“The Data Is Simply Not Available, Minister.”

SIR HUMPHREY APPLEBY: "Yes Minister, promising to build 500,000 affordable homes would be a very courageous policy, indeed!"

IS LABOUR getting Sir-Humphreyfied on housing? For younger readers, Sir Humphrey Appleby is one of the leading protagonists in Antony Jay’s and Jonathan Lynn’s incomparable 1980s television satire “Yes Minister”. So compelling was the Sir Humphrey character (played to perfection by the late Nigel Hawthorne) that his name quickly became synonymous with the obfuscating, prevaricating, manipulative and often downright misleading senior civil servant who steers his ministerial master away from his better instincts towards the maintenance of the bureaucratic and political status quo.

Dr Chris Harris, a specialist in urban design and planning, raised the Sir Humphrey question with me after a careful reading of “Stocktake of New Zealand’s Housing”, the study authored by Alan Johnson of the Salvation Army, Otago Public Health Professor Philippa Howden-Chapman and economist Shamubeel Eaqub, which was released by the Housing Minister, Phil Twyford, on Monday afternoon.

One figure, in particular, caught his attention. This was Figure 3.4 “New Dwellings Consented, By Owner Type, 1970-2017” (see below). It’s most notable feature, explained Dr Harris, was the extraordinary spike in new dwelling consents which followed the election of the Third Labour Government, led by Norman Kirk, in 1972.

The graph shows consents flat-lining at around 23,000 per year in 1970, 1971 and 1972. Between the end of 1972 and the beginning of 1974, however, the number of dwelling consents shot up to an astonishing 39,000.

The first and most obvious question that springs to mind is: “How on earth did the Kirk Government do it?” Finding the answer to that question would, surely, be of considerable assistance to Minister Twyford as he sets about tackling New Zealand’s appalling shortage of affordable housing?

Presumably, the same thought occurred to the “Stocktake” authors. What was their conclusion? That’s when Dr Harris’s eye fell upon the concluding sentences of the paragraph printed immediately below Figure 3.4:

“While current levels of new house building compare favourably with the low levels of construction seen immediately after the global financial crisis, during the period 2009 to 2011, these current volumes are not historically exceptional particularly compared with the early 1970s. However, data on government involvement in the 70s boom is not available.”

Get that? Information on the way in which the Kirk Government managed to nearly double the number of houses being consented “is not available”. (My emphasis.)

In his e-mail alerting me to this extraordinary omission, Dr Harris writes:

“Note the last sentence! In fact, you can find out quite a lot from consulting the on-line NZ Official Yearbooks of the time. State Advances credit, available for actual housing construction but not speculation since 1919, was increased. And on top of that there was as yet no Accommodation Supplement to fritter away government housing money, so that it very much went on actual building. There was also a shift from building large stand-alone houses on the city fringe to building lots and lots of small and affordable flats in more urban locations, which is where the real shortage was, and had long been. And this was all directed from the top by Big Norm.

“Norman Kirk re-founded the old-time Ministry of Works as the Ministry of Works and Development in 1973, and founded the Housing Corporation in 1974, also to try and get more houses and flats built. It turned out that urban flats proved easiest and quicker to build once central government weighed-in to overcome the usual obstacles. This was a really important part of the recipe for getting runs on the board quickly. Our cities are still full of flats built in the 1970s – the standards were higher than in later decades. Mass-produced hollow concrete blocks, suitably reinforced, were the building material of choice. Concrete block walls signify a 1970s flat in the same way that a tiled roof is typical of a 1940s state house. 

“Big Norm's policy of pulling out as many stops as possible and focusing on flats really did work surprisingly quickly and the proof is in the consent graph. Our population back then was only a bit over three million, so the graph actually understates the success of the policies of the 1972-1975 Labour Government.

“Actual builds are always a bit less than consents granted. In the early 1970s the peak rate for actual housing construction was 34,300 units built in one year. This roughly equates to 50,000 a year today, if not more, and that nice round number might explain why Shamubeel Eaqub challenged the government to see to it that 500,000 housing units are built in ten years.

“Interestingly enough, few of the houses built under Kirk's administration were state houses. To get things moving quickly, the policy was very much one of collaboration with commercial builders and developers, who were offered guarantees to go and work flat out building small affordable units without worrying too much where the money was coming from, or whether the consent was going to be approved.”

Dr Harris goes on to observe:

“You have to wonder whether there is some kind of an embargo on the level of government activism that led to such a boost in housing production in the early 1970s. It's like an episode of Yes Minister in which the bureaucrats have hidden all the relevant files and the politicians don’t notice that they’re missing straight away. Adding to suspicion of a stitch up by a business-as-usual brigade is the fact that the word ‘credit’ does not appear in the report and there is only spotty and empirical reference to ‘finance’. So, no need to frighten the banks in other words. There also doesn't seem to be any mention of the really important part played by central government institutions in making things happen more effectively and in a streamlined way back in the past: institutions such as the State Advances Corporation, the MWD – which the Rogernomes abolished in 1988 while dialling-back state construction lending at the same time – and the Housing Corporation. The Housing Corporation is still with us of course, but only in a feeble and gutted sort of a way.”

Here, perhaps, is the explanation for Shamubeel Eaqub’s extraordinary forthrightness during Monday’s media conference in the Beehive Theatrette. With barely concealed frustration at what he clearly regards as the new government’s half-hearted housing effort, he urged the governing parties to break free of the fiscal “straightjacket” in which they are currently restrained by Finance Minister Grant Robertson’s Budget Responsibility Rules.

