NEWS ON POLICY
AND POLITICS |
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| IN POLITICS Government at Sea? May Day That'll Leave a Mark! SPOTLIGHT ON …the Public Sector UPCOMING more... IN OTHER NEWS IN PARLIAMENT Bills Introduced Bills Before Select committee
more... Bills Reported Back more... IN THE WINGS Electoral Campaign Funding more... IN CONSULTATION more...
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IN POLITICS |
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Government at Sea?It should have been a political minder's dream. A picture of the Prime Minister aboard NZL92 as it forged, close-hauled, across the finishing line would have been invaluable to an administration much in need of a fillip with a disenchanted public. The development is a telling one for a government that has until now maintained a vastly better grip on the business of coalition politics than its opposition. Normally a sign of a tired administration, Labour's inertia is also an indication that the business of cutting deals is becoming harder. This is unsurprising. New Zealand First, United and, to a lesser extent, the Greens have gained little from their acquiescence to Labour's agenda. Their electoral futures will rest on their ability to put a distinct mark on policy and we can be sure that forecast budget initiatives on company taxation, Kiwisaver and climate change will not emerge as the exclusive property of Labour - despite what will be Dr Cullen's undoubted best efforts on the day. This reality is not lost on the PM who understands very well that the perception of path forward and a deft hand on the tiller will be critical to her own fortunes in 2008. Her sallies into the media on topics as diverse as arts royalties and dog control should be seen in that light. But even a TV nation addicted to 'Survivor' and watching fat people get thinner eventually catches on to being told to "look over here" when the real problems are over there. What remains to be seen is whether Labour can successfully jostle its partners sufficiently aside to put a proprietary stamp on the policy directions of the future. May DayHaving failed to wrest the political initiative from an active John Key, Labour needs a circuit breaker. With its only immediate point of advantage being its grip on the cash register, the Government can be expected to make full use of it. The need to present as something other than a tired administration is pressing and Labour cannot afford to wait until 2008 to convince the public that it is in sufficient command to merit a fourth term on the Treasury benches. As a result, this year's budget will be more of an election year budget. Several sweeping initiatives have been forecast with varying degrees of authority: a cut in the company tax rate, a no tax on contributions sweetener for the Kiwisaver scheme, additional health funding, a first home equity scheme, tax credits for exporters and off-road freight measures are all on the cards. The fact that credit will have to be shared with Peter Dunne and Winston Peters will be no deterrent. That'll Leave a Mark!Even the seasoned Beehive operators admitted to never having seen it before: A Prime Minister and Leader of the Opposition sharing a podium to announce an opposition-sponsored solution to a Government hot potato. What made things even more alien was the fact that the potato - the anti-smacking Bill - isn't a Government Bill and was never something over which the Government should have found itself looking for a solution in the first place. Labour's minders will have wanted to get the issue off the front page, a sensible enough tactic that in other circumstances would have taken the wind out of the Opposition's sails. In this case, though, the damage had been done. By exercising the whip on what should have been a conscience matter and advocating so strongly for the Bill's passage, Clark made it her own in public perceptions if not actuality. Of the two leaders it is Key who comes out ahead as the more astute operator.
