Illustration: Daniel Blackball
Illustration: Daniel Blackball

The Sunday EssayAugust 28, 2022

The Sunday Essay: An administrative revolution

Illustration: Daniel Blackball
Illustration: Daniel Blackball

Our fire trucks are breaking down, the road toll is up and we’re desperately in need of more nurses. But rather than tackle these urgent issues, the government drops billions on consultants, comms staff and various other removed, abstract thinkers. Or so it appears to Danyl Mclauchlan. 

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Illustrations by Daniel Blackball


In July New Zealand’s Covid pandemic was killing about 150 people a week. The hospitals were under enormous strain: they didn’t have enough nurses to cope with the surge in patients, and industry experts estimated the health system was about 4000 nurses short. Yet, oddly, the Labour government was at the same time defending a decision not to fast-track nurses into the country via their new immigration system. As part of a policy reset to shift the economy to a high wage model, they were trying to reduce the numbers of low wage migrants. There was a green list for in-demand occupations including GPs and various surgical specialties who received automatic residency. But nurses weren’t on that list. 

How to explain this? It doesn’t seem to be industry protectionism, since nursing industry organisations were furious about the situation. There’s been some suggestion that it’s a form of gender discrimination. Nursing is a traditionally female occupation; if you look at the roles that are on the green list − engineering, construction, primary industries, ICT − they’re mostly male-coded. Or was it racism, because migrant nurses tend to come from the Philippines? I asked someone in the government if they thought either of these were the case, and they doubted it. To them this was probably just an oversight, an error at the ministry of business, innovation and employment (MBIE), but the opposition attacked the government over it so the government dug in its heels and now here they were, forcing nurses to go through a two-year residency process while people died in hospital corridors. This theory is so bleak, there may be truth in it. But I want to explore an alternative, more elaborate explanation. 

The crisis in the health system is happening alongside an $11 billion project to reform the health bureaucracy. Also underway is the centralisation of the polytechnics. These used to be funded and monitored by the Tertiary Education Commission, but this work has been transferred to Te Pūkenga, a new organisation dedicated to the polytechnic sector (and this new organisation is overseen by a new department in the TEC). Te Pūkenga is already in dire financial trouble, with its CEO on paid leave for a period while not responding to media enquiries (he has now resigned). So far the merger has cost $200 million, and the government is cutting back teaching and administrative staff at the polytechnics to pay for it all. The whole debacle has been attacked by former Otago Polytechnic CEO Phil Ker who told the Otago Daily Times: “Those hundreds of millions have just gone into structural stuff. Not a single dollar has been put into improving outcomes for learners, not a single dollar to strengthening the regional providers, and so the issues that we had before Hipkins started this misguided venture, are not only still there, they’re worse. The initial goal was to build a system that delivered more education to more people – particularly Māori, Pasifika and people with disabilities – and to do it better… It just hasn’t happened.”

On the same day Ker made his complaint, Stuff reported that the next phase of the government’s Let’s Get Wellington Moving transport infrastructure project – “a detailed business case involving no construction” – would cost more than $120 million and take three years to complete.

Note that Wellington’s infrastructure is rapidly deteriorating. Also that day NewsHub reported that the government was spending a billion dollars a year on consultants, with Imogen Wells writing: “Back in 2018, the cap on public servants was removed with the aim being to reduce the Government’s contractor and consultant spend. Since then, the number of public servants has grown, but the government’s still spending just as much taxpayer money on contractors and consultants.”

A few weeks later a Stuff story focused on the fire service, with firefighters complaining they were underpaid, understaffed and poorly resourced. National’s internal affairs spokesman Todd Muller pointed to spending on contractors and consultants increasing from $4.5 million in its last year as the fire service, to more than $140 million over the past five years, since it was centralised as FENZ.

“FENZ had $468m capital expenditure in the last five years and firefighters are questioning where the money has gone,” Muller said. “There has been no improvements to resourcing over that period… We are witnessing fire trucks breaking down across the country.”

