Thursday, December 4, 2008

Outcomes are the Result we Want

One of my recent experiences caused me to realise that the New Zealand Public Service has everything backwards. It turns out that we serve them, rather than vice versa.

Take the example of an Early Childhood Centre. It is a community based centre, licensed by the Ministry of Education. The Education Review Office is about to do a review of the centre and sends out to the Licensee a schedule of what is to be covered in the review - pages of stuff. And what they are going to review is documentation and procedures that the centre has in place. The ERO does not seem to care about the outcomes. They seem to have a naive assumption that if their prescription is followed then the unstated outcomes will be achieved.

Surely the only way to measure the effectiveness of something like an Early Childhood Centre is to undertake some kind of longitudinal study on the children who pass through the Centre. Look at their skills and knowledge at the time they enrol, and compare that with when they start school. Of course there are lots of other influences on a child, such as family background, but if on average the children attending one Centre are better prepared for school than those going through another then something could be concluded about the effectiveness of a Centre.

While on the subject of children, surely parents have an unstated responsibility to prepare their children for adulthood, to be sociable and productive adult members of society. How parents get an infant from their initial state of helpless dependence to being an independent, responsible young adult is a program that parents have to customise to each child. Having three children, it is obvious that what works with one does not necessarily work with the other two, so parenting must be adaptable. (You can probably guess where I am going with this.)

Governments are again too prescriptive in the area of regulating parenting. Take one example - children are not able to be left at home alone under the age of 14 years. Firstly, for many circumstances this is impractical, especially in rural areas or in solo parent situations. Secondly, it does not take account of individuality. No one from [whatever agency would enforce that law] could have all the information available to them that I have in order to decide if I can leave my child(ren) at home alone. For some it might be that even at 14 it might be inappropriate for the eldest to be left responsible for a younger sibling, due to the younger one's behaviour or needs. In other instances a 12 year old may have the maturity to cope. [In the end a lot comes down to the skill and aptitude of the parents involved.]

Governments should not be running this stuff as tightly as they do. And the regulations that are put in place should hinge around achieving societal outcomes not the means of achieving them.

As similar sort of thing exists in the Health Sector and Local Government. There are so many bureaucrats managing the minutiae of regulations that they have lost sight of the "outcomes" they are supposed to be achieving. Health would be a good candidate to hand over to the private sector, but I fear that the mentality of the bureaucrats would be a hindrance. Those from the public sector whose responsibility it would be for setting standards and monitoring them have no idea how to set standards that are based on outcomes. They would likely want to pass on the box-ticking, paper shuffling, soul-destroying bureaucracy they have created.

We need new thinking. We need to break free from the bureaucratic shackles that dictate the "how" and "how not" and instead focus on outcomes. How we get to the outcome is not important.

I am not advocating that the end always justifies the means. We have laws and other societal regulations that ensure that unsavoury means are not used to achieve the desired ends. What has happened, as I have pointed out above, is that those laws governing the the means, have been exploded into petty regulations that are prescriptive and, in the end, counter productive.

Wednesday, November 26, 2008

Economic crisis - What crisis?

I can help thinking that there is much truth in the maxim that Governments rule by fear. In my lifetime we have had:
  • the Cold War
  • the Hole in the Ozone
  • Y2K
  • SARs and Bird Flu
  • Global Warming/Climate Change
In recent weeks there has been a huge emphasis given to the current "global economic crisis". It was extremely timely for the US Presidential Election and also for the New Zealand General Election. In both cases the candidates were able to transfix the populace with their proposals for how their administration would rescue us from impending and imminent doom. Other matters, such as social issues, morality or law and order, were either not addressed or were relegated to a very low priority.

As far as I can determine, there have been collapses of banks and lending institutions around the world due to them lending to people who acquire things that are not particularly good in terms of "security". The borrowers have defaulted on the loans, leaving the lender with a gap between what they themselves owe to their depositors and what they have as security (less their salaries, fringe benefits and bonuses). Easy credit has driven up the price of some more desired items e.g. houses; so that people have borrowed more than can be currently realised for that asset in a mortgagee sale - if a buyer can be found.

