was prepared by David Preston when National disestablished Superu (the evaluation agency) with the support of Labour in 2017. It is a reminder that since at least 1938 being an independent analytical or policy advice body in NZ requires ongoing political consent, which can evaporate in a moment.
Thanks Len. Your comment prompted me to look for the legislation that disestablished the Families Commission (aka Superu). The Families Commission Act Repeal Act 2018 (https://www.legislation.govt.nz/act/public/2018/0010/19.0/whole.html#LMS11624) is remarkably direct and succinct. Once political consent evaporates, the legal hurdles look minimal.
Is productivity capped because for many small NZ companies the capital investment required to achieve higher productivity in it not justified because their access to larger markets is limited by distance compared to their competitors in export markets?
The constraints you mention are real, and no doubt NZ productivity levels are lower than they might be if such constraints did not apply. That said, there are many routes to improvement, so productivity is not "capped" in any absolute sense.
Taking your example further, if there are gains to be had from capital investment then I would be asking questions like:
* What is blocking those small companies from aggregating to pursue those gains?
* Is the blockage the result of something that government has done or failed to do?
The Productivity Commission was set up to answer questions of this sort, and to provide credible and reasoned advice to government that might underpin policy change. Its demise has left a gap...
'Thank you for writing this, well reasoned and I think nails the conundrum. I personally like the idea of consulting opposition parties on members - creates a positive incentive to choose on merit and talent. However I agree with the risks you outline
NZ's Independent Police Conduct Authority (IPCA), like the Productivity Commission (NZPC) , is an Independent Crown Entity (ICE). A reader pointed out that the appointments for Members of the IPCA need to be approved by Parliament (Members being the IPCA equivalent of the Commissioners at the NZPC). So, there is already a model that could be built upon for current and future ICEs.
Update: According to an announcement on the NZ Productivity Commission's website dated 20 December, the Commission will be disestablished by the end of February 2024.
Graham Scott and Murray Sherwin weren't seen by people on the left as neutral but rather as controversial figures in advancing neoliberal reform (the outcome of which was mixed in many cases, and still contested) so from day dot the PC was perceived my some as a vehicle for advancing a narrow new right view rather than something more open to a range of intellectual perspectives. Its unfair to suggest that Robertson broke a convention given Scott was literally an ACT candidate in 2005!
Thanks for commenting. I have 3 quick reactions. (1) I acknowledged in my post that Robertson may have thought the convention already broken. Even if so, whether to continue to abide by it or not was his choice. (2) I'm uncomfortable with the idea that standing as a political candidate should rule someone out from future public office. That idea, applied indiscriminately, would inevitably lower the quality of people in both Parliament and public office. (3) My personal experience of working with Graham Scott & Murray Sherwin over the best part of a decade is that they were always professional, apolitical, and open to new data & reasoned argument. The ultimate test of someone's suitability for public office is how they perform in that office, not what they did or didn't do years before.
It is ironic though that there is such a correlation between "ideology" and productivity. Generally when people on the statist left are running things, there is a productivity problem. And it generally needs reforms that the left labels "right", to reverse the decline. NZ was lucky to have an era where even the Labour Party was dominated by realists like Roger Douglas, Richard Prebble, Mike Moore etc.
It is also ironic that the left throws the "ideological" label at its political opponents so much of the time when it is the real life practice that shows up the failure of their own ideas; they don't seem to be capable of noticing that it is failure year after year and decade after decade that is an indicator of "ideology". Rather than "right wing ideology", what their political opponents are really guilty of is REALISM.
Among all the famous last words that should be constantly getting rubbed in to its adherents, was Michael Cullen's promise in around the year 2000, that "we are going to make public health so efficient that private hospitals and insurance will be superfluous" (so it wouldn't be necessary to ban them, much as he would have liked to). It seems that the "centre right" is especially bad at fighting the battle for public opinion by simply using history and evidence. The 1990's health system reforms that were abandoned - why ever should we just assume forever that they were a bad idea to be left in the dustbin of history, when what we kept trying instead has been such a disaster? Why does the "centre right" always just roll over and allow the other side to dominate the defining of "historical verdict" when the reality is so insupportive?
It seems to be inevitable that the quality of advice from bureaucracies will trend in the direction of "poor" and "declining" - any signs of the opposite happening, seem to result in the good people being sidelined. My favorite subject is bureaucratic advice on housing affordability, which consists of a raft of recommendations that provably make housing more expensive, everywhere they are used as policy, decade after decade after decade. There is a handful of people who might include one or two who get into bureaucracy, who have the obvious suggestion of what will work, based on the historical evidence; elected representatives need to push back on obvious nonsense from their bureaucrats and accept the obvious. Elected representatives would do well to assume that their bureaucracies are telling them the wrong things, and should track down the contrarians who are saying something else based on evidence.
