Year: 2018

Reflecting on Jim Anderton

Michael Reddell labour party, New Zealand economic history, NZ politics, Uncategorized

I have a pleasant memory of the only time I met Jim Anderton. One of his daughters was in the same class as me at Remuera Intermediate, and at the end of the year the Andertons hosted a class barbecue at their home just up the street from the school.   I was a youthful political junkie and Jim Anderton was running for Mayor of Auckland.  It was a pleasant evening and he seemed to be a lively and engaged parent (later struck by the awfulness of the suicide of another daughter).

Accounts suggest that Anderton did a good job of helping to revitalise the Labour Party organisation in the late 1970s and early 1980s.  He was, for the time, a moderniser, instrumental in helping reduce the direct influence of the trade unions in the party, and promoting the selection of some able candidates who hadn’t served time in the party (eg Geoffrey Palmer).  Various tributes talk of a personal, and practical, generosity.

I don’t suppose either that there was any doubt that he pursued causes he believed in, and that those causes were, more or less, what he regarded as being in the best interests of New Zealanders (perhaps especially “ordinary working New Zealanders”).   Probably most politicians do.  Sometimes they are mostly right about the merits of the causes they pursue, and sometimes not.    In Anderton’s case, even if one agreeed with the sort of outcomes he might have hoped for, his views on the best means seem –  perhaps even more so with hindsight than at the time –  to have been pretty consistently wrong.   And for all the public talk in the last few days about Anderton’s contribution to New Zealand, few (if any) of the things he opposed in the 1980s have been unwound/reversed, and few of the things he championed when he served later as an effective senior minister have done much for New Zealanders.

Take the 1980s when, upon entering Parliament in 1984, Anderton quickly isolated himself in caucus.  Even before that election, he’d opposed the CER agreement with Australia, and opposed Roger Douglas’s talk of a need for a devaluation and a reduction in the real exchange rate.  Even after the 1984 election, in circumstances of quasi-crisis, Anderton still opposed the by-then inevitable devaluation –  and in league with Sir Robert Muldoon sought to use a select committee to run a kangaroo-court inquiry, to undermine the choices his own government had made.   He was opposed to GST, and he was opposed to creating SOEs for state-trading operations.   He opposed privatisations, whether small or large.   Of the large, there was vocal opposition to the sale of the BNZ and of Telecom.  I suspect the list of reform measures, not subsequently unwound, that Anderton did enthusiastically support would be considerably shorter –  perhaps vanishingly so –  than the list of those he opposed.

As a pure political achievement, to have survived resigning from the Labour Party – in a pre MMP period –  was worthy of note.  But then Winston Peters did much the same thing –  and he’d had the courage to resign his seat and win a by-election to return to Parliament.  And the distinctive Jim Anderton party has long since disappeared, as Anderton returned to the Labour fold.

And what causes did he champion as a senior minister (for a time, deputy prime minister, in the fifth Labour government).   Probably the institution that will be always associated with Anderton’s name is Kiwibank: it certainly wouldn’t have existed without him.  But to what end?   Has Kiwibank changed the shape of New Zealand banking?  Not in ways I can see.  It remains a pretty small player, operating in segments of the market where there has always been plenty of competition.  It hasn’t come to a sticky end –  as many state-owned banks have here and abroad –  but we’ve never had the data to know whether, even on strictly commercial grounds, the establishment of the bank was a good deal for taxpayers (but the fact that no private new entrant has tried something similar suggests probably not).   If simply promoting competition in banking had been the goal, perhaps it would have been preferable to have prevented the takeover of The National Bank by the ANZ?

There has been talk in the last few days of Anderton’s contribution to “revitalising the regions”.  I’m not sure what this can possibly mean –  even allowing for a few government offices being decentralised (at some cost) around regional centres.   Generally, the real exchange rate mattters much more for the economic health of the regions than direct stuff governments do.   Anderton was Minister of Economic Development.  In that role, he was keen on using taxpayer money to subsidise yacht-building (which didn’t end well), and a champion of film industry subsidies.   In tributes this week, there has also been the suggestion that Anderton was one of those responsible for the creation of the New Zealand Superannuation Fund, something I hadn’t heard before.   If so, I guess he deserves some partial credit for the fiscal restraint the then Labour government exercised in its first few years.  Beyond that, what was created was a leveraged speculative investment fund –  not a model followed, as far as I can tell, in other advanced economy –   with returns that over almost 15 years now really only seem to approximately compensate for the high risks the taxpayer is being exposed to.  No doubt Anderton opposed the decision in 1989 or 1990 to start raising the NZS eligibility age from 60 to 65, and the same opposition to any further increase in the age beyond 65 –  even though it is a step many other advanced countries have taken, as life expectancies improved –  was presumably behind any involvement he had in the creation of the NZSF.  In so doing, once again his hand was involved in holding back sensible gradual reforms, and keeping New Zealand a bit poorer than it need be.

