The cost of outsourcing Government

A few people from the ruling class get paid handsomely for their expertise in helping the Government make decisions, but many people wait and struggle.

It’s important that any Government reach out and utilise the expertise of non-elected people. However it is fair to question the amount they do this, and the amount they spend on it.

It’s well known that the current Government was not well prepared to take over, despite spending nine years in Opposition (in which time the did a number of inquiries/investigations).

It’s also well known that they have set up many reviews, working groups, inquiries, teams, committees and whatever else they call them. It will be some time before we can judge whether the cost is justified.

There are various claims about the cost of outsourcing Government decisions.

Andrea Vance – Outsourcing Government: The $55m cost of reviews

A bumper number of Government working groups, reviews and inquiries has a $55m price tag – with some consultants raking in $1400 a day.

An analysis by Stuff puts the number of reviews at 31, with 10 inquiries, and 27 working groups.

In Opposition National has a more liberal interpretation.

The National Party puts the cost even higher – with a $114m price tag for 122 working groups and 45 reviews. Leader Simon Bridges said that’s bringing about “a slow death by consultants.”

His party’s costing, released on Thursday, includes the establishment of government departments like the Pike River Recovery Agency and the Social Investment Agency, and reviews that are required by legislation or enacted by the previous government.

Of course the Government PR plays the other way:

The Government has pushed back, saying it counts 38 reviews. Of those, 29 are costed with a $34m price tag. They say that in the long-run, it works out at four cents for every $100 of government spending.

Their $34m claim doesn’t include all of their ‘reviews’. Their ‘four cents’ claim is meaningless.

When homelessness and poverty are constantly in the news the amount paid to those co-opted onto the many committees looks obscene:

Former Ombudsman Ron Paterson will earn $1400 a day chairing an inquiry into mental health and addiction.

Retired Supreme Court Judge Sir Terence Arnold will get the same for leading the year-long inquiry into controversial Afghanistan military Operation Burnham.

Former Prime Minister Geoffrey Palmer will net a $1300-a day fee for the inquiry into Defence Force actions.

Ex-Governor General Sir Anand Satyanand will be paid $1400 for each day he works chairing the Royal Commission into State Care abuse.

Ex- Labour Finance Minister Michael Cullen is getting a daily $1062 fee for heading up the Tax Working Group.

And Helen Clark’s former chief of staff Heather Simpson will get the same for leading a review into the health and disability system.

Many struggling New Zealanders wil barely be getting that sort of money per month.

And most of the above members of the ruling class will also be getting Government superannuation.

Ardern said there was a lot for her Government to fix.

“These aren’t things are being done because everything is fine. Where we have decided to take a second look, it’s because something isn’t working.”

The Government made quick decisions on some things – like the $billions committed to fee free tertiary education where it is debatable that anything has been fixed, and the $billions committed to regional handouts with a rush to dish out the dosh.

But many people in real need have to wait on a review or inquiry, and some will have to wait on the election in 2020 and then help is still in doubt.

The cost of outsourcing Government isn’t just in monetary terms, it is a cost to the quality of life for many of us.

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74 Comments

  1. Trevors_elbow

     /  June 7, 2018

    So why aren’t committed Socialists like Palmer and Cullen doing these public services for a cut rate or free? Thought it was only dirty righties who wanted market rates for high level consulting?

    The dosh they dont pillage from the public purse could be spent in disadvantaged children, emergency housing and general poverty! Think of the Children Sir Geoff and Sir Mike…. or are just stinking elitests who, in typical socialist elitest style, are feeding heavily from the public teat while lecturing others on the need for equality?

    Hypocrisy write large by our current overlords

    Reply
    • Blazer

       /  June 7, 2018

      Under Joyce M.B.I.E spent around $1.25 million a WEEK on consultants ..alone.

      Reply
      • Trevors_elbow

         /  June 7, 2018

        Your point being? Apart from diversion from topic and regurgitating you Joyce derangement syndrome…. of course because your idols like Sir Mike are the good guys so its all ok…

        Reply
        • Blazer

           /  June 7, 2018

          my point is National handed out consultancies like confetti,and wasted 10’s of millions of taxpayers money on allsorts of daft ‘initiatives’!

          Reply
          • Trevors_Elbow

             /  June 7, 2018

            Again an aimless “National Suxs” comment form the jilted bride…. jeez they did a number on you ay… and ya can’t let if go…KDS, JDS, EDS… you’ve got all the derangement’s running full noise in side one little skull… surprised you can open the fridge to get the milk out…

            Reply
            • Blazer

               /  June 7, 2018

              the milk turned into sour yoghurt,…now you have a Govt you can be proud of..get over being jilted’..Winston was won over by a sexier ..maid..in NZ.