And a few days after that Stuff reported on the government initiative to improve the mental wellbeing of school students. It had allocated $44 million to fund counselling at primary, intermediate and small secondary schools for four years, with the Ministry of Education claiming it would deliver 100,000 hours of counselling each year. But it looked set to provide just 9600 hours this year

In the story, National party mental health spokesperson Matt Doocey said it appeared the government was spending more than $500 per counselling session. “Normally counsellors charge about $150, so you’d have to ask: Where is this money going?”

Where IS all the money going? In the past few months the government has created a new anti-terror research centre, committed $300 million to replace the school decile rating system with an equity number, created a new ministry for disabled people, a new national health provider, a new health authority for Māori, a new ambassadorship for Pacific gender equality, a new supermarket watchdog. It’s hard at work creating a new mega-sized public media entity – estimated cost $350 million – and establishing four new regional wastewater entities at an estimated cost of $296 million (the total three waters reform is priced at about $2 billion). It has purchased Kiwibank for $2.1 billion. 

Some or all of these might turn out to be worthy enterprises but there’s a huge assumption in this government and on the left more broadly that they can only be Good Things – that questioning the rapid expansion of the administrative state can only be right-wing hate speech, part of a covert neoliberal plot to gut health, education, welfare. 

Aren’t we seeing an erosion in state capacity alongside all this centralisation and expansion? Aren’t outcomes in health, education and welfare trending down rather than up? What’s going on? You can’t have effective public services without bureaucracies, but it’s not clear that the torrents of money flowing into them are delivering more value to the public or to the marginalised communities some of them are named after. It’s almost as if the primary role of the administrative state is shifting from serving the people to the redistribution of wealth to the staffers, lawyers, PR companies, managers and consultancy firms that work in them, or for them. A billion dollars a year in public sector consultancy is an awful lot of money when you’re running out of teachers and nurses because you don’t pay them enough, and the fire trucks are breaking down.

I sound a little conspiratorial when I talk about this, as if there’s a smoky room filled with senior ministers, high-ranked public servants and partners at consultancy and law firms all laughing as they cut frontline services and stuff wads of cash into each other’s underpants. And a certain amount of this happens under every government. But I think there’s something else at work here. 

In 1994 the US historian and cultural critic Christopher Lasch died, and a year later his final book The Revolt of the Elites was published. Lasch started his career as a socialist and ended it as a hard-to-categorise hybrid of anti-capitalist, anti-consumerist pro-environmental conservative. The revolting elites in his book are the professional managerial class: the educated technocrats who occupy a commanding position across post-industrial economies, not by direct ownership of capital or overt command of the political system but by managerial  control of all our institutions. They run everything. I’ve written about the professional managerial class before – I don’t think you can understand 21st century politics without them – and for Lasch their most important qualities are: a) they’re a global class; b) they’re more concerned with the virtual and abstract than the physical, and, c) the primary purpose of their politics is therapeutic. 

What does any of that mean? It’s less complicated than it sounds. Firstly, the PMC are “symbolic analysts”: lawyers, media professionals, academics, programmers, bankers, brokers, consultants. They work with information; they manipulate words and numbers and other abstract symbols. Because the markets for these skill sets are international, they are a wealthy yet transient elite. They travel for their educational credentials, their careers and their holidays, which means they have more in common with other educated elites across national borders than they do with the majority of their fellow citizens, whom they generally regard as ignorant and parochial. 

Lasch mourns the decline of the mid-20th century socially democratic left; the working class movement that built the modern welfare state. And he notes that the PMC often imitates their rhetoric but primarily employs the state as a means to appropriate the public’s wealth for themselves while defecting from its core institutions. He notes: “They send their children to private schools, insure themselves against medical emergencies… In effect, they have removed themselves from the common life. Their only relation to productive labour is that of consumers. They have no experience of making anything substantial or enduring. They live in a world of abstractions and images, a simulated world that consists of computerised models of reality.”

And this disconnection from the physical world and their fellow citizens means their politics is increasingly therapeutic rather than material; it’s the politics of personal self-esteem, emotional wellbeing, self-expression, self validation, relentless positivity. Jacinda Ardern gave a nice demonstration of this in a recent interview on TVNZ’s Q+A with Jack Tame. When asked about her government’s failure to deliver across multiple policy areas and what she’d learned from these mistakes, she replied: “You know what, I would not ever change the fact that we have always throughout been highly aspirational. We have always focused on how we can make New Zealand better…  In setting out a vision for what that should look like, you will still hear me talk about New Zealand as a place that should be free of child poverty. Absolutely, because anything less in my mind… anything less demonstrates that we don’t believe that things can and need to improve.”

