THE NATIONAL PARTY has demonstrated considerable political skill in funding its new “FamilyBoost” policy by savagely pruning the consultancy money-tree. I’m sure I’m not the only New Zealander who has scratched his head at the shocking figure of $1.7 billion spent on consultants by this Labour Government. Why would they do that?
New Zealand’s present over-reliance on consultants raises all sorts of questions about the quality of its public service. Is it really so bereft of talent and expertise that outside advisers must be brought in to show them what to do? And, if that is the case, then why hasn’t the government recruited the talent and expertise its short of, rather than renting it for a few months at exorbitant expense?
All those additional public servants Labour has hired since 2017 – roughly 14,000 of them – surely they should have reduced the need for expensive consultants? And yet, the government goes on injecting them into the body politic with all the desperation of a drug addict.
Small wonder, then, that the National Party has chosen the massive government spend on consultants as its most promising source of savings. Ceasing to pay these parasitic characters $9,000 per week, and then applying the money saved to something as wholesome as reducing child-care costs for Kiwi families battling inflation, must have struck Christopher Luxon as an absolutely crackerjack idea.
There will be some who dismiss National’s latest policy as crude populism. As if giving people what they need is a bad thing? But what is so bad about delivering the greatest good to the greatest number? Isn’t that what democracy is supposed to be all about? Who could possibly object to that?
Except, anyone posing that question seriously clearly hasn’t been paying attention to the way this country has been run for past 40 years. Responding to public needs; delivering the greatest good to the greatest number; that’s what New Zealand politics used to be about. Political parties might squabble about the best way to do these things, but very few politicians disputed the idea that they had to be done.
The problem which eventually grew large enough to make politicians question their most basic democratic assumptions was: How to meet public needs that never seem to grow smaller? Or, to put it more crudely: At what point does the cost of delivering the greatest good to the greatest number become fiscally unsustainable?
Forty years ago, this was the question keeping New Zealand politicians awake at night. The top tax-rate was already at 66 percent, inflation seemed untameable, and “fiscal drag” was causing even relatively low-paid workers to squint hard at their pay-slips. Business leaders complained that the country was unnecessarily swaddled in controls and regulations. Workers complained that their unions couldn’t keep pace with the constantly rising cost of living.
Labour’s new leader, David Lange, thundered: “You can’t run a country like a Polish shipyard!” His finance spokesperson, Roger Douglas, had written a book called There’s Got To Be A Better Way. There were many who agreed with both sentiments.
Those Kiwis who voted out Rob Muldoon’s National Party Government in 1984 weren’t to know that Roger Douglas’s cure for what ailed New Zealand would be much, much worse than the complaint. Too few of them thought through the consequences of not responding to public need, or of ceasing to deliver the greatest good to the greatest number, but to a handful of obscenely wealthy businesspeople instead. Even fewer grasped the disturbing truth that if democracy is, indeed, about responding to the people’s needs and wants, then it is politically incompatible with lower taxes, less regulation, weaker unions, and fewer public servants.
Which brings us back to those expensive consultants – the most costly of whom are employed by giant multinational accountancy and investment firms. They are brought in by governments not because our public servants are bad at their jobs, but to prevent our public servants from doing their jobs.
If the medieval Catholic Church was a transnational institution dedicated to preserving the Christian faith, then so, too, are these massive global consultancies. They are contracted to ensure that no heretical policy initiatives are ever permitted to disturb the orthodoxy of the Neoliberal Church.
Christopher Luxon may cut back on some consultants, but not the ones that cost – and count – the most.
This essay was originally published in The Otago Daily Times and The Greymouth Star of Friday, 10 March 2023.
In former times the State Services Commission used to advertise for public servants with a quote from Plato: "Only the best should serve the State". Senior public servants in the 1960s and 70s were highly regarded for their professionalism and expertise, and rightly so. These days public servants are recruited and promoted on the basis their race, gender, sexual orientation and commitment to "Te Tiriti". So consultants are required to fill the resulting yawning gap in expertise, and even that only goes so far. As the Labour government has discovered, the more public servants of today's approved variety you recruit, the less likely you will be able to fulfill your cherished goals. They are simply clutter.
"Which brings us back to those expensive consultants – the most costly of whom are employed by giant multinational accountancy and investment firms. They are brought in by governments not because our public servants are bad at their jobs, but to prevent our public servants from doing their jobs." Really? Gasp! I'll have to think about that, Chris. But-but that's even more corrupt than I already thought they were in their pursuit of He Puapua. I need a good book.
A friend of mine's daughter worked for a government department and left to do some overseas travel. When she got back she was headhunted because she was very, very good at her job. In fact she once saved the country tens of millions of dollars, simply because she stayed on the phone and wouldn't take no for an answer.
She was offered a job as a consultant. She asked around and decided to ask for $200 an hour. She was told she was really selling herself short she should have asked for $800 an hour! So obviously some of the more senior people were getting this bloody outrageous sum. To be fair, there was no holiday pay or sick pay – it was all built-in. This was what – 20 years ago?
This is all a direct result of Roger Douglas pruning the civil service back and Jim Bolger & Co doing exactly the same in order to save money. What it's done of course is not so much save money is put in the pockets of private companies. All the while stereotyping civil servant as shorts/sandals/sock wearing dullards.
I've never worked for a government department directly, but what I saw of civil servants was nothing like this. Even if it were, I don't mind a bit of dullness in my bureaucrats. I've had pretty good service from them if I ever had to deal directly with them.
