Pacific Islanders believe corruption is a big problem in both their governments and the business sector, says a new report.

About one third of 6000 interviewees across the region believe that most or all members of parliament and staff in heads of government’s offices are involved in corruption, says Transparency International’s Global Corruption Barometer – Pacific 2021.

The survey subjects across 10 countries and territories were asked what they thought about corruption, if they have directly experienced it, and whether things could change.

Transparency International says the result is the most extensive public opinion data on corruption ever gathered in the region.

Corruption was perceived to be worst in Solomon Islands (97 percent) and Papua New Guinea (96 percent), followed closely by the Federated States of Micronesia (80 percent). It is also bad in Vanuatu (73 percent), Fiji (68 percent) and Tonga (62 percent).

Despite more than half of respondents reporting a “fair amount” or a “great deal” of trust in their government to do a good job and treat people fairly, 61 percent believe corruption is a significant problem in their government and 56 percent think it is getting worse.

Impunity also appears to be a problem, with less than a fifth of respondents (18 percent) believing that corrupt officials frequently face appropriate consequences for their actions.

Added to this, only 14 percent believe their government regularly considers them when making decisions.

Bribery common
About one in three paid a bribe

“One of the most significant results was how often ordinary people in the Pacific directly encounter corruption in their daily lives,” says the report.

“Thirty-two percent of interviewees recently paid a bribe to receive public services – a higher rate than any other region surveyed by Transparency International.”

However, rates differ widely by country.

The most common reason given across the region for bribery is to receive a quicker or better public service.

Bribery appears to be a problem across a range of government services, from applying for official government documents to dealing with the police.

Only 13 per cent of those who paid a bribe for a public service reported it. This rises to around 30 percent in Fiji and Kiribati.

‘Sextortion’ also a problem
“Even more worrying is that 38 percent of respondents say they or someone they know have personally experienced ‘sextortion’, where an official requests sexual acts in exchange for an essential government service,” says the report.

About a quarter of respondents have been offered a bribe for their votes. This has serious consequences for the integrity of national and local elections.

In addition, 15 percent of people have received threats of retaliation if they do not vote in a specific way.

It is not only their governments which Pacific Islanders are concerned about. A majority of people interviewed feel that corruption is a big problem in business, too.

“A corruption ‘hotspot’ appears to be government contracts, which more than two thirds of respondents believe businesses secure through bribes and connections,” the report says.

“Almost half of the people we surveyed think there is little control over companies [which] extract natural resources, which is of particular concern given that this is one of the largest industries in the region.”

The good news, says Transparency International, is that “more than 70 percent of respondents say that ordinary people can help to fight corruption”.

“More than 60 percent also think their government is doing a good job at combating corruption”

Article by AsiaPacificReport.nz

Academics are increasingly expected to share their research widely beyond academia. However, our recent study of academics in Australia and Japan suggests Australian universities are still very much focused on supporting the production of scholarly outputs.

They offer relatively limited support for researchers’ efforts to engage with the many non-academics who can benefit from our research.

One reason engagement is expected is that government, industry and philanthropic sources fund research.

And when academics share their research with the public, industry and policymakers, this engagement is good for the university’s reputation. It can also lead to other benefits such as research funding.

But the work involved in sharing our ideas beyond academia can be diverse and substantial. For example, when we write for The Conversation, it takes time to find credible sources, adopt an appropriate tone, communicate often complex ideas simply and clearly, and respond to editor feedback.

We also need to be able to speak to the media about our findings, and respond to public comments when the piece comes out.

Unis don’t allow for the time it takes
However, as one respondent said in explaining why they were not sharing research with end users beyond academia:

It’s not recognised by uni. So, when it is not recognised, it means that I don’t have any workload for that, and obviously I’m work-loaded for other stuff, and that means that I don’t actually have enough time to do this.

Sharing our findings beyond academia isn’t typically seen as part of our academic workload. This is problematic for academics who are already struggling to find time to do all the things their complex workload requires of them.

In our research, time and workload constraints were the most often-cited barriers to sharing research beyond academia. One respondent said they saw lots of opportunities to build partnerships with practitioners in their field, but added:

[I] just cannot do that, because I’m doing other things that, in my work, are a priority.

When we spend our time sharing our research with academic readers through journal articles, conference papers and academic books, our employers clearly value and expect these scholarly publications.

These works, and how the scholarly community receives them, have more weight in evaluation of our performance. Last year an Australian academic nearly lost her job for failing to meet a target for scholarly publications.

Our research found Japan-based academics feel a greater weight of expectations than their Australian counterparts to engage with diverse audiences beyond academia.

Universities clearly expect this engagement. Yet they often don’t back it up with support such as workload recognition, resourcing and training.

Universities need to offer better support if they wish to increase academics’ engagement with diverse audiences. They should also consider both the benefits and risks of this engagement.

Academics see the benefits of sharing research
The academics we spoke with valued the benefits of engaging with diverse audiences. They were pleased to see others putting their research to use. Sharing research often helped to secure funding.

They also saw engagement as an opportunity to learn from end users. This helped ensure their research was responding to real-world needs.

Even very early in their careers, many researchers look to engage with audiences beyond academia. In previous research, we found doctoral candidates may opt for a thesis by publication rather than a traditional thesis approach due to their desire to share findings.

What other problems do researchers face?
The early-career researchers we interviewed noted other barriers and risks in sharing their work with diverse audiences. Universities often did not help with these issues.

They described communication skill gaps when seeking to tailor research content for diverse audiences. For example, the way research is communicated to industry experts needs to be different to how it is shared with governments or the general public.

Researchers may need to learn to communicate their ideas in many different forms. They may have to be skilled in producing industry reports, doing television or radio interviews or presenting their findings in professional forums.

Some encountered frustrations when sharing research via the bureaucratic processes of government. For example, a respondent explained:

There’s still that much back and forth because there’s three or four different government departments that are involved in the process and it goes to different people. Some people don’t want it to be changed because they’re vested in the old way of doing things, and then they’ve got to bring ministers up to speed, and then all of a sudden you’re got a new state government that comes in, so that all changes.

Many felt unprepared to deal with the media.

One respondent described being cautious about overstating the impact of their research. In their field, they saw messages claiming: “This is the be all and end all. This will cure cancer.” They were “wary of accidentally going down that path and making a claim bigger than is true”.

Respondents also described risks in sharing controversial and sensitive research beyond academia.

What can universities do?
For respondents in both Australia and Japan, demanding and diverse workloads crowded out opportunities to share findings. Universities cannot just expect engagement responsibilities to be absorbed into an already swollen workload.

If universities are serious about supporting the sharing of research beyond academia, they need to recognise these contributions in meaningful ways. For example, Australian academics usually must meet teaching, research and service requirements in their workloads.

If sharing research with audiences beyond academia were counted toward service, academics could have this work properly taken into account in performance management and when seeking promotion.

Universities can do better at supporting academics to share their research with the public, industry and government. Improving access to training and mentoring to communicate research findings both in academia and beyond would be an important step forward.

By Dr Margaret Kristin Merga, senior lecturer in education, Edith Cowan University and Dr Shannon Mason, assistant professor in education, Nagasaki University. This article is republished from The Conversation under a Creative Commons licence. Read the original article.

Article by AsiaPacificReport.nz

Budget-related Economic Chatter

Last week in New Zealand was Budget week, and the chatter about the burden of government debt reached a crescendo. I will highlight here comments made, on Monday 11 May, by four economists with substantial media profiles, from Radio New Zealand’s Nine to Noon (hosted by Kathryn Ryan), and TVNZ’s Q+A (hosted by Jack Tame).

These economists – Brad Olsen (Infometrics), Sharon Zollner (ANZ), Shamubeel Equab – (all under 40 years old, as I understand) – and Cameron Bagrie (I think in his 40s). These are all highly capable professionals, with plenty of great insights to offer the New Zealand public.

The problem comes in two ways. Firstly, the lines of questioning such economists face reflect sets of unexamined assumptions. Secondly, most of our economists come from the same ‘liberal bourgeois’ mindplace as the journalists they engage with, and therefore are susceptible to normative assumptions infiltrating their analyses.

(Note here that use of the word ‘bourgeois’ is often associated with Marxist writing. I use the word here, not out of any Marxian sympathies, but because it is the best word to describe the mindframe that governs so much of our public discourse; and it is the mindframe that prevents so many people from engaging with even simple ideas that to not fit the liberal bourgeois sets of assumptions.)

The central issue here is that of government debt, and its presumed link to intergenerational inequity. The sense is that, when governments incur debt, they are grabbing ‘money’ (understood as a synonym of ‘wealth’) from the future, to satisfy the requirements of the present.

Some quotes

“Thursday’s Budget is set to reveal a wall of debt that will see debt-to-GDP soar. … Just how much debt can the country afford to take on?” (Kathryn Ryan)

Note the presumptive use of hyperbole [“wall” and “soar”], and the assumption that the debt of the government is the debt of “the country”. This latter characterisation of public debt leads to the ludicrous idea that creditor countries such as the Netherlands and Germany are in fact substantial debtor countries. Germany has a public debt to GDP ratio of 60%, and the Netherlands has a ratio of 49%. Indeed, under this characterisation, every ‘country’ in the world has an alleged debt; Yet, by definition, the world as a whole must have a debt of zero.

“We know what’s happening, spending and debt [are] rising….” (Kathryn Ryan)

Note that ‘spending’ is presented as a negative, a bad thing that raises debt. This idea about spending is pure mercantilism, noting that ‘mercantilism’ is to economics what ‘alchemy’ is to chemistry. The supposition is that the economic purpose of life is to ‘make money’, and that spending undermines this purpose (as in ‘the more money we spend now, the more money we must make in the future, to restore the coffers’). In particular, this mercantilist narrative sees exports as good (‘making money for a nation’) and spending on imports as bad (‘losing money as a nation’). [In fact imports are an economic benefit to a nation, exports are a cost – what must be given up – and spending is the market force without which there could be no market economy.]

“… the third rail of superannuation, will it come on the table again? …” (Kathryn Ryan)

“… I think there are a few holy cows, sacred cows that might be getting a little worried; superannuation is a biggie, the fact that it’s just universal, not means-tested, and kicks in at age 65 …” (Sharon Zollner)

Actually, the most sacred of sacred cows is the ‘financial responsibility’ rule that dictates government debt should be less than 50% of GDP, and preferably at around 20% of GDP.

The general tenor of Zollner’s comment is that taxes will have to be higher than they would otherwise be, and future benefits will have to be cut, in order to restore the government debt ratio to 20% of GDP.

Forcing older people to delay retirement at a time of potentially high unemployment makes no sense whatsoever. Retirement of workers today – and funding that retirement – is part of the solution, not part of the problem. The worst possible form of intergenerational inequity being contemplated this century is the raising of the age of qualification for New Zealand Superannuation; ironically it is the young people themselves who are most strongly promoting that policy, and the oldies who would be unaffected who are most strongly defending the rights of future generations to be able to retire and enjoy some life free from the dictates of market forces.

“… borrowed money needs to be paid back sometime, and that goes back to those issues of intergenerational fairness that you touched on … we have limited fiscal resources … it’s very important given the debt we are going to leave the younger generations with that we invest in projects that increase the productive capacity of the economy so that these things will in time pay for themselves …”
(Sharon Zollner)

“… the key thing for me is who’s going to be left with this debt; I’m a young person … this is going to fall on young people if we don’t have a plan to pay it back … the people 30 years down the track, if we don’t have a plan are going to be saddled with this higher debt, so we have to have some idea what the timeframe is, and if the government is willing to take on some of these hard decisions, or if it’s going to pass the buck down to the further generations; not only to pay it back but to make those tough choices as well … (Brad Olsen)

“… look, we’ve had many decades of not dealing with the hard issues when it comes to the fiscal situation, whether it’s around aging or the superannuation questions … we have to think about, collectively, what’s the fairest way of paying [the debt] back …” (Shamubeel Eaqub)

In the abstract we may have ‘limited resources’, but the biggest present problem we are hearing about is excess labour (indeed much of the RNZ interview was about unemployment), an abundance rather than a scarcity of resources. The narrative suggests that, due to a scarcity of resources today we must conjure up resources from the future, and that these teleported resources will have to be extinguished (paid back) in the future. The narrative is that a conjuring of resources today must be accompanied by a deconjuring of these resources tomorrow.

The amount of gold (what most of us still tend to think of as real money) that is sitting in either goldmines or bank vaults will not make any difference to what is affordable or what is not affordable in the future. Money is not a limited resource, it’s a social technology.

The real issue is about how both present and future generations can have higher living standards, noting that living standards have taken a setback in 2020 due to the pandemic. Tricks around the conjuring of money today – pretending that newly created money comes from the future (rather than the present balance sheets of our central banks) – and the timing of when that money should be deconjured are in no way helpful. Failure to do the best we can today for the people alive in the world today will make things worse for future populations, not better.

“How bad are the books likely to be? (Jack Tame)

“In a word, terrible. … [we can expect fiscal deficits larger than] what I have seen in my working lifetime … ” (Cameron Bagrie)

“How are we going to pay for this? (Jack Tame)

“That’s the million dollar question on the other side [of the balance sheet]. … Borrowing today we are putting a tax or a liability on the next generation. The options are asset sales … spending restraint.… Or tax increases; look, at some stage I think that is going to be inevitable. I think we are going to need to make some pretty tough decisions in regard to those sacred cows we don’t want to talk about, such as the likes of raising the retirement age; well sorry, that one needs to get done. But the big one is, just make the economy grow faster. If the economy is doing well we are paying more tax … but its easier said than done to get a whole lot of magical growth out of this on the other side.” (Cameron Bagrie)

If governments do not borrow now – and borrow big – then interest rates in all the main national economies might have to be substantially negative in order to get desired saving and desired borrowing into balance. The biggest question for now is what would happen to the global market economy if governments fail to act as ‘borrowers of last resort’.

Bagrie is firmly wearing his ‘mercantilist hat’ when he talks about paying back the debt, and flogging our future 60-somethings as a way to help do this. But he wears his ‘economist hat’ when he says that economic growth is the best way (indeed the historical way) of achieving lower debt to GDP percentages. One real problem that economists who think inside the box face is that economic growth, as box-dwelling economists understand it, may itself be a part of the problem that future generations will need to untangle humanity from.

(The actual solution here is to expand the ‘relaxation’ ring of the economic pie chart; and to shrink the divided pie. This will require higher taxes and higher universal benefits; not to burden the rich or anyone else, but to ensure that non-labour income is distributed less inequitably. Twentieth-century solutions to inequality that focus on ‘jobs, jobs, jobs’ not only will not stem rising inequality; logically labour income cannot provide a solution when it represents a falling share of total income.)

How did the New Zealand government ‘repay’ its debt after the GFC?
Did the Australian government repay its debt? The UK?

New Zealand did not raise taxes to repay the post-GFC (global financial crisis) government debt. Nevertheless, that debt did fall back to under 20% of GDP. (See Chart Analysis – National Income, Spending and Debt.) The debt fell back in large part because of economic growth; one feature of that growth in New Zealand was the government running Budget surpluses from 2015, shown in red in the third chart. By definition, Budget surpluses means the repaying of net debt on the government’s balance sheet.

There was no policy in New Zealand to repay debt. No new taxes were used to repay that debt. No benefit cuts were introduced to repay that debt. Rather, the private sector in New Zealand became confident to run financial deficits; these private sector deficits are the main drivers of economic growth, and of rising tax revenues in entrepreneurial capitalist economies.

Back in 2009 there was much angst about the prospect of a decade of deficits’. We were worried then about how we would ever pay it all back. Not only was it so easy to pay back that we didn’t notice we were doing so, but the amount of new government debt incurred was less than we thought. The media narrative at the time was that the debt would be huge.

Australia, which did not experience a recession in 2009, did however experience a decade of government deficits. It had similar economic growth to New Zealand, powered also in large part by private sector deficits. But the Australian government did not prioritise the doctrinal sacred cow of ‘fiscal responsibility’. (Australia had other priorities, like funding cancer treatments, and tax cuts.) It did not pay back the government debt it incurred over the last decade, to the point that government debt in Australia reached 41.5% of GDP in 2018. Despite its failure to pay back the debt, compared with almost all other advanced capitalist countries, the Australian government serves an example of fiscal rectitude.