The vision is everything. In 2019 the government unveiled its Road to Zero campaign. This approach to road safety, funded at $3 billion over the next three years, “adopts a vision of a New Zealand where no one is killed or seriously injured in road crashes”, which it pretends it will realise by 2050, and which is accompanied by a $15 million advertising campaign (including the famous $30,000 in illuminated zero signs). The transport agency delivering the campaign, Waka Kotahi, has seen a dramatic increase in staff, especially comms staff. NewsHub reported it has “more than doubled its PR team since 2017 – when Labour took power – from 32 staffers to 88, 65 of whom are earning $100,000 or more.” It has more managers, more HR administrators, more accountants. It spent $25 million refitting its offices. But road deaths are trending up even though petrol is more expensive so commuter miles are down. RNZ reported that Waka Kotahi have only installed a fifth of the median barriers they were supposed to, and fewer than a fifth of the side barriers. There are numerous media reports about worsening road conditions around the country. 

And,  from Lasch’s perspective, this all makes total sense. For his managerial class the primary purpose of the transport agency and the rest of the state is to create high income jobs and lucrative contracts for the cognitive elite – they are the true value creators, after all – and to deliver media campaigns celebrating the bravery of their visions, the nobility of their aspirations; to affirm that they are the good and smart people. The actual safety conditions of provincial roads are largely irrelevant. And if we circle back to the beginning of this essay, he’d see the decision not to fast-track nurses into the country the same way. Nursing is a credentialed, moderately well paid profession. But nurses are not knowledge workers the way medical doctors and some other health professionals are. Nurses work almost entirely in the real not the abstract, therefore they can’t be adding “real” value to the health system, any more than safety barriers installed by uneducated manual labourers can reduce traffic fatalities, or fire trucks can put out fires.

When you write about class – or race, gender, faith – it’s hard to avoid the sin of essentialism where you lump a huge, diverse group of people together and declare them all intrinsically good or bad. But what Lasch describes is a cultural and social logic rather than a group of evil people. I’m part of the PMC myself; we’re (mostly) decent on an individual basis. It’s the political outcomes of this class relentlessly following its own self-interest that are bad. In his book Capitalism, Alone, the inequality researcher Branko Milanovic describes the tendency for educated elites to practise “assortative mating” – forming highly credentialed dual-income couples that can afford residential property close to hub cities, where their investments are artificially inflated through strict zoning regulations. This happens all over the world and no one co-ordinates it. Lasch notes that because the PMC is meritocratic it tends to strip-mine non-elite communities of their best and brightest, elevating them into the cognitive class. So anti-managerial movements tend to be disorganised, incoherent, leaderless and easily captured by bad actors. We’re seeing that all over the world, too. 

I always feel despondent when I write about this stuff – the rise of the cognitive class, the erosion of state capacity – because I don’t see many happy solutions. I don’t think the situation improves if you vote the current government out and a right-wing one in (although I’m vaguely encouraged by the opposition’s vague rhetoric about targeting and outcomes). The creation of the MBIE super-ministry, the welfare reforms, the “business growth agenda” were all projects of the previous National government that can be classified as lavish-yet-worthless PMC machinations with slightly different messaging than that of Ardern’s administration. 

There is currently a pay freeze across the entire public sector. It’s scheduled to last for another year. But back in April NewsHub revealed there had been over 2500 exemptions to the freeze in which public servants on high salaries received pay increases. And of course contractors are exempted from the freeze. A new government might reduce state funding to pay for tax cuts for the rich, but it’ll be the managerial class that decides what gets cut and it’s never going to be them. 

And I’m not arguing that Lasch’s perspective explains everything (or that I agree with everything he says). But I’ve come to the end of this essay in early August, and the health minister Andrew Little has just announced a suite of measures to address staff shortages in the health sector. No, he’s not changing the immigration rules for nurses – but the government is launching a media campaign, teaming up with Shortland Street to promote nursing as a career. The cost of the campaign will not be made public. 

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