The last thing the “Sir Humphrey’s” at the top of our own civil service want, deeply imbued as they are with the neoliberal economic orthodoxy which has guided New Zealand public policy for more than 30 years, is for “their” ministers to begin searching back through the historical record to discover how, forty years ago, a newly-elected Labour Government responded to the needs of its people by – of all things – fulfilling them.

This essay was originally posted on The Daily Blog of Saturday, 17 February 2018.

Democratic Engineers, Or Neoliberal Mechanics?

Storming The "Engine Room" of Government: As the product of a “top-down” economic and social revolution, New Zealand Neoliberalism – far from needing to rein-in the powers of the civil-service mandarinate – was determined to re-fashion the state bureaucracy in such a way that it would be able to resist any and all attempts by elected politicians – and their parties – to dismantle the neoliberal machinery of "governance".

“THEY’RE THE ENGINE ROOM where ministerial decisions are put through the mill by officials.” In that single sentence, the very worst aspects of neoliberalism are laid bare. It’s author, political journalist Stacey Kirk, like so many of her generation, have been taught to regard politicians as, at best, necessary evils. Accordingly, Cabinet Committees – the “engine rooms” of government – are held up as the necessary correctives to poorly conceived “ministerial decisions”. Places where the ideas of elected politicians get knocked into a shape acceptable to their unelected “officials” – New Zealand’s only trustworthy wielders of political power.

Kirk’s story, inspired by Opposition criticism of the new government’s apparent willingness to be guided by – and act on – its own advice, plays directly to the crucial neoliberal concept of “governance”. At its core, governance represents the idea that the policies of both local and national government, if they are to meet the fundamental test of effective and efficient public administration, must be professionally crafted and implemented. By this reckoning, the ill-informed amateurism of elected politicians poses a constant threat to the delivery of “good” governance. Which is why “officials” putting “ministerial decisions” through “the mill” is presented not as an affront to democracy, but a very good idea.

Essentially, Kirk ranges herself alongside the Sir Humphrey Appleby character from the celebrated British television series, Yes Minister. Sir Humphrey represents the haughty mandarinate of the Civil Service: the ones who regard themselves as the guardians of the State’s permanent interests. Ever on the alert against the obsessions and enthusiasms of reforming politicians, Sir Humphrey and his colleagues are constantly manoeuvring to thwart the pet projects of their ministers.

In its day, Yes Minister was conceived of – and certainly became – a primer for the “free market” reforms of Margaret Thatcher. The senior civil service of 1980s Britain was depicted as dangerously protective of the fast-decaying post-World War II Keynesian settlement. Yes Minister’s key message was, therefore, that the British people needed to elect ideologically-driven politicians who knew their own minds, and could not be swayed by the blandishments of Machiavellian bureaucrats like Sir Humphrey.

In the case of New Zealand, however, the neoliberal revolution was not carried through by ideologically-driven politicians (as happened in the UK and the USA) but by ideologically-driven bureaucrats in the New Zealand Treasury and, to a lesser extent, the Reserve Bank of New Zealand. It was these civil servants who radicalised the political leadership of the Labour Party and placed in the hands of David Lange’s government the carefully prepared economic reform package that would later become known as “Rogernomics”. (The book-sized briefing document, dubbed ‘Economic Management’, can still be found on the shelves of your local public library.)

As the product of a “top-down” economic and social revolution, New Zealand Neoliberalism – far from needing to rein-in the powers of the civil-service mandarinate – was determined to re-fashion the state bureaucracy in such a way that it would be able to resist any and all attempts by elected politicians – and their parties – to dismantle the neoliberal system.

In this regard, the concept of “governance” was crucial. Policy had to become the more-or-less exclusive province of highly-trained professionals. Men and women, thoroughly schooled in the neoliberal ideology, who could intercept and demolish any attempt by politicians – especially those of the Left – to advance an alternative economic and social agenda.

In effect, the whole idea of a democratically-elected government, empowered by the electorate to implement its party’s – or parties’ – manifesto/s, is presented as a dangerous threat to the effective and efficient management of public affairs. Lip-service has to be paid to democratic principles, of course, but all governance-oriented politicians understand that Steve Maharey’s infamous formula: “That’s just the sort of thing you say in Opposition, and then forget about in Government”, continues to describe the true condition of our democracy.

None of which should be construed as an argument for doing away with the civil service. Highly-educated and experienced civil servants will always be needed to provide the policies of elected politicians with effective and efficient delivery mechanisms. Free and frank advice to ministers will always constitute a vital aspect of testing and refining policy ideas. What is most definitely not needed, however, is a civil service comprised of neoliberal cadres: bureaucrats who are, first and foremost, loyal to an ideological system which is absolutely antithetical to the whole notion of “government of the people, by the people, for the people.” New Zealand urgently needs to get rid of this neoliberal priesthood.

Rather than question Jacinda Ardern’s government for spending too little time in the “engine rooms”, Stacey Kirk should, perhaps, cast a critical eye over the legislative mechanisms which preserve the neoliberal ascendancy in New Zealand’s civil service. The State Sector Act, the Public Finance Act and the Reserve Bank Act: all provide the statutory obstacles that render effective, politician-led change so exceedingly difficult in this country.

If our new Cabinet Ministers are working independently of their “officials”, then that is not, automatically, a bad thing. On the contrary, in a democracy: the spectacle of officials working for politicians, who are, in their turn, working for the people; offers welcome proof that the system is working exactly as it should!

Surely, the “engine room” of any government is the place where the policies promised to the people by their elected leaders are connected to the machinery of the state by its loyal civil servants – and set in motion.

This essay was originally posted on The Daily Blog of Saturday, 11 November 2017.