It is unlikely the $2.75 million given to the Mongrel Mob to fund a meth rehab programme will do much mischief to the public debt because much of the money may well have come from the mob in the first place.
We suggest this makes it a marvellous money-go-round – or an exercise in fiscal recycling – because …
- The money (according to a Stuff report) came from the Proceeds of Crime fund (or money seized from gangs and criminals by police) ; and
- The NZ Herald last month reported that about $2m in cash and assets, including five residential properties, vehicles, motorcycles, jet skis, cash and the contents of various bank accounts were seized in an operation that targeted senior members of the Mongrel Mob in Hawke’s Bay involved in supplying methamphetamine.
This mention of the mob in Hawke’s Bay was part of a report on the smashing of another major drug ring, with more than $44 million in drugs seized as police surpass the $500 million milestone in confiscated assets from gangs and criminals over the past four years.
This should be comforting for those of us who are keeping an eye on cavalier government spending after the Treasury warned the government that its debt is on an “unsustainable trajectory” over the coming 40 years.
That’s because of an ageing population driving up superannuation and health costs.
The officials made a point of insisting this should not be interpreted as a a criticism of the Ardern government and its fiscal focus on our general wellbeing.
Treasury is not worried about current debt levels brought about by Covid-19 spending, saying this spending is temporary and remains low by international standards.
New Zealand Initiative chief economist Eric Crampton recently attended a post-Covid fiscal and monetary policy workshop, hosted jointly by the Reserve Bank and Treasury, which he said
“… seemed designed to warm the policy economics community to higher levels of public debt”.
He said Treasury Secretary Dr Caralee McLiesh opened the event by drawing some of the past year’s lessons for the public sector.
She noted the strong fiscal and monetary response mitigated potentially far worse economic consequences of the pandemic.
But Treasury also took as lesson that fiscal policy – tax and expenditure – can be far nimbler than has been considered possible. That, combined with lower interest rates and practical difficulties in reducing interest rates below zero, made an argument for greater use of fiscal policy in economic stabilisation and for higher overall debt levels.
Prudent debt levels had been considered to sit around 50 to 60 per cent of GDP, with room left beneath that for taking on debt to deal with emergencies like earthquakes. But with low interest rates and higher government debt levels elsewhere, Treasury was coming to view higher debt levels as prudent if the debt funds investments providing strong value for money.
The PM seems keen to make the most of this, although whether she is supporting initiatives that provide strong value for money in some cases is open to serious challenge.
Examples:
- She has defended the funding of the Mongrel Mob-led meth rehabilitation programme and declared she was one of the ministers who approved it.
Perhaps she figured this would be welcomed by the public because it was named “The Kahukura programme” and was serving up to 10 participants over eight weeks on a marae in Central Hawke’s Bay, which suggests this was another publicly funded programme run by Maori for Maori and therefore had been necessitated by the Treaty of Waitangi.
- She says it is fair for the Government to cover the managed isolation costs for Kiwis “fleeing” New South Wales (did she use the word “fleeing”?) because they had travelled to Australia with a reasonable expectation they would be able to fly home. She also noted those stuck in the state would likely be under some financial pressure to cover their extra time in Australia.
But other Kiwis have to pay at least $3100 for a room in MIQ, unless they left the country before August last year and are planning to stay for longer than 180 days. And the Government warned that the trans-Tasman bubble would be “flyer beware” when it launched, although Ardern now insists this did not extend to charges for MIQ.
At Point of Order we do not put government spending on cancer treatments in the same category as spending on Mongrel Mob drug treatment programmes or on helping travellers who gambled on being able to come home from NSW.
Indeed, Health Minister Andrew Little today announced a new national cancer treatment service will rule out the need for patients to have to travel to Australia. Instead they can be treated in Auckland.
The new service will be at Auckland Hospital and will treat up to 40 people a year. It is expected to cost $1.9 million in the first year and $1.6 million a year after that.
Latest from the Beehive
Health
Increased support for midwives
New measures to help bolster the midwifery were announced today by Associate Minister of Health Dr Ayesha Verrall.
The DHB midwifery workforce has been shrinking, while demand for their services and expertise is increasing, Verrall said.
New graduate midwives, those coming back into the workforce, and other midwives who need some extra help, will have access to a coach – an experienced DHB midwife who can provide both clinical and wider support.
The clinical coaching programme was identified by the Midwifery Accord Group as an innovative solution to help stabilise the midwifery workforce.
Over the next three years, $5 million has been committed to support this initiative.
The funding will ensure at least one clinical coach will be available at each DHB. DHBs with multiple hospitals, higher birth rates, and/or tertiary levels of care, may receive additional coaching support.
Foreign affairs
Prime Minister’s Speech to NZIIA Annual Conference
The PM spoke e New Zealand Institute of International Affairson New Zealand’s future in the Indo-Pacific region.
Health
New national cancer treatment service opens
A new national cancer treatment service will enable patients who used to travel to Australia for treatment to be treated in Auckland.
Peptide Receptor Radionuclide Therapy, or PRRT, can help manage symptoms of metastatic neuroendocrine cancer and increase and improve life for people who have it.
The treatment involves attaching a radioactive medicine to a special protein and injecting it into the bloodstream, where it delivers a targeted high-dose of radiation to neuroendocrine cancers cells. Most patients have four doses, although some need only two.
The new service will be at Auckland Hospital and will treat up to 40 people a year. It is expected to cost $1.9 million in the first year and $1.6 million a year after that.
It is being jointly funded by district health boards and supported by the Cancer Control Agency, the Unicorn Foundation and the Ministry of Health.
The economy
Speech to the trans-Tasman Business Circle: The Road Ahead for the New Zealand Economy
Finance Minister Grant Robertson addressed the trans-Tasman Business Circle on the road ahead for the New Zealand economy.
Child welfare
Government commits to change for Well Child Tamariki Ora
The Government is promising significant change to a programme which supports the health, development and wellbeing of all children from birth until five years old.
The programme is Well Child Tamariki Ora.
Associate Health Minister Ayesha Verrall announced the findings of a review of the programme during a visit to Porirua’s Ora Toa Community Health Unit, which has been providing Well Child Tamariki Ora services for 21 years, and contributed to the review.
The need for a range of short-term improvements and longer-term changes were identified across six priority areas: models of care; funding and commissioning; governance; quality, monitoring and evaluation; information and technology; and workforce.
The Well Child Tamariki Ora Review Report is available from the Ministry of Health website: https://www.health.govt.nz/publication/well-child-tamariki-ora-review-report
Point of Order 