Archive for the 'public services' Category

Key reneges on PSA promise

Published
by
Tane
on November 17, 2008
in national/act government, public services, spin and workers' rights
. 22 Comments

Well, just days after a high profile meeting with PSA head Brenda Pilott and a promise to engage with unions John Key has decided to exclude the PSA from his Task Force on the future of the public sector.

The National/ACT government will instead appoint private sector consultants and private sector chairs to review government spending and the future of PSA members’ jobs, with the results likely to recommend major cutbacks and privatisation as they did in the ’80s and ’90s.

The PSA’s Brenda Pilott is not impressed:

“We are disappointed that Mr Key has now announced that the private sector will be represented and will chair these Task Forces, reviewing government spending, but the voice of 57,000 public sector workers is at this point excluded.”

Brenda Pilott says she is writing to Mr Key stating that she expects him to follow through with the indication given that the PSA would be included in the review of government spending.

“Mr Key talks of running an inclusive government but his actions in this area do not match his words,” says Brenda Pilott.

Pilott is right to be annoyed. She and her union were used by John Key as a PR opportunity to present himself as inclusive, centrist and non-threatening to workers, then as soon as the media moved on they were dropped and shut out of the process.

This kind of cynical behaviour might work in opposition, but when you’re government it doesn’t pay to needlessly make enemies - they have a nasty habit of coming back to bite you later on.

Local Govt minister wants to privatise water

Published
by
Tane
on November 17, 2008
in national/act government and public services
. 90 Comments

As you’ll have read, John Key has made ACT leader Rodney Hide his Minister of Local Government. So, what’s ACT’s local government policy?

Commercial activities are best performed by the private sector because they have more incentive to innovate and deliver better services. Local government should progressively shed ownership of its commercial activities.

Local government should be confined to the core activities that produce general public benefits, such as regulation, flood control and roads.

Local government will be required to shed its commercial activity, thereby eliminating the need to separate regulatory and commercial functions between local and regional councils.

Roads and piped water will be supplied on a fully commercial basis.

Require councils to focus on their core functions.

Ensure there is much greater scrutiny of regulations that undermine property rights.

Lower the cost of complying with the Resource Management Act and other regulatory regimes.

Promote contracting out of many council services.

So, contracting out, privatisation of public assets and the commercialisation of water and roads. Is this the change people had in mind when they voted for John Key?

UPDATE: Herald journo Martin Johnston has done a good piece on ACT’s radical plans here.

PSA tackles the stats

Published
by
Dancer
on November 3, 2008
in election 2008 and public services
. 38 Comments

The PSA have put together some interesting numbers on the size of the public service. They appear to tell a different story to the one we’ve been hearing about from Mr Key who wants a” razor gang of cabinet ministers to trim state sector fat”. For example:

We’re on par with Australia:

  • Australian public service comprises 0.99 % of the population
  • New Zealand public service comprises 0.98, % of the population

Government spending as a proportion of GDP is down slightly:

  • 1999=32.4
  • 2008=31.8

The public service is mainly outside Wellington: 58.1% are outside Wellington with the fastest growing areas Otago, Northland, and Southland

These and other statistics (and some great graphs) are in an election special in the PSA’s election feature on their website or download the psreport.

Statistics are always open to interpretation but these provide some context for deciding whether we need a special Cabinet Expenditure Control Committee or not…

Trickle-down

Published
by
Steve Pierson
on October 12, 2008
in assets, bill english, economy, election 2008, families, kiwisaver, media, national, public services, slippery, spin, tax and workers' rights
. 10 Comments

A few thoughts from today’s Agenda:

Questioned about why National would introduce another tax rebate, having endlessly criticised Working for Families because of its complexity, English says ‘we do, in the long term, want a simpler tax system’. So, be on notice, Working for Families is under threat from National - they would ‘eventualy, but not yet’ replace these targeted tax rebates with tax cuts (for the wealthy, naturally)

English deseperately trying to defend trickle-down economics without naming it was a little sad. He must miss the 1990s, when he could just say what he believes.

He says National would stand behind the vulnerable. The most vulnerable workers (people on incomes from $14K to $24K, working families where the parents each earn less than $44K, and anyone on Kiwisaver) would be worse off under National. Meanwhile, the most wealthy New Zealanders would get higher tax cuts the higher their income. National would stand behind the vulnerable alright, as they pushed them over the cliff.

Rawdon, ‘the top 20 countries getting together and coming up with a unilateral solution’. Saying unilateral rather than universial or multilateral once sounds like a slip up. Doing it twice in a row suggests you don’t know what you are talking about.

I’ve read everything David Skilling’s New Zealand Institute has published. Universally, the work is poorly researched and provides threadbare arguments, usually lacking any empirical evidence, that lead to a radical, neo-liberal pro-rich ’solution’. Look at his ’solutions’ to the credit crisis - tax cuts for business, selling off public assets, tax cuts for rich expats coming back. Basically, tax cuts for the rich masked as an economic package. No evidence that these would do anything for growth and nothing for most Kiwis. But ‘radical economic package’ sounds impressive, eh?