In 2010, the United Kingdom tried to implement an austerity policy – called fiscal consolidation – to repay its GFC-incurred government debt. It tried to do this before the private sector was ready to run financial surpluses. Thus, the Cameron government snatched fiscal defeat from the jaws of victory. Only the 2012 Olympic Games prevented the United Kingdom from moving into a post-recession recession. The United Kingdom experience is shown in the fourth chart of Chart Analysis – National Income, Spending and Debt. The result of the United Kingdom trying to repay its government debt was a government debt to GDP percentage of 83% in 2017, up from 34% before the GFC. In the UK the government tried to reduce its deficit at the same time that the private sector was trying to repay its debt. The result was that economic growth was suppressed, and government deficits remained at over 5% of GDP until 2015.

The European Union and the rest of the World, in the long run.

The European Union had the same idea as the United Kingdom. But, in the Eurozone, the private sector showed no interest in running deficits. Thus, government deficits accommodated private surpluses. However, by Eurozone edict, governments were determined to get their deficits down. The Eurozone succeeded by running a mercantilist economy, using low interest rates and exchange rates so that the Eurozone could run large foreign sector deficits (otherwise known as current account surpluses). The Eurozone wanted to make money by exporting much more than it imported. The Eurozone sees itself as an export economy.

Government debt levels remain high in the Eurozone; for example 60% of GDP in Germany. The fifth chart of Chart Analysis – National Income, Spending and Debt reveals the Eurozone’s long run strategy. On government debt, the plan is to run balanced budgets; and I expect that the European Commission will try to revert to that plan as soon as possible, following Europe’s severe Covid19 emergency. They do not plan to ‘pay back’ the government debt; rather their plan is to let the debt percentage fall as a result of export-led GDP growth.

The guts of the Eurozone strategy, shown by the Eurozone chart, is to have annual private sector surpluses at about 4% of GDP (in blue), matched by current account surpluses (foreign sector deficits, in green). And to do this into eternity.

What it effectively means is that, over time, the Eurozone hopes to give away 4% of its GDP every year. This is because, each year, countries outside of the Eurozone will buy 4% of the Eurozone’s output on tick, and will never repay that debt. If the world economy grows each year, these countries will have a stable debt percentage of their GDPs. These countries will never need to repay their debts to their Eurozone creditors. Further, Eurozone investors and exporters will continue to knock on the doors of these countries, asking them to keep importing goods and services from Europe, without asking for payment for those imports. Because Europe wants to perpetually export more than it imports, it therefore wants the rest of the world to import more than it exports, into perpetuity.

Giving away 4% of its GDP seems a strange wish for Europe to have. But it’s a reflection of the same sorts of mercantilist thinking that New Zealand’s liberal bourgeois journalists and economists indulge in when they claim that future generations of New Zealanders will have to pay back, as a burden, the money that we today appear to be conjuring from their future.

Income in an Economy

The chart above shows how income is distributed in an economy. It shows three major sectors: Government, Business and Households. Households are the principal sector; governments and businesses serve households, and are accountable to households. The chart is a pie chart, representing the economic pie. (For now, ignore the outer ring of the pie; the pie is the part divided into sectors.)

In this stylised example of a closed economy (ie no foreign sector), government receives a portion of national income (which is practically the same as gross domestic product). Part of the government income share goes to infrastructure, part goes to collective services like healthcare and education, and part goes on alms and other welfare payments. If the government sector – which includes local governments – saves part of its income, then it runs a surplus. (Repaying debt is a form of saving.)

The business sector both retains income and distributes income to households. The part that it retains – in blue – can be either invested on capital goods and services (eg buildings, machinery, staff training) or saved. If the sector as a whole saves part of its retained income, then the business sector runs a surplus. (Otherwise it runs a deficit, which is simply a negative surplus.)

The same applies to the household sector, represented here by six families: Waititi, Cooper, Patel, Duff, Tan and ‘destitute’. If the household sector saves more than it spends, then it runs a surplus.

By definition, the sum of the sectors’ surpluses adds to zero. So, if any sector is running a surplus then at least one other sector must be running a deficit.

The incomes shown represent entitlements to shares of the goods and services that contribute to the pie. For example, if the Cooper family run a business that makes barrels, then the business sector (or any other sector) may use part of their entitlement by purchasing those barrels. The profits from this cooperage business represent both income to the Cooper business and income to the Cooper household, enabling the Coopers to buy other stuff.

Surpluses and Deficits

If most households save part of their incomes, then the household sector most likely runs a surplus. (In most countries the household sector runs a surplus most of the time.) We generally expect the business sector to run a deficit about equal to the household surplus. That leaves the government sector with a balanced budget. However, if the business sector does not run a large enough deficit, then the government sector must run a deficit too. If, under these circumstances the government sector resists running a deficit, then not all the goods and services in the pie will be purchased, and the whole economy will shrink next year. (Imagine a missing slice from next year’s pie; that slice is called unemployment, or, strictly, ‘involuntary unemployment’.)

In this chart, debt is easily understood. Most likely the Waititi family does not wish to spend its full income entitlement; and maybe this year the Duff family wants to spend more than its income entitlement. So the Waititis can – directly or indirectly – transfer some of their present entitlement to the Duffs. The usual arrangement will be that the Duffs agree to transfer  – directly or indirectly – a slightly greater amount from a future year’s pie to the Waititis.

The Waititis run a surplus this year, and the Duffs run a deficit. The Waititis contract to run a deficit in the future, so that the Duffs can run a surplus in the future. That is what a debt contract is; a commitment on the part of a creditor who runs a present surplus to run a future deficit, a commitment to be repaid. (The Waititis can defer this future obligation if sufficient new debtors can be found, in the future.)

Economic Growth

If next year’s income pie is bigger than this year’s pie (ie it contains more goods and services), we call that economic growth.

Inflation

The market may put a dollar value on this year’s income pie. If we produce essentially the same pie next year, but the market places a higher dollar value on next year’s version, then the economy has experienced inflation.

Relaxation

The ‘relaxation’ ring around the pie represents the extent that our economy is not ‘maxed out’; it’s the reserve capacity of the economy. It represents the ‘life’ part of a society’s work-life balance. (Economists call this ‘voluntary unemployment’; many do not realise that voluntary unemployment is a vital part of our wellbeing.) Our economic happiness is measured by the enjoyment that we get from consuming the goods and services that we buy, plus the opportunity to chill out and enjoy what we have.

We could increase our living standards by increasing the size of the relaxation outer ring, while keeping the economic pie the same size. Or, we could increase the size of the pie while keeping the size of the outer ring unchanged. While both possibilities reflect an increase in both living standards (aka economic happiness) and the productive capacity of the economy, only the second of these options would be measured as economic growth. Thus many economists have a growth bias in favour of that second option.

There are other options that represent increased economic happiness. The ‘relaxation’ option that needs to be mentioned here is to have a smaller income pie, and a bigger outer ring. This is the option that, coming out of the Covid19 pandemic, makes most sense. We will want to spend less – to buy fewer goods and services – while retaining a highly productive market-based economy. The solution to the Covid19 economic crisis is a structural readjustment to our work-life balance, maintaining economic capacity while spending and working less.

The Pie Chart representation has a Weakness

The sixth household – ‘destitute’ – does not appear on the pie chart, but does appear in the chart’s legend; the ‘legend’ is the table of labels to the right of the chart.

‘Destitute’ is statistically invisible, unless made visible by including it in the table. ‘Destitute’ has no income, no work-life balance. In this situation, the destitute household has little choice but to try to run a deficit, but will struggle to find a creditor. Failing that, destitute can only survive by alms, known by economists as income transfers.

Alms are good, but economic rights are better. Surely ‘destitute’ has some economic rights; rights that grant it at least some income from the pie? Yes, but only if society is grown-up enough to acknowledge and properly confer such rights. Otherwise ‘destitute’ remains visible only to those who will see.

Fact Checking

On Mondays – or Tuesdays after public holidays – National Radio’s Kathryn Ryan runs a session called ‘Political Commentators’. On 28 April, from the right was regular commentator Matthew Hooton. From the left was Neal Jones who is listed as: “Chief of Staff to Labour Leader Jacinda Ardern, and prior to that was Chief of Staff to Andrew Little”.

It was good to hear Hooton now becoming something of an advocate for a Universal Basic Income (UBI), though (given past comments) I am not clear yet that he understands it fully.

It was concerning, however, to hear Jones – a man close to Prime Minister Jacinda Ardern – repeating falsehoods about Universal Basic Income. Jones said that a key problem with UBI is that it would be paid to New Zealand’s richest man, Graeme Hart. That comment reflects an attitude that is dismissive of universalism. Universalism is the basic principle that underpins democracy; and, more generally, underpins ‘horizontal equity’, the idea that we are all equal in our economic and other civil rights.

Perhaps even more importunately, Jones’ comment on Tuesday was false.

It was me who in 1991 first coined the term ‘Universal Basic Income’; my aim was to connect the established concept of ‘Basic Income’ (‘Citizens Income’ in the United Kingdom) with insights gleaned from New Zealand’s tradition of universal income support, as established in the 1938 Social Security reforms and as reaffirmed in the 1972 Royal Commission on Social Security.

The mechanism I envisaged in 1991 is: “a universal tax credit available to every adult – the universal basic income (UBI) – and a moderately high flat tax rate”.

(Refer to my ‘Briefing Paper’ From Universal Basic Income to Public Equity Dividends (2018) which in turn links to a report that links to, among other papers, my original 1991 University of Auckland Policy Discussion Paper. To the best of my knowledge, this was the first ever published use of the name ‘Universal Basic Income’. The name started to be used internationally after I presented a paper at the Basic Income European Network conference in Vienna in 1996.)

Since the 1990s, the concept of Universal Basic Income has become poorly defined, and tends to be seen, simplistically, as an unfunded handout, a kind of regularly paid ‘helicopter money’. In that sense, it is true that some proposals that use the name ‘Universal Basic Income’ would raise Graeme Hart’s income. But not all versions of UBI. In those versions that are truest to the underlying concept – Graeme Hart’s income would be unaffected.

So, once again, for the remainder of this essay, I am going to avoid the term ‘Universal Basic Income’. The term I will use here is ‘Universal Income Flat Tax’ (UIFT, if you will). This is a mechanism made up from a universal income and a single (flat) rate of income tax. Thus, the universal income is funded by the removal of the lower marginal tax rates. In the New Zealand case, that means the universal income replaces the 10.5%, 17.5% and 30% marginal tax concessions. With a single tax rate of 33% and a universal income of $175 per week, Graeme Hart would be completely unaffected, at least in the implementation phase. This represents a reconceptualisation of income tax rather than a redistribution of income.

The Mechanism at Work

Rather than labour the point about how we introduce the UIFT mechanism, it’s good to get the vision of the mechanism in action. It is a mechanism that addresses the issues of stability, precarity, equity, and sustainability. UIFT is not a sufficient panacea to cure all our economic ailments, just as the introduction of MMP did not remove the politics from politics. UIFT is, however, a mechanism that makes the necessary possible. It is an enabling mechanism for the evolution of liberal democracy. The Covid19 global emergency has shown more clearly than ever that our present ways of thinking about public finance are disabling, and as such threaten to bring about an end to liberal democracy in some parts of the world.

(Much of the disabling is due to the fact that many welfare benefits continue to be delivered to us in the form of tax exemptions, allowances, concessions and graduations. These are attractive to recipients because they are unconditional – they do not have to be applied for – and to policymakers because they barely contributes to public debates about social welfare. The big problem with this kind of benefit is that, when a person’s income declines, these tax-related benefits also decline. We tend to think of benefits as a cushion, or a safety net. These tax-related benefits represent the cushion being removed when we fall. The best benefits are cushions that are there for us when we fall, rather than cushions given to us when convalescing from an uncushioned fall.)

So, imagine that we already have in place a 33 percent income tax and a weekly basic universal income of $175. (For present beneficiaries, this $175 per week would represent the first $175 of their present benefit. This situation does not represent any substantial change from the income distribution we have become accustomed to. It is a conceptual change.)

How could we use this tax-benefit mechanism to address the four issues: stability; precarity; equity; sustainability?

Stability.

Stabilisation is the familiar issue of how societies use fiscal and monetary policies to manage normal economic downturns and upturns in the economy. Governments expect to pay more welfare benefits in an economic contraction (eg a recession), fewer benefits in an expansion. And governments expect to collect fewer taxes in a contraction, more taxes in an expansion.  Thus, we expect the government to run budget deficits during contractions and budget surpluses during expansions.

When we have welfare benefits that are easy to access, this process is known as automatic stabilisation. While such automatic benefits are good for the recipients, they are especially good for the stability of the economy as a whole. (Countries that already had a system of benefits in place before the Great Depression of the 1930s – notably Sweden and the United Kingdom – emerged from that emergency comparatively quickly, in 1932. Other countries – for example France and the United States – were still in economic depression at the onset of World War 2.)

The more bureaucratic the process of accessing benefits – and the more conditional those benefits are – the less efficient is the stabilisation process. (Reliance on benefits delivered as tax concessions is especially destabilising, because these benefits are lost when they are most needed. A particularly egregious example of a destabilising benefit in New Zealand at present is the In-Work Tax Credit, which, as its name suggests, is lost when recipients lose their employment. Another such benefit is the KiwiSaver annual tax credit of $521, which is progressively lost as a person’s gross weekly income falls below $1,043.)

Under the UIFT mechanism, the full universal income is retained when a person loses their job, or suffers a reduction in wages. And it’s instant, a genuine cushion; not a subsequent palliative. Further, this cushion benefit cushions people with partners still in work; many people (especially married women) do not qualify at all for present targeted bureaucratic Work and Income benefits.

When there is an economic expansion, under this UIFT regime, government income tax revenue increases by 33 cents in the dollar for every extra dollar of gross income; thus, during a normal economic upturn, the government moves into surplus more quickly and more automatically.

Precarity.

Precarity is the situation where many people are employed on short-term contracts; some may be expected to be ‘on call’ without being compensated for that restricted time. It also refers to many the self-employed people – free-lancers and small business operatives – whose labour incomes fluctuate with little predictability.

For these people, a basic universal income works as a personal economic stabiliser – a cushion allowing some income tide-over during down times – with a higher marginal tax rate which offsets this cushion in the good times. With the UIFT mechanism in place, these people can remain self-reliant, and will have minimal need to engage the welfare bureaucracy which needs to prioritise those people with structural income incapacity.

Further, the unconditional benefit component of the UIFT creates some incentive for self-employed workers to retain work-life balance, by not overworking at certain times, and by not penalising them when they need some downtime, such as family time.

Equity.

Equity is a central component of democracy. And equity represents the equal ownership of productive resources. Private equity represents the equal ownership rights of the principals of private businesses. Public equity represents the equal ownership rights of all economic citizens over those many productive resources which are not privately owned. Equity-holders expect to receive an economic return on their equity. There is no law of economics that restricts this capitalist expectation to private shareholders.

The consequence of this liberal democratic reasoning is that the universal income component of UIFT can be properly understood as an economic dividend; interest on the public equity represented by the public commons. And it also means that a universal income that is basic (ie low) need not remain low under all possible future circumstances.

Just as political citizenship reflects the universal suffrage, one person one vote, so, in a mature democracy, economic citizenship requires a universal publicly-sourced private income. One person, one equity dividend. A reflection on equity principles suggests that the universal income part of the UIFT mechanism should be understood as a public equity dividend.

A universal publicly-sourced private income is capital income, not labour income. It is a social dividend, not a wage. It is a yield on public capital. It is social capitalism at work, not socialism.

The word ‘equitable’ must be associated with an equalising mechanism. Here we may consider both financial inequality and time inequality.

A liberal democratic dividend means that one substantial part of the economic pie is distributed equally, and that the remainder of the economic pie is distributed unequally in line with market forces. It means that people experiencing substantial declines in their market incomes retain a personal stake in their liberal democracy, through their rights to an income from the public share. And it means that people experiencing increases in their market incomes do not simultaneously draw increases from the public share. Financial inequality is mitigated.

Time inequality is addressed, because the inclusion of an unconditional universal income gives encouragement to the overworked to work less, and for the underworked to work more. Without such an equalising mechanism, workers, who also lose public benefits when they lose private incomes, are disincentivised from reducing their work overloads. Likewise, people with little or no work know that, with UIFT, they will retain their publicly-sourced private income when they take on increased market workloads. The overworked work less and the underworked work more. For the unemployed and the underemployed, a basic universal income is work enabling; it facilitates rather than restricts labour supply.

Sustainability.

This issue relates to both the issue of robots and the issue of climate change. It relates more generally to the possibilities of being able to enjoy high living standards in a more relaxed form, and having a supply-elastic economy. At present we try to have a full-capacity (ie, ‘maxed out’) growing economy where we have little choice but to overproduce and overconsume. At present, our overconsumption is someone else’s livelihood.