I suspect many of the tributes of the last few days are mostly a reflection of Anderton’s part in the Labour reconcilation.  The prodigal son returned –  having been one of the leading figures in fomenting the civil wars in the first place, before walking out of the party.   They were tumultuous years, and few things are nastier than civil wars.  Anderton doesn’t ever seem to have been a team player, but by the end of his career he seem to have found his place back alongside the team he started with.

But from a whole-of-nation perspective, what did Anderton accomplish?     If the reforms of the 1980s and 1990s haven’t produced the results the advocates hoped for –  we still drift, more slowly, further behind other advanced countries – that wasn’t for the sorts of reasons Anderton advanced.  Had we followed his advice, we’d most likely now be poorer still –  and many of the issues around equality and social cohesion that he worried about might have been no more effectively addressed.     In the end, Anderton is perhaps best seen as a belated figure from the New Zealand of the 1950s and 60s.  There was a lot to like about the New Zealand of those years –  some of the best living standards in the world then – for all the increasingly costly distortions to our economy.   There are parallels to Muldoon –  who famously told a TV interviewer of his goal to leave New Zealand no worse than he found it –  both in the genuineness of their concerns, and the wrongness of too many of their policy stances.  Both seemed to back very reluctantly into the future, with all too much willingness to trust our fortunes to the state, and the possible winners identified by politicians and officials, rather than to the market.

A very strong economy driven by the strong economic plan?

Michael Reddell New Zealand economic performance, Productivity

The latest quarterly GDP data came out just before Christmas, and they included substantial revisions to the data for the last few years, flowing on from the annual national accounts data released in November.

The actual level of GDP is now a bit higher than had previously been reported, but what caught my eye was the reported claim from the former Minister of Finance, Steven Joyce, that the new data suggested that there was no productivity growth problem after all.   You’ll recall that for some time I –  and others –  have been highlighting data suggesting that there had been basically no productivity growth at all in New Zealand for the last five years.

Here was Steven Joyce’s specific claim

Mr Joyce says the figures released today finally put to bed the fallacy that New Zealand was having a ‘productivity recession’.

and he went on to claim that

“These figures provide clear confirmation that the new Government has inherited a very strong economy driven by the strong economic plan of the previous Government.

So what do the productivity numbers look like on the revised GDP data?  You may recall that I’ve been calculating nine different measures of real GDP per hour worked (using the two quarterly measures of GDP, and the HLFS and QES hours data, and an average measure).    Since GDP for the last few years had been revised upwards and the hours numbers weren’t touched, productivity growth was inevitably going to be a bit stronger than previous estimates had suggested  (which was a relief, because the previous estimates had, if anything, suggested a modest fall in the level of productivity and that didn’t really ring very true).

Here is how the average measure of real GDP per hour worked has behaved over the almost 10 years since 2007 q4 (just prior to the 08/09 recession).

GDP phw worked NZ Jan18

Over the last 10 years (less one quarter), total labour productivity growth has been 6 per cent.    Over the last five years, New Zealand’s total productivity growth has been 1 per cent (ie about 0.2 per cent per annum).   It is a little better than the previous iteration of data has suggested, but……it isn’t much to boast about.

Using the same average measure, I calculated the average annual rate of productivity growth for a few historical periods:

  • Under the National-led governments in the 1990s,  average annual productivity growth was 1.2 per cent (quite dismal enough, given how far behind we had slipped),
  • Under the Labour-led governments of 1999 to 2008, average annual productivity growth was 1.0 per cent,
  • Under the National-led governments of 2008 to 2017, average annual productivity growth was 0.8 per cent, and
  • (as already noted), over the last five years, average annual productivity growth was 0.2 per cent per annum.

And here is the comparison with Australia, on the newly-updated New Zealand data.

AUs and NZ reaL gdp PHW

Australia’s numbers seems to have been flat for the last couple of years, but even over that short period we’ve done a bit worse than they have.

