Politician keeps promise – markets fall

They suspected that they might be electing a radical, but to their great surprise, Britain’s Conservative party members found out on Friday that they had also elected a party leader who meant what she said.

British politics may take a little while to recover.

New finance chief Kwasi Kwarteng delivered a package outside the parameters of fiscal orthodoxy, headlined with big personal and corporate tax cuts and some scary debt projections.  Certainly the Treasury advice could be summarised as ‘you’re on your own, mate’.  But then smart ministers know that anyway.

NZ public service reform for the UK?

It’s not unusual for governments to decide the solution to their frustrations is to tweak the machinery of government.  Nor for senior public servants to channel those ambitions to safety.

But things look more serious in the UK.  A sequence of reports from high-powered ‘independent’ commissions and well-connected think tanks are floating proposals which bear more than a resemblance to the state sector reforms implemented in New Zealand at the end of last century.

For one of the key players, the seeds of change were planted back in 2010. Back then, Michael Gove (now the Minister for the Cabinet Office) was put in charge of education.  He coined the term ‘the Blob’ to describe the coalition of resistant civil servants and external ideologists who opposed his proposals to change the school system.  And helping him on the Blob job was Dominic Cummings – PM Boris Johnson’s erstwhile chief strategist.

State service heads face much the same challenge as journalists – getting through to Ardern’s Ministers is a struggle

Andrea Vance, writing at Stuff, has taken the Ardern government to task for its media “management,” how ministers evade questions, how they deflect interviews and questions all, of course, in the name of the PM’s much-vaunted transparency.

Well, it seems she has stumbled on to something bigger than her focus on journalists struggling to get information.  From our inquiries we have found that heads of departments, ministries and agencies are facing something of the same challenge.

Firstly, ministers are said to be keeping permanent heads at a distance. Some find it hard to secure scheduled appointments.

In the good old days, the permanent head of each department saw his or her minister before Monday Cabinet meetings – and frequently in between.

Now there is a layer of “advisers” between them.

The RBNZ’s staff numbers surge – but the governor warns he wants more (especially for supervision)

Staff expenses at the Reserve Bank  – which have increased by an average 4.4% a year since 2009/11 – surged by 14.8% in the 12 months to 2018/19.

Total staff numbers increased by an average 3.4 a year during those nine years  but shot up by 19  in 2018/19 from 255 to 274.

But wait.  We need more – or rather, the governor says he needs more.

The Taxpayers Union reckons we should ignore him.

According to the Dominion-Post, Adrian Orr this week told a parliamentary select committee the bank is anticipating “a much more significant increase” over its next five-year funding period.

“The begging letter is on its way to the Treasury for inspection and then we will be going into our funding agreement discussion with the Minister of Finance in mid-March,” he said.

Orr told Parliament’s Finance and Expenditure select committee he was not comfortable talking about the scale of the possible resourcing increase ahead of those discussions, but said it was “30 per cent perhaps”.

“The biggest percentage change in staff would be in supervision.”

How the management of monetary policy (and other RBNZ activities) are being steeped in Maori mythology

Acculturation – the cultural modification of an individual, group, or people by adapting to or borrowing traits from another culture or a merging of cultures – is increasingly evident in this country’s public agencies.

The Reserve Bank of New Zealand has not escaped the process.  In July 2018, soon after Adrian Orr became the governor, the Otago Daily Times reported the new  head of the country’s august central bank was planning to shift the mindset of the institution towards better embracing the rich cultural diversity of the country.

Since he had taken up the post (the ODT reported)

… phrases like tikanga Maori and te reo have begun to feature prominently on its priority list.

And:

Under his watch, the bank’s Statement of Intent, where it sets out its strategic objectives to the Government for the next four years, highlights its intent to embed  te reo and tikanga Maori into the culture of the bank.

Hurrah for NZ’s public service – it has taken the silver medal on global “effectiveness” index

New Zealand ranks second overall in the latest International Civil Service Effectiveness index.   Our public service scores top marks for integrity, capabilities and procurement.