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SPOTLIGHT ON |
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... the Public SectorState Sector Performance Faced a few years ago with some dodgy administrative practice, Australia's Parliamentary committee on finance and public administration was prompted to ask whether Australia's public sector had lost its way. It was a rhetorical question, but officials and committee members felt moved to hold forth on both the problem and its causes. Taking comfort in the validation offered by contrasting 'us' with 'them' they reached an informal consensus that the ills with which they were confronted could be blamed on the rise of quasi-governmental entities and arms-length providers in the delivery mix. The administrative conventions that had guided public managers of the Westminster school were not, it was thought, well-understood by the new breed of civil servant. Recruited from, or still resident in, the private sector, these otherwise willing souls were seen as insufficiently steeped in the ethos of the professional public service. The rigour of public management had suffered as a result. Or so it was supposed. As with most arguments, there were merits in the view. But it was probably also true that there had been an over-fond regard for the good old days, when public sector mandarins and their political masters wandered free and sure-footed across the sunlit veldt. Also true was the underlying discomfort felt at the diminished political control that had come with managerialism (letting public managers manage) and the practice of engaging non-governmental agencies to deliver public - and thus political - goods. This Australian tale and the conclusions that arose from it are familiar. Successive governments here have alternately welcomed and then rued the devolution of accountability outward for things that the public obtusely continues to see as core government business. People dying in hospital corridors for want of competent, or even vaguely sympathetic, care is not something excused by pointing at the relevant District Health Board. Like it or not, in the public eye at least the buck stops with the Minister. It's an awareness of this and the accompanying political exposure that has prompted a swing of the pendulum to centralism and the extension of Ministerial reach where, under the new machinery of government, it was not intended to go. This and a polemical view that some things should only be done by government have been factors in the current administration's rejection of private and semi-private delivery options - even where they have been effective. It also sits behind the burgeoning expenditure on public administration. Let's look at that. Over the past six years the state sector wage bill has grown dramatically from roughly $7 billion in 2001 to what looks like being more than $11 billion in the course of this year. A large chunk of that (over $7 billion) is devoted to staffing the health and education systems and is probably sacrosanct. But the $3 billion and rising of costs for the remainder of the sector prompts some legitimate questions about just how well the core public sector is doing its job. This has not been lost on the central agencies. The Treasury, for one, has stressed the importance of policy coherence and the longer-term view. The State Services Commission, for another, has emphasised the need for better coordination and accessibility of state services, Also, along with the Department of Prime Minister and Cabinet, the two agencies have together undertaken a 'Central Agency Review' to define what is meant by good performance and how it can be promoted. Published last December, the review findings offered up some comfort to those exercised by cost-benefit of big government. It found on the whole "a well-performing State sector, with some areas of real excellence." But less happily, it also conceded that there were some "areas of unevenness" in performance (however defined) and that the central agencies do a better job in defining high performance, being clear about their roles, monitoring and taking "more of a client perspective". This is all to the good. But those with longer memories can fairly ask what happened to the many similar performance reviews that precede this most recent one and why it is that there's an abiding sense of churn in the sector's introspection. As the costs of government begin to impact directly on the country's economic prosperity, the casual observer may also be forgiven for wondering about the apparent disjuncture between the rhetoric of best practice public administration and the outcomes it delivers. Those many able officials battling to close the perceived gap will doubtless cavil at the implied criticism. They will point, with justification, to the lack of public awareness of the good that is being done and the failure of the media to report it. One example recently held up was the news that the Commonwealth Fund of New York had recently ranked the New Zealand health system overall second of the first world systems evaluated. However, this impressive result lost most of its force when, on the indicators of actual effectiveness, we are to be found not at the top of the pile, but, rather, at the bottom. Like the award winning hospital in Yes Minister, administrative excellence doesn't count for very much when you don't have any patients. Faced with this and stories like it, we too might ask whether the state sector has lost its way? With a reduced ability to blame third party delivery agents for not understanding how things should work, we might also ask what the central agencies are going to do about it? But what this ignores an essential truth that how well the state sector does things is inextricably tied to what it has to do. The 'what' is where the much of the value proposition lies and it's something over which the officials have little, if any, control. Required to do the administrative equivalent of reconciling the Russians and the Chinese, whilst playing a banjo and helping people into their first (weathertight) home is not an easy undertaking. It's made worse by Ministers (regardless of stripe) who, while accepting the need to take a long view, must also confront the Darwinian realities of an election every three years. This is where the real disjuncture lies. It is why, in two or three years, the central agencies will be undertaking yet another review of how well the state sector does things, which can be added to the pile. It is also why we should be asking the more pertinent question of whether there are, or should be, practical limits on what government does.