The robot concern is that our economies will become too productive. The only thing scary about that scenario is that, at present, we have no social mechanism to distribute the proceeds of that productivity. In the absence of such a mechanism, the endgame is extreme inequality, which means (among other things) extreme poverty. An advanced society with extreme poverty has high unemployment of bothpeople and robots.

How does a mature UIFT mechanism address this issue? It addresses the issue by both raising the amount of universal income and by raising the income tax rate. If done in a neutral manner, then the overall extent of economic inequality (measured by the Gini Coefficient) would be unchanged.

In order to avoid increased inequality, both the universal benefit amount and the tax rate would need to increase. This would be a simple reflection of increasing capital income relative to labour income; more gross income accruing to ownership relative to income accruing to effort.

(At this point we might note, Graeme Hart, as a likely robot investor, would be even richer than he is now, before tax. While the UIFT mechanism would give him an increased public equity dividend, he would also pay more income tax. The net effect of these three influences on Hart’s income should be that his ‘disposable income’ would increase at about the national average.)

As this process of rising incomes and rising income taxes unfolds, it means that the public share of the economic pie increases relative to the market share. This increases the willingness of the overworked to work less. And it increases the understanding that paid work is a cost rather than a benefit. Rising public equity dividends relative to total income gives the necessary signal to the entire workforce to work less for money, and to embark on more projects that may not deliver financial returns. More voluntary unemployment, less involuntary unemployment. More ‘slack’, in the sense that slack represents market supply elasticity. An economy with more slack has the capacity to increase production when it needs to. In normal times, liberal capitalist economies should not be ‘maxed-out’; only in certain types of emergency.

We can now imagine a democratic capitalist world order, in which people choose to both earn less and spend less, while being assured that basic economic needs are covered, as well as many higher-order needs. Ironically, in our Covid19 lockdowns many of us gained a sense of that, though missing the coffee and ambience of the local café. But not missing the wider rat-race.

It is this slower living – which we have seen briefly – that has the potential to bring about environmental sustainability. We have heard more birdsong. We have smelled the flowers. We have heard that the people in China have lately seen the stars in the firmament.

We can have a high productivity economy without maxing-out our countries’ GDPs. We just need a mechanism to make the necessary possible.

What is the First Step?

In New Zealand, the first step is to reconceptualise our tax-benefit system, and in the process to apply a little relief to those who work hard without receiving high wages. This step would have easily been funded through tax revenue in 2019, pre-Covid19. Today this first step should be funded – and immediately, eg through the 14 May 2020 Budget – by Reserve Bank credit, just as the emergency wage subsidies have been funded.

See my Five Examples for any further clarification about how the transition to UIFT would affect different people.

In many other countries, the process will be more difficult. They have more complexities to unravel (compared to New Zealand) in their present income-tax scales. Australia could make the transition quite easily, with a 37% tax rate and a basic universal income of $240 per week.

We need political commentators with open minds.

————————————–

References:

Universal Basic Income (or Basic Universal Income) and Covid19. Scoop or Evening Report, 7 April 2020.

From Universal Basic Income to Public Equity Dividends (2018); Policy Observatory Briefing Papers, AUT, Auckland

Public Equity and Tax-Benefit Reform (2017); Policy Observatory, AUT, Auckland

The Universal Welfare State incorporating proposals for a Universal Basic Income, Keith Rankin, University of Auckland Policy Discussion Paper No.12, 1991

Constructing a Social Wage and a Social Dividend from New Zealand’s tax-benefit system, paper presented to the Basic Income European Network (BIEN) international conference; Vienna, Austria, 12-14 September 1996.
(Note that in this paper, I used the terms ‘full universal basic income’ and ‘adequate universal basic income’. My use here of words such as ‘full’ and ‘adequate’ are suggestive of the aspiration that a basic income could be more than a basic dividend; rather a substitute for a wage, and therefore a possible disincentive to engage with the labour market. However my emphasis in this paper – and subsequent papers – was the ‘social dividend’, a basic universal income that might eventually evolve into a non-basic payment.)

The Government has been widely panned over its major announcement yesterday on housing. There are a few positive takes on the “reset”, but generally it has been viewed as an embarrassing backdown at best, or at worst a sell-out of those needing the housing crisis addressed. One political journalist has even branded yesterday’s announcement as “easily the worst day politically” for the Labour-led Government so far.

This criticism isn’t just politicking from conservatives or the right. The most severe criticism has come from progressives and the left. This isn’t really surprising because – as with Jacinda Ardern’s capitulation on the capital gains tax – the announcement suggests the Government has essentially given up on bringing transformational change to the housing crisis. Many of those who might be sympathetic or supportive of the Government are those most deeply disappointed with what Housing Minister Megan Woods is now doing with KiwiBuild.

To get an idea of critical reaction from the political left, it’s worth reading the No Right Turn blogpost: Not impressed. He calls the reset a “broken promise” and is disappointing about the tinkering announcements, suggesting they might actually make the housing crisis worse.

He concludes that the reset shows Labour, as with other political parties, simply isn’t interested in solving the housing problem: “while the obvious policy we need is a mass house-building programme of state and affordable homes, to crash both house prices and rents, the property owning class – which includes almost every MP – don’t want that, because it would devalue their assets and their landleach income-streams. So instead we get this sort of bullshit, spending billions on producing the impression of action, while actually doing nothing much”.

It’s not only leftwing bloggers who are unimpressed. For a scathing assessment of yesterday’s announcement see Newsroom editor Bernard Hickey’s latest column, Young renters just got double toasted, in which he argues those suffering from the housing crisis have now been abandoned by this government.

Hickey argues that the jettisoning of the basic KiwiBuild promise was entirely unnecessary: “to abandon the entire target for the entire 10 years is simply silly because the first year’s target was missed. Urgent and large scale action by the Government could have cleared the way for a 100,000 house build over the next 10 years. Labour just gave up at the first hint of trouble”.

As to all the minor announcements made yesterday, Hickey thinks they’re a “distraction” meant to help sell the capitulation to the public: “It also tried to dress the broken promise by making it easier to use more KiwiSaver money for home deposits and to be able to borrow more to buy a first home. Neither will sweeten this dead rat much. It’s more of a rotting and hairy cat.”

Hickey says the conclusion we can draw from the KiwiBuild reset is that Ardern’s reputation is now settled, and it goes to “prove she is just another transactional smile-and-wave politician who believes she is better at wielding the status quo than the other lot. She has now forfeited any right she had to talk about being transformational and claiming ownership of a generation’s dream.”

Similarly, in an opinion piece for RNZ, I’ve argued that Labour and its coalition partners now risk losing support from their core supporters who were relying on seeing real progress on the housing crisis, and those struggling with housing might legitimately feel “ripped off” – see: Government should be held to their 100,000 KiwiBuild promise.

Here’s my conclusion: “much like the CGT backdown – the government’s other key policy to deal with the housing crisis – it will shake the confidence of supporters who are wanting to see the transformational change promised. The Year of Delivery becomes an empty slogan for those depending on real change. When it comes to next year’s election, the governing parties might find their lack of courage leads to fewer of their supporters being mobilised to vote… Having won power in 2017 on the basis of promises like KiwiBuild, it would be apt if the Labour-led government lost that power in 2020 because of their failure to deliver.”

RNZ’s Tim Watkin points out that this failure of delivery and ambition is what Labour used to criticise the last National Government for: “Twyford was famous for mocking previous Minister Nick Smith by saying ‘you can’t live in a consent’. Truth is, you can’t live in a reset either” – see: You can’t live in a reset.

Watkin labels yesterday’s announcement a “disaster”, saying “amidst the announcements came the smell of burning rubber as the government preformed some of the biggest political u-turns you’ve ever seen.” Green co-leader Marama Davidson was also at the announcement, claiming the KiwiBuild reset put housing “back within the realm of lower income people”, but Watkin says “It’s hard to see how.”

Political journalists have also been damning in their reports. Henry Cooke, who has probably written more on KiwiBuild than any other journalist in recent years, says: “KiwiBuild is now a shadow of the huge promise it once was” and that the reset was a “serious humiliation for the Government” – see: KiwiBuild emerges from nine months in the shop a shadow of its former self.

He disputes many of the claims of the Housing Minister. For example, on the notion that the Government is still delivering a significant house ownership programme, he says: “that’s like selling someone a car and delivering a scooter. They both serve the same purpose, but the product is not what was said on the tin.”

As to Megan Woods’ new mantra that “KiwiBuild is a lever, not an outcome”, Cooke says: “That’s fine and good if you’re looking at the housing market from the perspective of a minister, but if you’re a young buyer who thought with 100,000 homes there was sure to be one for you in the mix, KiwiBuild sure as hell was the outcome, and an outcome you wanted. Bad luck.”

Cooke also outlines how the Government is failing to deliver in other areas of housing. And some of the new announcements seem half-baked at this stage – for example, “the fact this progressive home ownership plan has still not gone to Cabinet beggars belief.” And he says that the changes to eligibility will not “change the problems with KiwiBuild thus far.”

As to cancelling the 100,000 house target, and the refusal to replace it with anything new, Cooke says: “Every Government breaks promises made during elections. But few break ones this big and this specific.”

This broken promise will come to haunt Labour in the future, according to Claire Trevett: “it has given Labour a credibility problem. This will cause Labour problems in future elections when they put up similarly ambitious policies. Ambitious is a kind way of saying unbelievable. It gives voters greater cause to doubt whether they can actually deliver. It has, in short, become Labour’s folly” – see: The lesson of KiwiBuild, the Little Engine that couldn’t (paywalled).

The failure to adopt a new target is also a problem for accountability she says: “The 100,000 figure was replaced by the rather more nebulous ‘as many homes as we can’. That is far less pithy – but also much harder to hold the Government to account for.”

This nebulous promise is highlighted by Herald political editor Audrey Young who says: “It is not a line that would be acceptable in many other policy areas. Imagine the farmers saying: ‘We will lower methane emissions as much as we can, as quickly as we can'” – see: KiwiBuild reset – Megan Woods gives masterclass in surrendering to failure (paywalled).

Young says this abandonment of targets is confusing, because in other policy areas Labour is adamant about the importance of such goals – for example: “It is clear the Government can’t make up its mind about targets. It’s good for child poverty reduction to have an overall target and short-term targets, so much so that it is now a statutory requirement to set targets.”

She also marvels at the chutzpah of the new Minister of Housing in selling such negative news as being so positive: “Woods gave a masterclass today in political communication that should impress not only her hapless predecessor, Phil Twyford, but every other member of the Cabinet that could be prone to trouble. Let’s not call it a reset. It was backdown to behold, a political surrender painted as showing courage and honesty to voters.”

Little attention has been directed, so far, at the logic of stripping a fifth off the KiwiBuild budget and putting it into a separate programme for the Greens’ nebulous “rent-to-own” scheme. But Newsroom’s Marc Daalder covers this in his article, KiwiBuild reset shows how badly policy was bungled.

Here’s his main point, questioning the scheme: “the Government concedes that only 4,000 people are expected to benefit from this. That’s 20 percent of the KiwiBuild budget put towards helping put people in just 4 percent of the now-scrapped 100,000 homes. While that money will eventually be paid back to the Government and recycled into KiwiBuild, that could take years. This raises the question: wouldn’t the money be better spent on state housing?”

In terms of Megan Woods’ decision to scrap plans to continue with hundreds of KiwiBuild houses and sell them on the open market, Daalder says: “the entire situation underscores how significantly the Government’s flagship policy was bungled.”

For economist Gareth Kiernan the reset was a missed opportunity, and he laments the “sticking-plaster solutions” that were announced – see: KiwiBuild reset proves Government still doesn’t get it. One preferred solution, he says, would have been to focus more on state housing supply: “the Government has missed the chance to shift its building programme from the middle-class welfare of KiwiBuild to concentrate on social housing, where the needs are evident.”

Kiernan also suggests that other more fundamental problems remain in the housing market, which he argues the Government are not grappling with – especially partnering KiwiBuild with mass construction technologies.

It’s not all bad for the Government. Some commentators have been supportive of the KiwiBuild reset. For example, today Newstalk ZB’s Mike Hosking says the Housing Minister has been sensible – see: New KiwiBuild Minister Megan Wood showing signs of common sense.

Today’s very congratulatory editorial in the Dominion Post makes the argument that modern governments aren’t equipped to make significant market interventions like KiwiBuild, and therefore Megan Woods is to be commended for recognising this and abandoning “unrealistic” goals – see: After the fantasy, Woods restores some sense in KiwiBuild.

The editorial points out the gist of the new KiwiBuild approach: “The reset KiwiBuild will help fund buyers into new homes, rather than build those houses for them.” Therefore: “The rethink is less a reset and more of a recognition that modern governments no longer have all the answers. Nor the means. They have steadily withdrawn from the many markets and industries they once controlled and must use greater wisdom to understand what they can change, and how to go about it.”

Former CEO of the Property Institute of New Zealand, Ashley Church, awards the Government with a 10 out 10 mark for scrapping the Kiwibuild targets, and a 10 out of 10 for making it easier for buyers with smaller savings to get together a deposit to buy houses on the open market – see: 5% deposits for first home buyers will remedy housing travesty.

Church says Woods “has delivered. The main features of her near-total rewrite of the previous policy have rendered it virtually unrecognisable – but the changes are mostly pragmatic and bring KiwiBuild more into line with the commercial and cyclical realities of the market.”

Finally, for humour about the reset, see The Civilian’s parody news report: Government says it will now build just one really nice home.

It’s also an idea that’s been spoken about a lot in the last couple of weeks as debate heats up about the Government’s current, and potential, role in keeping the New Zealand media alive and kicking. Of course, there is hyperbole and self-interest in some of the pleas being made by journalists and company executives, but there is also no doubt the industry is in a major decline, which will have an impact on politics.

“Market failure” is another phrase increasingly being used to describe the decline of the “fourth estate” function of holding powers to account. The phrase comes with the consequent notion that this failure should be met with government intervention. The market failure is the notion that traditional media outlets are now unprofitable, which might lead to some – such as TV3 – collapsing, with negative consequences for democracy.

Therefore, there all sorts of hard decisions for the Government to make about the future of the media, about its ownership of public broadcasters, it’s role in funding private media and, generally, its regulation of a sector that is in crisis. Some of these issues were canvassed earlier in the year in my column, The State of the NZ media.

Today, the state-owned broadcaster TVNZ has released its annual report, announcing a 44 per cent decline in profits, down to $2.9 million – see Chris Keall’s TVNZ profit halves, cans dividend. According to this report, “CEO Kevin Kenrick says the company’s financial results are reflective of challenging market conditions.”

And it comes after recent news that TVNZ is also forecasting a $17m loss for the next financial year. Rival MediaWorks is already making large losses from its TV3 channel.

This week also saw the NZME (owner of the New Zealand Herald and Newstalk ZB) announce its profits are down, though its new paywall service is surpassing targets – see: NZ Herald Premium subscriptions hit new milestone, NZME half-year operating Ebitda at $19.4 million.

The article also reports on its main competitor’s recent financial results: “Last week, Australian-owned publisher Stuff (formerly Fairfax NZ) reported a 24 per cent fall in full-year Ebitda to A$28m ($30m) on annual revenue that declined 10 per cent to A$243m ($246m).”

Campaign “for democracy” by TV3’s MediaWorks

The latest round of media industry soul searching has been pushed along with a lobbying campaign by MediaWorks (the owners of TV3, Magic Talk radio, etc), that called for the Government to take action in order to ensure their television channel was not forced to go off air, or collapse in some other way. A number of MediaWorks items were broadcast or published that were designed to pressure the Government to step in and help save the industry.

The most important was an opinion piece on MediaWorks’ Newshub website from its chief news officer, Hal Crawford, who argued that loss-making media outlets like his were in danger of going out of business, which would lead to problems for democracy: “this is a good old-fashioned market failure. The thing that we need, that society needs, is not only under threat, it’s not being provided right now. The small public broadcasting news operations and the commercial players can no longer provide enough news to keep our society healthy at a local and national level. Unfortunately, all the cliches about the free press and democracy are right: we need news to keep this lemon on the road. When markets fail, governments must step in” – see: The problem with news in New Zealand.

The news boss also argued that the many ways TVNZ is being protected by the Government is having ill-effects for competitors such as TV3: “Being one of their competitors, I’m angry about this. I’m angry that the market for television advertising in New Zealand is distorted by this bizarre, anti-competitive set up. I’m angry that my newsroom, Newshub, is part of a business struggling to keep its head above such polluted waters. I’ll be damned if I lay off one more person or say ‘no’ to one more important assignment without expressing it: TV in New Zealand is broken. And it could have a big impact on news in this country.”