If these results are what Steven Joyce had in mind in talking of a “very strong economy driven by the strong economic plan” one can only really shake one’s head in despair.   If there was a plan to lift overall productivity performance, it clearly didn’t work.  Economic policy was simply misguided, and seems to have paid no attention to the severe limitations of our location.   Perhaps more depressing –  given that Joyce and his colleagues are in Opposition –  is that there is little sign that the new government has any more convincing a strategy  (and where is the deeply-grounded persuasive advice of MBIE and Treasury?).   One hopes –  but is that just against hope –  that they care.

On more mundane matters, I had cause to wonder about even the cyclical strength of demand when, over the holidays, one evening my wife and I walked from Epsom to Parnell and back, and were staggered by just how many empty shops there were in both Newmarket and Parnell.    Any reader insights into just what is going on (or not) in those up-market shopping districts would be of interest.

 

OIA obstructionism – yet more evidence for RB reform

Michael Reddell OIA, Reserve Bank, Reserve Bank Act reforms, Uncategorized

Working my way through things that turned up while I was away, I stumbled on an impressive piece of public sector diligence.  At 3.44pm on the last working before Christmas – a time by which surely most office-bound workers had already left work for the holidays –  Angus Barclay, from the Communications Department of the Reserve Bank, responded to an Official Information Act request I’d lodged with the Bank’s Board several weeks earlier.   I was impressed that Angus had still been at work, but was less impressed with the substance of the response.

I’d asked the Board for copies of the minutes of meetings of the full Board and any Board committees in the second half of last year (specifically 1 July to 30 November).  It didn’t seem likely to be an onerous request: there would probably only have been four or five full Board meetings, and perhaps some committee minutes, all of which will have been readily accessible (in other words virtually no time all in search or compilation).    Perhaps the Board would have wanted to withhold some material, and (subject to the statutory grounds) that would have been fine.  But again, doing so shouldn’t have been onerous.   The Board, after all, exists mostly to monitor the performance of the Governor, on behalf of the public.   In an open society, it isn’t naturally the sort of material one should expect to be kept secret.

In fact, in the 22 December response I received I was informed that there were only five documents.  But I couldn’t have them.  Instead, the request was extended for almost another two months, with a new deadline of 19 February.   Oh, and they foreshadowed that they would probably want to charge me for whatever they might eventually choose to release.

Why was I asking?     After an earlier request to the Board, around the appointment of an “acting Governor”, it had come to light that there was no documentation at all around the process for the appointment of a new Governor (that had been underway in 2016, before Steven Joyce told them to stop), which in turn appeared to be a clear violation of the Public Records Act.    The process of selecting a candidate to be the new Governor is one of the Board’s single most important powers.   And yet the records showed that nothing had been documented –  to be clear (see earlier post), it wasn’t that material was withheld (for which there might well have been an arguable case), it just didn’t exist.   Following that post in May, I was interested to see whether the Board had sharpened up its act, and come into compliance with its statutory obligations.

I had some other interests, of course.   For example, in the five months covered by my request, Graeme Wheeler had finished his term, and I also wondered if there might be some insight in the minutes on the still-secret Rennie review on the governance of the Reserve Bank.

But instead I met obstruction.

There are two things that interest me about the response.  The first is that, although the request was explicitly made of the Reserve Bank Board –  which has a separate statutory existence, and whose prime function is to hold the Bank/Governor to account –  the response came from Reserve Bank staff, referencing only Reserve Bank policies and practices.  It is consistent with my longstanding claim that the Board has allowed itself to simply serve the interests of, and identify with, the Bank –  rather than, say, the Minister who appointed them, or they public whom they (ultimately) serve.

Thus, in respect of the charging threat, I received this line

The Ombudsman states on page 4 of the guidelines on charging that: “It may also be relevant to consider the requester’s recent conduct. If the requester has previously made a large volume of time-consuming requests to an agency, it may be reasonable to start charging in order to recover some of the costs associated with meeting further requests.”

I’m not precisely sure how many OIA requests I lodged with the Board last year, but I’m pretty sure it was no more than four (and one of those was to secure material that was in fact covered by, but ignored in the answer to, an earlier request).   Three of the four I can recall were simply requests for copies of minutes – with no substantial search or collation costs.  Given the uncertainty around the legality of the appointment of the “acting Governor”, major events during the year such as the Rennie review, questions around compliance with the Public Records Act, and the process of selecting a new Governor, it didn’t seem like an undue burden on the Board.

