by frog
The Press carries a story about a not yet released report from ANZ National Bank that is highly critical of government spending in the public service. The Bank’s Chief Economist Cameron Bagrie says ANZ had done the research as a follow-on from work on productivity and regulation last year:
“because a lot of government spending is going into what I call non-productive, or back-office, functions as opposed to the front line.”
The bank workers’ union Finsec has an interesting take on the issue and is calling on ANZ National Bank to come clean on its political leanings:
ANZ National’s position is almost word for word what board member Dr Don Brash might have said in his previous occupation as leader of the National Party. It is ridiculous for the bank to say they are not being political…
ANZ bank chief economist Cameron Bagrie has previously said he wouldn’t mind seeing unemployment increase to help curb inflation. Have he and the bank now identified who they want unemployed – public servants?
If the Australian Bank is playing politics here in New Zealand that would explain the strange situation around the announcement and release of the report, which has been deferred until June:
A senior ANZ National Bank official said yesterday the report was likely to cause a “feeding frenzy” and a decision had been made to wait until after today’s Budget to release it in a bid to minimise the political fallout…
[Bagrie said] “We obviously don’t want to put that out before the Budget, because I just think that is unfair, and we don’t want to put it out straight after the Budget.
If the bank was concerned about a ‘feeding frenzy’ Budget Week is exactly when it would release the story so that it got less pick up. Holding it back suggests the bank does want a feeding frenzy about funding for public servants.
Bank economists get granted a lot of mana in our business media as independent economic commentators. But the reality is that their economic views are not so much independent as deeply political. Their comments probably need to be contextualised far better so that they are not presented as the only or even the prevailing economic view.
Published in Economy, Work, & Welfare | Media by frog on Thu, May 22nd, 2008
Tags: ANZ National Bank, Budget Week, Cameron Bagrie, Don Brash, Finsec, Frog, frogblog, green party, greens, new zealand, Public servants
on the trolls and those who are unable to keep on topic
You are entitled to shoot the messenger as it is a politically motivated press release.
But could you also address the message.
Under this Labout government we have seen a 25% increase in public servants (some on $200.000 a large number on $120.000 and most on the $70,000 mark) Which has been bleeding the productive sector dry.
How many non taxpayers can the economy carry?
What ratio of tax recipients to tax payers are we at?
Before you jump up and down and say that public servants pay taxes let me remind you they dont. That immigration official on $200.000 theoritically pays $80,000 (39%) in tax. But not really as the government only has to collect $120.000 to pay her. They dont collect the full $200.000 from the productive sector and then pay the $80.000 to themselves.
While we need some public servants the huge expansion in the service is out of proportion to the performance they are delivering.
Maybe that is an issue you’d care to address?
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If you want to know how much banks politic than perhaps you should watch these to documentaries.
http://video.google.com/videoplay?docid=-9050474362583451279
http://video.google.com/videoplay?docid=-515319560256183936
And then watch the presentation of Edward G. Griffin
http://video.google.com/videoplay?docid=-515319560256183936
Most of our tax dollars go towards paying these parasites off and not into doing good for the people.
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Hm-m-m. Rather than just look at numbers (or salaries) in the public service, has someone, can someone, research what the expanded P.S. does? And how do the numbers now, in 2008, comapre to 1998, 1988? Relevent to the population?
Is there a core number of P.S. required to manage a country?
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Good question Joy,
When we see a public service with more health administrators then hospital beds, it is a good question.
How many does New Zealand need?
Or is the public service now like the old railways. A place to park unemployable people.
And with the railway back into the public service fold, will those be “shunted” back into the railways?
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I would agree that the P.S. should not be expanded for anyone’s agrandisement or merely to employ people.
I shall assume that there is a core number and quality of PS employees in order for Govt services to be well researched, well implemented and to have a timely delivery.
Anecdotedly it hospitals do give me the impression that the ratio of true medical staff to paper managers/data entry etc may not be in the balance that I, as a patient, would like to see.
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My wife and I have been involved in projects in six ministries now, and can assure you that the level of productivity in the Public Service is in inverse propostion to the reproductive capability of South Island rabbits.
The most recent example is a piece of work for a ministry that they had budgetted four weeks for; it took three days to do! The reaction from the contracting manager was amazing! Whereas I would have looked at the work to make sure it was done to the expected level of detail and quality (it was,) their position was that something else would have to be found to be done as the budget had been allocated so needed to be spent!