I've never found private companies to be any better when it comes to customer service that's for sure. The problem is, Douglas and Bolger wanted "efficiency" forgetting that government departments and public servants need to be also effective. They have considerations other than merely the bottom line.
It's ironic now though that National are beating this drum when they jumped on the bandwagon so easily in the 1990s.
Speaking from experience, as an economic consultant.
I do not know about other areas but I do know that in economics in particular, the government is truly shocking in who it decides to hire. Treasury no longer respects Masters degrees in economics instead seeking diversity of thought by hiring people with literally any other degree (no joke).
My friends who went through Masters economics courses with me and ended up at Treasury, fairly quickly got burnt out and left, as if you could actually do the job you got hammered with both training all the BAs up so they could provide value, while also doing all the work. Where did these friends of mine go? They either left for London, Singapore etc... or if they stayed now work as consultants!
You're right though Chris, these skills could be inhouse. But it would require a culture shift from government HR departments, and a willingness to remunerate properly.
Chris, an element I had hoped you'd pick up on was the irony that outsourcing and growth of the consultant and contractor class to create more capitalists and weaken unions, was a key plank in the neoliberal playbook the world over the last 40 years. To have Luxon go at this so naively risks undermining this vital strategem. Seymour's response is very revealing because he knows the underlying reality and how wrong this could go, it could lead to inhousing and more workers, and even more powerful public sector unions. It could spread to the private sector, given how large a purchaser the Crown is, which enables it to influence entire markets (imagine cleaners for example) commercially, let alone if new contractor unfriendly regulations came in. Luxon could score an own goal of monumental proportions if he is too successful. That is why, despite forcing Labour's hand to tighten, major donation flows from certain consulting firms will go Labour's way this year, or Luxon will see sense, before he goes "too far".
"Which brings us back to those expensive consultants – the most costly of whom are employed by giant multinational accountancy and investment firms. They are brought in by governments not because our public servants are bad at their jobs, but to prevent our public servants from doing their jobs."
Unfortunately you are incorrect...the public service hasnt been prevented from doing its job...it has lost the ability to do its job.
40 years of consultants has destroyed the institutional knowledge and capability of the public service to the point where they no longer have the ability to effectively critique the private sector advice....a grim state of affairs indeed....and all by design.
"These days public servants are recruited and promoted on the basis their race, gender, sexual orientation and commitment to "Te Tiriti"."
Citation? And is there some reason why peoples race gender or sexual orientation would inhibit their intellectual ability? If so I'd like to know what it is.
Our bloated bureaucracy and endemic churn of consultants is now an entrenched facet of parliament. Despite Luxon's recent initiative, I doubt taking the scalpel to these institutions will be a plank of National's manifesto for they too are adherents.
Loosely speaking, decades ago, party boffins formulated policies, ran them past the party faithful, introduced them to the electorate via their respective manifestos and implemented them upon winning the election. Now responsibility for new policies has devolved to consultants thereby absolving the government of "the buck stops here."
Like everything these days, the electorate can be relied on to just suck it up.
I plead guilty to having consulted to the public sector both in NZ and the UK.
My first NZ consultation was to the old Ministry of Transport. They had a long-running problem for which they had considered a number of solutions. But nothing had worked. It took a colleague and I less than a week to unpick the birds nest and come up with a solution. When we proposed our solution, their reaction was: ‘But surely it can’t be that simple.’ After a couple of months of trying to find a reason not to implement the proposed solution, they gave in; did what we suggested; and… problem solved.
That first project led to several others for other public sector units. In most cases, the solutions were relatively simple. But the public sector people had ‘ways of working’ that often prevented them from seeing what was right in front of them.
If the public sector does have too many consultants roaming the corridors (and it certainly sounds as if there might be), I suggest that public sector managers will need to learn to think more like outsiders.
It's quite fitting that both the ubiquitous use of childcare by families where both husband and wife must spend all of their time working instead of raising their own children (related to there being a need for something like National's Family Boost childcare policy), as well as the dire state of the general abilities of the public service (related to the grotesque use of taxpayer funded money in order to pay for consultants to do the public service's jobs, funding which is to be reduced to pay for the childcare policy) are both direct consequences of neo-liberal policies that have at once almost completely undermined functional family arrangements as well as producing a public that is, in so many cases, barely educated to a first world standard.
While, due to our lack of any real national sovereignty, the US-led neo-liberal mafia and international finance cartels would never allow New Zealand to leave the "rules-based" neo-liberal order for one that would actually benefit our society at a level deeper than GDP metrics, we can still diagnose the root of nearly all of our problems and place the blame at the feet of neo-liberalism (and even more broadly, modernism in general).
While it is of course impossible to go back in time, we can still think of a better path forward by looking back and seeing what it was that made the past better than the present in so many respects. The reason there is so much misery and dysfunction in societies all across the West is because people have become atomised, rootless and alienated under neo-liberal dogma.
Kathryn Ryan on RNZ rather surprisingly came up with a strong argument against consultant-ocracy. They try to please while the old public service just spoke it's idea of truth. Struck me, and then a strain in my back tossing compost.
"is there some reason why peoples race gender or sexual orientation would inhibit their intellectual ability"
Strawmanning again GS.
It's not difficult to understand; if you prioritise identity over ability (or competence, qualification or conscientiousness etc.) then you get people that are less competent. Obviously. Even some of our political parties (Labour & Greens especially but not TMP) now have diversity quotas for candidate selection.
Perhaps it's not mere coincidence that the current clown show, apparently the most "diverse" in our history, is also the least competent?
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