As the Ombudsman’s charging guidelines also note

Note, however, that some requesters (for example, MPs and members of the news media), may have good reasons for making frequent requests for official information, and they should not be penalised for doing so.

Since this blog is one of the main vehicles through which a powerful public agency –  Bank and/or Board –  is challenged and scrutinised, I’d say I was on pretty strong ground in my request for straightforward Board minutes.  (And just to check that the Board itself isn’t being overwhelmed with other requests, I lodged a simple further request this morning asking how many OIA requests the Board has received in each of the last two years, and copies of the Board’s procedures of handling OIA requests made of it.)

I can only assume that the Bank itself, which seems to be controllling the handling of requests made even to the Board, has gotten rather annoyed with me again, and decided to use the threat of charging as some sort of penalty or deterrent.  Longstanding readers may recall that we have been this way once before.  About two years ago, the Bank got very annoyed with me (and some other requesters) and started talking of charging left, right and centre.   Reaction wasn’t very favourable, and Deputy Governor Geoff Bascand even took to the newspapers with an op-ed defending the Bank’s stance.   There was talk of a “mushrooming” number of requests, but on closer examination even that didn’t really stack up –  the number of OIA requests the Bank received was much smaller than, say, those The Treasury received.     Explaining is (often) losing, and as I noted at the time, the Bank didn’t come out of the episode well.   As a refresher, the Bank released responses to 20 OIA requests in 2017.  The Treasury, by contrast, released responses to more than 80 OIA requests (in both agencies there will be have responses not posted on the respective websites).

But even in their defence a couple of years ago, Bascand asserted that the Bank –  no mention of the Board –  would be charging only when the requests were “large, complex or frequent”.  My latest request of the Board is neither large nor complex, and neither were the earlier requests.

Even though the Bank and the Board are not the same entities, they are clearly trying to conflate my requests to both entities.   But over the course of last year, my records suggest I lodged no requests at all with the Reserve Bank itself in the first five months of last year.    Between June and the end of the year, there seem to have been quite a few, but on topics as diverse as:

  • the new “PTA” signed by Steven Joyce and Grant Spencer,
  • the Toplis suppression affair,
  • assumptions about new government policies the Bank referred to in its latest MPS,
  • some data from an expectations survey that the Bank had not published
  • three old papers, each clearly-identified in the request,
  • a specific paper on RB governance issues explicitly mentioned in the Bank’s BIM, and
  • work on digital currencies that the Bank explicitly highlighted in a recent research paper.

All still seem like reasonable requests, of a powerful agency which has a wide range of functions.  It seems unlikely that many of them should have involved any material amount of time to search for, or collate (in fact, in response to several requests the Bank responded quite quickly and in full, prompting notes of thanks from me).   There are no requests that can reasonably be described as “fishing expeditions”, and no pattern of repeated requests for much the same information.  They seem like the sort of requests those who devised the Official Information Act might have had in mind.

Finally, it is worth noting what the Ombudsman’s guidelines suggest can and can’t be charged for (bearing in mind that very few agencies charge at all).    Agencies can, in appropriate circumstances, charge for things like

Search and retrieval 

Collation (bringing together the information at issue) 

Research (reading and reviewing to identify the information at issue) 

Editing (the physical task of excising or redacting withheld information) 

Scanning or copying

Five nicely-filed documents (Board minutes) will have taken mere minutes to retrieve, no time to copy (since they will exist in electronic form already) and no time to research.  It is conceivable that the physical task of redacting withheld information might take a little time –  but very little.

And what can’t agencies charge for at all?

Work required to decide whether to grant the request in whole or part, including:
– reading and reviewing to decide on withholding or release;

– seeking legal advice to decide on withholding or release;

– consultation to decide on withholding or release; and – peer review of the decision to withhold or release. 

Work required to decide whether to charge and if so, how much, including estimating the charge.

If the Reserve Bank or the Board think that trying to charge for five simple, easily accessible, documents is consistent with the principles of the Official Information Act, or of the sort of transparency they often like to boast of, things are even worse than I’d supposed.   And in the attempt, they will again damage their own image and reputation more than they inconvenience me.