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US-NZWatch for an upbeat speech this week from the US Ambassador on the US-NZ relationship. Will the ghost of ANZUS finally be laid? Boundary ChangesElectoral boundary changes will be announced this week. |
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IN OTHER NEWS |
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Second Milestone Report for the Quality Regulation ReviewGovernment has released the Cabinet paper on the Second Milestone Report for the Quality Regulation Review. It summarises progress to date and sets out the key issues for the next stage of the review. Commerce Minister, Lianne Dalziel said themes had emerged through the review about how regulation was designed, implemented and administered. These included:
The Minster has pointed to pending improvements, including:
The Regulator Unleashed The Ministry of Economic Development's ("MED") has released a discussion document reviewing the regulatory control provisions in the Commerce Act. It proposes to arm the Commerce Commission with a suite of new powers for regulating businesses and sectors with "natural monopoly" characteristics. However, at their widest, some of MED's proposals would also extend beyond natural monopolies—the targets of the existing regime—to place regulatory scrutiny on the pricing and profitability of many other businesses. Among the options visited are:
Individual businesses will have the option of negotiating individual terms. MED indicates that there could be a substantial degree of flexibility in this regard, where the individual business is seeking to change the terms of a regime in order to commit to substantial investment. On the other hand, applying for tailor-made terms could backfire: the Commission might be given power to impose more stringent terms on a business than other similar businesses if that business makes a proposal that is not "reasonable". Submissions on the Discussion Document close on Friday 6 July 2007. A fuller description of the proposed changes can be found in Russell McVeagh's 'Competition Alert'. Wonderful Spam. Marvelous SpamThe Unsolicited Electronic Messages Act received its royal assent. This legislation prohibits the sending of unsolicited commercial electronic messages (in the form of emails, text messages, or instant messages of a marketing nature) from a New Zealand link. This legislation will impact on all individuals and businesses who send emails or text messages of a commercial nature to ensure consent is expressly received (or reasonably inferred) from potential recipients prior to sending a message. Wherever a breach is alleged consent will need to be proven by the sender of the message. Additionally, messages sent must clearly identify the sender of the message as well as having a functional "unsubscribe" facility (with unsubscribe requests requiring action within five working days). The enforcement regime sets out penalties for individuals sending messages in breach of the new Act of up to $200,000, and companies will face penalties up to $500,000. A person or business found to have sent a message in contravention of the Act will have a defence (against imposition of a penalty) if they can show the message was sent by mistake or without their knowledge (e.g. computer virus or malware). The Department of Internal Affairs will operate as the enforcement agency and backstop to the Act. Labour Party Repays Election Spending DebtIn an effort to lay another ghost before the budget and its anticipated new lease of life, the Labour Party last week repaid the $824,524 it wrongly spent fighting the 2005 election. The loss of the fight on the state funding of electoral campaigns does not mean Labour has given up on proposed limitation of 'big money' campaigning.
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IN PARLIAMENT |
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Bills IntroducedNo new Bills have been introduced. Bills Before Select CommitteeOpen for submissions
Bills Reported BackArbitration Amendment Bill Supplementary Order PapersSOP 105: Immigration Advisors Licensing Bill: Dr Pita Sharples The amendments introduce the requirement for Immigration Advisers to have a level of competence in understanding the Treaty of Waitangi and tikanga and te reo Maori in order to adequately prepare migrants for future citizenship in New Zealand. SOP 106: Major Events Management Bill: Hon Trevor Mallard The SOP inserts a new subpart 5 into Part 2 of the Bill. The new subpart makes it an offence for a person to go onto a playing surface, or to propel an object onto the playing surface, at a major sporting event. A person who commits an offence under this new subpart is liable to a term of imprisonment not exceeding three months or to a fine not exceeding $5,000. Consequential amendments are also made to the Bill's purpose clause to indicate that the purpose of prohibiting pitch invasion is the same as the purpose of prohibiting ticket scalping (namely, to ensure major events run smoothly). Bills PassedJustices of the Peace Amendment Act (assented to 14 April) Regulations2007/90 Securities Act (GH Emerging Markets Fund Limited) Exemption Amendment Notice 2007 Hearings Of NoteMost select committees have been in recess throughout April and will resume business as usual this week. The Commerce committee has called for submissions from nominated organisations on the inquiry into valuation methodology and practice for valuing State-Owned Enterprises. The terms of reference include discovering how the valuations are struck; who provides the valuations; how often the valuations are struck; and the impact of valuation on the Crown's fiscal position. Submissions close on 3 May. This committee has also started hearing submissions on the Major Events Management Bill. The Government Administration committee continued its consideration of the Therapeutic Products and Medicines Bill. It is proposed to divide the Bill into two separate Bills: the first will establish the joint trans-Tasman regulatory scheme for the regulation of therapeutic products; and the second will repeal and replace the Medicines Act 1981 with new controls on the advertising of medicines. The Local Government and Environment committee heard from 64 submitters in a two-day session in Auckland last week on the Waste Minimisation (Solids) Bill. Submitters included the local and regional councils, Watercare Services, the Sustainable Business Network and the Packaging Council of New Zealand. Concerns raised include the definition of waste and the trigger point for the application of any levy regime.