In short, a culture of spending what we don't have has lead to its natural consequences.

In the last few days we have the leaders of the APEC nations meeting in Lima, Peru. They have pledged to beat the economic crisis in 18 months. But their method seems to me a bit crazy. To me it sounds like what was said was: "Trust us. Don't lose your nerve. Keep spending." Talk of committing to Free Trade Agreements so that people can keep spending and help everyone trade their way out of this crisis does not sound like prudent management for a household - much worse for a nation.

It sounds like on the one hand we got into the crisis due to careless spending and the way out is to keep spending. As Barack Obama said, "it is not going to be easy for us to dig ourselves out of the hole we are in." (If that had have been Obama's predecessor the media would have leapt on it as a "Bushism"). Mr Obama, when you are in a hole, it only gets bigger if you keep on digging.

Because of the mistaken belief that the 1930's depression was ended by Keynesian economic policy of the "New Deal", which involved increases in Government spending, we are hearing a lot of talk about increasing or not curbing Government spending. This is nonsense. Governments either have to tax or borrow in order to spend. If they tax, then they will curb private expenditure. If they borrow then they end up constructing public works that people can ill-afford to use. (Given that most economies are in recession then the tax take is going to decline even if they increase the tax rates and Government expenditure only artificially grows the economy, imposing greater cost on the private sector.)

There is this "spend at all cost" (double-entendre intended) mentality. Buy a whole lot of stuff that you really don't need because the world needs to keep on selling stuff. But hey! Isn't it all this unnecessary stuff that got us here in the first place?

If some factory making big screen television sets closes because of the current economic crisis and all the workers end up out of a job, and a burden on the tax payer, is that such a tragedy? Yes. It is for the workers. But is the absence of the goods they produced going to make the world a worse place? Are the goods they produce a necessity?

If nothing else this economic crisis should help a new generation distinguish between necessities and luxuries. Unfortunately though much of the pain in these times is born by those who produce primary products. In the US in the '20s and '30s those most adversely affected were farmers and timber workers. Why? Those who took their produce, which was still in demand, were not prepared to concede their margin, so that the people who produced the raw materials could make a living.

My call is for a more pragmatic approach to this crisis. If luxury goods producers are suffering, that is of little import compared to those who, even before the current recession, were struggling with the basic necessities of life. Governments should "butt out" of economics and intervention, and get back to protecting the defenseless. They should revert to upholding a high moral standard and maintain law and order.

In my view Governments are too big a player in the economy. Governments can, and do, distort the economy to a disproportionate extent, either through taxation, spending or through legislation and regulation. The sub-Prime mortgage fiasco in the US is an example. It seems poetic justice that the good citizens of the US have voted in a Democrat President who will be faced with the consequences of the previous Democrat President's meddling in the economy.

In New Zealand we have had successive Governments being too involved in economics. Unfortunately the way politicians deal with economics is something like a game of "Whack a Mole". They club something they don't like here and something pops up over there, which they then try to smack. Over regulation has stifled growth, and expenditure by Governments in areas they really shouldn't be in has necessitated increased taxation which has similarly impeded growth.

Ideally Governments should be concerned with Defence, Law and Order, Health and Welfare and (possibly) education. All the petty regulations and laws that could easily be replaced by "It's illegal to be stupid" are costly and and frustrating. People need to take responsibility for their own lives, not cry out for the Government to intervene and regulate at every adverse turn.

I expect I am too optimistic to think we can completely dismantle the Welfare State and undo all the regulation and intervention, but stopping anymore occurring would be a good start.

Tuesday, November 18, 2008

Some Cautious Optimism

I must admit that the events of the last two weeks have given me cause to question my view of MMP. I would not go so far as to say it is an ideal form of Government.