The 2019 InCiSE Index covers 38 countries (seven more than in the previous version) and uses 46 more metrics and five more data sources than previously. It has also explored ways of including non-OECD countries and developing countries.

InCiSE attempts to define the core characteristics of an effective central government central service. Effectiveness is then assessed based on two interrelated components: Core functions – the key things a civil service does (“what”).

A Tale of Two Ports

Port of Tauranga has cracked the $100M net profit mark for the first time, underlining how efficient it has become as NZ’s largest port. The NZX-listed Mount Maunganui-based company also reported this week its long-term credit rating had been elevated from ‘BBB+’ to ‘A-‘ by credit rating agency Standard & Poors. The short-term rating was affirmed at ‘A-2’.

PoT’s market capitalisation hit $4.3bn in the wake of its latest result, a huge leap from the $78m at the time of its IPO in 1992. The company has provided a river of gold for the Bay of Plenty Regional Council, which retains 56% of the shares.

So why have other local bodies, which own ports, been so slow to follow the example of the BOP Council in partially privatising their port businesses and reaping the rewards?

Being advised to contact Fig might have a fruitful outcome but perhaps we have gone to the wrong translator

It looked – for a few moments – as if the government was again favouring something from The Bible when looking for Te Reo names for its agencies and programmes.

One thing they want to avoid, for reasons only they can explain, is to connect the name too directly with the actual work done.

In the good old days, a visitor to this country who saw a sign that said “Ministry of Foreign Affairs and Trade” could reasonably conclude this was the agency whose staff handled the country’s foreign affairs and trade activities.  Likewise, the prosaic but uncomplicated names of the Ministry of Education and the Ministry of Health effectively and unambiguously signal the nature of the work undertaken by those state agencies.

In short, these are user-friendly names.

But if you are told you might benefit from attending a state-funded Piki programme – what help or service should you expect?

Makhlouf gets credit for his promotion of well-being – but what has happened to Treasury’s well-being?

Ireland has appointed the head of New Zealand’s Treasury department, Gabriel Makhlouf, as the next governor of its central bank.  He succeeds Philip Lane, who is moving to Frankfurt to join the executive board of the European Central Bank as its chief economist.

Confirming Makhlouf’s appointment to the Central Bank of Ireland, Irish finance minister Paschal Donohoe said:

“Gabriel has demonstrated his broad and detailed knowledge of economics, financial markets, monetary policy and fiscal policy, and has the experience of leading a large and complex public service organisation of 10,000 people.”

Before heading New Zealand’s treasury, Makhlouf was chair of the OECD committee on fiscal affairs, the world’s leading tax rule-making body.

According to the Financial Times, this is a priority area for Ireland in light of moves to overhaul global corporate tax rules.

In this country, in its report on the appointment, Stuff said Makhlouf is credited with introducing well-being measures into government Budgets.

Heartwork and the game that is helping to inject compassion into Budget preparation

Oh dear, what a shame … the Point of Order team missed it.

So did Eric Crampton, chief economist at the New Zealand Initiative.

But Crampton did preview the occasion – he drew attention on April 9 to the invitation to pay a $35 registration fee which would help to promote a small business involving a former Treasury staffer by hosting a Heartwork event and encouraging folks to buy its products.

The promoters were  Fiona Ross, The Treasury Chief Operating Officer, David Dougherty, The Treasury Manager Strategy and Performance, and “24 curious and creative people at The Treasury” who have been “experimenting in the social lab” by “playing and rapidly prototyping with the Heartwork Wellbeing Card Game…” 

After Crampton blogged about Heartwork, a Newshub story prompted National leader Simon Bridges to criticise the card game as “bizarre and actually wrong”, while Jacinda Ardern hastened to explain that she and her ministers had nothing to do with it.

Regardless of this lack of prime ministerial approval, blogger Danyl McLaughlin did attend the session at Treasury and reported on it at The Spinoff.