If anything, it is further evidence of why a full overall of the Reserve Bank Act –  and of the institution –  is required.  You might have supposed that, with a review underway, the Bank and the Board would have wanted to go out of their way to attempt to demonstrate that there were no problems, no issues, in an attempt to convince the Minister to make only minimal changes, leaving incumbents with as much power and control over information as possible.  But no, instead by the words and actions they simply reinforce the case for reform, and indicate that they have little concept of what genuine public accountability means.   We should be looking for openness, not obtuseness and obstructiveness from the Bank –  whether the Governor (“acting” or permanent) or the Board, supposedly operating on our behalf to keep the Bank in check.  Once again, we don’t see what we should have the right to expect.

Perhaps, on reflection, the Bank or the Board will reconsider their wish to charge for some simple documents –  the sort of documents that should probably be pro-actively released as a matter of course.  If not, one can only assume they have something to hide.   The “good governance” former public servant in me is sufficiently disquieted about the evidence of weak or non-existent recordkeeping that I am thinking of taking further the apparent breach of the Public Records Act.  Options might include:

  • a letter to the chair of the Board, asking how the Board is assured that it is operating in compliance with the Act,
  • a letter to the Minister of Finance, asking whether (and how) he can be sure that his appointees (the Board) are operating in compliance, given past evidence of major gaps,
  • a letter to the minister responsible for the Public Records Act itself,
  • a letter to the Auditor-General expressing concerns about the evidence suggesting that the Board of the Reserve Bank is not meeting its statutory obligations under the Public Records Act.

 

Money and madness

Michael Reddell Uncategorized

On Monday morning we were driving home from holiday, with a car so chock-full that my eleven year old daughter had bet me I couldn’t get everything back in (she lost), when we got to Tirau and saw a sign advertising a book sale –  at $1 a book.  It was too much for us to resist.   Among the hall full of books, I spotted Street Freak: Money and Madness at Lehman Brothers, by one Jared Dillian.

Readers may recall Dillian.  He was the US-based commentator who late last year wrote a piece on forbes.com claiming that, with the election of the new government, New Zealand was about to “commit pointless economic suicide”.     I wrote about his column here (various other people had a go too).   Like others, I was pretty dismissive: perhaps, as Dillian suggested, there will be a recession here in the next few years (but in any three year period that is a non-trivial risk, including for factors quite outside New Zealand’s control).   And as for “pointless economic suicide” (I noted)

If there is a “suicide” dimension to economic policy in New Zealand, it is the wilful blindness of successive governments led by both main parties, who keep on doing much the same stuff, and either believe they’ll get a different and better (productivity) result, or who just don’t care much anymore.

I’d never heard of Dillian previously –  although on checking around I found that he was a regular markets commentator, and seemed to have people willing to pay for his views –  and had given him no attention since.   But on Monday I picked up his book anyway, for three reasons:

  • it was only $1 and I was just a little curious about the author,
  • the jacket suggested it wasn’t just another description of life in the financial markets, but was also a pretty honest and searing account of the author’s struggles with mental illness, and
  • the rave review on the back cover from the novelist Siri Hustvedt  (“Always vivid, by turns hilarious and sad, this is an electrifying memoir”).     It turns out that Hustvedt had spotted Dillian’s writing talent when she was helping with a programme in a psych unit when Dillian was at his lowest.

It is an excellent book.  I’m a bit of a sucker for (second hand) histories of American corporate takeovers, I have quite a few books about markets acquired when I shifted into the Reserve Bank Financial Markets Department 20+ years ago, and really big piles of 2008/09 financial crisis books.  Dillian’s is unlike any of them.  He had –  and offers –  almost no insights on the failure of Lehmans (though no doubt the name helped him find a publisher a few years after the failure). Dillian was a trader (latterly head trader for exchange traded funds) and knew little more about his employer’s travails –  and reckless real estate risks – than anyone could see (evenually) in the share price.  He’d developed his newsletter  –  and found an audience –  while still at Lehmans but then much of it was about the esoterica of market liquidity.