In my view the National Party has done a very good job of putting together political alliances in order to form the next Government of New Zealand. What has impressed me has been that they have joined together with more parties than required to achieve a 51% majority in Parliament. Had they been pragmatic, they could have struck a deal with ACT or the Maori Party and set about governing. But instead they have taken an extra 6 seats by including United Future and both ACT and the Maori Party.

This creates a more representative Parliament, with the minor partners acting as tempering influences on each other. It could be seen that National could use the threat of "We've got the numbers with ACT to push through this piece of legislation so your votes don't matter" or it could be seen that they have taken on a more tricky position in having to work things through with more partners.

It is going to be interesting to watch this one play out.

I suppose what is most surprising is that National has gone down this track given the strength of support they received in the ballot box. There has not been such strong support for one party since the inception of MMP.

Monday, September 22, 2008

The Proportional Representation Fallacy

MMP is supposedly a proportional representation system of Government. Supposedly we elect a Government that is proportionally representative of the views in society. So explain to me why the Government is made up of Labour, the Progressives, the Greens, United Future and New Zealand First?

According to official election results the National Party received 39% of the vote. Note: I am not singling out the 2005 election for any partisan reasons, and the National Party did the same thing previously). Instead of a Government being formed in proportion to the wishes of the people, the party with the largest number of votes stitched together agreements with "minority" parties to get over a 50% threshold in order to govern. This effectively relegated the wishes of those who voted for ACT, the Maori Party and National to the opposition benches. Clearly the wishes of the people were not listened to.

This has resulted, as I have pointed out previously, in a situation where we have the minority parties setting an agenda out of proportion to the views they represent in society. We can have a party that represents the views of only 5% of the population, getting support for legislation, when a party that has 39% support does not get to put forward policies it had in its manifesto. This is the phenomenon of "the tail wagging the dog".

Hopefully this immoral and unrepresentative electoral system will be overturned. Given the level of disenchantment I hear from people I associate with I think a referendum would show people support ditching the system.

However, I suspect that if the final decision is left to the politicians then they are not going to back the majority view of the people, but will try to make the system more palatable. The corporations they work for (i.e. the political parties - they are just businesses in my view) are not going to want to lose their grip on power.

Here are some suggestions for how MMP could be made more palatable:
  1. Axe it (well as I said that is about as likely as hell freezing over)
  2. Abolish the Westminster Parliamentary System (chances about the same as MMP being abolished)
  3. Change the percentage requirement for a vote to pass in Parliament from 50% to 75%
If the threshold for a vote to pass in Parliament was increased from 50% to 75% then the major political parties would have to be more accommodating of each other (the idea of the Grand Coalition). Immediately following a general election those parties that represent the majority views of the people would have to work out a way to work together on issues, and establish a much more collaborative approach. The political minorities would be relegated to supporting or opposing legislation in proportion to their representation in society.

The Electoral Commission needs to look into this. If the threshold is raised to 75% then the matter of how an election is run, first past the post or some form of proportional representation, is largely irrelevant. 50% is too low a threshold for making decisions with regard to a country.

Friday, August 15, 2008

Paying and Paying Again

This just typifies the plight of this current generation of workers! When I heard it reported that Winston Peters had told Grey Power
"And you have a right to this because of your contribution to society.
Let’s face it, New Zealand was a better place when you were running it!"
I was horrified.

The current generation of Superannuitants had an extremely 'cushy' time of it when they were in the workforce, while they were raising their families and while they were buying their homes. Let's reflect on what they had:
  • 3% interest rate home loans under the State Advances,
  • free doctors visits and no prescription surcharges - I never once remember my mother paying for a visit to the Doctor or for the medicines prescribed,
  • free education for their children - my parents paid a pittance for my Primary and Secondary education. By the time I reached University user pays was just starting to "kick in" and I had to fund quite a lot of my Tertiary education,
  • Family Benefit of $6 per child per week, which could be capitalised to provide a deposit on a home.
I could go on! But my point is that with all those advantages, if the current generation of retirees did not make provision for their own retirement years then that is not my generation's problem.