For Crawford, the answer is for the state to start funding independent news media operations across the board, in the same way that it funds the judicial system. And elsewhere it has been reported that MediaWorks has been lobbying Government for them to directly fund their Newshub service.

In conjunction with Crawford’s plea for Government help, various other MediaWorks staff and journalists went public, in what has been described by one media-watcher as “an extraordinary” campaign. For instance, AM Show host Duncan Garner broadcast his plea for the Minister of Broadcasting, Kris Faafoi – an old friend of his – to intervene to essentially save their jobs and profession.

This is all covered very well by former news manager at MediaWorks, Mark Jennings, who is rather scathing – see: Garner’s strange outburst fitted PR strategy – and by RNZ’s Colin Peacock – see: A media cry for help.

According to Jennings, Garner’s broadcast was “cry baby stuff”, and he asked: “What prompted it? Is the axe hovering over his and other news shows at Three? Probably.” Jennings is unimpressed with what he sees as the unprofessional use of Garner and other MediaWorks staff (Crawford, Patrick Gower, Sean Plunket) in a PR campaign for the company: “using its own journalists, on its own platforms, to attack a competitor feels like a misstep. It’s the sort of thing the Rupert Murdoch-owned media does in Australia when it attacks the ABC, or others, to further its own commercial interests.”

RNZ’s Colin Peacock was also sceptical about the campaign, concluding: “It remains to be seen if the minister is persuaded by these very public and self-interested pleas for help – and the loftier claims that democracy could die in media darkness. After years of accusing the industry’s critics of talking too much about its problems, it’s extraordinary that a media company is now using its own outlets to do the same – and push them firmly into the face of the government at the same time.”

The owner of another media outlet, the Spinoff’s Duncan Greive, assisted the MediaWorks lobbying campaign, publishing an interview the same day as the Crawford piece with MediaWorks CEO Michael Anderson. In this, Greive reports the feeling in the TV company: “a rising sense that no matter what they do, no matter how hard they fight, how many titles they cut or people they make redundant – that absent some kind of radical intervention, their business is beyond saving” – see: Contemplating the end of Three.

In this interview, the MediaWorks CEO makes it clear that without government intervention TV3, as well as other outlets, might close, and this would impact on politics: “A democratic government has to protect democracy… I have to believe it’s true of any elected government. If that’s true, then a government would need to do what it needs to do to make sure that there’s news diversity. And certainly the government could never find itself in a situation where [there’s] a monopoly on broadcast news. Just for the perceived conflict, you know. It doesn’t work for democracy.”

Debate over the future of TVNZ

A big part of MediaWorks’ angst is the way the Government is treating its main broadcaster, TVNZ, which continues to exist in a state of neither being fully commercial nor a fully public service broadcaster. For although TVNZ’s channels are mainly commercial, the current Government has declared that it’s no longer expected to deliver a dividend to the taxpayer.

To MediaWorks this is a form of subsidy, which gives it an unfair advantage in competing with the private broadcaster. All the while, TVNZ continues to hoover up much of the broadcasting advertising market, leaving MediaWorks unprofitable.

However, even TVNZ is now deemed to be unprofitable, as covered in John Anthony’s Plot thickens for TVNZ as a $17.1 million loss looms. Apparently, TVNZ’s decline represents “its worst financial result in a decade… despite its advertising revenue holding up.”

Furthermore, the article comments that “The falling profit comes as debate around the broadcaster’s future intensifies and the Government comes under increased pressure to deliver on work it’s doing to strengthen public media. Possibilities for TVNZ’s future include the removal of ads for TV One, returning to a charter and merging with RNZ.”

These solutions are highly-favoured by MediaWorks, as well as a number of other commentators. The above article reports that one public media lobby group would like to see this: “Better Public Media Trust director Myles Thomas said he hoped TV One went non-commercial and believed it would happen.” Thomas is also quoted: “The minister has made some intonation that something big was coming.”

Making TVNZ an ad-free service would apparently cost about $150m a year, and would effectively turn TVNZ1, and maybe other channels, into a public service broadcaster.

But former TVNZ broadcaster Mike Hosking thinks that would be a mistake, saying that “If the Government are going down the upheaval track, there will be more tears and disappointment than there will be problems solved” – see: TVNZ’s in trouble and they should blame their own bad decisions, not Google.

Hosking argues that turning TVNZ into a proper public service broadcaster wouldn’t really fix anything but just become a subsidy for elites: “given few watch, would anyone really care if TVNZ 1 started showing a lot of Māori programmes, bird documentaries, foreign travel shows, and long-format interview specials? No. But having worked for TVNZ under the charter invented by the last Labour government I can tell you for nothing it is not a recipe for any sort of success. But if success is not your guiding principle to start with, then it becomes a sort of creative outlet for the worthies and the single agenda ‘artists’ who have previously plied their trade at the NZ On Air application box”.

Another former TVNZ broadcaster, Damian Christie, takes the opposite approach, suggesting that it’s the NZ On Air model that is broken, with an unhealthy focus on ratings which is preventing quality TV from being made – see: The truth about public service television in New Zealand.

For Christie, it would be a mistake to go back to the old days of TVNZ’s Charter, and concludes that “public service television and advertising don’t work well together.” His suggestion is this: “Why not make TVNZ 1 commercial free and have TVNZ 2 offset at least some of the costs?”

Others wonder if we have gone beyond these old possibilities, with Finlay Macdonald saying that nostalgia for public service broadcasting and other current proposals for change ignores the fact that “Some of the best current affairs ‘TV’ is now found online” – see: An ad-free TVNZ? Technology has moved on, why can’t we?.

Similarly, see Anna Rawhiti-Connell’s No way back from media’s forbidden fruit. She argues that although the news media is indeed in a precarious position, the answer has to be bigger than just trying to save TVNZ and MediaWorks. For example, the 6pm news model is not necessarily worth saving.

The problem is more “the whole internet and 20-something years of radically changing human behaviour.” The public is now consuming our media in very different ways, and this isn’t about to change: “our VPN using, ad-blocking, Netflix smorgasbord-loving selves indulge in behaviour every day that contributes to the strangulation of the model that sustains and supports the things we hold so dear.”

A mega-merger of broadcasters?

The current rumoured proposals for TVNZ also involve merging the broadcaster with RNZ, and possibly Māori TV. The existence of this proposal has been confirmed by Nanaia Mahuta, according to Maori TV’s Heta Gardiner: “The Minister of Māori Development has officially confirmed a merger involving TVNZ, RNZ and Māori Television is an option that’s been discussed at Government level. Nanaia Mahuta confirmed the option has in fact been placed on the table but it wasn’t her preference” – see: Māori Development Minister confirms consideration of MTS, TVNZ, RNZ merger.

For the best analysis and discussion of the proposal, see Duncan Greive’s Assessing the TVNZ, RNZ and Māori TV merger that everyone is talking about. He says, “the case for a megamerger is compelling” and this option “is likely the cleanest way of averting this growing media crisis.”

After describing the merits of the individual broadcasters, Greive says the merger would be good for democracy: “the problem-solving it does for commercial media is ultimately less important than the upside it contains for the country and its democracy. A combined government mega-media agency would help paper over one another’s cracks, and create a kind of rebooted NZBC, one which could safeguard New Zealand against some of the chill political winds blowing around the world.”

Of course, there continue to be noises about two of the biggest private media companies merging – see Tim Murphy’s StuffMe 2: the return of the beast. He discusses the fact that a merger of Stuff and NZME would require legislative change from the Government, “along the lines of the law which allowed Fonterra to be created”.

And in another recent column, Murphy forecasts some big cuts and possible closures coming in the Stuff empire – see: Stuff floating on cloud Nine.

Hard decisions for the Government

The Government has indicated that it will respond to debate about TVNZ later in the year, and it’s currently undertaking a larger review of media under the watch of broadcasting minister Kris Faafoi.

Thomas Coughlan says the Government has some hard choices to make, and “the problem is fairly simple: take TVNZ non-commercial, or prop-up MediaWorks with cheap Government loans and NZ On Air funding. Either way, a lot of money is on the table” – see: The Government won’t help MediaWorks – there’s no money.

The problem for Faafoi, Coughlan says, is that the necessary money is not available: “what work he manages to achieve will be heavily constrained by how much the Government and viewers, are willing to spend on broadcasting. Currently, the answer is ‘not a lot’.”

The answer, according to economist Shamubeel Eaqub is for the Government “to find a way to tax Facebook and other internet companies more before their dominance of the advertising market kills off local media companies” – see Dan Satherley’s Taxing internet giants key to saving media industry – economist.

Eaqub says: “Ultimately if we want to fix the media, we have to create long-term sustainable funding that is not up at the whims of politics.” But he doubts that the current Government is going to be bold enough.

The NBR’s Brent Edwards has recently interviewed Kris Faafoi about some of these issues, including whether the Government will front up with the necessary cash – see: No silver bullet for news media problems (paywalled).

Edwards reports: “Faafoi said it was really important that the country had a strong fourth estate and that was why the government was intent on ensuring the future of public broadcasting.” And as to the whether Faafoi thinks the public would care if TV3 goes under, he says: “I hope they would because, as a former journalist, I do think having a strong fourth estate is important.”

Edwards has also written about some of these difficult issues facing the Government, arguing that there’s a simple choice to be made about TVNZ: “to either throw it to the commercial wolves – let it sink or swim but, let’s be clear, it would sink – or turn it into a fully-fledged public broadcaster” – see: MediaWorks’ pleas raise new fears for journalism and democracy (paywalled).

But helping out TVNZ would not, Edwards says, resolve the situation and might lead to other difficulties: “if we accept a healthy news media is critical to a well-functioning democracy then taxpayers do have some interest in their survival. It would be a sham democracy if the public became reliant on a single public broadcasting behemoth to provide them with news, analysis and commentary. But if taxpayers’ money is going to be used to sustain journalism, how would the government ensure an equal playing field? All media organisations would surely deserve some support, not just those television channels that cried loudest.”

And if it all goes badly, then Edwards foresees a degraded democracy without a proper media helping inform the public: “Perhaps democracy will be played out solely on social media as individual parties and candidates spin their messages directly to voters. But the day politicians do not have to worry about critical journalism, or even about someone pleading on the telly, then that’s the time to worry.”

Finally, it seems that ultimately Labour and National don’t much like public broadcasting, and this can be seen in their reluctance, so far, to properly fund it – see Duncan Greive’s article, One chart which reveals NZ’s incredible 30 year decline in public media funding.

Is it “Trumpian” to dispute the veracity of the botched census statistics? That’s the question currently dominating the political debate following the release of the official report into how the 2018 government census operation went so badly.

Leader of the Opposition, Simon Bridges has slammed the handling of the census operation by Statistics New Zealand and Minister of Statistics, James Shaw. More controversially, he is disputing the usefulness of the census data that is about to be released. That’s because, instead of surveying all New Zealanders, or even “nearly all”, the census only had a response rate of 83.3 per cent, meaning that there are some major gaps in the original data. But Bridges’ criticisms have drawn accusations of Trump-like behaviour from Shaw and others on the political left.

The fierce political battle over the botched census really kicked off yesterday when Bridges went on RNZ’s Morning Report and pushed a hard line of accountability for the Government and James Shaw for the census debacle. You can listen to the five-minute interview here: Outgoing Stats NZ boss shouldn’t be scapegoat – Bridges.

In terms of challenging Shaw’s role in the census shambles, Bridges says in the interview that Shaw has to take more responsibility for the outcome: “He was asleep at the wheel. He expressed blind confidence when concerns were raised. To give you the contrast, Maurice Williamson as statistics minister in 2013 for that census had 18 meetings on the census six months prior. Shaw didn’t have a single one. He had meetings on other things, measurements of our feelings, wellbeing and the like, but not the core business of the census.”

Bridges’ RNZ interview is also reported here: Botched census: Statistics Minister asleep at the wheel, says Bridges. According to this, “Bridges said as a result he didn’t believe the data would be robust enough to help redraw electoral boundaries and said these should stay as they were for the time being. He said the 2013 census presented more reliable data.”

Furthermore, in the interview, Bridges questioned the wider credibility of data being produced by the department: “I worry more broadly in relation to Statistics New Zealand. Because we have seen in recent months, whether it’s GDP, whether it’s immigration, vast swings as we revisit data and chop and change them. It doesn’t do a lot for our confidence in statistics in New Zealand.”

Shaw has responded to this interview with alarm, suggesting that Bridges is playing dirty politics. In what has been termed a “blistering broadside” at the National leader, Shaw has responded by accusing him of Trump tactics, especially because Bridges is undermining public confidence in official government statistics – see today’s article by Craig McCulloch: Simon Bridges’ comment ‘a very bad turn for NZ politics’ – James Shaw.

Shaw has parodied Bridges’ position on Statistics NZ like this: “Oh, they made a mistake over here, therefore, I don’t trust anything that they’ve produced”, and Shaw has said this position “is, frankly, absurd”. Fuelling mistrust in the census results is a problem, Shaw says, because “He doesn’t really care what the collateral damage is along the way … and I don’t know how he expects to govern if he totally destroys public confidence in the basis of evidence-based decision making.”

Shaw accuses Bridges of adopting a populist approach: “The lessons of Trump, the lessons of Brexit, and the lessons of the Australian election seem to have gone to Simon Bridges’ head and this ‘burn-the-house-down’ in order to win approach… is a very, very bad turn for New Zealand politics.”

At the heart of the issue is whether the upcoming re-drawing of the electorate boundaries can take place, given the questions about the quality of the census data. According to the above RNZ article, Bridges said “he did not accept Stats NZ’s assurances that the figures used to determine electorate boundaries would be robust. Bridges says: “We’ve got significant numbers of New Zealanders – hundreds of thousands in fact – who weren’t counted. It seems to me on that basis, it would be hard to run new electoral boundaries.”

Shaw disputes that there are any problems with the data for determining any new electorate boundaries saying the quality of the census stats have been verified by “an independent data quality review panel… Experts from all over the country – including someone from the UK Statistical Office as well to provide that international view – and they have put the gold stamp on this… He can take it into a court of law if he likes, but he’s going to lose.”

Shaw is backed up by economist Brian Easton, who is quoted in the RNZ article saying “We haven’t actually seen the data, so we can’t jump to conclusions… What we’ve got is people who are uninformed who are panicking – and quite illegitimately. What they’ve got to do is wait and see what happens.” He adds, however, that “I respect Mr Bridges saying that if they don’t have the confidence in the data, then we should stay with the 2013 electoral boundaries.”

Easton is also quoted in a previous article by Craig McCulloch, in which he elaborates on his fear of a developing Trump-style atmosphere of distrust of authority and “facts” in New Zealand: “We’ve seen in America that people say anything that comes out of Washington is not true, and there is a danger that that sort of attitude could happen in New Zealand” – see: Stats NZ could need years to regain public trust.

The worry is that despite strong attempts by Statistics NZ to fix problems with census data quality, some in the public will doubt that the results and further census work can be trusted: “Statistics New Zealand has done some very high quality work. It has some really good statisticians, but the public may go, shall we say, to a Trumpian position of ‘we don’t trust them’.” Furthermore, “I expect during the 2023 Census that people will be saying, ‘we can’t trust the statistics department’. Trust is a hard thing to build up, easy to lose, and I’m afraid that’s what has happened.”

Another researcher, however, suggests that questions should definitely continue to be asked about the quality of the census data. According to the above article, Massey University’s Paul Spoonley believes that “some scepticism from the public and Opposition” is understandable. He says: “The way in which [the census] was carried out now opens it up for questioning by whoever … and I think they have every right to raise those questions. We should have good experts look at the data and make sure that it is okay”.

Shaw’s alarm with Bridges’ so-called Trumpian stance on statistics is shared by political commentator Chris Trotter, who says today that Bridges’ questioning of the census data is just the latest in a more populist approach taken by the National leader recently, seen in terms of his stance on Ihumātao and National’s aggressive social media advertising. This all shows, Trotter argues, that Bridges and National are emulating the likes of Australian Prime Minister Scott Morrison, Trump and the Brexiteers, and taking the “low road to power” – see: Simon Bridges leads National down into the dark.

Here’s his main point: “This is an especially dangerous game to play. From calling into question the reliability of official information it is but a short step to advancing the Trumpian claim that the public is being assailed by “fake news”, or, worse still, that the election is being rigged. That is no small matter. Once truth and propaganda become fused in the minds of one’s followers, debate and discussion become redundant. If one’s opponents are all outrageous liars, then engaging with them in any way is pointless.”

