16 May 2012

Welfare Reform

Some questions arise from the government's announcement of a Board, chaired by Paula Rebstock, to advise on and oversee the implementation of the forthcoming welfare reforms.
First, the board's roles and position appear to create a recipe for conflict. The board consists of six very fine, experienced people from outside of the public service. But they have the dual roles of advising the chief executive of MSD on the implementation of the reforms, and reporting to the Ministers of Social Development, Finance and State Sector on the performance of WINZ (the largest unit of MSD). This arrangement is quite extraordinary and outside of the normal reporting and accountability systems in the public sector. The opportunities here for misunderstandings to arise between the board, the management of MSD and the State Sector Commission are obvious. What advice have the responsible Ministers received about clarity of roles and accountability under this unusual structure?
Secondly, the plan for the reforms includes the actuarial valuation of the system of welfare benefits. But Ms Bennett's press statement tells us that “The lifetime cost of today’s total number of beneficiaries is estimated at $45 billion." That is, a valuation appears already to have been performed. Can we have more information about who did this valuation and what methods and assumptions they used? Can we see their report?
Thirdly, what is actuarial valuation to be used for? My guess is that such a valuation will make it possible for government to negotiate with private-sector insurers and health-care providers to "invest in" specific cohorts of beneficiaries. That is, the government could contract out their case-management for a negotiated fee, and the actuarial valuation will assist the agencies in calculating the risk.
Fourth, if there is now an official valuation in print of the NZ government's contingent liability in its welfare scheme, what effect does it have on NZ Inc's credit-rating? Would an off-shore lender now be wanting to deduct that $45 billion liability from the government's balance sheet so as to fully appreciate the risk that it faces?

08 May 2012

Benefits and babies

Offering free birth-control to female welfare beneficiaries, and their daughters aged 16 to 19: Is this an enlightened policy that will help low-income women (who may lack full knowledge about birth-control methods) to take control of their lives? Or is it egregious state interference in the human reproductive rights of the individual; and will "offering" contraception turn eventually into "coercing", with a potential threat to income entitlement and work-testing?
I imagine that many women who were planning on visiting the doctor for contraception will now await the new policy in order to save some money. Hopefully none of those will get pregnant inadvertently in the meantime.
A lot will depend on implementation and on how beneficiaries are made aware of this new "entitlement". We should not assume that women (and their male sexual partners) are making "free, rational" choices all the time regarding sexual activity, contraception, pregnancy, benefit reliance etc. The supposedly "voluntary" nature of the "choice" to accept an "offer" by WINZ to take up "free" contraception has been, however, announced disingenuously by ministers, without asking us to examine the conditions of the choice itself.
Contraception is already subsidized by the state, but one has to ask why not make the "free offer" to all women on low incomes (or just all women), rather than target beneficiaries? There is no reason why a woman on a low wage  today (or her daughter) may not later seek support from the DPB tomorrow, if circumstances change. Are women on low wages being disadvantaged, then, by not having the same "free" service "offered" to them? Or, are women on benefits being inappropriately singled out?
The government and MSD will have their work cut out to ensure that this policy does not begin to look like a form of eugenics. It's an old complaint that "the poor and feckless" or "the underclass" are breeding too fast. Given the modern-day welfare system, someone is bound to argue that social rights should be balanced by a supposed "duty" to society to control one's own fertility. It's not far from that reasoning to a coercive fertility policy that could be a breach of fundamental human rights.
The present government's reassurances about "voluntary" contraception may be subject to slippage as the policy gets implemented or as a future government takes another look at it.
Before you know it, the government will be creating a dating agency out of WINZ to marry off those single mums to high-earning males... They could "offer" a free limo ride to the local church.

