Brash blows budget on 2025 taskforce

Written By: - Date published: 9:21 am, July 16th, 2010 - 32 comments
Categories: Economy, Politics, tax - Tags:

I wonder if Dr Brash thought close scrutiny would have faded once he left the political limelight?  He certainly sounds entirely comfortable with spending the tax taskforce’s entire three-year budget for his meeting fees as chairman in just one year, reported in today’s Dom Post:

Dr Brash was paid $1200 a day to chair the commission, and the Government expected to pay him for eight full days of meetings and preparation in 2009-10 and four days for the following two years. But documents made public by Treasury show Dr Brash received $39,450 in the first year four times the amount earmarked for his first year on the taskforce….

Dr Brash said the cost of his fees reflected the fact that he was working “close to fulltime” on the 2025 report. “I certainly worked a lot more than 10 days … working with the author, working through drafts etc.” It would have been “utterly absurd” to expect the task force to complete its work in the four days set aside by the Government.

But does the inference that this is money well earned hold up? Does it make sense for such an expensive person as Dr Brash to spend so much direct time on the drafting? Surely there were others who could have done the work more cheaply, still allowing for Dr Brash to provide feedback? And then there’s the ‘did it matter anyway’ questions. After all the Dom Post reminds us that:

Prime Minister John Key was dismissive of the group’s first report and has suggested that its recommendations are unlikely to be implemented quickly, if at all….

Dr Brash admitted being “disappointed” with the Government’s reaction to the first report but said the task force was committed to completing its work. Set up under the confidence and supply agreement with ACT, it is charged with looking at how to grow the economy to close the wage gap with Australia.

He had better hope that the Government don’t add the sort of test of ‘worth-spending’ that Joyce is talking about with tertiary education, given that the Herald’s reporting that Universities may soon have to ensure students not only perform well but also get a job after they graduate if the institutions want to secure funding. Does Dr Brash pass the value for money test that National is so keen on promoting elsewhere?

32 comments on “Brash blows budget on 2025 taskforce ”

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  1. Lanthanide 1
    16 July 2010 at 9:29 am

    Just to clarify, because I do not think this is obvious from the report or the post above, they only blew PART of the budget.

    Brash was budgeted for 8 days in the first year, but his expenses for that year amount to 32 days.

    The total budget is reported at the end:

    ” $450,000 budgeted for the task force over its three-year life.

    In its first year it spent $153,929, mostly on meeting fees $39,450 to Dr Brash and $34,000 to the other members. ”

    From this we can see that they spent a smidgen over 1/3rd of their budget in the first year, which actually isn’t an issue.

    The only issue here is that more money went to Brash personally than was otherwise originally envisioned, but IMO that’s not a huge deal – they were being paid to do a job, specifically who does the job doesn’t matter as long as the job is done to a high standard and the budget not overrun.

  2. michaeljsavage 2
    16 July 2010 at 9:44 am

    Fact is – the ‘taskforce’ was overseen by a man who has a background with the Reserve Bank – is a through and through National/Act man and even the Nats didnt want his findings when he submitted the report.

    In normal commercial circumstances perhaps they would need to ask for a refund for a substandard product.

    Why does a Government need some seperate body to be paid to look at an issue like this? At the very least it could have been headed by an independant possibly non political appointment. What about adding a couple of average citizens onto the working group just to balance out the aristocrats and merchants?

    Shame on Brash – $39,000 odd dollars for what? A big non-event.

    • Jim Nald 2.1
      16 July 2010 at 9:43 pm

      One would hope it is not Key’s belated gift of a golden parachute … or silver harakiri for Brash’s denouement from the National leadership.

      There’s surely little reason now to be going through the torturous motions of smiles and waves and assasination?

    • jagilby 2.2
      16 July 2010 at 10:22 pm

      “‘Fact is the ‘taskforce’ was overseen by a man who has a background with the Reserve Bank”….

      I’m failing to see where the issue is there?

      He does not just have a background, he was Governor. And what? Is that the issue – do we not want people of that calibre on having an influence on our country?

      Shame on Brash? For Chairing one of the major Government taskforces and going over his 4 day budget? If you had your name on a highly publicised document I think you’d want more than 4 days involvement with it. This is an absolute beat up.

  3. Scott 3
    16 July 2010 at 9:46 am

    Why did it take Brash so long to complete the report? Everything he needed for his report was already on the Act Party website. Clearly he’s not very good at using the “copy and paste” function on his computer.

    • William Joyce 3.1
      16 July 2010 at 8:49 pm

      Well said Scott. Surely there was no doubt that Brash and co. would regurgitate the same old tired bankrupt Friedmanite/Washington Concensus/Rogernomics BS that did nothing but trickle wealth upwards.
      Like you say, it was so predictatble that any primary school class could have cut and pasted the press releases from the eighties and beyond, and produced it for National Standards qualifications.
      “What does rort mean?”, “Where is Switzerland and why do people go and live there?”, “Spell the words – Corporate greed”
      Even after the Global Financial Crisis, precipitated by Treasury Secretary Henry Paulson playing the Friedmanite playbook and letting Lehman Bros fail and cascade to other financial institutions, you would have thought that these guys would have got it by now.
      Well as Time magazine said refering to Paulson & the GFC – “if there is a face to this financial debacle, it is now his.”
      It’s hard to shift the thinking of people who are committed zealots to a religious ideology.