      • Andrew

         /  June 7, 2018

        You really are a dolt – those internal and operational consultants fees will still be being paid out of Government agency operational budgets. All government agencies use consultants.
        This thread is about the “external” cost being worn by Government on reviews/working groups etc above normal operational spend.
        For someone that likes to comment so often from a position of higher intelligence you really are quite thick.

        Reply
    • PartisanZ

       /  June 7, 2018

      @Trevors_elbow – “Thought it was only dirty righties who wanted market rates for high level consulting?”

      Hell no Trevor. Marketeers come in all shapes, sizes and political persuasions.

      What you call “socialism” is only ‘Command Capitalism’ anyhow …

      It’s all market-driven.

      Reply
      • Trevors_Elbow

         /  June 7, 2018

        it can’t be socialism they’re not doing it right…ffs is that still your go to riff???

        Reply
        • PartisanZ

           /  June 8, 2018

          We all have them … as you exhibit above …

          ‘Consultancy’ was one way of roping-in the corporate-political elite ‘flotsam & jetsam’ of Rogernomics – like containing an oil spill – which has grown with each successive government since, be they National (your ‘Capitalist’) or Labour (your ‘Socialist’) …

          Yet under either, the ‘free market’ globalisation ‘capitalist’ ethos has continued apace …

          Prof Jane Kelsey’s criticism of the FIIRE economy was directed at Fifth Labour more than anyone else …

          It isn’t ‘not socialism’ because they’re not doing socialism right … It’s not socialism because they’re not doing socialism at all … they’re sliding more in the direction of ‘command capitalism’ along a continuum of capitalism …

          Reply
  2. Grimm

     /  June 7, 2018

    Chardonnay socialists using other people’s money to pay other chardonnay socialists, to fix any holes in their echo chamber.

    Reply
    • PartisanZ

       /  June 7, 2018

      May I?

      Chardonnay neoliberals – ‘socialised capitalist’ or ‘privatized capitalist’ – using other people’s money to pay other chardonnay neoliberals to fill any and all holes in their market fishing net.

      Reply
  3. High Flying Duck

     /  June 7, 2018

    I have no issues with the fees being paid as long as they go to recognised experts who can find genuine solutions.
    These names read like a “jobs for the boys” junket for out of work ex politicians and lackeys. I’d love to know how the rates they are receiving compare to their income from non-public sector work.

    Reply
  4. Griff

     /  June 7, 2018

    The cost of policy not based on careful consideration?
    $100,000,000 for nationals little experiment with attacking drug users wasted by housing nz alone. You can reasonably double that for the money wasted in the private sector on the same farce.
    I dont agree with the exorbitant rates paid for consultations.
    However Conservative Feelz based policy has proven far more adept at wasting our money.

    Reply
    • Grimm

       /  June 7, 2018

      “You can reasonably double that for the money wasted in the private sector on the same farce”

      Solid evidence based decision making there Griff. More feelz?

      Reply
      • Griff

         /  June 7, 2018

        Hello Grimm the butt hurt..
        Note the qualifier.
        That means I am indicating I am making an informed guess not a stating a fact .
        If housing NZ spent $100,000,000 on the farce with a portfolio of only 60,000 houses how much do you think was wasted in the private sector, with about 600,000 rental units, on the same boondogle?
        Feel free to produce some facts to dispute my view rather than just whinging based on your hurt feelz…

        .

        Reply
      • double is an understatement, its a fair low ball figure….. a little consulting upfront could have saved hundreds of millions of dollars, hell the Drug Foundation were giving that advice for free!

        Reply
        • High Flying Duck

           /  June 7, 2018

          Why did the Standards Committee not listen to them when researching and setting the standard?

          Reply
          • It was never a standard, just a guideline from MOH around safe levels for former clandestine manufacturing labs……

            National took it and ran with it for all housing as an excuse to evict people and run down the housing stock…..
            That was a 100 million dollar fraud that ruined thousands of lives.

            Reply
    • PDB

       /  June 7, 2018

      “However Conservative Feelz based policy has proven far more adept at wasting our money.”