My generation is now in a situation where we are having to:
  • pay higher interest rates on our mortgages, or any borrowings for that matter
  • pay a significantly higher cost for our offspring's education
  • make do without receiving assistance from Government similar to the Family Benefit
  • make our own provisions for retirement, and
  • pay much higher tax by way of Income Tax, GST and other levies and rates that are hidden in the costs of many goods and services that we consume (most often the essentials we consume).
In addition to paying for the rearing of the offspring that I have fathered responsibly, I am also paying for numerous children who have been irresponsibly conceived or have been born into families who abuse or mistreat them. And Winston Peters wants me to "feather bed" Grey Power as well.

Let's look for a moment at what our society is like. 50 years ago there were two murders a year in New Zealand. This year we would hear of two murders a week. That increase in offending is not due to population increase. Population has doubled in those 50 years but murders have increased by 4000%. We hear daily of family violence and many other crimes. Some would want us to believe that it is a matter of better reporting or a change in society's attitudes to this kind of offending that is bringing it to light.

I say that the reason is that the current generation of Superannuitants did a pretty bad job of raising their children! (This is a blog and that is a gross generalisation). In the 1950's and 1960's New Zealand enjoyed a great deal of prosperity. However, there was a loosening of morals and the adoption of more liberal views. Although they didn't grow their hair, smoke dope and 'drop acid' many Kiwi's attitudes were affected by the hippie culture and the philosophies that spawn such a sub-culture. Most people of that era did not openly or knowingly adopt those views but they were influenced by them.

As a result we have now in New Zealand a generation who were raised in such a liberal environment, who are now the parents of children who are running amok.

New Zealand may have been a better place when the current retirees were running it, but they squandered the opportunities. They started the break down of the family unit. They sowed the seeds of the society we now live in where there is such an upsurge in lawlessness and an attitude that you don't need to raise your own kids, (leave that to the state) and you don't need to work (draw a benefit).

My generation is paying for the short sightedness of my parent's generation. [However, thanks Mum and Dad for instilling in me the values that enable me to raise my family with 2 parents, and to have had education that enables me to earn enough to help support numerous beneficiaries (and a few extra MPs and bureaucrats) in New Zealand.]

During the 1950's and 1960's those people with the attitudes I am decrying here were in the minority. Only a small percentage of the population were responsible for the break down that we are seeing now. It only goes to show though in what a short span of time a few people can take a country in such a disastrous and negative direction.

Monday, May 19, 2008

A Referendum on MMP

National has picked up on the sentiment of the people. I have to agree that a referendum is at the very least the voters deserve. It was, in my view, promised by previous Governments and is now long overdue. However, the cynical side of me wonders whether there will be any point in participating.

Any debate on electoral reform in New Zealand centres around the basic assumption of the continuation of political parties. You have read my views, (if not, then read some of my back issues) on political parties. I cannot state it strongly enough - they are basically undemocratic.

Political reform that delivers platonic representation and accountability can only be achieved through the abolition of political parties.

For this debate to result in something that is going to result in democracy becoming a reality in New Zealand, it must not fall into the hands of the parties. Party people will only want to advocate a system that delivers them power, control and prestige. This debate must be had by those who are truly vested in the interests of New Zealand - individual New Zealanders.

No doubt there will be debate, maybe even Select Committees, on political reform in the years to come. Whatever happens a higher weighting must be given to the views of individual New Zealanders than to the collective views of political interest groups. (In fact the views of interest groups should be totally disregarded.)

Part of this debate should be on the merits of the Westminster Parliamentary system. In my view there are few to be seen. We need to devise and adopt a Parliamentary system that is more collaborative and less combative than this relic from our colonial heritage.

Don't let the Politicians and Political Parties hijack this opportunity to introduce true democracy.

Monday, May 12, 2008

The Burden on the Few

This is something of an addendum to my previous post.

Talk of Warrants of Fitness and Vehicle Registration get me a bit worked up. One episode in the last few years always springs to mind.