      • jagilby 3.1.1
        16 July 2010 at 10:41 pm

        “Well as Time magazine said refering to Paulson & the GFC ‘if there is a face to this financial debacle, it is now his.’ ”

        Haha, it’s hilarious that you try lot act as though you have the world’s best intentions when you’d love nothing more than to see the back of capitalism.

        Sure he is the face of the crisis but not in the way you would like to portray him – I’m absolutely certain that quote is taken out of context because it is a demonstrative of a lack of appreciation for the events that took place.

        Fact is that Lehman Bros was allowed to fail and the last thing Paulson or Bernanke wanted was to end up in a situation of unbridled moral hazard – if you have watched/read anything of substance on the GFC you would know that they both 100% resented having to bow down to the bulge bracket and admit that systemic risk was an issue. They were pinned in a corner. They hated having to admit they were wrong in letting Lehman’s fail on the basis of moral hazard – all the major financial institutions in the US were so intertwined that they were synonymous with systemic risk. Any further failures would have seen the US literally on its knees.

        “It’s hard to shift the thinking of people who are committed zealots to a religious ideology.” You said it mate. You said it.

        • William Joyce 3.1.1.1
          18 July 2010 at 9:34 am

          “Haha, it’s hilarious….”
          I doubt you found it that funny but you certainly did make assumptions about by beliefs ie. “…you’d love nothing more than

          to see the back of capitalism.” I fail to see how you came by this. I certainly don’t hold that belief in the slightest.
          I am not anti-capitalist. I am very much in favour of capitalism. So I am perplexed.

          Is it because you equate Friedman, Brash and the ilk as being the only and last word on capitalism?
          If so, I guess that since I disparaged Friedman, Brash etc etc you took that to me that I am anti-capitalist.

          If this is your approach then perhaps you are expressing the very issue if was trying to address.

          I was concerned at the slavish adherence to an ideology that brooks no doubts, modifications, counter arguements, or adaptations etc etc. We remember that phrase of the eighties, “There is no other way”. It was the utter predictatbility of Brash’s report that I was commenting on. His one-solution-fits-all beliefs have been well documented, have not changed, have been communicated over twenty years plus, could have been assembled into a document that said, “This is what this school of thought thinks” by someone who charged a lot less and the whole project at a fraction of the cost. The report was an irrelevancy, a white crayon. It was part of what National needed to deliver to get ACT into coalition.

          To address the other issue of slavish adherence to a doctrine…some of the characterists that people like Brash, Douglas et al express are used to define a fundamentalist. They have a set, prescibed way of doing things and nothing else will do. They consider that they have the truth and that all others are corrputed in the “faith”. This makes them inlfexible, unwilling to adapt and set in their ways.

          As for Paulson. Yes, Paulson, like many, was not fully aware of the degree to which the problems faced were systemic.

          From what I can tell Bernanke had some idea and as he was well steeped in the history of the Great Depression he had serious misgivings about playing the Moral Hassard card beause of the risk and the lessons of history. He wondered if it could possibly be a case of both Too-Big-To-Fail and Systemic and would therefore cascade. He at least would not automatically rule out government intervention…but the decision was Paulson’s and he played it the way he was educated and ideologically committed to doing so. He acted not pragmatically but ideologically. He was limited in his thinking.

          When it came to Bear Stearns, AIG etc he had learnt to adapt and find other solutions.

    • felix 3.2
      19 July 2010 at 12:34 am

      “Clearly he’s not very good at using the “copy and paste’ function on his computer.”

      Well apparently he prints out his emails to read them so it’s not too much of a stretch to believe that his copy/paste process involves actual paste.

  4. burt 4
    16 July 2010 at 10:03 am

    Would have better to spend the money on hip-hop tours eh guys…..

    • Lanthanide 4.1
      16 July 2010 at 10:11 am

      In so far as hip-hop tours might give some money to otherwise unemployed people at the bottom of the heap, yes, that would have been a better use of money than giving it to Brash who already has very high networth.

    • exbrethren 4.2
      16 July 2010 at 11:25 am

      So you’re attacking Key for more dodgy spending Burt John’s Hip-hop flip-flop.

      Remember both the Brash report rort and Key’s pacific holiday jamboree were JK approved abuses of tax-payer money whereas the ‘infamous’ hip-hop tour you refer to was approved at a lower level.

  5. Lanthanide 5
    16 July 2010 at 10:09 am

    Also, the title of this post is wrong.

    Brash was on the 2025 Taskforce, charged with working out how we can catch up with Australia.

    He has nothing to do with the Tax Working Group. These groups are often mixed up because they were formed at the same time and reported close together and the 2025 taskforce had a long of recommendations around tax, but they are separate entities.

    captcha: irritating

    • Draco T Bastard 5.1
      16 July 2010 at 11:59 am

      These groups are often mixed up because they were formed at the same time and reported close together and made the same ideological and delusional recommendations.