Take the WCC's proposed lowering of speed limits, for example. We owe it to one bright and very hard-working Councilor, Tony Randle, for scrutinizing spreadsheets and finding a basic and stupid error in cost-benefit analysis. We desperately need elected representatives who have a good sense of smell - and tell the bureaucrats, this model is nonsense, and get it audited by the right agency. Tony Randle should be in charge of such an agency and being remunerated well for it, not doing thousands of hours of work in his own time for the public's sake. Even now, his years-old audit of the Auckland Central Rail Link financial estimates should be dusted off by National. We need "centre right" elected representatives who fight effectively on behalf of the constantly-defrauded public instead of running up the white flag because the MSM runs propaganda campaigns. There needs to be an electoral cost, and a career risk to bureaucrats, over colossal wastes of public money due to dishonest "accounting" and ideological "staying the course".
The near-global carbon-copy Covid response was the last straw for some of us - it looks like our civilization is finished, at the hands of bureaucrats who wrongly get all the power over elected representatives minds. Everywhere we see orthodoxies being reversed, and the direction is always the same. Creating a tsunami of funny money, apparently was absolutely the inevitable right thing to do to pay entire workforces to stay at home and do nothing - even when funny money could have been created in the past to say, build hospitals and highways, we didn't do it because "everyone knows it results in inflation". Now we have the inflation, nah, it is "supply chain issues". Themselves to a great extent caused BY "Covid responses". But anyone who even now suggests that there were massive costs to these "responses", apparently is heartless about the deaths of grannies. Even now that we have the costs, they either don't exist or are "because of something else".
What we desperately need in the appointment of bureaucrats, is the FINISH of the careers of people who have provably been responsible for failure, and the guaranteed appointment of "contrarians" whose advice has been revealed by hindsight to have been good, regardless of how discounted it was at the crucial time. I hope NZ is on the verge of being world leaders at reform once again; the contest of policy advice is the most urgent area of focus.
This review paper thehub.swa.govt.nz/assets/Uploads/Whom-the-bell-tolls-030418-WEB2.pdf
was prepared by David Preston when National disestablished Superu (the evaluation agency) with the support of Labour in 2017. It is a reminder that since at least 1938 being an independent analytical or policy advice body in NZ requires ongoing political consent, which can evaporate in a moment.
Len Cook
Thanks Len. Your comment prompted me to look for the legislation that disestablished the Families Commission (aka Superu). The Families Commission Act Repeal Act 2018 (https://www.legislation.govt.nz/act/public/2018/0010/19.0/whole.html#LMS11624) is remarkably direct and succinct. Once political consent evaporates, the legal hurdles look minimal.
Is productivity capped because for many small NZ companies the capital investment required to achieve higher productivity in it not justified because their access to larger markets is limited by distance compared to their competitors in export markets?
Thank you for your thoughtful query John.
The constraints you mention are real, and no doubt NZ productivity levels are lower than they might be if such constraints did not apply. That said, there are many routes to improvement, so productivity is not "capped" in any absolute sense.
Taking your example further, if there are gains to be had from capital investment then I would be asking questions like:
* What is blocking those small companies from aggregating to pursue those gains?
* Is the blockage the result of something that government has done or failed to do?
The Productivity Commission was set up to answer questions of this sort, and to provide credible and reasoned advice to government that might underpin policy change. Its demise has left a gap...
'Thank you for writing this, well reasoned and I think nails the conundrum. I personally like the idea of consulting opposition parties on members - creates a positive incentive to choose on merit and talent. However I agree with the risks you outline
NZ's Independent Police Conduct Authority (IPCA), like the Productivity Commission (NZPC) , is an Independent Crown Entity (ICE). A reader pointed out that the appointments for Members of the IPCA need to be approved by Parliament (Members being the IPCA equivalent of the Commissioners at the NZPC). So, there is already a model that could be built upon for current and future ICEs.
Poland’s incoming government faced a similar situation with state media companies they believed were stacked with appointees of the right-wing PIS. Having exhausted other options, they have liquidated those companies. See https://www.reuters.com/world/europe/polish-culture-minister-says-he-will-put-state-media-into-liquidation-2023-12-27/
Update: According to an announcement on the NZ Productivity Commission's website dated 20 December, the Commission will be disestablished by the end of February 2024.
"We received formal communication from the Minister of Finance yesterday and are now working towards winding up the Commission’s operations by the end of February." https://www.productivity.govt.nz/news/recent-updates/end-of-year-message-from-dr-ganesh-nana/
Graham Scott and Murray Sherwin weren't seen by people on the left as neutral but rather as controversial figures in advancing neoliberal reform (the outcome of which was mixed in many cases, and still contested) so from day dot the PC was perceived my some as a vehicle for advancing a narrow new right view rather than something more open to a range of intellectual perspectives. Its unfair to suggest that Robertson broke a convention given Scott was literally an ACT candidate in 2005!