      Which is nonsense of course – already this govt has wasted millions of $ bribing students for no educational purpose, set up endless committees and given Winston billions of $ to throw around haphazardly in a cold war against the Chinese in the Pacific he is doomed to fail and around provincial NZ at the whim of Shane Jones who couldn’t even be trusted with a govt credit card. Not only that they are seen as a ‘soft-touch’ and the unions are now demanding massive pay increases under threats of strikes. All in around only 6 months.

      No doubt more money will be given to those on benefits whilst their obligations are removed which is a far cry from what Bill English was trying to craft with his social investment policy based on actual data, not ‘Feelz’. Throwing more money at problems in the hope that fixes the underlying causes of the problems is after all the Labour way.

      Reply
      • High Flying Duck

         /  June 7, 2018

        Remember PDB – Griff is not a socialist, he is a right wing liberal. He just prefers all of Labour and the Greens policies over all of National and ACT’s policies and has both the selective cherry picking and the Feelz to back it up.

        Reply
        • PDB

           /  June 7, 2018

          What ‘Griff’ are you referring to? ‘Griff’ (?) said yesterday that he could speak in the third person because ‘Griff’ was just a fake name he (?) uses on here & therefore they are separate entities. So are you talking about the real person behind the fake name ‘Griff’, or the fake persona under the name ‘Griff’ on this site? Real ‘Griff’ (?) might like all National/ACT policies whilst fake ‘Griff’ may like all Labour/Green policies.

          Reply
          • Griff

             /  June 7, 2018

            ROFLMAO
            Best to keep the hurt feelz to your self kids

            Reply
            • High Flying Duck

               /  June 7, 2018

              I forgot to add you have the ROFL’s as well as the Feelz – it’s an impenetrable armour of almost-logic!

            • Grimm

               /  June 7, 2018

              Are you 12?

            • Griff

               /  June 7, 2018

              He just prefers all of Labour and the Greens policies over all of National and ACT’s policies

              You wonder why I laugh at you peploe?
              logic.
              This is what is known as a straw man argument.

              He just prefers all of Labour and the Greens policies over all of National and ACT’s policies

              Can you spot the straw man?
              All.
              No some .
              I think that having a change in government is healthy for NZ and the right as it allows for the examination of some failings.
              like residual drug testing, the student immigration rort ,the present unbalance in employee employer relations , the fact overseas buyers are heavily distorting our housing market and our response to global warming.

            • Grimm

               /  June 7, 2018

              “Can you spot the straw man?”

              Umm, nope. Seems legit.

              But thanks for the continued lecture on logical fallacies. They help to highlight yours. Including this brilliant piece of Ad populum;

              “like residual drug testing, the student immigration rort ,the present unbalance in employee employer relations , the fact overseas buyers are heavily distorting our housing market and our response to global warming”

            • Griff

               /  June 7, 2018

              Argumentum ad populum – Wikipedia
              https://en.wikipedia.org/wiki/Argumentum_ad_populum

              In argumentation theory, an argumentum ad populum is a fallacious argument that concludes that a proposition must be true because many or most people …

              Do point out were reference made to the popularity of those standpoints in support of my position in that comment.
              Random references to logic fallacy’s just makes you look even more illogical.
              Do try harder I am getting a headache from all the laughter .

            • Grimm

               /  June 7, 2018

              We know that they are all just lefty talking points. You’re trying to sound knowledgeable and principled by regurgitating lefty nonsense.

              Just because some people buy into them, doesn’t make them true.

          • Blazer

             /  June 7, 2018

            Griff is allowed to wear as many ‘hats’ as he…likes…someone championed this approach…very recently.

            Reply
            • High Flying Duck

               /  June 7, 2018

              The new government have used the “hats” argument as well in defining what they will and won’t answer in the house – it’s almost like it’s a legitimate point to make.

            • Kitty Catkin

               /  June 7, 2018

              Don’t insult Act !!!

              I think that it’s a fair bet that alloytoo, High Flying Duck and Phantom Snowflake are not these people’s real names, but they don’t refer to themselves in the third person.

              A nom de plume is just that; it doesn’t make the person different, just anonymous.

              Kitty Catkin is my real name, of course.

    • PartisanZ

       /  June 7, 2018

      I don’t agree with the exorbitant amount paid to consultants either.