07 May 2012

Eyes on Epsom, again

As things go from bad to worse for John Banks, the PM must be wondering how long he can defend him (and keep the ACT party's one pro-government vote in the House) before the association with Banks starts to have negative electoral consequences for National.
New allegations (reported here) by a former employee of Kim Dotcom suggest that, despite efforts to hide the provenance of the latter's donations, John Banks must have known about them, as he allegedly called to say thank you soon after the deposits were made.
Should that story be true, then surely John Key would have to sack Banks as a minister. Key has already made 'ethics' stretch a mile for Banks, and that has been damaging enough for National.
If stood down or sacked as minister, Banks could conceivably stay on as a backbencher and continue to give his vote to the government. But then there's a possibility, given the allegations against him, that he may have to leave Parliament altogether, forcing a by-election in Epsom.
Speculation about a by-election has already begun, with Rodney Hide (the former ACT leader and MP for Epsom) ruling himself out, and Colin Craig, the leader of the Conservative Party, saying he'd be in.
The latter, although true blue, appears to have so many policy differences with the National Party that he would not necessarily be a very helpful partner in government from Key's point of view.
Key can probably hold on to John Banks until the Budget legislation is through (for which he needs Banks's vote), but after that all bets are surely off.
After a dream run in their last term in government, National has suffered a series of discrediting blows since last year's election. And their relationship with ACT has been at the heart of some of these problems. We can expect some restructuring to the right of the political spectrum before the next election.

06 May 2012

Minister worries about cheating at university

Following up on my earlier post about the Performance-Based Research Fund (PBRF), it is intriguing to see that the Minister responsible, Mr Joyce, has announced a review of this funding and ranking scheme. He is concerned about "gamesmanship" in the PBRF, such as the manipulation of employment arrangements to get a higher institutional quality score – though why don't we just call this "cheating"?
It's good that the dishonesty of some in the universities has been outed, but the impending review's objectives are already clear: to change the PBRF so that there is more reward and incentive in it for universities to commercialize their research. What may unfold, then, is a newly-designed, possibly more complex and time-consuming, system that universities can cheat on in new ways.
If universities are commercializing research (a good thing, when it works), then they are already getting some income that rewards that – or, at least, they stand to get some, if commercial spin-offs are still in the design stage. There's no lack of incentive. Why, then, should universities be rewarded with an augmented stream of income from the public purse for doing that? Would that not be double-dipping? Should tax-payers subsidize even more than at present the commercial arms of the universities?
In any case, Mr Joyce's comments showed a lack of understanding of the present PBRF method. If an academic "steps out of the system for a year to go and work on a commercial project somewhere, does that damage their PBRF score?" he asked. He appears to worry that commercialization is disadvantaged, as the PBRF-related priorities get in the way. But if a PBRF-eligible researcher "steps out of the system for a year" then that temporary absence can be taken into account in their assessment. It shouldn't affect the assessment of that individual.
This, coupled with his comments about reducing the size of university Councils (the governing boards), however, suggests that the government sees the future of the universities now in largely economic and commercial terms. A disdain for the humanities accompanies this, of course. But I fear that New Zealanders are mostly philistine enough not to care about that.

01 May 2012


The ex-National Party MP and failed candidate for mayor of Auckland, John Banks, took over control of the ACT Party in a messy coup in 2011, and then did an even messier deal with the National leader so that he (Banks) could win the Epsom electorate and support Key in forming a government. Now he's creating a major headache for the PM due to allegations over whether he really 'knew' about a supposedly 'anonymous' donation from Kim Dotcom and about an effort to influence the latter's application to the Overseas Investment Office.
Banks's 'strategic use of ignorance' – pretending that the Dotcom donation was anonymous because he supposedly did not know that Dotcom had made the donation, even though Banks himself solicited it – even if it's within the law, shows a willingness cynically to manipulate the law in his own favour. The very fact that Banks was sucking up to the mega-wealthy Dotcom – who has not distinguished himself in the eyes of conservative New Zealanders – is bad enough. But using a 'veil of ignorance' (legally or not) to shield this close relationship and its donations from public scrutiny is much worse.
Banks has also brought into disrepute the very justification for having anonymous donations: that, being anonymous, the candidate is not beholden to the donor for political favors. Any reform of local government electoral finance laws will have to include provisions for much greater transparency.
We now have to ask not only should Banks stand down while the matter is investigated by the Police, but, further, is this the beginning of the end of ACT? Could ACT survive another election?
Banks appears to have become a major political liability for the National-led government, and it may only be a matter of time before he is stood down from his ministerial portfolio, or even cut loose altogether. The implications for the future of the Key government would be interesting, if that happens.
In the meantime, Key will have to defend the indefensible, but that may not be possible for much longer.