Otago University law professor Andrew Geddis has a similar view, suggesting that we are headed for a Brexit or Trump-style environment if Bridges questions the stats too much – see: Let’s not turn an omnishambles into a clusterf*ck.

Here’s Geddis’ main worry: “when Statistics NZ assures us that this process will produce some (but not all) census data that is as good as (if not better than) that from previous censuses, why wouldn’t we believe this? Because if we’re not prepared to believe it, then we’re solely left with a world of ‘alternative facts’ and individual reckons in which there is no common basis for either agreement or dispute. The international news pages of our newspapers (ask your parents, kids) are giving us a good, real time look at how societies that make decisions based on such assumptions work out. They don’t look all that great to me. And it would be nice if we could avoid importing the worst of their mistakes to our shores.”

Geddis agrees that the census was a disaster, and suggests that Bridges might be right to go hard against Shaw in the search for accountability, but says the politician should pause before threatening long-held arrangements on electoral matters. He’s particularly unhappy with the idea that National might dispute or wreck the process by which electoral boundaries are reconsidered. He argues that Bridges is wrong that the census data isn’t good enough, and that he should trust Stats NZ and the various experts when they tell him this.

There are others who are also questioning the quality and use of census data, however. Today, The Press newspaper has an editorial that is probably as scathing as Bridges, describing the census process as “Bungled, botched or butchered” and criticising James Shaw as being “remarkably blase over the data collection failure” – see: Māori have been let down by census botch-up.

Although Shaw has tried to paint the results in a positive light, saying they constitute a “mixed bag”, the editorial stresses the problem: “The results were much worse than merely ‘mixed’ for Māori. The response from the Māori community was 68.2 per cent, which means almost a third of the Māori population missed out. That figure is 20 percentage points below the 2013 response. Responses were also much lower than targeted in Pasifika, Asian and younger communities.”

The editorial laments that for Maori, this poor-quality data will be an “impediment on self-determination and progress that will have an impact for up to a decade”. It points to sociologist and statistician Andrew Sporle calling it “an information shackle” on Māori, saying “especially as the census is the primary source of iwi numbers. Those iwi engaged in Treaty negotiations will be hit especially hard.”

Another social scientist, Polly Atatoa Carr, is quoted, saying the “most likely to be under-counted are those experiencing the worst outcomes in the context of a Government that has made a priority commitment to achieving equity and addressing wellbeing”.

So, how did Maori get so under-counted by Statistics NZ? According to Raniera Tau, the chair of Te Rūnanga Ā Iwi o Ngāpuhi, “They failed to do the job, I mean they didn’t listen, the big thing is they didn’t listen to Māori and now we find ourselves in this situation and it is going to take another three years until we find out exactly where we sit” – see Meriana Johnsen’s ‘They didn’t listen’ – Iwi leader on botched census.

Finally, for the best examinations of this week’s official report into the census debacle, see Thomas Manch’s Census 2018: Review shows you could almost count on census failure, and David Williams’ Pulling apart the butchered census.

The solution has been relatively well-received, because it has an elegance in its “cost-neutral” approach of putting a penalty tax of up to $3000 on the purchase of new higher-emitting vehicles, and using the proceeds of that revenue to offer up to $8000 in subsidies for those buying new energy-efficient cars such as electric vehicles (EVs).

But is it enough? Does it really match the scale of the problem? And what negative consequences will it have for those who can’t afford, or aren’t able to use, electric and low-emissions cars?

A well-received policy

Newspaper editorials have been especially positive towards the Government initiative. Yesterday, the New Zealand Herald argued that the policy is a “clever” way to encourage greener car purchases, and that the public is likely to be highly supportive in the same way that the plastic-bag ban has been accepted – see: Clean cars the right road forward.

Similarly, the Otago Daily Times labelled it a “smart policy” because of its “moderate” and light-handed approach to changing consumer behaviour. The newspaper editorial emphasised that this meant the policy was likely to be enduring: “It is also sufficiently restrained to likely survive any change in government” – see: Nudging car fleet changes.

The paper praised the “nudge” component of the approach: “It is a variation of the ‘nudge’ theory, recognised in marketing circles and human psychology. Rather than use education, enforcement and over-the-top rules, it adjusts the costs of new and imported used vehicles. While how much impact that will have can only be estimated, the plan would lower one of the high hurdles to electric and hybrid ownership, the relatively steep purchase price.”

The Dominion Post has also praised the policy as “practical, maybe even elegant”, and has defended the scheme from critics who “lamented the Government’s lack of boldness” – see: Better late than never for a plan to lower vehicle emissions.

A number of other voices have been very positive about the proposal, including the motor industry. And even National is generally supportive of the subsidies for greener cars.

But attention has also been focused on those sectors of society that might be negatively affected by the cost of many cars going up – especially the poor, but also farmers and tradespeople – see Jason Walls’ National says the Government’s plan to get greener cars on the road could hurt NZ’s poorest.

National’s Brett Hudson says: “There is a risk that a feebate system could turn out to be regressive in its nature; that lower-income workers and working families might see themselves worse off compared to some people on better incomes”.

Similarly, the Taxpayers’ Union says “this is a tax on Otara vehicles to subsidies Teslas in Remuera” – see Rebecca Moore’s Government’s proposed vehicle tax taking from the poor to benefit the rich, Taxpayers’ Union says. Executive Director of the lobby group, Jordan Williams, says “Just because something is shrouded in environmental branding doesn’t make it any less nasty to the poor”.

Lacking boldness and ambition?

Is the new policy ambitious enough? After all, given the climate change emergency we face, is this policy sufficiently bold and radical to meet the challenge?

So far, environmentalists have been less than impressed. Greenpeace energy campaigner Amanda Larsson has welcomed the policy in general but questioned the penalties being imposed on the less-efficient petrol and diesel vehicles, saying that the upper level fee of $3000 is disappointing. She points out that the French equivalent is about $10,000 – see Jason Walls’ Greenpeace wants the fee charged on higher emitting vehicles to be a lot higher than $3000. Greenpeace is also calling “on the Government to set a timeline for banning the sale of new petrol and diesel vehicles.”

This is a point also made by blogger No Right Turn: “As the Cabinet paper points out, a dirty car imported today stays on our roads for 19 years on average. So the quicker we turn off that tap, the better. But more importantly, we need to turn it off permanently. Other countries have announced phase-out dates for fossil-fuel vehicles, typically aiming to ban new sales in 2030 (and non-museum-piece registrations 5-10 years after). Such a date sets market expectations and helps drive the push for people to make their next car electric. But there’s no mention of one at all in the Cabinet paper – the necessary action seems like too much for the government to take” – see: Climate Change: Timid and unambitious.

The blogger also takes issue with the timeframe of the Government’s initiative, saying “the government needs to do more than this, and it needs to do it faster. They should be pushing this through the legislative process as quickly as possible, and implementing it immediately, rather than with a 5-year phase-in.” He points out that “the government is planning to apply a vehicle fuel efficiency standard Japan and Europe had five years ago in 2025”.

Drawing attention to Jacinda Ardern’s promise of a “nuclear-free moment” in combating climate change, No Right Turn says “contrary to the Prime Minister’s rhetoric, we’re not seeking to lead on climate change, we’re not even being a ‘fast follower’. Instead, our government is dragging its feet, just like its always done.”

On this issue of whether the Government is intervening enough, business journalist Liam Dann discusses why strong intervention is required: “Left to market forces alone, the widespread adoption of electric vehicles looks a long way off – too late for the world based on current predictions of a climate crisis. So if New Zealanders collectively want to hit current climate targets and reduce fuel emissions – it seems we need further government intervention. And that means big calls about the politics of who pays” – see: Kiwis are still too addicted to petrol, Govt had to act (paywalled).

In the end, the Government’s proposed scheme isn’t likely to make a huge difference in the take-up rates of EVs. David Linklater makes the case that current EVs simply aren’t yet very economical, even once discounted. For his “reality check” on the costs of buying an EV, and the costs of running them, see: Let’s not be fundamentalist about feebates and EV ownership.

He argues that to have a truly beneficial impact on the environment, car buyers need to be buying new EVs rather than second-hand ones, but at a cost of about $60,000 it’s hard to make the case that they are more cost-efficient over the long-term than the equivalent petrol-fuelled versions. For example, he argues that “it will take you 150,000km to recover the extra cost of a Leaf over a top-line Corolla”. Nonetheless, he says the new feebate policy isn’t designed to get everyone into an EV immediately, but just to nudge everyone into more efficient cars generally.

What is missing from the Government’s green vehicle policy?

The Dominion Post editorial, cited above, makes a recommendation for improving the Government’s green vehicle policy, suggesting that a serious investment in the infrastructure of public charging stations is required: “Charging stations remain an urban novelty, and are even rarer between some of the country’s cities and towns. That is an important next step, especially if the Government hopes to have its feebate running by 2021. We can’t afford another long wait for progress.”

Similarly, the Herald says: “There is also the issue of whether there will be an adequate network of charging stations to serve an increase in electric vehicles.

The Government also considered and rejected an array of other policies before announcing the latest green vehicle initiative. For example, a more generous subsidy for EVs could have been on offer, with the consideration of an extra $2000 being possible to reduce the costs – see Jason Walls’ article, Cabinet paper reveals the Government scrapped plans for a direct $2000 subsidy for EV buyers. The Government also decided against taking GST off electric vehicles.

Reporting on a Cabinet paper on the issues, Walls says the Government “is also exploring the possibility of a second-hand EV leasing scheme aimed at reducing transport costs for low-income households and supporting EV uptake”.

But why didn’t the Government decide to put some of their own money into subsidising EVs? In another article by Henry Cooke, the Associate Minister of Transport, Julie Anne Genter explains: “We just decided it wasn’t tenable to take away $100m from schools or hospitals or hip operations to subsidise new cars that wouldn’t work for a large amount of New Zealanders” – see: Government considered $2000 subsidy and age limit on imported vehicles instead of feebate.

According to this article, the Government also rejected a “variable annual licensing fee”, which would make registration more expensive for high-emissions cars.

Will New Zealanders really care about this EV subsidy? Talkback host Ryan Bridge suggests otherwise, arguing that “Kiwis don’t care about climate change. They say they do, but then they go buy a new SUV and have another child. They have choices already and they’ve voted big, loud, and gassy” – see: Climate change tax proposed for driving utes, SUVs.

He’s rather cynical about the policy, saying “Farmer Bob from central Otago with his Ford Ranger will be hit with a $3000 tax, while latte-sipping, lentil-eating Fabio from Ponsonby with his VW Golf Electric will get an $8000 discount.” And today’s Listener editorial on the topic adds to this, saying “there is in this policy a whiff of pandering to urban liberals at the expense of workers in the provinces.”

Finally, Judith Collins took to Twitter this week to ask: “Given that EV cars have a wee electric motor, why do the manufacturers charge so much for them?” And to explain that, see David Linklater’s article, Silly car question #53: if EVs have ‘wee’ electric motors, why are they so expensive?

The original news story by Nita Blake-Persen was published on the RNZ website, and relayed how “Parents lined up in the torrential rain for hours this morning outside Manurewa’s Work and Income office to meet with advocates who help them with their claims. Without them, they say their desperate pleas for cash are almost always denied” – see: People queue from 2am outside Work and Income for help.

The first person in the queue, who arrived at 2am, told the reporter he needed a grant, as he was struggling to buy basic necessities for his three children: “I need to buy long pants, jumpers, jerseys and that, and then I need to get food, because I stay in a three bedroom house – I pay $610 a week.”

Like others lined up at the Work and Income office, he had come on that particular Thursday because the advocacy group Auckland Action Against Poverty (AAAP) come along on that day every week to help beneficiaries obtain their full entitlements. Those advocates claim that beneficiaries are otherwise being turned away from proper grants.

One of the AAAP advocates appealed to the Prime Minister to sort out the situation – Kathleen Paraha challenged Jacinda Ardern, saying: “The government needs to get off their bums and come down and have a look for themselves.”

The story has provoked some strong reaction on Twitter, with many saying it epitomises this Government’s failure to deliver the transformation it has promised. For example, Newsroom editor, Tim Murphy, stated “This is one of those stories that will be remembered about a government’s time in charge”, and “The more that this Governments term progresses, the more clear it is that that they are at their core no better than the last guys, or the ones before that. Virtuous media soundbites & photo ops aren’t making a difference”.

And his business journalist colleague Bernard Hickey pinpointed the conservative fiscal approach of Ardern and her Government as being responsible, saying the 2am welfare scenes occurred “At the same time as a ‘progressive left’ Government has a $7b budget surplus and has net debt so low that even Moody’s says we could almost double it and keep our AAA rating. Yet…budget Rules…”

Political activist and former MP Sue Bradford suggested that the Government was not following through on its promises: “Minister Sepuloni used to talk about the culture change she wanted at Work & Income, but the ongoing desperation of people who need help to get the most basic of needs from W & I flies in the face of Labour’s supposedly ‘kinder’ approach to welfare.”

In the blogosphere, some on the political left expressed their frustration. Steven Cowan blogged to say the continued plight of beneficiaries was a case of Paying the price of Jacinda Ardern’s austerity policies. He argued “these Auckland beneficiaries provide more stark evidence of a society where the depth of poverty continues to deepen and the chasm of inequality continues to widen”.

And he pointed out that “It was only two months ago that the Labour-led government declined most of the recommendations of its own welfare working group”. Similarly, Martyn Bradbury argued the incident was an example of The Toxic culture of WINZ & MSD laid bare,

But is it really fair to see the 2am Manurewa event as representative of the Government’s failed welfare reform agenda? The Minister of Social Development, Carmel Sepuloni, went on RNZ’s Checkpoint programme to dispute this version of the story – see: Long queues outside MSD ‘shocking’ but not the norm – minister. Sepuloni’s reaction to the story was: “I saw the image and I saw the story and no one would pretend that it’s not shocking to see that… that is not a normal occurrence at MSD (Ministry of Social Development) offices around the country.”

The Minister’s main point was that the queues from 2am in this instance were not directly due to Work and Income decisions, but because the advocacy group AAAC had arranged for beneficiaries to gather in a way that they needed to arrive early to get the chance of advocate help.

She said: “They’re not meeting with MSD at that hour, they’re actually meeting with their advocates… We tell AAAP… on Thursdays they have guaranteed appointments for their clients, that we will see them on that Thursday – so there’s no reason for them to turn up at that hour of the morning.”

In another interview, Sepuloni explained “I am advised that the long queues seen at Manurewa are the result of benefit recipients being encouraged by their advocates to all congregate at the same time on Thursdays”. She has also called on AAAP to work differently to help beneficiaries: “The queues can be avoided if AAAP works with MSD to deal with these cases in an orderly way across the week, rather than creating a bottleneck that forces everyone to be there at once in the rain” – see Michael Daly’s Auckland Action Against Poverty hits back at Government over WINZ queues.

The same article reports Work and Income regional commissioner Mark Goldsmith claiming that the AAAP advocacy group had refused “numerous attempts” made to work together. And, further, that “We would be happy to pre-book appointments with clients and AAAP advocates so clients don’t have to wait, but so far AAAP haven’t agreed to this.”

The group has responded, disputing this: “It’s categorically untrue we’ve refused to engage with MSD re:Manurewa.” And in open letter to the Government, published on The Spinoff, the group say: “When you say we should go to different offices to spread out the work of Ministry Social Development staff and avoid ‘creating a bottleneck’, what you are admitting is that MSD staff all over Aotearoa New Zealand are failing the people they are meant to be assisting. You are admitting that there is something seriously wrong with our welfare system” – see: We should not have to do MSD’s job for them.

The group also challenges the Government on its welfare policies in general: “There is enough money to end poverty but you need to be bold. You need to tax wealth and redistribute it into social welfare and public housing. You need to spend that surplus you are sitting on. It is socially and fiscally irresponsible to allow people to continue to live in poverty. We would like to see this rhetoric on well-being and kindness materialise in the lives of the people we work with.”

To get a better understanding of the work that the AAAP group is doing with welfare beneficiaries at the Manurewa office, it’s worth reading Michael Daly and Joel MacManus’ Minister responds to Manurewa Work & Income queue problem. In this, it’s explained: “The arrangement with Work and Income was that AAAP advocates were allowed to help 65 people in the queue on Thursday mornings. There were usually about seven advocates at the office, and they interviewed those 65 people.”

