Dita De Boni 's Opinion

Business columnist, with a political twist, for NZ Herald

Dita De Boni: Privatisation triumphs again

172 comments

Taxpayers left trying to revive the white elephant that is Novopay.

Illustration / Anna Crichton
Illustration / Anna Crichton

The upshot of the Government's recent Novopay announcement is this: we've spent $110 million to get a lemon from Australian company Talent2 - the same lemon now being touted as a $15 million government "asset".

Now, as well as taking over the flawed system, we will pay Talent2 another $9 million-plus for the ongoing pleasure.

Questions have to be asked about how we came to own this splendid asset. Like, why was a cheap foreign bid from people with no direct experience chosen over an incumbent with direct expertise? Why was this new system, for which we paid so much, basically the old system, with the costly addition of some cack-handed modifications? And why, after almost three years of cock-ups, can the minister involved, Steven Joyce, say it should "not necessarily be seen as failure on anyone's part any more than it had been?"

Spin, spin and more spin. And they keep spinning, trying to pin the blame on the complexity of payments for the 110,000 or so teachers and support staff. Apparently their collective contracts have too many extra payments, which makes the system unworkable. Which is quite the opposite of what we are constantly being told - that teachers' pay is not diverse enough, and the "good" ones should get more.

It seems unlikely that Novopay, which struggles to handle the Bolshevik-inspired system now in place, would be able to adapt to the bulk-funded fantasies of Joyce, Parata and co.

It's incredible that we are now hearing the best place for Novopay to be situated is within government control, as if this is a great revelation. As it happens, thousands of New Zealanders could have guessed that paying an enormous workforce of civil servants might be a task best suited, in the first instance, to their employer.

Yes, Mr Joyce, to use your own words, under the new arrangement there will be lots more "senior management bandwidth" to cope with issues as they arise. And borrowing the language of corporate-speak, we can probably also look forward to more "thought leadership" and "surge capability" to deal with problems too.

Who knows, we may even be able to get to a landing place with more granularity, if that's not too much to ask.

But most of all, it would be nice to think that with the payroll system now under government management, we might see greater accountability when things go wrong. Even better, we can hope that the old bogey of "commercial sensitivity" doesn't get trotted out whenever details are sought.

I can't understand why there is any reason for "commercial sensitivity" to exist when contracts involve public money being spent to fulfil basic government functions. Why can't these deals be conducted in the open, stating costs, expenses, penalties and key objectives up front? Would high-performing operators be deterred from bidding for millions of dollars in contracts if it meant being transparent about price, and about how they uphold their end of the bargain?

Instead, with Talent2 and Novopay, we have a failed deal, a minister who has to persevere with it long after he would have liked to have given it the flick, and the public bailing it out (which gets spun as a "win").

This is precisely what is meant by privatising profits and socialising costs -- otherwise known as "lemon socialism". Lemons, of course, being a frequent outcome for a public that has had no choice but to go along with the ever-increasing privatisation of practically everything.

Debate on this article is now closed.

- NZ Herald

Dita De Boni

Business columnist, with a political twist, for NZ Herald

Dita De Boni is a columnist, commentator and TV producer/journalist. She first wrote columns for the NZ Herald in 1995, moving to daily business news in 1999 for four years, and then to TVNZ in Business, News and Current Affairs. After tiring of the parenting/blogging beat for the Herald Online she moved back to her first love, business (with a politics chaser), writing a column for Friday Business since 2012.

Read more by Dita De Boni

Sort by
  • Oldest

© Copyright 2014, APN New Zealand Limited

Assembled by: (static) on production bpcf03 at 24 Nov 2014 17:08:28 Processing Time: 406ms