      FIFY

      • William Joyce 5.1.1
        16 July 2010 at 8:27 pm

        Wasn’t one of the tax taskforce members also one of the tax advisers to Westpac for the scheme that was found to have illegally deprived the NZ tax of 2 Billion dollars?
        Talk about the foxes in charge of the chicken coup!

  6. ianmac 6
    16 July 2010 at 10:33 am

    “Its first report called for the Government to slash spending by $9 billion, reform welfare, scrap the NZ Superannuation Fund, raise the pension age, cut subsidies for health and education and reform employment law.”
    Good money well spent?

  7. J Mex 7
    16 July 2010 at 2:51 pm

    Seems Brash isn’t very good at managing other peoples money.

    A shame for a few people because that is what he now does for a day job.

  8. peter 8
    16 July 2010 at 3:56 pm

    Thats a heck of alot of corned beef dinners !

  9. Rex Widerstrom 9
    16 July 2010 at 4:08 pm

    Dr Brash said the cost of his fees reflected the fact that he was working “close to fulltime’ on the 2025 report. “I certainly worked a lot more than 10 days

    As it happens, I’m working on a report for a client right now (well, when I’m not skiving off commenting on blogs, that is).

    We discussed the work involved and agreed a budget for my input.

    Thank you, Dr Brash, for giving me foresight and the courage to bill my client three times what we agreed and, when he asks me what the hell I think I’m doing, I’ll simply say “the cost of my fees reflect the fact that I worked ‘close to fulltime’ on the report and that I certainly worked a lot more than the time we agreed upon”. With no reference to my client to see if they minded paying the extra of course.

    Does anyone know if Brash runs business mentoring courses? Given he’s invented a proven method to triple your income, I’d be interested in signing up 8-|

    • Lanthanide 9.1
      16 July 2010 at 5:36 pm

      Yes, it is true that Brash got paid much more than expected, however the overall budget itself was not blown, and the product was still delivered.

      • J Mex 9.1.1
        16 July 2010 at 6:18 pm

        Yes. Not hard to do if the budget has funds aside to seek expert opinions and you don’t bother. you just ask yourself and pocket a bit more of the cost savings.

    • Hamish Gray 9.2
      18 July 2010 at 1:40 pm

      Well according to Kiwiblog, Brash did work that would otherwise have been farmed out to more expensive external consultants – so what’s the big deal?

      Rex you should know this then – anyone who has commissioned a consultancy knows that you agree to a price based on estimated workloads and timelines, but that entails flexibility within the agreed price on how the end product is delivered. So if the contractor doesn’t farm out as much of the service as originally expected, then no big deal, provided their hours equal their charge rate.

  10. theseeker 10
    16 July 2010 at 8:32 pm

    this man in charge of a kiwisaver fund yeah right!

  11. rainman 11
    16 July 2010 at 8:42 pm

    $1200 a day isn’t really that expensive – for a contract consultant – although it depends what value one is getting, and in this case I’d suspect the answer would be something awfully close to (if not below) zero.

    Captcha: clubs – old boys?

    • Hilary 11.1
      16 July 2010 at 10:32 pm

      $1200 is about 6 weeks worth of the unemployment benefit and many such beneficiaries would be contributing to the economy through voluntary work, child care etc. What exactly did Brash contribute for his $1200 per day from the taxpayer? And they got extra for food, housing and transport.

      • loota 11.1.1
        17 July 2010 at 12:57 am

        Come now Hilary, you know its different rules for the home lads than for the bennies.

      • rainman 11.1.2
        17 July 2010 at 1:01 pm

        Don’t misunderstand, Hilary – I’m the first to criticise the discrepancy in wages within NZ. I was just pointing out that it is going rate for a certain type of person.

        And no, I don’t feel there was any value extracted from the good doctor in exchange for his fee. I know plenty of libertarian idiots who can spout the same stuff – it’s not that hard, let’s be honest.

  12. hmmmm 12
    18 July 2010 at 11:59 pm

    Is nobody going to mention the fact that Brash did the work instead of contracting it out, and that money was saved over all? Worth a mention, surely.

    $150/hour is a small fraction of what Brash could command. I think it is bad form, to say the least, to accuse him of blowing his budget when, actually, he’s spent less money than planned without bothering to mention that, and not recognise he is working for way below his market rate. Bad form, Standard.

    • loota 12.1
      19 July 2010 at 1:17 am

      I’m confused – it seems to me like you’re saying that there’s no problem with Brash spending the entire 3 year budget in a single year on himself because really, we got such a good deal on him that we “saved money overall”? Even though part of the issue is that he clearly did not plan his time correctly to what was allowed in the budget?

      Sorta reminds me of my ex who was of the opinion that “the more you spend at a sale, the more you save”

      I think this is what you’re saying, yeah?

      • Armchair Critic 12.1.1
        19 July 2010 at 6:48 am

        I think hmmmm is saying that $150/hr to repackage the ACT party manifesto is excellent value for money. And it is excellent – for Don Brash..

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