AAAP coordinator Ricardo Menendez March is reported saying: “In reality we always see far more. People have the right to have a support person at Work and Income… Throughout the day we end up helping far more people, explaining to them the process and making sure the case managers are doing their work and following the law adequately”.

Menendez March says that this has been going on for about two years, during which time the queues have always existed but are getting worse. Why? He says: “We know beneficiaries have been the most disproportionately impacted by the rising cost of rent. More people than ever require hardship grants to get by.” And according to this article, “The Manurewa WINZ office gave out $698,000 in Special Needs Grants for food last year, the highest in the country by more than $200,000.”

This article is also useful for providing the Government’s side of the story on what it is changing at the frontline to help welfare recipients, with Sepuloni stating: “this Government has sent a clear instruction to frontline MSD staff that anyone coming in is to be provided with the full financial support they are legally entitled to…. As a result of this instruction the number of hardship grants provided by this government has increased 60% year on year. The value of hardship grants has gone from $81m to $128.5m from March 18 to March 19.”

In addition, the article points out that “The Government has also announced funding for 263 new frontline MSD staff over the next 4 years.”

Perhaps this means that Work and Income offices will also stop referring beneficiaries to loan sharks to help raise their necessary funds, as reported recently by 1News – see: ‘Fundamentally wrong’ – Ministry referring beneficiaries to loan sharks, activists claim.

What else can be done to alleviate the plight of those on benefits? University of Auckland economist Susan St John has come up with a list of possible solutions that could be implemented immediately. Her “emergency package” includes the “Payment of the full Working for Families tax credits to all low-income families”; “An increase in the allowable income before any benefit is lost to 10 hours at the minimum wage or $170 per week”, and “A suspension of all student loan repayments for families who get Working for Families” – see: Poverty: not an earthquake but still a crisis.

As to what reforms the Government has already come up with, St John is derisory: “The tiny changes made in the 2019 budget will miserably fail to make a difference to the immediate problem. Worse still they don’t come in until April 2020.”

And like other economists, she criticises the fiscally-conservative approach of the Government as being at the root of their failure to act: “It may be laudable for the Government to be fiscally responsible, but not in the very narrow ways it has chosen. The nation is facing a crisis, it’s like a slow earthquake shaking our values to the foundation. You don’t store up goodies for the future when faced with life damaging catastrophes, you invest in reversing the damage and in preventing further damage.”

Finally, is there a need for reform of how the welfare system treats people in relationships? A new report out last week challenges the “traditional” and “current rules” in which people’s eligibility for benefits is based on whether they are in “relationship in the nature of marriage” – see Sarah Robson’s Welfare system needs to change how it defines relationships – report. And for a personal version of this story, see Sarah Wilson’s The consequences of love: how finding a partner left me penniless.

It would not be surprising if this faith is slightly eroded as a result of the fiasco over how Treasury handled the so-called Budget “hack” – when the Police were called in, and a panic started over the notion that New Zealand government agencies might be losing a war in a serious and criminal cyber-attack. The whole episode was bewildering.

The release of the report from the official investigation was supposed to resolve the issue. It was hoped that it would clarify, once and for all, the disturbing question of whether the senior public servant earning about $670,000/year had been incompetent or whether he had misled the public. And it was supposed to lead to some sort of closure, allowing the public to feel that accountability had been achieved.

However, the report released on Thursday – a day that was notable for being both Gabriel Makhlouf’s last day of work and also the time that a Cabinet reshuffle announcement was expected – was less than clear in its outcome.

On the one hand, the report clearly identifies that Makhlouf erred, providing numerous criticisms of how he handled the situation. The public record now shows that the Treasury boss acted “unreasonably” in coming out with alarmist and inaccurate explanations for how Budget secrets had come into the Opposition’s hands.

For the best news coverage on this, see Derek Cheng’s Gabriel Makhlouf responds: ‘My honesty and integrity are not in question’. This discusses the State Services Commission (SSC) report on the whole scandal, and details how the Treasury was actually well aware that the Budget leak had probably come from their own website, and that Makhlouf was informed of this before he went nuclear with his inflammatory public statements.

This article also makes it clear that the SSC boss Peter Hughes is completely condemning of Makhlouf’s actions. Hughes is reported saying, “It was a clumsy response to a serious issue and is not what I expect of an experienced chief executive.”

Hughes also told journalists that he had high expectations of government department bosses: “When things go wrong, I don’t want ducking, diving, running for cover, spinning. I want people to stand up, own it, fix it, learn from it and be accountable.”

However, the main problem is that the SSC has chosen not to take the issue further. No sanction or penalty was imposed on Makhlouf. This lack of reprimand is discussed by Newsroom’s Sam Sachdeva who asks “why don’t the State Services Commissioner’s actions regarding Gabriel Makhlouf match that ethos” of high standards? – see: Makhlouf falls short – so why the shortage of SSC action?. He concludes “While the SSC report is clear, it is the response to those findings where it feels like Hughes has fallen short.”

Hughes explains that a formal reprimand of Makhlouf was out of the question because he was leaving his job anyhow. Hughes believes it would have only been symbolic, and therefore “meaningless and cynical”. To this, Sachdeva replies: “but it seems just as cynical to deliver a tongue lashing for inappropriate behaviour yet stop short of doing anything tangible to register that impropriety. Does failing to register an official caution now set a precedent for any SSC employees who find themselves in a similar situation?”

Herald political editor Audrey Young also takes issue with Makhlouf’s lack of leadership and his failure to take responsibility for what he’d done wrong. On reading the report, she says: “what is clear is that there were more than sufficient grounds for Makhlouf to have offered his resignation” – see: A case of good faith butt-covering by the head of Treasury (paywalled).

So why did the Treasury boss act so badly in this? Here’s Young’s explanation: “One is left to surmise that he believed admissions of failure and responsibility might impact on his new job than protestations that he acted in good faith at all times. It appears a clear case of good faith butt-covering”. And she takes issue with the report describing Makhlouf as having acted in “good faith”, suggesting this could simply mean that he was acting “sincerely” out of self-interest.

The most scathing critique of the scandal comes from veteran political journalist John Armstrong who suggests that the New Zealand public service now has an accountability problem: “So just where exactly does the buck now stop in the separate, but interconnected worlds of politics and the public service? If your regard for accountability is as similarly bankrupt as seems to have been the case with Gabriel Makhlouf, the now (thankfully) former boss of the Treasury, then the answer is that the buck never stops at your door” – see: Gabriel Makhlouf’s refusal to resign over ‘Budget hack’ saga sets a truly awful example.

Armstrong describes Makhlouf’s actions over the whole episode as panicking, wreaking havoc, “bungling and blundering”, and resulting in a “spectacular gaffe” which has overshadowed everything else in his career. Armstrong says what he did was “inexcusable”.

Makhlouf did put out a statement on the same day as the report was published, in which he showed scant contrition, instead suggesting exoneration. On this, Armstrong is highly critical: “Makhlouf’s parting gesture was to instead issue a brief statement in which he belatedly apologised ‘that Budget information was not kept secure’. That offering was very carefully worded. It might have been an apology. It was not an acceptance of responsibility.”

Armstrong’s problem isn’t just with Makhlouf, but with the SSC – the government agency tasked with ensuring the integrity of the public service. He concludes his piece by saying: “Faced with Makhlouf’s refusal to be accountable for the mess, Hughes should have fired him. Failing that, Hughes should have formally reprimanded Makhlouf. The State Services Commissioner acknowledged the inherent symbolism of such a reprimand. His decision not to issue one is just plain wrong.”

Long-time critic of public service standards, economist Michael Reddell, has been outraged by how the SSC has handled the scandal. Reddell focuses on why no one else in Treasury or in the SSC were apparently helping Makhlouf and preventing him making his endless mistakes: “it was Makhlouf’s job to lead the organisation above the embarrassment and to do the right thing. He simply didn’t do that, and no one else –  in his department or elsewhere in the public sector (the very top tier of public servants) – was willing or able to stop him. Where, for example, was his employer –  Peter Hughes” – see: The SSC on Makhlouf.

Reddell says “We – citizens – deserve much better. We deserve more answers from SSC themselves.” The answers don’t appear to be in the report. And he’s highly critical of Hughes for so publicly and effusively praising Makhlouf at his farewell party, just a week or so before the damning report was published.

According to Reddell, Hughes praised Makhlouf as “authentic and straight up” as well as being “calm and unflappable”. In Reddell’s view, “In no conceivable universe (except perhaps some parallel one inhabited by SSC) could Makhlouf during that Budget episode be said to have displayed ‘calm and unflappable’ leadership. Had he done so, there’d have been no inquiry. And the inquiry report demonstrates just how far from calm and unflappable Makhlouf’s conduct appears to have been, and how little ‘strong leadership’ and ‘personal integrity’ has been on display.”

In the end, according to Reddell, the SSC seems to have shown their tolerance for Makhlouf’s very poor performance. And there’s a suggestion that the close relationships between the top echelons have simply helped protect him: “What message does that send? That really severe misjudgement by one of the most senior public servants in the end doesn’t matter that much, cos’ he’s a good bloke?”

Of course, there was always a chance that the whole scandal would prevent Makhlouf from taking up his new job as the next governor of Ireland’s central bank, but Derek Cheng has confirmed that Gabriel Makhlouf’s job in Ireland appears to be safe.

Cheng also confirms that right up until the end, the top public servant has also refused to make himself accountable to the public via media interviews: “Makhlouf has repeatedly refused any interviews since May 29, the day before Budget day, and again refused interviews yesterday, his last day of work at the Treasury.”

Finally, Maklouf’s replacement has now been announced: Australian economist and academic Caralee McLiesh. Most, but not all, are impressed. Victoria University of Wellington’s Simon Chapple puts the argument against employing, once again, a non-New Zealander for this crucial role – see: Public sector pick carries disheartening message. And for a reply from one of Chapple’s colleagues, see Jeroen Van Der Heijden’s Treasury pick carries risk of tall poppy paradox.

That’s why we absolutely need to know who has the ear of decision-makers. And why, throughout the world at the moment, there is an increased interest in the power of corporate interests in democracies and, in particular, on the oversized influence of lobbyists in the political process.

Here in New Zealand there is a staggering example of corporate lobbying power happening – the employment by Prime Minister Jacinda Ardern of lobbyist GJ Thompson. It’s been an extreme case study in which a lobbyist has been given extraordinary power within a government, access to privileged information and networks, and allowed to continue to utilise this all for the vested interests who pay Thompson’s firm handsomely to get the sort of influence that a lobbyist close to the Prime Minister has.

In the case of GJ Thompson, he was literally a “corporate lobbyist running the government”. As I explained in columns last year, Thompson runs a lobbying firm, and was “seconded” by Jacinda Ardern to come into the Beehive to be her Chief of Staff and help set up the new government – see: The Government’s revolving door for lobbyists and Lifting the lid on lobbying in politics.

The problem was that Ardern hired this corporate lobbyist to come in and run the Beehive, knowing that this would involve choosing the new staff, choosing Cabinet ministers, getting access to all Cabinet papers, and then immediately returning to his lobbying firm where it would be his job to lobby these very same people and try to give corporates the inside advantage on how to influence the new Government.

This would not happen in other parts of the world – certainly not in proper liberal democracies. Such practices are normally outlawed. A conflict of interest of this kind would be labelled “corrupt”.

At the time that the Prime Minister chose to make a corporate lobbyist one of the most powerful figures in the Beehive, the public was told that the conflicts of interest would be appropriately managed. We now know that this wasn’t the case, and you can read about this in yesterday’s expose on the Spinoff website by journalist Asher Emanuel – see: Nothing to declare: new questions in lobbyist-turned-chief-of-staff saga.

This piece of investigative journalism is based on Official Information Act requests which have yielded documents about the details of the lobbyist’s employment in the Beehive and which suggest that no adequate procedures were followed to ensure lobbing conflicts of interest didn’t occur. Yes, some sort of basic contracts to try ensure probity were signed, but they appear lax, and were seemingly not followed in practice.

Emanuel says his investigation shows Thompson “appears to have failed to comply with commitments he made to disclose conflicts of interest on an ongoing basis”. This, he says, raises “questions about a breach of government rules around conduct in the public service.”

Furthermore, the official documents show that Thompson failed to reveal his lobbying clients while running the Beehive: “Neither the prime minister nor Ministerial Services were provided with a list of Thompson’s firm’s clients.”

He comments that: “Without having seen a list of the firm’s clients, and in the absence of Thompson alerting Ministerial Services to any real or potential conflicts related to clients as they arose, it is difficult to see how the prime minister’s office or Ministerial Services could identify or manage any conflict between the interests of his firm’s clients and the interests of the government.”

Not knowing what corporates Thompson was representing while working as the PM’s Chief of Staff, it’s hard to now know if there was a lobbying problem. But Emanuel says: “At least two of the firm’s known clients — Huawei and property developer Darby Partners — seem likely to have had interests affected by government policy.”

Is this a problem? Well, as the article points out, Thompson “had some involvement in the appointment over 100 staff to ministerial offices and access to all Cabinet papers, which range from mundane to critical, and from the essentially public to the literally Top Secret.” And, “After returning to his firm, Thompson’s work would include lobbying the same people he had helped hire.”

Furthermore, the article clarifies that, despite assurances from the Prime Minister that Thompson had resigned from his lobbying firm, the reality was quite different: “Companies Office records show that he did not resign his role as director. A company law expert told the Spinoff it is not possible to take a “leave of absence” from a directorship and that Thompson’s legal duty to act in the best interests of his company would have persisted during his employment as chief of staff.”

Reaction to this story in the blogosphere has been interesting. Leftwing blogger No Right Turn discusses the arrangement and labels it An invitation to corruption. This is not to suggest that anything has been untoward, but that the arrangements mean we won’t know: “While there’s no evidence he behaved corruptly in the role (because we don’t know who his clients were), ignorance isn’t a good enough standard. Our government must not only be honest – it must be seen to be so. And Thompson’s appointment and behaviour simply fails that test.”

The blogger says the Prime Minister and government officials have erred in not protecting the integrity of the political process: “Effectively Ardern and Ministerial Services left it entirely up to Thompson to identify any problems, and he didn’t. Which simply isn’t good enough. With the integrity of our government and political system on the line, I’d expect something a little more proactive – like forcing him to identify his clients, and then firewalling him from anything to do with anything they might be interested in (such as appointments to agencies they lobby).”

The Spinoff’s Alex Braae makes the case that this ongoing controversy should be taken seriously, because although “it could be seen as a minor technical matter”, “it could also be seen as symptomatic of something much wider and more concerning” – see: More questions around lobbyist’s role with Ardern admin.

He points out that Thompson’s privileged position makes him powerful, and asks: “is this how a democratic government should work?” And he’s got a good question for many of those complaining that this is a non-story: “for supporters of the government who don’t see anything to be concerned about with this – would you feel the same way if the PM in question was John Key?”

On Twitter, others have debated whether this should be taken seriously as a scandal. Morgan Godfery (@MorganGodfery) has said: “Usually when people say ‘if John Key did it the left would be outraged’ I shrug but in this case I really do think if John Key did it we’d be calling it corruption. Now we’re just shrugging (including myself, a hypocrite, btw).”

Continuing this point, National Party blogger David Farrar blogs to say: “think if the situation was reversed. Say Simon Bridges became Prime Minister and appointed Matthew Hooton as his Acting Chief of Staff for six months, with Matthew remaining a Director of Exceltium while hiring all the Beehive staff and seeing all Cabinet papers. There would be non-stop media coverage” – see: Imagine the outcry if this was a National PM’s Office.

Today in the Herald, Claire Trevett agrees with this sort of argument: “National-aligned commentators have argued that had National employed one of its friendly lobbyists in the same circumstances, there would have been a riot of raised eyebrows. They are not wrong. Key rode through such criticisms untouched, as Ardern is now doing. Such issues rarely get resonance with the wider public. That does not mean they should be ignored. Nor should they be overstated. All governments have mixed records when it comes to transparency” – see: Labour’s transparency drive falters in dance of many hats.

Trevett is also dismissive of the Prime Minister’s defence of her role in this scandal so far: “The general gist of Ardern’s defence was that Thompson was a mate of hers and so could be trusted. It highlights the difficulty politicians have in applying the ‘if the shoe was on the other foot’ test. They tend to take the assumption everybody will see the ‘other side’ as a bit dodgy, while they can get away with the same thing because they are beyond reproach.”

Jacinda Ardern and authorities are still dodging questions about their role in the arrangements. But Ardern’s main response on the issue is akin to that of John Key’s classic response to scandals, in which he would express that he was “relaxed” about the controversy – it was reported yesterday that she is “comfortable” with the arrangements – see Henry Cooke’s PM Jacinda Ardern says lobbyist chief of staff matter handled appropriately.