Previewing the Prefu

Published
by
Steve Pierson
on October 5, 2008
in economy, election 2008, public services and tax
. 9 Comments

Tomorrow the government’s books will be opened up. It is not expected to be a pretty picture. Oil prices and the credit crunch have forced the economy into recession. The debt to GDP ratio will be higher than was modelled in the Budget for three reasons (at this point, I just want to remind our excitable righties that fiscal modelling is not carried out by Micheal Cullen but by Treasury officials):

1) GDP is lower than expected: the Budget expected the GDP to be $180 billion in the year to June. In fact, it was $179 billion. It may have shrunk by another billion since, whereas the model had it growing by a billion. Even a constant level of debt increases as a % of GDP when GDP shrinks.

2) Tax revenue will be lower than expected: a recession hits corporate tax revenue hard. Employment, while not down, has not grown as modelled, so income tax revenue will also be lower than expected. Lower than expected consumer spending means lower GST revenue. All of which means that even if government spending was at expected levels, more money would need to be borrowed to make up the difference.

3) Spending will be higher than expected: So far, the number of people on the unemployment benefit has not increased so benefit payments have stayed low. However, other government spending has been higher than expected - high oil prices have driven higher than expected inflation, increasing government costs. Add to that the sign-up rate for Kiwisaver has been much higher than modelled. Treasury thought there would be 270,000 members by July 1, today there are over 800,000 - each costs the Government $1000 on sign-up and around $40 a week more. That adds up to around a billion more spent than expected this year. More expenditure means more borrowing.

Add in losses from the Government’s financial assets (the Cullen Fund, the ACC Fund etc) and we are looking at net government debt worsening by several % of GDP more than expected. So, tough times. What should we do? Well, we shouldn’t cut government spending, that would just deepen the recession. Measured increases in government spending (as Australia is undertaking) can prime the economy’s pumps, getting us out of recession quicker. We certainly should not increase debt any more than necessary, especially while international credit markets are in such turmoil; if there was ever a time for borrowing for tax cuts, now is not it.

How the parties react to all this will be an important test of their readiness to govern. Will they react prudentially or will they carry on as if nothing has happened and attempt to win the election at any cost?

Academic, youse are paid too much

Published
by
Steve Pierson
on August 7, 2008
in articles, public services, wages and workers' rights
. 42 Comments

Professor John Gibson from Waikato University says public servants should be paid less because they get paid more than their private sector equivalents and they enjoy their work.

First, I would be highly suspicious the methodology of any study that claims to compare like with like between the public and private sector. How many police are employed in the private sector? How many legislators, councillors, diplomats, prison staff, policy staff, judges? We know that in sectors with true comparability - health and education, the better pay is in the private sector. Private sector lawyers are also better paid than their public sector counterparts.

Overall, the average public sector wage is higher than the average private sector wage. For a number of good reasons: a) the public sector doesn’t employ in low-paid professions - retail staff, wait staff, cleaners, factory process workers, agricultural workers - the higher average skill level of public sector jobs results in higher average pay. b) government workers are more heavily unionised. Stronger unions = higher pay rises. c) There is a public interest in public sector wages being decent because low wages encourage corruption.

Gibson makes an argument that, frankly, disgusts me: public sector employees enjoy their work more than their private sector counterparts so they should be paid less. Why not just give them really uncomfortable chairs or random electric shocks to take their enjoyment levels down instead?

And notice that Gibson has identified a wage gap between public and private sector and his suggested response is the one that would drive wages lower overall. If wages are lower in the private sector, isn’t that the problem? How are we going to become a higher wage economy if we are constantly forcing wages down?

I have one final question. Professor John Gibson is a public employee. How much is he paid, and does he enjoy his work? If so, should he give some of the money back?

PSA rips Bagrie report

Published
by
Tane
on July 18, 2008
in articles, business, public services and workers' rights
. 7 Comments

Good piece in the Herald yesterday (and the Dom Post the day before) from PSA national sec Richard Wagstaff critiquing ANZ National chief economist Cameron Bagrie’s woeful report on public sector ‘waste’.

Wagstaff takes aim at the underlying assumptions of the report about ‘productive’ versus ‘non-productive’ public sector spending, then proceeds to rip through some of the more glaring omissions and misleading examples in the report.

One of my favourite examples:

Then there’s the Department of Conservation. According to the report, it’s also “non-productive”.

But where would New Zealand’s tourism industry be if DoC staff weren’t protecting our natural and historic heritage? Of the 2.2 million overseas tourists who visited between March 2006 and March 2007, 668,400 - 30 per cent - visited a National Park maintained by DoC staff.

The West Coast’s five National Parks generate $220 million in tourism activity a year, creating jobs for 1800 “Coasters”. In the North Island, the Whakapapa and Turoa ski fields are also included in a National Park maintained by DoC. They generate more than $45 million a year and create more than 2100 jobs.

Yet ANZ says this is “non-productive”.

You can read the full article here.

tis the season

Published
by
Ralph Malcolm
on July 10, 2008
in john key and public services
. 14 Comments

I am beginning to think John Key’s attempt to turn statements that involve him into ‘personal attacks’ might be catching on. Check out this story, on the TVNZ website, but sourced to Newstalk ZB, that accuses Trevor Mallard of ‘lashing out’ at Cameron Bagrie over his loose with the truth report on public services. Now Trevor can be prone to be a bit of hyperbole from time to time, but since when did pointing out factual weaknesses in a report amount to ‘lashing out’?