NZ First MP Shane Jones. Photo by Hagen Hopkins/Getty Images

PoliticsApril 18, 2019

How an OIA laid bare the pork barrel shambles that is Shane Jones’ provincial growth fund

Guest writer

NZ First MP Shane Jones. Photo by Hagen Hopkins/Getty Images

Economist Eric Crampton on the primary school maths and abuse of the official information act underpinning Shane Jones’ provincial growth fund.

It seemed a simple enough question. It was, really. So why did it take more than two months to get an answer under the Official Information Act?

On 5 February, MBIE’s head of the Provincial Development Unit, Robert Pigou, was reported claiming that the Provincial Growth Fund “was on track to create 10,000 jobs” – in contrast to National’s claims that the fund had created only a handful of jobs to that point. I assumed that MBIE had run an economic forecasting exercise to estimate the effects of their various initiatives, and I wanted to know whether their assumptions had stacked up. So I made a simple request:

“Please provide the workings underlying the job creation claims, along with any correspondence with Treasury relating to that modelling.”

At the same time, I asked Treasury for a copy of any analysis they had undertaken on MBIE’s work. Since any serious modelling work should have been run past Treasury for comment, asking both agencies about it seemed a good idea. I suspect Treasury might have been a tad more pleased than MBIE to tell me about the problems Treasury had found in MBIE’s workings.

On 26 February, Treasury advised me they had no information to provide as they had not provided any advice to MBIE. On 6 March, MBIE advised that they had extended the OIA deadline to 22 March. Why? Because “consultations necessary to make a decision on the request are such that a proper response to the request cannot be made within the original time limit.”

Trying to parse bureaucratese is never easy. I assumed that MBIE’s answer meant the modelling might have drawn on commercially sensitive material provided confidentially by applicants.

Then, on 22 March, MBIE informed me that “the Ministry is due to publicly release a spreadsheet detailing the 10,000 jobs figure at www.growingregions.govt.nz, as such this part of the request has been withheld”. Section 18(d) of the Act allows withholding information that is soon to be publicly available. MBIE also told me no correspondence with Treasury about the figure existed – something Treasury had told me a month earlier.

The problem with section 18(d) is that Ministries like to use it to indefinitely defer their obligations under the OIA. The Ombudsman has clarified that section 18(d) should be used only when the Ministry is reasonably certain that the information will be published in the near future – and that more than eight weeks after invoking section 18(d) is unlikely to be considered ‘soon’.

So good OIA responses should give some clarity around just how soon is soon.

By now, I was getting suspicious. An initial extension for consultations had turned into what could be an indefinite delay without Ombudsman intervention. So I turned to the Ombudsman for help, noting the absence of any expected date the modelling might be delivered. I was becoming worried that MBIE might have been creating the workings during the delay.

But I had given MBIE perhaps too much credit. The modelling wound up being far simpler than I had expected – especially given the amount of time it wound up taking them to tell me. On 8 April, the Ombudsman’s office pointed me to a release on MBIE’s website providing the figures.

Here is what MBIE did to produce the 10,000 jobs figure.

They took the number of jobs that every Provincial Growth Fund applicant promised in their grant application. They added those numbers. Then they added one job for every feasibility study the Provincial Growth Fund was undertaking – that’s because you have to hire somebody to do a feasibility study.

That’s it.

No complex modelling. Just a summation at the bottom of a column in Excel.

Now you might think people making applications for grants through the Provincial Growth Fund might not be the most unbiased assessors of the number of jobs the grants might support. Perhaps, and hear me out here – maybe, just maybe, the grant applicants might have thought they would be more likely to receive a grant if they put a bigger number on the form. It isn’t like the money would be taken away if job creation figures wound up being less than advertised.

But you might also think that back in February, MBIE might have just told me:

“You know what? All we really have for modelling here is an adding machine. We added up the numbers that people promised in their grant applications. Getting the actual Excel spreadsheet up that has the numbers for each grant proposal – that will take a bit of finagling with the applicants. So that could take a while and don’t hold your breath. But if you’re looking for workings and method here, it’s just an =sum cell in an Excel sheet tallying up the promises we were made by grant applicants. When they provided a range of estimates, we used the bottom of the range. But it’s just a simple sum.”

That wouldn’t have taken long. It took me less than a minute to type that paragraph – but I type quickly.

So why did it take until 16 April for MBIE to finally point me to that spreadsheet?

The simplest answer is that Minister Shane Jones was under a lot of fire for his loose-sounding numbers around the Provincial Growth Fund back in February, and waiting for more than two months to release the figures would make life a bit easier for the Minister. Maybe there’s a better answer, but it would take me months and months to find it under the Official Information Act.

This isn’t how the Official Information Act is supposed to work, but here we are.

Keep going!