Meetings to arrange meetings of mid-level managers. Instructions to cease providing improvement opportunities as they were net required. A direction to put “DRAFT” on every page of a report suggesting that productivity could be doubled with little effort and no cost so that it could be buried. Appointment of people with no qualifications (well, maybe school cert) to lead technical science departments. A constant concern to observe the CYA policy. An aversion to change. All seen in the last few years.
Finally, a response to sensible government initiative to consolidate identical work done by eight agencies into a single centre. (Paraphrased) Wow! That’s great! We should be able to get a basic plan of attack togther in two years and deliver a proposal back to cabinet in about five.
If 15,000 people, with an average cost to treasury of just $100,000 p.a. (that’s totalcost not salary) were stripped out of the public service, $1,500,000,000 p.a. would be made available to raise the standard of living and keep some of the better minds here that are leaving for those better standards in other English speaking nations. I’m sure we could come up with a few ideas on how it should be spent.
FInal comment. A department in a big ministry was asked to develop a strategy for a vitally important piece of New Zealand. Five people, all of them well above the average PS salary, spent eighteen months on the project. At the end of the work, they managed to deliver a ’strategy’ that had nothing in it that wasn’t already bedded into the system; caused no controversy at any level of impact, and was published in living colour after a major (translated = expensive) piece of design work by an advertising agency. None of the people who did that work are still at the Ministry, they have all moved on, to better paid positions, through responding to the never ending stream of advertising for Policy Analysts in the media.
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PS
Does someone reading here believe there is a cause and effect ration between the population size and the number of people employed by the state?
Perhaps in essential services, like medicine, law and order, etc., but the whole of the public service?!!??
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I think I despise bureaucrats more than bankers, then again, maybe not.
I have done 20+ years of battle with DOC on many issues and never cease to be amazed at their mind numbing inefficiency. I sometimes wonder if it’s deliberate.
And I pay them, they work for me!
Then they say they don’t have the budget for marine conservation!!
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As someone who used to work as a policy analyst for a government ministry, I can say that the lower level policy staff (advisers and senior advisers) are generally productive and hard working and deserve their salaries. The issue I had was the huge levels of beaurocracy at management level. Over bosses were checking on under bosses who were checking (and often spying!) on junior staff, and so many projects that were started by junior staff were canned when they progressed up the heirarchy. It was also impossible to speak to a minister directly if you were a junior, everything had to go up the line. So for example when the minister had a technical question on a topic that a colleague of mine was an expert in, she was not allowed to explain to the minister directly, but had to brief the CEO (not an expert), who then passed it on to the minister.
So, yes the public service does need pruning, but make sure you cut away the right dead wood (highly paid management) and leave the productive branches intact.
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Gerrit- I think it’s a bit misleading to say that there’s been an increase in public servants under Labour when National lowered them beforehand. Far better would be to try and come up with specific instances where we’re overemploying in the public sector. I think you’ll have great difficulty with that personally, unless you start dismissing social departments like Maori Affairs or Women’s Affairs as useless.
You’re basically parroting National Party talking points- have you considered that the figures you cite for the health service include many front-line staff as “administrators”, such as receptionists? I have no problem with arguing for efficiency, but I would not accept service cuts because of it, and I honestly don’t think inefficiency is that much of a political priority- if that’s all the opposition has to show after three terms of Labour government, I don’t think they really deserve a crack at the other side of the house, do you?
And this last paragraph is to both you and Kiore- mismanagement is definitely the biggest problem in the public sector, and I think in that sense it might have something to learn from National. But you can’t fix mismanagement with staff cuts, it requires replacing high-level staff and a change of culture within the management team in general. While there is certainly efficiency to be gained there, I find the idea that this efficiency should be returned as cash instead of being in the form of services to be a bit silly, given that money put into the public service has benefits that flow through into the whole economy in ways that are hard to do cost-benefit analyses of.
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Ari,
How many PS do you need then? That is the problem that I think Joy alluded to. When is enough enough?
Why do we have so many district health boads, each with their $50 million dollar computer system (at least that was the quote for the Hawkes Bay Distict Health Board)
Surely one comuter system that works for all DHB would be sufficient? Why reinvent the wheel?
