Christopher Luxon accuses Labour of leaving a $200 billion hole in the nations transport plan and signals spending reductions to come in his State of the Nation address today.
In his State of the Nation speech, the Prime Minister outlined how poor governmental decisions have left the country in a fragile state. The coalition has agreed on a process to make governmental decisions more effective.
The three governing parties have agreed that “thecoalition Government will make decisions that are ... principled – making decisions based on sound public policy principles, including problem definition, rigorous cost-benefit analysis and economic efficiency.”
It is a total reversal of how Labour made decisions. Labour set impossible aspirational goals, for example, the “Road to Zero” to eliminate on-road fatalities, created a media campaign and then implemented a gesture policy, such as lowering speed limits.
Labour failed because their policies did not address the problem. A road toll of zero is not achievable because humans are fallible. The Government’s own review reveals TV road safety campaigns had no effect on the road toll. The speed restrictions saw the road toll rise. My local highway is more dangerous as overtaking has increased.
If speed kills then the Waikato Expressway, with its 110km/h speed limit, would not be one of the safest highways in the country. From the end of the expressway to Piarere there are speed restrictions, but it is one of the most dangerous roads in New Zealand.
Better road engineering has the most impact on the road toll. Labour did no analysis when, as a gesture to the Green vote, the extension of the Waikato Expressway was cancelled.
A road toll of zero is not achievable because humans are fallible. Photo / Peter de Graaf
Replacing poll-driven gesture decisions with proper problem definition and cost-benefit analysis would transform government. Let me give an example.
Government departments engaged in a six-month power struggle to be appointed to manage the Queen’s chain over the country’s 10,000km of streams and rivers.
I chaired the cabinet committee to consider the rival bids. ”Before we appoint a department and approve a multimillion-dollar budget,” I said, “let us define the problem.”
The problem was ensuring public access to the Queen’s chain and managing a massive extension of the Crown estate. The solution was obvious. Allow the adjoining owner to manage the land, providing they allow free public access. Any refusal of access or failure to manage, then the Crown would assert its rights. It is a cost-free solution that works well.
Government decision-making that is problem-defining and subject to rigorous cost-benefit policy is very effective.
There are seven more decision-making principles in the coalition agreement.
The most transformative is that “decisions will be based on data and evidence, with programmes regularly assessed to see if they are delivering results ... Interventions that aren’t delivering results will be stopped.” The agreement says that the assessment of government programmes will be “based on rigorous cost-benefit analysis”.
Prime Minister Christopher Luxon and Finance Minister Nicola Willis. Photo / Mark Mitchell
This is revolutionary. While it’s a business maxim not to throw good money after bad, governments do it all the time. Departments spend tens of millions of dollars rather than admit they have made a mistake.
If governmental decisions were based on data and evidence, many programmes would never have begun. An example.
The Ministry of Education is building open-plan schools where several classes and teachers are accommodated in large open spaces which the ministry calls “modern learning environments”.
There is no research that teaching multiple classes in a hall is a good idea. The NCEA results from modern learning environment schools are lower than those from schools with traditional classrooms. This has not stopped the ministry from continuing to build open-plan schools.
Applying the coalition’s agreement’s decision-making approach would mean the issue would become how to convert these open spaces into traditional classrooms.
There are multiple government programmes costing billions of dollars that “aren’t delivering results” and do not “meet rigorous cost-benefit analysis”.
Nicola Willis’ 6.5 per cent to 7.5 per cent savings is an arbitrary policy that will reduce Government spending but meets no cost-benefit or economic efficiency test.
Departments offer to cut programmes they do not like and keep programmes they do like, such as “modern learning environments”.
Ministers reviewing all government spending against the coalition agreement’s decision-making principles would result in better policy and greater savings.
The eighth decision-making principle is “upholding the principles of liberal democracy, including equal citizenship, Parliamentary sovereignty, the rule of law and property rights, especially with respect to interpreting the Treaty of Waitangi”.
New Zealand Transport Agency Waka Kotahi wants to install more camera surveillance to issue citizens with three million fines a year. Speeding tickets to the well-off are a cost of motoring. For many young men, the fines are unaffordable and their first step on a path to prison and a wasted life. Camera surveillance and issuing citizens with revenue-raising fines is what police states do.
Christopher Luxon’s experience as a CEO must have been influential in the coalition adopting a business management approach to governmental decision-making. But the words are just gesture politics unless they are implemented.