From left: Grant Robertson, Jacinda Ardern, Kelvin Davis arrive in Parliament on October 19, 2017, having just emerged victorious from the coalition talks. (Photo: AFP PHOTO / Marty MELVILLE Photo illustration: Tina Tiller

PoliticsApril 17, 2019

Four months in, Labour’s ‘year of delivery’ is a disaster

Danyl Mclauchlan

Contributing writer

Just after 2pm today, the capital gains tax proposal was pronounced dead by Prime Minister Jacinda Ardern. It’s just the latest in a run of bad news for the government’s much-vaunted policy projects, writes Danyl Mclauchlan.

At the start of the year Jacinda Ardern declared that 2019 was her government’s ‘year of delivery’. Last year they were still figuring out how their phones worked. Next year is another election. This is the one that counts; the year they make good on those campaign promises of transformational change to our economy and society. They’re doing this through four huge, hugely ambitious policy projects. Or, at least, they were.

The first transformational project is KiwiBuild: the solution to the housing crisis. It doesn’t appear to be going well, with Judith Collins exposing a new flaw, or scandal or oversight in the scheme roughly every seventy-two hours. The second is the Zero Carbon Act: a framework to price greenhouse emissions and transition us to a green economy. This was supposed to come before select committee in February, but New Zealand First has fought such a prolonged and ruthless campaign against it the prime minister was forced to intervene in the negotiations to ensure its very survival. We don’t know what the act will look like, but Climate Minister James Shaw now predicts our emissions will continue to rise until the mid-2020s, which doesn’t sound hugely reassuring.

Next month we get the Wellbeing Budget, built around a ‘living standards’ framework. This is designed to shift the public service away from its neoliberal focus on economic and financial measures and towards ‘human, social and natural capital’, and will let the PM go on TV and talk about how much she cares about Kiwi kids and mums ‘as a mum herself’ If nothing else we can probably put this down as a foregone PR triumph.

The fourth was the capital gains tax, which Labour has campaigned on for the last three elections – because it is an issue which goes to the heart of inequality in New Zealand – and which they just ditched after one of the most bafflingly disastrous public policy debates imaginable, making John Key’s flag-change campaign look like the Normandy landings. There will be no capital gains tax, the prime minister announced today, and Labour will not campaign for one under her leadership. What happened?

The most obvious culprit is the government’s senior coalition partner, New Zealand First. They’re opposed to a CGT. Given Winston Peters enormous power in this government – he seems to function as a virtual co-prime minister; he can veto anything Labour tries to do, and Ardern cannot retaliate or discipline any of New Zealand First’s ministers – it wasn’t possible to introduce a CGT during this term. That didn’t prevent Labour from campaigning on one next year though, but Ardern just ruled it out in perpetuity.

For that we can blame Labour’s communications strategy. They didn’t want a public policy dispute between Ardern, Robertson and Peters, because that would have been ‘a bad look’ so after the Tax Working Group’s report was made public the government entered a two month consultation period. They spent this time refusing to comment on the report’s findings while a vast, sophisticated, devastatingly effective public relations campaign tore the Working Group’s proposals to shreds.

The proposal had a lone champion: former Labour finance minister and Working Group chairman Sir Michael Cullen. Having him front the debate probably sounded like a good idea when it was dreamed up in the Beehive by a room full of people dazzled by Cullen’s brilliance, but it was never obvious that the wider public (a) remembered who Cullen was or (b) if they did, whether they liked or trusted him, Cullen having been a rather caustic and smug political figure, or (c) if they did remember and trust him, whether they were aware of Cullen’s very vocal contempt for a capital gains tax the entire time he held the finance portfolio, and also (d) all that aside, how much credibility he had once it was revealed the government was paying him $1000 a day to do their job for them.

The only person who could have won the debate was Jacinda, and Jacinda was regally silent. She had to be because she was ‘consulting with her coalition partners’ but even when she was forced to speak to tax issues in the House – the one place Ardern and Robertson couldn’t pay Cullen to speak for them – her lines were barely coherent. It’s the only time Simon Bridges, National’s inept, doomed leader looked more prime ministerial than Ardern.

Popular governments can do unpopular things. The Key government raised GST and announced the part-privatisation of the power companies in their first term. But Key fronted the policy and convinced the public. Ardern is even more of a master of populism and soft media than Key, but her genius is in generating iconic visual images and simple apolitical slogans (‘Let’s do this!’). It all makes a very compelling case for Ardern as a prime minister but doesn’t explain why her government wants to do any of the things they want to do. And it is less and less clear that they’re actually doing them.

It’s the right thing to do strategically. Ardern and her finance minister Grant Robertson probably just bought themselves a second term in government today. But at a cost of one of Labour’s most important, long-term policies, and it was their failure to control their coalition partner or even attempt to make the argument for taxation reform that forced them to pay such a bitterly high price.