But it is simply an extraordinarily vivid book –   not sparing the vulgarity, or accounts of his alcohol excesses –  tracing Dillian’s desperate, obsessive, desire to make it in the financial markets (as a late entrant –  he’d been a US Coast Guard officer –  with a part-time MBA from a no-name university.  There are the highs and lows, the emotional intensity, of markets let alone of Dillian himself.  One is never quite sure how his wife coped with him, even before the mental illnesses came to the fore.   As the jacket notes

The extreme highs and lows of the trading floor masked and exacerbated the symptoms of Dillian’s undiagnosed bipolar and obsessive compulsive disorders, leading to a downward spiral that eventually landed him in a psychiatric ward

And that after an earlier suicide attempt, which he survived only because after taking a big dose of pills he –  as people sometimes do –  made a call, not for help but just to say goodbye.  After a family member went through years of serious mental illness I also have a pile of books on mental illness and the experiences of patients and families.  I’m tempted to shelve Dillian’s book with those works, even though most people buying it will probably be after the markets stuff.   Siri Hustvedt continues her endorsement suggesting that the book is “not only about money and madness, but the madness of money”, but I think that is both simply too cute, and wrong.   But it is a powerful account, full of insight, of one man’s experience of both.

What also interested me was Dillian’s career turn. Through much of the book his aspiration is to turn himself into a prop trader successful enough that he could work where he wanted, pretty much on his own terms  –  his example was a Lehmans prop trader then operating from Florida  And when I’d seen he’d previously been at Lehmans I assumed he’d lost his job in the failure, and after a time taken a different path.  His was a (much) braver call.  After the Lehmans failure, Barclays acquired many of the better bits of the business, and Dillian’s job was safe.   And yet he chose to walk anyway, leaving without severance or great wealth (and having lost all the value in his locked-in Lehmans shares) deciding he was going to pursue the vision of writing (and selling) his own newsletter.  That took guts in September 2008 as the crisis was heading towards its worst.

The book is well worth reading.  The author may, for now, have nothing useful or interesting to say about New Zealand economic policy or performance, but set that to one side.  He can certainly write, and it appeared that in his day he could trade and generate trade ideas.   The book is searingly honest –  at times almost uncomfortably so –  and the better for it.

As I say, Dillian can write.  I’ve even signed up now for his free weekly newsletter, The 10th Man . He’s a contrarian;

His free weekly newsletter isn’t called The 10th Man for no reason. It’s named after a strategy which states: if nine people agree on a particular action or plan, then the tenth must disagree in order to stir up alternatives to be considered.

Flicking through some of his past issues, I’m not sure I often agree with him (on things I know something about), but he makes one think and writes interestingly.  Perhaps one day he’ll even revisit New Zealand and there will be some nugget to think about.

A bauble for underperformance

Michael Reddell Uncategorized

As an Anglophile traditional conservative, the idea of the twice-yearly honours lists appeals to me.   It has deepish roots in our past  –  although not that deep (the Order of the British Empire, initial source of most of the awards to ordinary people who do good dates back only to 1917.)   Many societies have such awards in one form or another –  although the United States doesn’t.    All societies honour success –  however defined – and/or sacrifice in some way or another, and formalised state awards can be a part of such a system.  Perhaps the best forms of recognition emerge from below –  whether subsequently encapsulated in formal awards or not.

But if the idea of the honours lists has a certain appeal, the practice is much less satisfactory.   That is especially so in the higher reaches of the lists, where there seem to be too many awards in total, and far too many given to people who, at best, have done competently in highly-paid (or otherwise rewarded) roles.   In our most recent honours list seven knighthoods were awarded –  about a quarter as many as in the UK, for a country with less than one twelfth of the population of the UK.   Are there really 14 people each year of such exceptional merit in New Zealand?     (I’m not bothered about the Sir/Dame title –  hardly anyone knows who has been awarded the premier award in our system, the Order of New Zealand, and there seems to be some merit –  as well as historical continuity –  in the use of a title for the handful of people of exceptional merit.)

And many or most of the people in the upper reaches of the system have already, as it were, had their reward.  Even among the 19 members of the Order of New Zealand, at least half seem to have been rewarded largely for doing their job, typically for quite a long time.  Ken Douglas anyone?  Or Don McKinnon?  Jonathan Hunt, Ken Keith, Ron Carter, or even Richie McCaw.  Jim Bolger, Helen Clark, Cardinal Williams or Mike Moore.

And what of the seven new knights and dames in the latest honours list?   There are a couple of public servants, two former politicians (one successful, one much less so), one former president of a political party, a judge, a successful business person, and a former sportsman –  from the amateur era – who appears to have put a lot back into rugby.   Perhaps they’ve all done exceptionally well at what they did –  most of the names I don’t know well enough to tell –  but in most cases they seem already to have had their rewards –  whether in salary, status, power or whatever.  In most cases, they seem already have have been officially honoured previously too.   From what I can see, there might be a compelling case for a high honour –  titled or not – to perhaps two of these people.