Why do we have 6 Councils in the greater Auckland area PLUS an overarching Regional Council?
remember Cullen has put a 1/4 billion reduction in the tax over the next four years.
Somewhere, someone is going to have to tighten their belts, remembering that on top of that we have a billion dollars to find every year to meet our Kyoto commitments.
No wonder both Labour (who did not put this 1 billion Kyoto commitment figure in the budget!!) and National are backtracking on Kyoto.
The country simply cannot afford it. Unless you cancel a lot public spending.
Remember the Ruth Richardson budget that cut 1 billion of public expenditure?
Well you are going to have to do that year in year out to meet Kyoto.
If the National party want to parrot my line of thinking thats fine, I dont have a morgage on common sense.
Just tell me Ari, where the money for Kyoto is going to come from. And dont say the pollutors because they will simply add those costs onto their retail price (or move to another country not tied up with Kyoto).
So farmers for example will simply pass their cost onto you. Your litre of milk may cost you $10. That side of lamb $200.
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Should read “Cullen has put 1 billion dollars tax take reduction over four years in this years budget”
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Gerrit, dude.
Stop like, thinking like a total breadhead, man. Polluter pays, man! Those fat cats with their factories and cows. Those dudes who are, like, ruining the grass (inhales). They are going to pay more, and we’ll all be free to, like, express ourselves…..
(A few months later…)
Dude wants how much for a block of cheese!? Oh man. That totally bums me out, man….
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BP,
LOL, but oh so true.
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BP – Dude, what have you been smokin? The price of cheese has already sky-rocketed and we don’t have an ETS yet! Until we break our addiction to the black gold, the prices will just keep rising, regardless. The people of this planet are already bummin out over the inflation. Where have you been?
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Come on frog,
question time again,
Where will the annual billion dollars for the ETS come from?
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The 60s, man. The 60s…..
I hear hurricanes ablowing.
I know the end is coming soon.
I fear rivers over flowing.
I hear the voice of rage and ruin.
Dont go around tonight,
Well, its bound to take your life,
Theres a bad moon on the rise
Nothing really changes. Hippies have always seen bad dudes everywhere.
(this now includes cows)….
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Gerrit – the annual billion dollars is already being spent on increased health care, destroyed biodiversity and ruined waterways. These costs are already externalised by the polluters and borne by the taxpayer, the environment and our children. The money is already spent. We just want the people who make the mess to pay for it themselves, rather than making us pay for it. It’s just common sense, no?
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frog,
If the billion dollars is already being spent on icreased health care, etc.
Where will the extra billion dollars required for the ETS come from.
What you are suggesting is that the pollutors will pay. Yep they will but their cost will be passed on to their customers. You and I.
Your reply still doesnt answer the question. Who will front up with the billion dollars per annum?
Long term we may see a reduction in health care spending, etc. but for a foreseeable future we need the billion dollars for internal health care, etc. PLUS another billion for ETS.
The changeover is not instant so you have to say what public service currently paid for by taxation will you curtail?
Or who will you tax extra to pay for it seeing it is not in Cullens budget for New Zealand.
Taxing the polluters will see cost passed onto the vulnerable consumer. It is a real quandry that needs to be managed.
How would the Greens manage this if Labour was to seek a a partner to govern in November 2008. If the votes counted in their favour?
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Gerrit – a great deal of the money would come from energy efficiency efforts by the biggest polluters, who will suddenly have an incentive to actually invest in the 30% of ZERO cost energy efficiency measures that the KEMA report says are just lying around on the floor, but industry is not interested in doing. The rest will come from consumers – as you rightly point out, who will then be incentivised to spend less money on carbon saturated products. This will be difficult and it will take time, but your implied alternative is that we do absolutely nothing. Who will pick up the even more outrageous costs if we do nothing? The same people. The Stern Report showed us that it is far cheaper to act and pay now rather than do nothing and pay much more later.
You are pretending to be an advocate for the downtrodden, but your proposed action will only screw them further. It’s a lazy cop-out.
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Of course the public service is overstaffed. Labour has admitted that. That’s why they merged Transfund with the LTSA, and why they are merging Transit with LTNZ. But not to worry. All the people made redundant probably went to work for OnTrack, which of course isn’t overstaffed and doesn’t need to be part the NZ Transport Agency.
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