Mike Hosking spoke to Prime Minister Christopher Luxon on the Mike Hosking Breakfast. Video / Newstalk ZB
Opinion by Bruce Cotterill
Bruce Cotterill is a professional director and adviser to business leaders. He is the author of the book, The Best Leaders Don’t Shout, and host of the podcast, Leaders Getting Coffee.
In November 2023 our new Government was sworn in. They comprised a coalition of National, NZ First and Act. National’s campaign had swept that party to power with a promise that they would “get our country back on track”.
As we said farewell towhat was arguably the worst Government in our history, a sense of hope emerged. Despite the woeful state of an economy riddled with debt and a society overladen with crime, we believed that we would scramble from our Covid-enforced hibernation and begin a recovery.
With that hope came anticipation that the policies of the recent past which led to the degradation of our health system, the silliness of what was being taught in our schools, the race-based policies of Three Waters and co-governance, racist recruitment policies, kowtowing to climate alarmism, and the World Economic Forum agenda would soon be things of the past.
That new Government that brought hope and promise is now the incumbent. In 15 months, their highlights have been few. But the people are starting to say that they are not living up to the promise we once held for them. Sadly, much of the silliness remains.
To be fair, they inherited a hell of a mess. From the state of our foreign affairs relationships, to our debt-laden and sometimes incompetent local authorities, we were a shambles. The performance within our once competent government departments had been decimated. The bureaucracy, fulltime equivalent employees in the public service, had grown by 34% to 63,000 people while the associated salary bill increased 72% to $6.1 billion. Despite the massive growth in employees, standards delivered by that service worsened.
But the new lot have had some wins. The one-time ram-raid industry is a shadow of its former self, inflation is nearing control and interest rates are approaching normality. There are some sensible conversations occurring within the education sector as the focus returns to English, maths and science. And our presence on the international foreign affairs stage is more consistent and better presented.
But the big problems remain. The health system remains a mess which has already taken a minister’s scalp. As Mayor Wayne Brown pointed out this week, the road cones remain. Despite tinkering around the edges of staff numbers, the bureaucracy continues to grow. Government debt continues to escalate and interest is now one of our top five expenditure items.
The new year brought some announcements. Speed limits reduced by the previous Government were to be restored. A new digital nomad visa allowing international visitors to work remotely from New Zealand was welcomed. An active investor visa has been introduced. All are nice to have. But they’re hardly going to move the dial quickly.
The Prime Minister has put his stock in the pursuit of a growth agenda. And he’s right. If we can generate economic growth, better jobs, better incomes and better lives should follow. If we can attract international investment we can build infrastructure more quickly, create more jobs and retain our talent. He’s even hosting a couple of summits to get the growth message out to the local and international investment community. That’s all good stuff.
But here’s the problem. The growth agenda, even if it’s wildly successful, is a slow burn. It will take a long time for the benefits to filter through. And in the meantime, while we’re waiting, the talent is leaving our shores, and the costs continue to mount.
The pace of change is frustrating to watch. “Just do something” is a common refrain. A couple of weeks ago, we even saw Newstalk ZB host, and unofficial champion for the centre right, Mike Hosking, venting his frustration at the PM. “Just do something!”
Growing our income base is a great aspiration, but it’s no good if that additional income gets gobbled up with an out-of-control cost base and ever-increasing interest costs.
Political theatre is a funny thing. As a gaggle of our MPs journeyed to the Wairarapa to stand on the side of the road for a rather pathetic photo opportunity with new speed limit signs, new US President Donald Trump was stationed in front of a live TV audience signing a pile of executive orders live on television and flicking pens into the crowd.
US President Donald Trump is not messing around. Photo / AFP
Those executive orders are changing the way America does politics and business. The US has debt and interest cost problems that dwarf our own. But they’re cutting expenditure. They’re getting out of unproven and troublesome global initiatives, clamping down on aid and fraud, and taking back control from interest groups and politicians alike.
You might not like Trump. But he was elected on a change agenda. And he’s doing the things he said he would do. In a hurry.
