ImperatorFish: More Futile and Cynical Policy

Scott at Imperator Fish has kindly given us permission to syndicate posts from his blog – the original of this post is here.

John Key must think the New Zealand public have the memory of a goldfish. He’s put forward bold plans before, but they usually end in failure. Closing the income gap with Australia, creating more jobs, reducing the number of people fleeing to a better life in Australia. And now the promise to get back into budget surplus, which he’s already backtracking on.

Key’s latest bold initiative is a set of targets that he wants the public service to meet. Bosses will receive bonuses for meeting these targets, and failure to achieve targets will result in pay cuts.

Some of the targets announced today are specific, while others are woolly and difficult to measure.

These kinds of targets are blunt instruments. Performance targets often work in businesses because businesses are usually focused on the financial bottom line. So meeting revenue or profit targets, doing a certain number of deals, or cutting overheads, will often result in private sector workers receiving a bonus.

Unfortunately for Mr Key, government departments are not business units. They do not exist to make money. They exist to fulfil a range of needs within the community. In any department where budgets are tight (and in the current economic environment budgets always are) trade-offs must be made and the needs of some groups must be balanced against the requirements of others. Unlike a business, it’s not all about the money.

So imposing a target on a department that must be met at all costs, at the expense of other priorities, and then using a stick and carrot approach to ensure the target is met, is almost guaranteed to ensure other important goals are not met.

This is something John Key will never understand, because he looks at everything through a business lens, where the only concern is to make a profit.

Some of the goals detailed in National’s plan are questionable ones. Take the goal of reducing the number of people on the dole by 30% by 2017. If National genuinely cared about job creation the goal would have been a more ambitious one: like finding full-time work for that 30%. Instead, the hard-headed businessman Key is only interested in cutting costs. So people will be shifted off the dole, and no doubt many of them will find themselves in welfare limbo: ineligible for the dole, but unable to find work. Welfare bosses will be financially incentivised to find ways to dump people from their benefits. Think it won’t happen? The same thing’s already happening over at the ACC.

Some of the goals will be met just by more of the same medicine. Crime rates have been gradually dropping for years. Immunisation rates have been steadily climbing.

Other targets are meaningless waffle, while others seem doomed to failure without some gaming of the stats. National’s plan to reduce the instances of child abuse seems unlikely to succeed, because its moves against those already struggling to make ends meet are putting huge pressure on vulnerable families. When people are under stress many of them snap.

But the good news for National is nobody will ever judge them on the results. It’s more likely than not that Labour will form the next government in 2014, but even if the Nats win another three years the results won’t be in until the end of 2017, and I doubt John Key will still be in politics by then.

If Labour returns to power in 2014, National will be able to blame Labour for everything that goes wrong. We were on track until Labour got in, National will argue.

I don’t know whether the policy is a purely cynical ploy, designed to take some of the attention away from asset sales. It’s entirely possible John Key actually believes it will work, because he thinks like a businessman. This may be something of a surprise to many, since the history of human civilisation tells us very clearly that governments are not like businesses.