Dr Michael Bassett

Dr Michael Bassett

Newspaper Columns


Making Quality Decisions

01/03/2005
In November 1986, with an election on the horizon, the Lange Government was struggling to turn the State's trading departments into SOEs. Taxpayers had invested billions in them, yet most still required subsidies. The main problem was that they employed on average three times more people than were needed to run efficiently. Geoffrey Palmer, Roger Douglas, Stan Rodger and Roderick Deane devised the new strategy. Cabinet and a majority of caucus backed it. A few MPs, including several members of the Clark ministry, opposed the SOEs. They lost. They then wanted all the conditions of employment in the old departments transferred to the SOEs and cronies on the establishment boards. Douglas rounded on them in caucus one day. He told them that if governments made correct decisions, not knee-jerk reactions, and appointed people on merit, then political success would usually follow. Bad decisions would always come back and bite perpetrators in the backside.

Douglas wasn't always right, but on this one he certainly was. The Lange Government was re-elected with an increased majority in 1987. With quality management, the SOEs soon paid their way. Surplus workers took one of several generous redundancy options and found other jobs. When some of the now-profitable SOEs were later sold, the money mostly went towards repaying debts inherited from Robert Muldoon. The economy slowly picked up, then shifted into top gear. New Zealand has not had an economic cycle to compare with the current one for half a century. Quality decisions made in the 1980s and the early 1990s lie behind it.

Current ministers are starting to feel pain in their posteriors for refusing to heed Douglas's advice. Bad decisions on numerous issues, and too many appointments of amiable party lightweights and fair-weather friends, are starting to cause trouble. Elevating Tariana Turia to the ministry in 1999 giving her silliness a platform; the NCEA catastrophe; the re-introduction of school zoning; jumping prematurely to sign Kyoto before weighing the counter evidence; refusal to re-jig police priorities that are clearly haywire; failure to deal with hand-held cell phones in cars; a return to national awards for state pay fixing, plus high minimum wages at the unions' behest, when the counter evidence is overwhelming. Just a random list of low quality decisions.

Sadly, Maori have been forced to wear responsibility for too many of them. Successive governments beginning with the one I served in, stoked expectations that a cargo cult might be a goer. Treaty discussions started in the 1980s with some reasonable understanding of what the parties could expect of each other, but soon degenerated into Maori preference. National and Labour are equally guilty. They overlooked another timeless political reality: a problem not confronted becomes serious and when still not dealt with, turns into a crisis. The wananga problem has been brewing ever since a silly response was made to a Waitangi Tribunal finding. Evidence of phoney rolls and inducements dates back several years. Some courses seem thoroughly suspect, and the culture of non-accountability intolerable. It is mind-boggling that Trevor Mallard can concede with a straight face that he had misgivings about the Maori tertiary sector before 1999, but then upped wananga funding from $4 million to $239 million. Why? I don't blame Rongo Wetere and his staff for their entrepreneurial behaviour with public money. Whenever governments have lavished poorly supervised grants or privileges, no matter how good the intention, recipients have taken advantage. Manufacturers rorted price controls in the 1960s and 1970s. Critics, quite rightly, didn't blame them, but the silly politicians who introduced the system. In 1974-5 Muldoon devoured for breakfast the hapless minister who gave us the unfathomable Maximum Retail Prices scheme. Mallard deserves the same fate. 350 cars? A grooming service? Even in the days of untaxed company cars the users were expected to wash them! Phones? Laptop computers? If only 20% of these stories prove correct, heads starting with several ministers' should roll. Stewardship of taxpayers' money is the first fundamental principle of good government. There's been too much blame of officials for bad Beehive decisions. Accepting ministerial responsibility has never been popular, but it's become a dead duck with this government.

The irony is that it might yet be the economic reforms of the 1980s and 1990s that rescues Labour at the coming polls. There is more complacent economic contentment at present than at any time in fifty years. The effects of good decisions linger. But, like infected bites, bad ones can quickly turn poisonous.