      But neoliberalism eviscerated the institutional memory of the Public Service – as it intended to do – and needed to re-employ many of those experts prepared to ‘tow the line’ plus a whole lot more ‘market-driven’ consultants to prop up the ideology … and simultaneously maintain a much needed corporate-political elite …

      Provided the ultimate goal of saving some government expenditure was achieved, so that the minuscule difference between pre-‘re-regulation’ income tax and post-“deregulation” income tax + GST + fuel tax + other taxes + more taxes could be championed, promoted and hopefully maintained … the end justified almost any means …

      The collateral damage was only people … especially blue-collar workers …

      Reply
      • Gezza

         /  June 7, 2018

        The old train, wharf & ferry strikes every school holidays and local General Motors car assembly manufacturing model had reached the end of its use-by date – but the flogging off of state assets to cronies for a song and lack of any transition planning beyond “suck it & see” was too big a shock. If we’re heading back into the strikes every month model I don’t think the public will tolerate it. Too many people these days now see themselves as independently employed & more in control of their own work rate & rewards – or intend to develop their careers that way. Although I think it’s a good idea to get the minimum wage rate to a point where it provides an adequate living for those who just want to work for the man and not step up any further – like my dad did. It will be interesting to see what this new Bolger-led Werkinggruppe comes up with.

        Reply
        • Blazer

           /  June 7, 2018

          if you look at the Australian model you will appreciate..there is nothing to..fear.A beat up by the usual..suspects.’suck it and see’ is the new buzz phrase…it may morph into either ‘suck it and swallow’…or suck it and..spit it..out’.

          Reply
          • Gezza

             /  June 7, 2018

            It would be good to see a more equitable distribution of profits being paid out to the workers who produce goods in the form of wage increases – but don’t you think that really does have to be balanced against the cost of capital investment by those who put their money into establishing or expanding business operations and who expect returns on those investments to continue investing?

            At least until the banking world is better controlled – which I don’t see happening for a quite some time yet – maybe not even after the next global crash.

            Reply
            • Blazer

               /  June 7, 2018

              The Japanese are always happy with a 3% ROE..apply that and share the profits by making workers shareholders as they do in some companies…and everyone..wins a prize.Greed and Harvard business school have alot to answer..for.

            • Gezza

               /  June 7, 2018

              True.

            • High Flying Duck

               /  June 7, 2018

              Everyone wants to share in the good times. But if there are losses and cash flow problems I doubt the workers would be as willing to play their part.

            • Gezza

               /  June 8, 2018

              That’s also a fair point. And that’s where things become problematic when shareholders are told they have to take a haircut, but workers unions and workers say “nuh-uh”.

            • PartisanZ

               /  June 8, 2018

              Yes of course … the workers … because they’re not human …

              They wouldn’t be capable of understanding about the ‘ups and downs’ of business in the process of becoming employee/shareholders …

              And would “cash flow problems” affect upper-level management ‘workers’ the same way …?

  5. alloytoo

     /  June 7, 2018

    Jobs for pals in order that they may recommend Cadre Deployment.

    Reply
    • PDB

       /  June 7, 2018

      They need to get in quick in case they all get kicked out in 2020 and/or the govt runs out of money (whatever happens first), hence the mad rush to set up as many working groups in the first 6 months as possible.

      Reply
      • Blazer

         /  June 7, 2018

        National set up over 75 in the same time frame.
        Winston upset things in the last election and all those National patsies that covered up incompetence are being found out…HNZ,ECQ…etc…National couldn’t run a..bath.

        Reply
  6. Blazer

     /  June 7, 2018

    this is one of many the Nats made that rankles…’the National Party appointed Neville Body ex Fay Richwhite to advise them on selling State Housing .They paid him $2.3mil for him to give advice on the best way of selling housing to him and his kind.’

    Reply
    • Grimm

       /  June 7, 2018

      Peanuts. We own 4000 state house in Auckland worth over $1m. Around 800 worth $2m. Twyford has essentially screwed himself (again) by pledging not to sell any. He expects everyone in Auckland to double bunk on their sections, except state house tenants. The plan was to sell these old shitters and put modern high density social housing on the sites. You know, the same as on the private sections so next door.

      Reply
      • Blazer

         /  June 7, 2018

        the plan was to sell these properties at huge discounts to Nationals mates.They would then allocate a small portion for state houses,and keep the best sections for themselves.Pt England is a fine example of their..plans.

        Reply
        • PDB

           /  June 7, 2018

          Blazer: “They would then allocate a small portion for state houses”

          A little white lie their Blazer – doesn’t take much of a search to find out National were in the process of building a lot more state housing than they were taking away.

          “Pt England is a fine example of their..plans.”

          Pt England was an initiative for more housing that Labour opposed because they…..didn’t want more houses.