Thanks for commenting. I have 3 quick reactions. (1) I acknowledged in my post that Robertson may have thought the convention already broken. Even if so, whether to continue to abide by it or not was his choice. (2) I'm uncomfortable with the idea that standing as a political candidate should rule someone out from future public office. That idea, applied indiscriminately, would inevitably lower the quality of people in both Parliament and public office. (3) My personal experience of working with Graham Scott & Murray Sherwin over the best part of a decade is that they were always professional, apolitical, and open to new data & reasoned argument. The ultimate test of someone's suitability for public office is how they perform in that office, not what they did or didn't do years before.
It is ironic though that there is such a correlation between "ideology" and productivity. Generally when people on the statist left are running things, there is a productivity problem. And it generally needs reforms that the left labels "right", to reverse the decline. NZ was lucky to have an era where even the Labour Party was dominated by realists like Roger Douglas, Richard Prebble, Mike Moore etc.
It is also ironic that the left throws the "ideological" label at its political opponents so much of the time when it is the real life practice that shows up the failure of their own ideas; they don't seem to be capable of noticing that it is failure year after year and decade after decade that is an indicator of "ideology". Rather than "right wing ideology", what their political opponents are really guilty of is REALISM.
Among all the famous last words that should be constantly getting rubbed in to its adherents, was Michael Cullen's promise in around the year 2000, that "we are going to make public health so efficient that private hospitals and insurance will be superfluous" (so it wouldn't be necessary to ban them, much as he would have liked to). It seems that the "centre right" is especially bad at fighting the battle for public opinion by simply using history and evidence. The 1990's health system reforms that were abandoned - why ever should we just assume forever that they were a bad idea to be left in the dustbin of history, when what we kept trying instead has been such a disaster? Why does the "centre right" always just roll over and allow the other side to dominate the defining of "historical verdict" when the reality is so insupportive?
It seems to be inevitable that the quality of advice from bureaucracies will trend in the direction of "poor" and "declining" - any signs of the opposite happening, seem to result in the good people being sidelined. My favorite subject is bureaucratic advice on housing affordability, which consists of a raft of recommendations that provably make housing more expensive, everywhere they are used as policy, decade after decade after decade. There is a handful of people who might include one or two who get into bureaucracy, who have the obvious suggestion of what will work, based on the historical evidence; elected representatives need to push back on obvious nonsense from their bureaucrats and accept the obvious. Elected representatives would do well to assume that their bureaucracies are telling them the wrong things, and should track down the contrarians who are saying something else based on evidence.
Take the WCC's proposed lowering of speed limits, for example. We owe it to one bright and very hard-working Councilor, Tony Randle, for scrutinizing spreadsheets and finding a basic and stupid error in cost-benefit analysis. We desperately need elected representatives who have a good sense of smell - and tell the bureaucrats, this model is nonsense, and get it audited by the right agency. Tony Randle should be in charge of such an agency and being remunerated well for it, not doing thousands of hours of work in his own time for the public's sake. Even now, his years-old audit of the Auckland Central Rail Link financial estimates should be dusted off by National. We need "centre right" elected representatives who fight effectively on behalf of the constantly-defrauded public instead of running up the white flag because the MSM runs propaganda campaigns. There needs to be an electoral cost, and a career risk to bureaucrats, over colossal wastes of public money due to dishonest "accounting" and ideological "staying the course".
The near-global carbon-copy Covid response was the last straw for some of us - it looks like our civilization is finished, at the hands of bureaucrats who wrongly get all the power over elected representatives minds. Everywhere we see orthodoxies being reversed, and the direction is always the same. Creating a tsunami of funny money, apparently was absolutely the inevitable right thing to do to pay entire workforces to stay at home and do nothing - even when funny money could have been created in the past to say, build hospitals and highways, we didn't do it because "everyone knows it results in inflation". Now we have the inflation, nah, it is "supply chain issues". Themselves to a great extent caused BY "Covid responses". But anyone who even now suggests that there were massive costs to these "responses", apparently is heartless about the deaths of grannies. Even now that we have the costs, they either don't exist or are "because of something else".
What we desperately need in the appointment of bureaucrats, is the FINISH of the careers of people who have provably been responsible for failure, and the guaranteed appointment of "contrarians" whose advice has been revealed by hindsight to have been good, regardless of how discounted it was at the crucial time. I hope NZ is on the verge of being world leaders at reform once again; the contest of policy advice is the most urgent area of focus.