The article reports that “Ardern and Thompson are known to be friends.” And Ardern gives her defence about employing a lobbyist friend to run her government: “It’s not easy to find someone who has the level of knowledge and experience, of course Gordon Jon Thompson had worked in this building before and was able to take a short period of leave.”

Cooke also reports on National’s low-key response to the ongoing scandal, saying that Simon Bridges “was quite restrained in his criticism of the matter.” He justifies not campaigning on this issue by saying “National is not going to wade into every situation we see, but it does seem wrong”. Perhaps more importantly, however, the same article points out that “Wayne Eagleson, the former chief of staff to John Key and Bill English, joined the [Thompson Lewis] company after National left government.”

Yesterday, Thompson himself responded to the controversy, putting out a statement to suggest that “any potential conflicts of interests were declared and managed at the time” and that “I took a leave of absence from the firm. The arrangements made reflected the short-term nature of the role” – see Jason Walls’ PM Jacinda Ardern confident a potential conflict of interest with former chief of staff managed appropriately.

This article also reports that “He told The Herald the idea that he hadn’t done everything by the book was ‘erroneous’. Asked if he had declared his clients to Ministerial Services, Thompson did not directly answer the question, only saying: ‘I did what was required by Ministerial Services to manage the conflict’.”

Although the Green Party used to be much stronger on lobbying issues, now that they are part of the Government they have gone quiet. Instead, it’s now Act Party leader David Seymour who is alone in pushing this lobbying issue. He has been asking questions in Parliament – see Zane Small’s Jacinda Ardern facing questions over former chief of staff’s lobbyist role.

Here’s the main point: “Seymour raised the conflict of interest issue in Parliament on Thursday. He asked Ardern why she said Thompson took a leave of absence from his company during his tenure as interim chief of staff, when there’s no record of it. Deputy Prime Minister Winston Peters, standing in for Ardern, replied: ‘On behalf of the Prime Minister, because it was and is a fact’.” Seymour has replied to this, saying “What’s really offensive here, is that the Prime Minister has said, actually he stepped down from those roles, when very clearly he didn’t”.

You can also watch Seymour’s exchange with both Winston Peters and Speaker Trevor Mallard: Question 4 – David Seymour to the Prime Minister.

This article above also cites the Cabinet Manual stating that care should be taken “to avoid creating a perception that representatives or lobbyists from any one organisation or group enjoy an unfair advantage with the government”. It points to the website of the Thompson Lewis lobbying company, which describes the firm as having “considerable understanding of Wellington and its processes, having spent significant time in senior roles in Government and Opposition, and working with the public sector”.

Finally, there’s another side to the story, from someone else with close connections to politicians and lobbyists. Bill Ralston says the “notion that the Government is being led astray by lobbyists insults its intelligence” and that as someone close to “three previous prime ministers” he can report that “there was little evidence that they listened to the well-meaning advice I gave them” – see: Stop kidding yourself, the Govt isn’t falling for spin doctors.

New Zealanders will be right to feel extremely suspicious that they were deceived last week by authorities. The whole scandal is a big deal, and the announcement last night of an independent investigation is welcome. The issues at stake go to the heart of integrity in public life.

The main problem is that Treasury boss Gabriel Makhlouf, followed by Minister of Finance Grant Robertson, informed the public there had been a “deliberate and systematic hack” of Treasury’s website, when we now know that this account was untrue.

The second problem is that Government politicians then used this claim to suggest the Opposition were somehow involved in criminal activity.

A lot of this is well explained today in Tim Watkin’s blog post, Gabriel Makhlouf’s already had three strikes. Can he really avoid being ‘out’? According to Watkin, “Makhlouf is in serious trouble. A new inquiry will have to uncover something yet unknown to excuse the three strikes he committed last week”. He says that Grant Robertson also has some big questions to answer, as there is a chance that “Makhlouf is covering for Robertson”, in which case “both are toast”.

For more details on how the whole scandal could have so easily been avoided, see Richard Harman’s How the Treasury leak could have been contained. He reports that “From what we now know, it is clear that the whole question of the Budget ‘leak’ could have been resolved last Tuesday afternoon. This is it when it appears the GCSB, National Cyber Security team concluded that Treasury had not been hacked by the National Party.”

According to Harman, the story about the “hack” could have been clarified early on: “The GCSB could have cleared that up on Tuesday, and either the Prime Minister or Robertson should have insisted they made a public statement and at the same time”.

For more on how the whole episode unfolded, see Stacey Kirk’s article, Smartest men in the room? Pffft! Treasury stands alone on Budget bungle. Her conclusion is this: “How Gabriel Makhlouf is still in a job is beyond me.” She says the actions of Treasury over the “hack” were “a total waste of police resources and an example of extreme arse-covering.” She argues “All signs suggest Makhlouf knew what had happened, and went ahead with his own version anyway.”

On the political right, there’s been outrage over the “hack” scaremongering. David Farrar, for example, says: “If these reports from within Treasury are true, we should expect resignations or sackings. Making false accusations of criminal activity to police to deflect from one’s organisation’s own basic incompetence is not acceptable” – see: No Dorothy, using a search engine is not a hack.

Farrar suggests the Government is essential guilty of incompetence at best or of dirty politics at worst: “Both Grant Robertson and Winston Peters have smeared National. Jacinda Ardern claims to lead a Government of kindness. Does smearing your political opponents as criminals because they used a search engine, fit with that? Robertson may claim he acted on Treasury advice, but he didn’t. He explicitly linked National’s material to an illegal hack, which goes beyond what Treasury said. But regardless a competent Minister should push back when an agency says ‘hey boss, we were hacked, it wasn’t incompetence’ and ask for at least some basic details of what is alleged.”

In contrast, the political left have mostly been inclined to respond to the scandal with silence or defend the Government. According to one leftwing blogger, this isn’t good enough. Martyn Bradbury challenges his own side to take the issue more seriously: “Comrades of the Left. If Treasury had just pulled a hacking manipulation this audacious while National was in power, we would be screaming for heads to roll, yet the majority of the Left are ignoring what Treasury did out of a misplaced loyalty to Jacinda & Grant. It’s infantile” – see: I think almost everyone on the Left who are trying to underplay what Treasury did hasn’t read this….

Bradbury concludes: “Shouldn’t we be incandescent with rage at such a manufactured deception by one of the most powerful Government Departments? If Grant doesn’t sack him, Grant should be sacked. It’s as simple as that.”

However some on the left have strongly condemned what has occurred. The best example is No Right Turn, who says: “I’m surprised they didn’t charge Treasury with wasting police time. Meanwhile, Treasury secretary Gabriel Makhlouf has presided over incompetence and smeared the opposition. We pay public sector CEOs the big bucks supposedly to take responsibility. We pay Makhlouf over $600,000 a year on that basis. So how about we get what we paid for? By running a muppet show, Makhlouf has f**ked up his agency’s biggest event of the year” – see: What a muppet show.

Other political commentators have taken a hard-line stance on the issue. For example, veteran political journalist John Armstrong makes the case that Makhlouf has now spoilt Treasury’s important neutral image, and should resign – see: Grant Robertson and Treasury boss should resign over Budget data leak.

Armstrong also makes the case for the Minister of Finance to go, but concedes that simply won’t happen: “Robertson is exempt from having to fall on his sword. That exemption is by Labour Party decree. He is just too darned valuable. Both he and the Prime Minister have made it very clear that they will move mountains to ensure Robertson emerges from this episode as untarnished as possible by placing responsibility for the breach fairly and squarely in the Treasury’s lap.”

The focus is increasingly on Robertson now. Many suspect he was likely to have been fully aware that he and Treasury were unfairly smearing his National Party opponents with criminal allegations, or at least allowing such insinuations to continue. Therefore, questions will be asked about what he knew about the so-called “hack”.

Richard Harman explains that the public needs to know what happened in the Minister’s office: “This whole affair now centres on one critical meeting or conversation; between Makhlouf, Robertson and Ardern’s Deputy Chief of Staff and Chief Press Secretary around 7.00pm last Tuesday night. After that meeting, Makhlouf issued a statement saying that Treasury had been subject to a systematic and deliberate hack and then 17 minutes later, Robertson went one step further and linked the National Party to the hack” – see: What did Makhlouf say to Robertson.

David Farrar asks some difficult questions: “What was said in this meeting. Did Robertson and the PMO really ask no questions about the basis for the claim of being hacked? And when did Ministers learn there was no hack? It almost certainly was well before 5 am Thursday. It may have even been Tuesday evening. Yet they said nothing” – see: SSC launches investigation of Treasury Secretary.

He also asks why the Government or the GCSB didn’t make any sort of statement to correct the incorrect perception last week that a “hacking” had occurred: “We now know that the GCSB did not regard Treasury as having been hacked. When Treasury then put out a release saying they had been hacked, surely GCSB informed one or more Ministers (or at least DPMC) that this information was incorrect. Could you imagine the GCSB saying nothing for 48 hours while stories around the world were proclaiming the NZ Treasury had been hacked? Treasury did not correct the record until 5 am Thursday. But when did Ministers get informed the statement was incorrect, and why did they allow the misinformation to persist?”

There are obviously some major issues of public accountability at issue. Some are wondering why the Treasury boss has neither resigned nor been fired. Economist Eric Crampton suggests the whole episode “extends the stench of Wellington unaccountability” and asks: “Just how bad does a public sector Chief Executive’s performance have to be before accountability kicks in?” – see: Protecting the privileged (paywalled).

Crampton argues that “when a resignation is not offered for performance this far off the norm, and the appointee continues in the position, something is manifestly wrong – either employment law as it relates to senior executives, or the government’s willingness to put up with exceptionally poor performance.”

But it could be, Crampton argues, that the Government is worried about a legal challenge from Makhlouf, especially if the State Services Commission review results in the departing Treasury Secretary also losing his new position at the Central Bank of Ireland.

Problems of accountability are also examined by former Reserve Bank economist Michael Reddell who sums up the hack debate as being “an extraordinary couple of days, and an extraordinary display of poor judgement by one of our most senior public servants” – see: On Makhlouf and standards in public office.

Reddell is trenchant in his criticism of the Treasury boss: “of things that have come to public view, it is hard to think of any (departmental chief executive) episodes that plumb the low standards on display by Makhlouf in the last week (not just a single choice, word, or act) but the accumulation of words, actions, choices over several days, each compounding the other, with no sign or act of any contrition). He should go, and if he won’t resign, he should have been dismissed (yesterday’s Cabinet would have been the opportunity).”

But Reddell isn’t convinced the State Services Commission inquiry will be adequate: “I have little confidence in this inquiry. For one, the inquiry is supposed to look into Makhlouf’s handling of last week’s events, but recall that the SSC made themselves an active player in those events when they agreed to a coordinated statement with Treasury on Thursday morning. They are, at least in part, inquiring into themselves.”

He then concludes with a picture of a cosy situation: “the State Services Commissioner is fully part of that same self-protecting establishment –  appointed by them, from among them, and now supposedly reporting independently on actions of another member that he himself was part of as recently as last Thursday morning. This must not be the standard we settle for.”

And, so should the public have confidence that everything is under control? Not according to technology writer, David Court, who can’t believe that politicians and officials have misunderstood and mishandled so much – see: Politicians and technology are a bad mix.

Here’s his main point: “The Treasury and Peters’ should be deeply embarrassed and apologetic. The rest of us should be worried. Having politicians with Luddite qualities is sometimes amusing and bemusing. It’s also dangerous. We have a Government that thought it was hacked. By Google. And reported it to the police. Give me strength. These are the same politicians that will be making decisions on important technology-related matters. Do you have confidence that these ministers will make the right decision on 5G and/or cyber security? Or is it more likely they’ll make an ill-informed, but politically motivated, decision? This week’s embarrassing display suggests the latter.”

Finally, for humour on the hack, see Steve Braunias’ Secret diary of Treasury Secretary Gabriel Makhlouf, and Andrew Gunn’s Budget leak more than a train-wreck.

The front page of the Christchurch Press declared it to be the “Helping Hand Budget”, while for the Dominion Post it was “The People’s Budget”. However, there’s another side to the Budget coverage that also deserves some attention – the more critical examinations, which raise questions about the shortcomings and substance in yesterday’s announcements.

Of course, there are always the usual partisan Opposition criticisms, which can be put aside (and really don’t amount to much this year anyhow). Even the business community’s criticisms were half-hearted and, in fact, many businesspeople seemed entirely positive about the Budget. More interesting, are the leftwing or “critical thinking” analyses, which question some of the fundamentals of what has been delivered – or not delivered.

It’s certainly worth thinking about whether the Government’s own constituency – beyond the cheerleaders – will be satisfied by what’s on offer. This was my thinking in an initial analysis piece I wrote for RNZ yesterday afternoon, in which I suggested that the hopes of many on the left might be dashed by what is a rather pedestrian Budget – see: A status quo Budget when transformation was promised.

I argue that this is not the budget of a “transformational government” and it delivers little for supporters when it needed to deliver so much

Many leftwing commentators have also been critical. The most important analysis comes from Gordon Campbell, who comprehensively eviscerates Robertson’s Budget for being timid and orthodox – see: On the ‘morning after’ feeling from the Wellbeing Budget.

Campbell says that instead of anything like “socialist red”, the Budget is more of a “lighter shade of pink that’s been spread thinly across a slew of social and infrastructural spending initiatives that – with a couple of exceptions – are disappointing in their scale and scope. It isn’t transformational.”

Even the increase in mental health funding, which takes that funding to a total of $1.9bn over five years, isn’t as impressive as it might look: “To some extent, those headline funds for mental health will be met from other areas of operation. For example: about $213 million of the funding to enhance mental health and addiction services will be ‘ring-fenced’ from within the funding boost delivered to DHBs. The downside of that situation is that DHBs have received a limited level of extra funding”.

Campbell argues that if the Labour-led Government really cared about fixing the infrastructure deficit or getting rid of child poverty, they simply could have spent proper amounts of money on those projects. Instead they’re “doing relatively little” because of their fiscal orthodoxy that they share with the National Party.

He points out that even National had been spending up on KiwiRail when it was in government, and there doesn’t seem to be any “transformational” plans for rail at all – just playing catchup on necessary expenditure.

Likewise, on the question of benefits being indexed, Campbell argues much more is needed, and “Nowhere was the gap between the caring rhetoric and substance made more clear than in the Budget’s treatment of beneficiaries.” The lack of any generous funding for this group, as for many others, has him concluding that it all “felt more like well-being on a budget, rather than a Wellbeing Budget.”

So, will the political left be disappointed? Herald columnist Rachel Stewart says today that “The left will secretly feel hacked off. And, if not, they need to ask themselves why” – see: Rail on track but climate challenges ignored.

Stewart suggests that much of the big spending initiatives were inevitable under any government and Labour has simply made a virtue of a necessity. Even on the praise-worthy mental health plans, she says this focus isn’t adequate: “it pays to temper such praise with reality. Poverty is also a driver of family violence. So, again, funding initiatives for family violence are just more ambulance/bottom/cliff stuff. Until the lowest-paid workers and beneficiaries see significant gains in their capacity to pay for the basics, the mental health/violence/addiction stats will remain static.”

In fact, the limitations of both the indexing of benefits and the mental health programme are being criticised by some high-profile campaigners. Although Grant Robertson credits Children’s Commissioner Andrew Becroft as giving momentum to the indexing of benefits, Becroft has come out today to say it’s not enough. Isaac Davison reports that “he also felt there needed to be a ‘catch-up’ increase in payments which took into account the fact that benefit levels had fallen behind over the last 25 years” – see: Beneficiaries will get $17 more a week – eventually.

On the topic of a large increase in benefits, Becroft says “That’s what we are waiting for”. And Davidson’s article points out that the “Welfare Expert Advisory Group said earlier this month that core benefit payments should be raised urgently, and recommended an increase of between 12 and 47 per cent.”

In the same article, anti-poverty campaigner Ricardo Menendez complains that “the lift in benefit payments was small when the costs of living continued to rise”. He says: “The Government needs to introduce a wider range of welfare reforms and invest on public housing if it is serious about the wellbeing of low-income people. This budget, unfortunately, failed to deliver on these two crucial issues.”

Menendez has also spoken out on the limitations of the large mental health spend, saying that the “Budget may be handing an impressive boost to mental health but without addressing what’s causing mental health problems, the $1.9 billion investment won’t mean much” – see 1News’ Anti-poverty campaigner says Budget 2019 gives ‘breadcrumbs for people on the benefit’.