I was leaving the Post Shop after having paid my Vehicle Registration. As I walked between my car and the car parked behind it I glanced at the windscreen of the other car. Right there, I saw an expired Warrant of Fitness and Registration. And I am not talking a few days either. This vehicle had been sharing the road with us for months without a right to be there.

How many more are there out there? And if they can't be bothered paying for Registration or a safety check, do you suppose they hold any insurance, even third party insurance?

The burden of cost always falls on the honest I am afraid.

Political Distrust

If anyone out there is reading this, I assume you have been waiting with bated breathe for the next installment. I have been working hard to keep the tax coffers full and the country running. We must soon be approaching "tax free day". Although that day is only calculated on Income Tax. If you include GST, Excise duty, Local Authority Rates, Regional Council Rates, Driver's Licensing, Vehicle Registration, and various other surcharges then we are paying tax until well into August. And if you have a mortgage, look at it like this - you are borrowing money to pay tax. If you do eventually see a real tax cut, in the interests of the country, increase your mortgage payments not your expenditure.

But something has really touched a nerve with me recently. Politicians are very trusting of the electorate. Once every three years when we go to the ballot boxes. In between times we the voters are hapless morons who can't even tie our own shoe laces (hence we go bare footed - although that is possibly evidence of us making sacrifices to pay taxes). This arrogance and air of distrust comes through many of the political voices we hear day by day. And it filters down through the Public Service.

As it came due, I put my diesel powered vehicle into a Warrant of Fitness testing facility. Everything tested out okay, and off I drove, with an appropriately lighter wallet. A few weeks later I received a letter from Land Transport demanding I pay additional Road User Charges. Their computer system had picked up that the end odometer reading from the Warrant of Fitness was greater than the end reading for RUC distance paid (smart computer system). The letter was written in such terms that there was a presumption of guilt on my part. I checked out the paperwork from the WOF inspection and found there had been a transposition of a couple of digits. A quick check of the odometer on the vehicle and the RUC label revealed the mistake, and confirmed that I was legal. I wrote back to the obnoxious department (there was not an individual named on the letter to write back to - in fact there wasn't even an invitation to contest the demand) and explained the error and informed them that I would continue to do my bit in purchasing RUCs as they fall due.

I find this obnoxious in that there was an automatic presumption of guilt. Right from the outset there was a high-handed approach rather than a polite reminder or opportunity to explain what was quite possibly an oversight.

I have not received a reply to my politely worded letter.

More recently we have had similar experience.

We came back home from holiday to find a note from our house sitters for my wife to contact Dun and Bradstreet urgently. On the next available work day she did as requested. D&B were trying to recover money she owed to ACC. This was the first either of us knew there was anything owed. She requested evidence this phantom debt. Instead D&B sent us a letter stating they had enclosed some forms for us to complete and return by a specified date. At this point I got involved. The forms included were not the ones stated, and the date for response was a day before the letter was received. I don't want to prejudice the matter as it is still being finalised, but this is persecution.

ACC had picked up from our PAYE, and our secondary business tax returns some way in which it was deemed that my wife owed extra ACC levies. They then proceeded to send demands for this to an address we have not lived at for nearly 7 years. Why they couldn't get our current address from the IRD returns we have furnished each intervening year is beyond me (they need to talk the LTSA to find out who programmed their smart computer system). It took D&B to track us down.

What is so galling is this presumption of guilt again. A bill we have never seen, and which as it turns out we do not actually have to pay, has been sent to a debt collector. I was not very happy about the time it took to try to sort this out (assuming that it is now sorted out) and suggested that ACC should pay me for my time. It is after all an era of user pays.

When politicians claim a mandate for all manner of policies, because they got the most votes or negotiated the biggest coalition, we start to see this arrogance towards the populace. In my reckoning, this started in the mid-1980s, so it pre-dates MMP. The general populace seems to be here to serve the politicians, not the other way round. We get one chance every three years to be thought of by politicians as serving some purpose.