          Reply
          • Blazer

             /  June 7, 2018

            comedy gold…’in the process’!

            Reply
            • PDB

               /  June 7, 2018

              They must’ve been considering all Twyford has announced towards Kiwibuild are houses already started under the National govt.

        • Grimm

           /  June 7, 2018

          “the plan was to sell these properties at huge discounts to Nationals mates”

          So, your argument process goes something like…

          I’m just gonna make shit up.

          Reply
          • Blazer

             /  June 7, 2018

            Tom Hunt Dominion-2016…’But, given the soaring price of property, the average sale price of state homes is notably low. This year, nationally, they sold for an average price of about $161,000, and about $228,000 in Wellington.’

            Reply
            • High Flying Duck

               /  June 7, 2018

              I wonder if they were selling their top quality properties or just the ones that were in disrepair and in the wrong areas?

            • Blazer

               /  June 7, 2018

              @HFD…never mind the house,land alone worth ..that.

            • Grimm

               /  June 7, 2018

              Just to make the point again, because you are as slippery as an eel

              “the plan was to sell these properties at huge discounts to Nationals mates”

              Making shit up.

            • High Flying Duck

               /  June 7, 2018

              Comparing sale price to CV is infantile. Twyford (who’s view you so charitably call “evidence”) just confirms he was saddly uninformed both befere and after being elected.

              We sold our last Auckland house for over $500,000 below CV. It was still a good price, but CV’s are not worth the paper they are written on.

            • Blazer

               /  June 7, 2018

              Tom Hunt is not a psuedonym of Twyford’s.
              ‘Comparing sale price to CV is infantile’….a very common practice throughout the entire RE industry.

              ‘We sold our last Auckland house for over $500,000 below CV. It was still a good price,-shall we charitably call this..’evidence?(God knows how extravagent your new hut is going to be then 😉

        • David

           /  June 7, 2018

          “the plan was to sell these properties at huge discounts to Nationals mates”

          Blazer, we have seen you in action over property sales before. All the required information for you to conclusively prove your point is freely available, so let’s see a transaction where a mate of National’s purchased a property at a huge discount to market rates.

          Where any such transaction occurred, it would be a simple matter for the current government to show it and lay criminal charges against those involved too.

          Reply
          • Blazer

             /  June 7, 2018

            dear David..Q…has any private buyer paid 38% of valuation for a HNZ owned ..property?

            Reply
    • Gerrit

       /  June 7, 2018

      There is no “evidence” in that linked story. Just mumbled hearsay.

      Does Twyford know the difference between…market value and CV valuation?

      No.

      Does he know the location and the derelict statutes of these houses and hence their market value…No.

      Interesting comments at the end off the NBR article…worth a read for the perpetually confused.

      Reply
      • Blazer

         /  June 7, 2018

        ‘market value and CV valuation?’…no one knows this before a property is…sold.

        The boom is in land..Einstein..’Does he know the location and the derelict statutes of these houses and hence their market value…No.’

        Reply
        • High Flying Duck

           /  June 7, 2018

          Land with a derelict house on it is worth less than bare land.
          CV’s are a fiction.
          If you can show proper process was not followed in selling the properties you may have an argument, but I haven’t seen any evidence of that.

          Reply
          • Blazer

             /  June 7, 2018

            depends on what you call…’proper process’…The Nats and HNZ say they followed ‘proper process’ in evicting state house tenants with their zero tolerance policy!

            Reply
            • High Flying Duck

               /  June 7, 2018

              The standards were independently set by (among others):

              Auckland Council
              ESR
              Housing NZ
              Forensic & Industrial Science Ltd
              Hutt City Council
              Insurance Council of NZ
              International Accreditation NZ (IANZ)
              Local Govt NZ
              Ministry for the Environment
              Ministry of Health

              I didn’t see the National Party listed.

              While the whole fiasco is a disgrace I find it difficult to see how the Govt of the time could go against what they were told was a thoroughly researched recommendation.

              Labour have relied on the scientific consensus they were provided just as National did.

              https://www.standards.govt.nz/assets/Publication-files/NZS8510-2017.pdf

            • High Flying Duck

               /  June 7, 2018

              The Insurance Council would have had a vested interest in the threshold being much higher as it has cost insurance companies a fortune. And yet they signed off on these standards.

            • Blazer

               /  June 7, 2018

              a polar opposite approach derived from the same independent…advice…remarkable!!

              ‘Labour have relied on the scientific consensus they were provided just as National did.’

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