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IN
THE WINGS |
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Justice Minister, Mark Burton, has announced that electoral finance law reforms will be introduced to Parliament in the near future. The Minister confirmed that Labour is currently consulting with other parties on the range of options for the reform package. Definition of "Serious Harm" in Employment Labour Minister, Ruth Dyson, has announced that the Government is seeking feedback on the definition of "serious harm" under the Health and Safety in Employment Act 1992. The definition has not been amended since the Act's introduction in 1993. The draft amendment addresses areas of improvement highlighted from initial consultation with businesses and stakeholder groups. Submissions are sought before 15 June. The Government is proposing to introduce a royalty payment scheme for artworks sold on the secondary market, allowing artists to receive a royalty payment each time an original work is resold. This arrangement has already been introduced in many other countries around the world. Submissions are sought before 22 June. The Government is proposing a new broad funding model for New Zealand's fire services which will be combined into a new national Fire and Rescue Service, requiring a new legislative framework. Funding will still come from property insurance and motor vehicle levies. Submissions are sought before 30 June. Financial Products and Providers Commerce Minister, Lianne Dalziel, signalled to the Institute of Financial Providers in Auckland last week that she will be putting forward proposals to Cabinet in the next few weeks with respect to the new regulatory framework for financial products and providers. This follows on from the comprehensive consultation that has been ongoing for the past year. The Minister is expecting to introduce legislation before the end of this year.
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IN CONSULTATION |
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What's New
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| RELEASED BY... | ISSUE | SUBMISSIONS CLOSE ON... |
| Agriculture & Forestry, Ministry of | Permanent Forest Sink Initiative |
14 May |
| Fisheries, Ministry of | Devolution of the registration of Automatic Location Communicators to the Seafood Industry Council |
9 May |
| Food Standards Australia NZ | Cholesterol-lowering phytosterols in a low-fat yoghurt mini-drink; Genetically modified corn; Processing aids for beer production and wine |
2 May |
| Health, Ministry of | Newborn Metabolic Screening Programme |
20 June |
| Inland Revenue Department | Life insurance tax reform– 2nd paper |
2 May 11 May |
| Retirement Commission | Variation to the Code of Practice for Retirement Villages |
9 May |
| Standards | NZS 3404 Steel Structures Standard |
8 May |
| Tertiary Education Commission | Foundation learning progressions for listening, speaking, reading, writing & numberacy - draft consultation document |
30 June |
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advice. No person should act in reliance on any statement contained
in this publication without first obtaining specific professional
advice. If you require any advice or further information on the
subject matter of this newsletter, please contact the partner/solicitor
in the firm who normally advises you, or alternatively contact:
| Tim Clarke - Partner Ph 04 495 7532 [email protected] |
Doug Bailey - Consultant Ph 04 495 7572 [email protected] |
© Russell McVeagh 2005. All rights reserved.