Argentine economist Javier Milei became that country’s President around the same time as our current Government was sworn in. Since then he’s eliminated 28% of government spending and reduced the number of ministries by half. He’s achieved the first budget surplus in 16 years and reduced monthly, yes monthly, inflation from 25% to 2.4%.
And despite the tough decisions, he, like Trump, is maintaining and building his popularity. Because the people like seeing action.
Both countries, and a swathe of others have now pulled out of the Paris Climate Agreement. They’ve also pulled the plug on the World Health Organisation. And they’re saving billions, simply by looking closely at what they are spending and where the money is really going.
Neither approach reflects the political norm. But you can bet that will change. The best thing about Trump and Milei is they are showing a new approach to political behaviour that is giving permission to other countries to follow suit. In our current state, we should be grabbing that opportunity with both hands.
Against such a backdrop, it’s disappointing to see our Government double down on our commitments to the Paris agreement. The world’s biggest polluters, China, India, and the US are not part of it. I’m not sure what impact we think that our tiny country can make, but the cost at $23 billion is too high. Can you imagine the hospitals, schools, roading and water treatment we could develop with that sort of money.
For my money we should be pulling out of Paris, WHO and the various other organisations trying to change the way we live as soon as possible. The Government said we couldn’t do that because it would impact our reputation. Some of our biggest trading partners would not seem to care. Who knows, it might even enhance our reputation with them.
And while we’re at it, with Government spending running at 42% of GDP, we also need to get the everyday cost of Government down.
When compared to similar-sized countries, we have twice as many Government departments as we need. Those departments include countless roles for DEI advisers, climate initiative advisers, sustainability directors and te ao Māori initiative advisers. You can bet each of these positions came about as a result of consultation and third-party advice. All of which takes time and costs money. And none of which adds to our financial performance or productivity.
We can’t afford to spend $4 million playing sperm whale noises in forests to combat kauri dieback. We can’t afford for the Department of Internal Affairs to spend almost $1m teaching “indigenous knowledge to become change agents”. MBIE has 30 people focused on grocery prices who haven’t made a 1c difference to the cost of groceries. They have similar teams working on banking and retailing. Why?
Regrettably, the big cost savings start with people. But we need good people, we just need them doing more productive things. I’m guessing there will be plenty of people in the Government bureaucracy who don’t enjoy their jobs.
So what if we offered a redundancy deal to all Government employees. Let’s say, 12 months on full pay, providing they enrol and complete retraining for a new career. We desperately need teachers, nurses, truckies, and police. If we are going to grow our economy we will need people in project management, farming, mining operations and tourism. We don’t have the people for that. But if we could take 20,000 people out of the Government and retrain them for productive roles, we could have a crack at the growth the Prime Minister is seeking.
Then, let’s have another look at the money we’re giving away. One thing highlighted by the Foreign Minister’s spat with Kiribati is that we give them $140 million per year. Why? What do they do with it? What are the other countries, organisations, aid programmes, and causes, both local and international, that we are funding? And how long is it since we reviewed that funding or checked that the money was landing where it’s meant to?
We also need to get serious about reforming critical services. Politicians and bureaucrats have failed the health service for 30 years. How about we let the doctors have a go? We’ve all seen some very successful medical businesses run by medical people. Who would have thought?
Imagine if we can get the bureaucrats away from the patient and focusing on ensuring we have the talent. We can get talent through a combination of education and immigration. But we need rapid action on doctors, nurses, specialists, and people who know how to run hospitals. And incidentally, that doesn’t mean more British expats. We’ve tried that. Let’s talk to people from the world’s leading health services like Taiwan, Netherlands, or South Korea. It’s a big problem. We need to hire the best people.
And finally, let’s stop exporting the bright young people who can help our country to recover. Meantime, we need to stop importing the masses of people who can’t.
These are merely the ideas of one person writing late into the evening. There will be plenty of others. There will be better ones. Much better.
But the intent is simple. Can we please get New Zealand “back on track”?
