and salary earners who donate directly to an approved charity from their pay cheque.

Yet such measures amount only to tinkering when compared with the extremely enticing tax breaks that underpin the strong tradition of private charity in the US.

The Dominion Post weighs in to the sterilisation debate:

ACT list MP David Garrett should know by now that, when he thinks aloud, he will almost certainly find himself in trouble.

Like Maori Party bad boy Hone Harawira, he shoots from the lip, and his homespun philosophy is rarely politically correct.

But despite both MPs’ comments ritually provoking outrage, a kernel of truth is often found therein.

Last week, Mr Garrett was in hot water again, this time for daring to suggest that parents who have abused their children be offered $5000 to get themselves sterilised. …

Predictably, Mr Garrett’s comments were compared with the excesses of Nazi Germany. Mr Kahui’s lawyer, Lorraine Smith, called them “outrageous and a disgrace”.

Karl du Fresne blogs on how hysterical some of the reaction was, with the Nazi comparisons.

Back to the Dom Post:

But those who lambast Mr Garrett for initiating an idea that at least attempts to confront the issue need to face an unpalatable fact: programmes in place now to protect vulnerable children are failing. Sixteen children died last year as a result of family violence.

Delcelia Witika, Lillybing, James Whakaruru, Nia Glassie, Chris and Cru Kahui comprise just a handful of the names on New Zealand’s roll of shame, each one killed by people whose responsibility it was to care for them.

And people who knew these little ones were being abused did not intervene. It is not good enough.

There is no doubt that the Garrett proposal is a step too far. However, even his most vehement critics should find an initiative instigated by Social Development Minister Paula Bennett more acceptable.

Last week, an Experts Forum on Child Abuse recommended that state agencies be able to keep track of parents whose children had died, or been taken off them.

The problem is that, at present, files are closed when a child dies, and social workers don’t know another child has been born to the same mother until that child, too, comes to their notice through abuse or, worse, because he or she has died.

I’m amazed we do not already do this.

It is no wonder Mr Garrett is casting around for new ideas. The old ones aren’t working.

And that is why his comments, on this blog, sparked a national conversation.

And the ODT looks at government spending restraint:

It makes sense for governments to regularly review the costs of administration and services and, especially, to look for efficiencies in operating and technology costs.

Some $2 billion is required to be found in the next two years for the latter, which in turn it is hoped should lead to less duplication of office support functions and services.

It is telling that Mr Key has cited last year’s health sector reforms, which pooled district health board payroll and procurement, with estimated savings over five years of $700 million – and the loss of 500 jobs.

The Government does not consider what is planned to be on the scale of the radical reforms of the Rogernomics era, yet it has declined to make public estimates of potential job losses, which rather implies that the reforms will be sufficiently substantial to be job-costly, and the public service unions have not been slow to express their anguish.

The recession knocked $50 billion out of the economy – the public sector can’t be immune from that.

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