Of the next tier down –  the eight recipients of the CNZM –  most (but not all) appear to have been rewarded for doing their day jobs, often again over long periods of time.   And this doesn’t appear to be unusual.  If I reflect back on people I’ve known who received honours over the years –  family members included –  most seem to have been honoured for doing their job.  In many cases, they probably did those jobs quite well, but not many seemed exceptional.  I suspect –  without doing the supporting analysis –  that there is a big difference between the upper and lower reaches of the honours list.  Probably most recipients of the QSM (eg this chap) are very worthy –  people who have poured their time and energies into some cause or community with little or no expectation of reward. In the higher reaches, that is much less common.  An acquaintance of mine won an award a year or two back for “services to the state”, which consisted of (paid) service on various government boards.  In this year’s honours list, David Smol –  recently departed head of MBIE –  picked up a QSO, simply for doing his job.   Perhaps he ran MBIE well –  but then he was well-paid to do so –  but when the citation suggests that

As Chief Executive of the Ministry of Economic Development from 2008 to 2012 and Deputy Secretary (Energy and Communications Branch) from 2003 to 2008, Mr Smol’s leadership has been critical to the New Zealand economy.

the words “gilding the lily” spring to mind, along with the debacle that is the New Zealand housing market, or an export sector that has been shrinking.  “Critical to the New Zealand economy”?  I think not.  Smol’s isn’t an egregious case –  it seems to be how the system works.

But if rewarding people with honours simply for doing competently a job they were well paid for sticks in the craw a little, rewarding people with high honours for doing a well-paid job rather badly simply shouldn’t happen.

I’ve written quite a lot about Graeme Wheeler, former Governor of the Reserve Bank.  After he left the Bank in September, I didn’t really expect to write about him again.  But then his name popped up in the New Year’s Honours List, as recipient of a CNZM.

In his single five year term –  so it wasn’t even a long-service award –  Graeme Wheeler exercised a great deal of power (the Governor is the most powerful unelected person in New Zealand), but generally neither wisely nor well.   Whether in stories when he left office, or in stories around the appointment of his successor last month, few seemed to much lament his passing from the scene.   So just a quick reminder of some features of Wheeler’s stewardship:

  • as sole monetary policy decisionmaker he materially misread inflation pressures, enthusiastically commencing a monetary policy tightening cycle which was soon widely recognised to have been unnecessary. The tightenings were fully reversed, but slowly and, generally, grudgingly,
  • as sole prudential policy decisionmaker he rushed into imposing LVR restrictions without any serious supporting analysis of the housing market or the nature of the risks to the financial system.  And then added greatly to regulatory uncertainty through repeated changes to the rules,
  • his public communications were poor.  Speeches were generally not very enlightening –  and at times at odds with policy moves shortly thereafter –  and he rarely if ever opened himself to critical scrutiny in the media (refusing all requests for interviews that might involve searching questions).
  • he adopted a consistently obstructive approach to the Official Information Act, all the while continuing to assert that he ran one of the most transparent central banks anywhere,
  • he oversaw systems that allowed an OCR decision to leak prior to the official release, and when reluctantly he finally had to acknowledge the leak he chose to praise the helpfulness of the media outlet responsible for the leak, and attempt to attack the person who brought the possibility of the leak to his attention (and that of the public),
  • his thin-skinned approach to debate and critical scrutiny reached a low point earlier this year when a leading bank economist got under the Governor’s skin to such an extent that Wheeler had his entire team of senior managers trying to censor or silence the economist.  The Governor himself –  regulator of the economist’s employer, the BNZ –  put in writing his attempt to have Stephen Toplis censored.

No wonder even the official citation lists no particular achievements, just offices held –  each and every one well-remunerated.    It is as if even Bill English and Steven Joyce knew there just wasn’t much there.  But they went ahead and tossed him a bauble anyway – comfirmed by the new Prime Minister and her deputy.   It is an award that reflects poorly on the system, on the recipient, and on those bestowing (or acquiescing in) the award.  It should be one more strand in the case for an overhaul of the system, perhaps even for disbanding all but, say, the QSM.  But no doubt Graeme Wheeler will enjoy his day out at Government House.

And thus I agree with much of the editorial in the Dominion-Post on honours lists that seems to have appeared a few days ago.