He says: “We welcome the fact that there’s been an injection of cash for mental health wellbeing but what has been left behind is the determinants of mental health which is incomes and housing… Access to adequate incomes and adequate housing is one of the most important things for your wellbeing.”

Of course, such large spending on wellbeing isn’t being considered by the Labour-led Government. Victoria University of Wellington’s Max Rashbrooke argues the government is being held back by its fiscal conservatism: “the Government’s predetermined fiscal rules severely limit its ability to enhance wellbeing. It plans to keep public spending at 28.8 per cent of GDP by 2023, even though many developed nations spend 40 per cent or more. Yet greater wellbeing is going to require a greater tax take” – see: For term wellbeing to be meaningful, Budget spending must be assessed across society.

Rashbrooke says that although the Budget “doesn’t deliver a transformation”, he’s still hopeful that the new wellbeing approach will lead to that. But ultimately more taxation and spending is necessary: “We’re also going to need to spend serious cash on things like renewable energy if we’re to avert disastrous climate change. The absence of any notable spending here is the Budget’s greatest blind spot.”

Others such as Greenpeace’s Russel Norman have raised similar concerns. And in her column, Rachel Stewart also draws attention to the lack of spending on climate change: “Where is the money for massive solar projects, or battery tech to start the huge task of reshaping our transport and industrial systems? If the Government won’t change their emphasis on solving the biggest crisis facing all of us, when will they? After the next election? After the next climate calamity?”

For a similar critique, see No Right Turn’s blog post, A deckchairs budget. Here’s his main point: “It’s the only policy that matters, and next to it everything else is deckchairs on the Titanic. But that’s what we got: deckchairs. No money for a major decarbonisation of our electricity system. No money for a major decarbonisation of our transport system. No money, in short, to stop us poisoning the planet. Governments show what they value with money. Jacinda Ardern’s government has shown what it values today, and it is not the future.”

Not spending money to deal with these issues was a deliberate choice made by the Government, according to Bernard Hickey: “it is essentially deciding that keeping interest rates low is more important than getting kids out of poverty and reducing the stress of painfully high housing costs. New Zealand could easily increase its net debt to 50 percent of GDP over the next 10 years without either hurting our credit rating much or sparking a spike in interest rates. The Government should be using that flexibility to address New Zealand’s massive infrastructure and social deficits” – see: What the Wellbeing Budget should have been.

Hickey argues that the Government should be borrowing “$150 billion over 10 years to rebuild the housing and transport infrastructure in our major cities in a way that drives down housing and transport costs and sets us up for a carbon neutral economy by 2050. That extra investment would drive up productivity and then flow through to increases in both GST and income tax revenues to pay the slightly higher interest bill. That $150 billion could be invested in rail lines, bus networks, brownfield housing infrastructure, EV vehicle subsidies, and better education and health spending to improve the health and skills of young workers, who’ll be needed for that re-engineering of New Zealand.”

Similarly, economist Ganesh Nana said in the Herald today that the Government had the fiscal ability to be much bolder in the Budget: “Is it transformative? Sadly, not really. Debt is is projected at a meagre 18.7 per cent of GDP in 2023 – and there is a surplus track of $1.3b, $2.1b, $4.7b and $6.1b. With these numbers it is somewhat surprising that this Government did not use more of this elbow room to trigger a dramatic transformation in business, economy, and communities across Aotearoa.”

If not borrowing, the Government could be raising more money to pay for such necessary spending according to The Spinoff’s business editor Maria Slade: “Tax is the elephant in the room. If the government wants to continue down the wellbeing route it has to be able to pay for it. It’s in the ballpark this year with an expected surplus of $3.5b and new spending of $3.8b, but at some stage New Zealand will be forced to face the fact that a large proportion of our revenue comes from taxing salaries and wages” – see: The well-meaning budget.

Slade says although the Budget is “a well-meaning start… it could hardly be described as transformational.” She acknowledges change takes time, but says it’s not clear much is being achieved at all: “Rome wasn’t built in a day. Nonetheless you’d hope the Romans achieved a metre or two of roading in a 24-hour period.”

Similarly, RNZ’s political editor Jane Patterson argues the Budget was a long way off “creating a seismic political shift” – see: Wellbeing Budget: Laudable, but not transformational. Patterson says many of the changes were more about easing “some of the pressures that have been building up since the election of the coalition”.

In the area of welfare, she says despite “promised transformation” Labour and the Greens “have delivered only incremental changes.” Other traditional areas of leftwing importance are also being neglected financially – for example we’ve seen “in education not enough money to keep up with operational spending.”

Finally, from a distance much of yesterday’s Budget seems bigger and bolder. Looking at the international coverage of the Budget, Alex Braae says they seem to be getting it all wrong – see: ‘A beacon for the world’: What foreign media is saying about the Budget.

Commentary & reaction
Corin Dann (RNZ): Some meat in Wellbeing Budget 2019 but will it satisfy?
Bryce Edwards (RNZ): A status quo Budget when transformation was promised
Matthew Hooton (Herald): This Government’s Wellbeing measures are total BS (paywalled)
Audrey Young (Herald): Wellbeing Budget is different, but it isn’t radical (paywalled)
Bernard Hickey (Newsroom): What the Wellbeing Budget should have been
Rod Oram (Newsroom): Budget: long on rhetoric and short on transformative funding
Brian Fallow (Herald): Was the Budget transformative? Maybe, but we’re not there yet (paywalled)
Henry Cooke (Stuff): Transformation within a tempest: A very stormy budget day
RNZ: Budget 2019 RNZ Radio Special: Our correspondents’ analysis
Spinoff: Wellbeing Budget 2019: The great Spinoff hot-take roundtable
Newstalk ZB: Political commentators say ‘Wellbeing Budget’ is pretty status-quo
Hamish Rutherford (Stuff): Budget 2019: An ambitious plan, but questions grow about the delivery
Arthur Grimes (Spinoff): The Wellbeing Budget: taking aim, but without targets
Stacey KIrk (Stuff): Budget NZ 2019: Wellbeing Budget filled with substance, but has Bridges’ name all over it
Tova O’Brien (Newshub): Somewhere between the Well-meaning Budget and the Blunder Budget
Sam Sachdeva (Newsroom): Real Budget delivered under ‘hack’ shadow
Hamish Rutherford (Stuff): Budget NZ 2019: Grant Robertson’s debt target squeezed by higher spending
1News: Analysis: 1 NEWS’ Jessica Mutch McKay and Simon Dallow break down Budget 2019
1News: Anti-poverty campaigner says Budget 2019 gives ‘breadcrumbs for people on the benefit’
Martyn Bradbury: With this budget, the Government have shown us they define ‘transformational’ about as well as Treasury defines ‘hack’
Steven Cowan: Plenty of nothing
Zane Small (Newshub): ‘It’s deeply disappointing’: Why Budget 2019 didn’t measure up for some
David Hargreaves (Interest): Our compilation of some of the key comments made in response to the 2019 Budget
1News: Kiwi punters, journalists, industry groups and politicians react to the ‘wellbeing budget’
Herald: Budget 2019: Who’s delighted and who’s disappointed?
Dominion Post: Budget 2019: What Kiwi families think of the details

Summaries and overviews
Keith Ng (Herald): Interactive Data Visualisation: Explore Budget 2019 for yourself
Chris Knox (Herald): Budget 2019 interactive: How does it compare with last year?
Andy Fyers (Stuff): Budget NZ 2019: The Budget in five charts
Belinda Feek (Herald): Budget 2019: The face of today’s Budget has given up on New Zealand and moved to Australia
RNZ: Budget 2019 model quit New Zealand for Australia due to cost of living
Henry Cooke (Stuff): Budget NZ 2019: Wellbeing Budget by the numbers
RNZ: Budget 2019: What you need to know
Anna Whyte (1News): Budget 2019: What you need to know
Claire Trevett (Herald): Budget 2019 at a glance: What you need to know
Tova O’Brien, Anna Bracewell-Worrall and Jenna Lynch (Newshub): Budget Day: Newshub Politics breaks it down in three minutes
Zane Small, Mitchell Alexander and Simon Wong (Newshub): How the Government’s divided up its funding
Jason Walls (Herald): What’s in Budget 2019: Benefits to increase, most school donations scrapped, $2b for mental health
Yvette McCullough (RNZ): Budget 2019 invests $1.9bn in mental health, $1bn to rebuild rail
Anna Whyte (1News): Mental health, child wellbeing and rail – the big winners of Budget 2019
Zane Small (Newshub): Billions of dollars for mental health, children, beneficiaries – and trains
Maria Slade (Spinoff): Budget 2019 at a glance: boost for beneficiaries, vulnerable children, mental health
Brad Olsen (Infometrics): Breaking down the Wellbeing Budget
BusinessDesk: Budget 2019: NZ surpluses narrow as spending ramps up
Eleanor Ainge Roy (Guardian):New Zealand ‘wellbeing’ budget promises billions to care for most vulnerable

Health
Emma Russell (Herald): Budget 2019: Expert says DHB funding falls short by $300 million
Karen Brown (RNZ): Budget 2019 Health portfolio: Mental health a $1.9bn priority for health portfolio
Brittney Deguara (Stuff): Budget NZ 2019: $1.9 billion won’t fix NZ’s mental health crisis, psychologist says
Nicholas Jones (Herald): Mental health workers for GP clinics – but where will they come from?
Jessica Long and Josephine Franks (Stuff): Budget NZ 2019: $683m for education a win for students’ mental health
Mark Quinlivan (Newshub): Budget 2019: More than $1 billion for mental health ‘massive step forward’
Laura Walters (Newsroom): Mental health gets long-overdue cash injection
Oliver Lewis (Stuff): Budget NZ 2019: New frontline mental health service will help the ‘missing middle’
Hamish McNeilly (Stuff): More than $1billion set aside for Dunedin Hospital

Education
Jessica Long (Stuff): Budget 2019: Not the ‘transformational budget’ schools need
John Gerritsen (RNZ): Budget 2019 Education portfolio: Govt scraps donations for some schools
Jessica Long and Lee Kenny (Stuff): Budget NZ 2019: Big incentive for schools to stop requesting donations
Derek Cheng (Herald): Budget 2019: No more school donations for decile 1 to 7 schools
Lynn Grieveson (Newsroom): Kids in school? How the Budget will affect you
Jessica Long  (Stuff): Budget NZ 2019: School property gets a $1.2 billion investment plan
Paul McBeth (BusinessDesk): Budget 2019: New schools spearhead $41.1 billion capital programme

Rail
Simon Wilson (Herald): ‘Rail is back on track’: Winston Peters to front big new funding announcement for KiwiRail
RNZ: Budget 2019 Transport portfolio: KiwiRail the big ticket item
Thomas Couglan (Newsroom): Rail infrastructure gets a boost
BusinessDesk: Budget 2019: Rail projects score $1.6B of new capital

Welfare
Isaac Davison (Herald): Budget 2019: Beneficiaries will get $17 more a week – eventually
Henry Cooke (Stuff): Budget NZ 2019: Benefits will follow wage growth in historic change
Derek Cheng (Herald): Budget 2019 surprise: Boost for beneficiaries from next April

Environment
No Right Turn: A deckchairs budget
Jamie Morton (Herald): Budget 2019’s environment spend: $229m to help clean up rivers
Jamie Morton (Herald): Budget: Cash boost to keep DOC rangers safe from threats

Māori, Whānau Ora
Leo Horgan (Māori TV): A well-meaning Budget 2019 offers almost half a billion for Māori
Leigh-Marama McLachlan (RNZ): Budget 2019 for Māori: Whānau Ora to receive $80m over four years

Business
Tom Pullar-Strecker (Stuff): Budget NZ 2019: some praise from business, but forecasts fail to convince everyone
Gyles Beckford (RNZ): Budget 2019 Business portfolio: little offered for NZ business
Aimee Shaw (Herald): Budget 2019: Ho-hum reaction from business
Tom Pullar-Strecker (Stuff): Budget 2019: $300m fund will keep high-growth Kiwi firms in NZ for longer
Alice Geary (Timaru Herald): Budget is aspirational but time will tell, say SC business organisations

Gun buy-back scheme
Laura Walters (Newsroom): Pin the tail on the donkey with gun buyback costs
Collette Devlin (Stuff): Budget NZ 2019: $168 million for gun buyback scheme – door open for more funding‘
Derek Cheng (Stuff): Budget 2019: Money for gun buy-back scheme may not be enough

Primary sector
Gerard Hutching (Stuff): Primary sector Budget funds focus on environmental protection
RNZ: Budget 2019: Climate targeted but ‘gaps’ in conservation – Fed Farmers

Other
Pattrick Smellie (BusinessDesk): Budget 2019: Will the Government meet child poverty targets?
Jono Galuszka (Stuff): Budget gives little aside from Orion fleet replacement to defence force
Pattrick Smellie (BusinessDesk): Budget 2019: Shane Jones’s $3 billion Provincial Growth Fund two-thirds committed
Tom Pullar-Strecker (Stuff): Budget 2019: Modest funding boost for RNZ
Jamie Morton (Herald): Budget 2019: Science funding not enough, group says
Derek Cheng (Herald): Green Party’s James Shaw questions $25m spend to stop boat people
Tom Hunt (Stuff): Te Papa, metro rail given Budget boost
Paul McBeth (BusinessDesk): Budget 2019: Govt sets aside funds for new cyber security strategy
BusinessDesk: Budget 2019: Govt raids Super Fund to boost venture capital funding
Pattrick Smellie (BusinessDesk): Budget 2019: Government cuts urban infrastructure fund in half
Charlotte Carter (Stuff): Auckland City Rail Link receives $500m from government after $1b budget blowout
Thomas Coughlan (Newsroom): Transport spend-up, housing flat

Opposition response
1News: Simon Bridges says a National government would’ve prioritised health, education, infrastructure and tax relief in Budget 2019
RNZ: Budget 2019: Bridges attacks ‘botched budget’
1News: Budget 2019 ‘disappointing’ to middle NZ, mental health funding ‘well under-cooked’ – Amy Adams
Brittney Deguara (Stuff): Budget NZ 2019: Middle-class Kiwis worse off after ‘botched Budget’, Bridges says
Herald: Budget 2019: Opposition leader Simon Bridges says ‘Wellbeing Budget’ a disappointment

Budget leak
Andrea Vance (Stuff): The whole, inglorious mess of the 2019 Budget smuggling
Audrey Young (Herald): The one thing missing from Treasury Secretary Gabriel Makhlouf’s statement
Danyl Mclauchlan (Spinoff): The Budget ‘hack’ and the time-honoured tradition of desperate arse-covering
Derek Cheng (Herald): Jacinda Ardern dodges questions about Treasury’s bungling of Budget information
Stuff: Political tempest explodes around Gabriel Makhlouf just as his tenure at Treasury is ending
1News: Grant Robertson doesn’t expect Treasury boss to resign after Budget data leak
Max Molyneu and Mark Longley (Newshub): Grant Robertson says he won’t resign
Mark Longley (Newshub): Opinion: Budget leak shows how shamefully out of touch modern politicians are
John Anthony (Stuff): National’s Budget leaks go against security agency’s advice and Treasury breach was unlawful, lawyers say
Lucy Bennett (Herald): Digital lawyer and expert discusses alleged Treasury hack and National
1News: Mike Budget leak wasn’t unlawful but it was unethical, ex-Labour president says
Derek Cheng (Herald): Robertson and Makhlouf must go; Peters should apologise, says Simon Bridges
Henry Cooke (Stuff): National’s Simon Bridges calls on Grant Robertson and Treasury Secretary to resign following website bungle
Ben Leahy (Herald): Budget leak: Simon Bridges wants heads to roll over Treasury hack ‘lies’
RNZ: Simon Bridges on Budget breach: Treasury secretary ‘must resign’
Laura Walters (Newsroom): Bridges shows how National did it
Zane Small and Jamie Ensor (Newshub): Simon Bridges calls for Grant Robertson and Treasury’s Gabriel Makhlouf to resign
Anna Whyte (1News): Simon Bridges shows how restricted Budget material was accessed, calls Treasury response ‘contemptible’
Toby Manhire (Spinoff): Budget hack scandal: So much for Treasury’s ‘bolt’ metaphor
Eleanor Ainge Roy (Guardian): New Zealand budget leak: ‘hackers’ had simply searched Treasury website
Jamie Ensor (Newshub): ‘Vicious and orchestrated’ attempt by Grant Robertson to gag Opposition – Matthew Hooton