The Bridges kowtow

In his Herald column last week Matthew Hooton offered some thoughts on what sort of Prime Minister Simon Bridges might be.   It seemed optimistic to me.  For example, according to Hooton.

Like Bolger, Bridges’ ambition is not just joining the prime ministerial club for its own sake, but to be one of the few to achieve genuine intergenerational change.

I racked my brains, dredging the recesses of my memory, and still struggled to think of anything –  whether in what he said as a minister in the previous government, or as Opposition leader in the last 18 months –  that would offer even a hint of such ambition, or of policy proposals that might bring about such change.   What sort of “intergenerational change” does Hooton have in mind I wonder?    Judging by the economics discussion document last week – which had some good, but not very ambitious, bits –  not something about reversing our decades of disappointing economic performance.

But one thing we have every reason to be “confident” of is that Simon Bridges as Prime Minister would be every bit as deferential to Beijing and its interests as Jacinda Ardern or John Key and Bill English before her.    All while, no doubt, trying to tell himself and us that somehow this shameful pandering is for our own good, in our interests.  The only interests it actually serves are (a) those of the PRC, (b) those of the political party fundraisers, and (c) a few exporting companies, including our universities, that made themselves (conscious choice to sup with the devil) too dependent on the PRC market, and thus exposed to the threats and pressures of the regime and Party.     Selling out the values of your people for a mess of potage never ends well.

It is only quite recently that Simon Bridges has been directly accountable for most of the National Party’s choices in this area.   Even in John Key’s final ministry, Bridges was only the 9th ranked minister, with internally-focused portfolios.   But by 2017, he’d climbed further up the Cabinet rankings and was Minister of Economic Development.  In that capacity, he was the minister who signed, on behalf of the New Zealand government, the memorandum of arrangement on the Belt and Road Initiative of the PRC.

I wrote about that document here.   I’m going to do Bridges the courtesy assuming that he (a) read, and (b) believed what he was signing.     Among those commitments was that the participants (Bridges’ government and the PRC) would promote a ‘fusion among civilisations”, and “coordinated economic, social and cultural development”.   There was also the commitment to advance “regional peace and development”, as if the PRC had any interest in such peace, except on its own terms (‘submit and you’ll be fine”).

Perhaps Bridges didn’t really mean it.  Perhaps the boss just told him to sign.  But there has never been any suggestion he didn’t mean it.  If he’d objected to this unsubtle attempt to suggest that the PRC system and our own are somehow equally valid options, I’m sure they could have found another minister to sign.  But Simon Bridges did.

Since then, of course, he has been elevated to the leadership.   Perhaps, as Hooton claims, the Bridges leadership style is a consensus one.  But things leaders care about tend to happen, and things leaders don’t care about don’t.     Perhaps as a mere minister, Bridges had known little or nothing about Jian Yang’s background in the Communist Party and in the PLA military intelligence system –  perhaps not even why he’d been moved out of the foreign affairs committee of Parliament –  but next week it will be two years since all that went public.   I’m sure Bridges back then didn’t know what Jian Yang has subsequently told us: that he misrepresented his past to get into New Zealand, and did so on the instructions of the PRC authorities.  But he has known it all for the entire time he has been leader.     Perhaps he didn’t know that serious figures –  not flame-thrower types –  would take the view that because of Jian Yang’s closeness to the PRC embassy it was important to be careful what was said in front of Jian Yang.   But he has now known that for a long time too.   Jian Yang sits in caucus meetings every week, and presumably Bridges is not particularly careful what he says.

Bridges didn’t control the National Party list in the 2017 election.  But he controls caucus rankings and responsibilities now.    And not only has he never expressed any public unease about the Jian Yang situation, only recently Jian Yang received a promotion (chair of Parliament’s Governance and Administration Committee) from Bridges, and this very week we learn that Jian Yang is part of the Simon Bridges/Gerry Brownlee official visit to the PRC.  No one really doubts that if Bridges had any serious concerns at all, not only would Jian Yang not be receiving these signs of favour, he wouldn’t even be in the caucus any longer.   (Of course, it is shameful that the other parties do nothing to call out the Jian Yang situation, but he is primarily the responsibility of the National Party, and of Simon Bridges in particular.)    Far too valuable as a fundraiser I guess, and if Bridges had said or done anything other regime-affiliated people and institutions might have looked on him with disfavour.  And he wouldn’t have wanted that would he?   Yikun Zhang, for example, mightn’t have invited him and Jami-Lee Ross to dinner.

Of course, the indications of how far gone Simon Bridges is in his deference to Beijing aren’t just about the Jian Yang situation.  No one heard him express any concern either about the ridiculous situation earlier in the year when regime-affiliated Labour MP Raymond Huo was going to chair the inquiry into foreign interference in our electoral processes etc.

And when a defence policy document uttered some mild, and pretty factual, statements about the PRC, what did we hear from Simon Bridges?  Not some support for a robust defence of New Zealand interests, values, and historical alliances, but rather complaints that the PRC might be upset.    There is no sign that he has reined in party president Peter Goodfellow’s enthusiasm for singing the praises of the PRC/CCP.   And when he senior MP, and close ally apparently, Todd McClay was defending the concentration camps in Xinjiang as “vocational training centres” and really nobody else’s concern, was there any apology, any distancing himself from McClay’s stance.  Not a bit of it.

When there were doubts about how ready the PRC were to invite the Prime Minister to visit, Simon Bridges was early into the fray to criticise –  not the PRC but –  the Prime Minister.  Can’t have Beijing being upset at all, ever, can we?  Not like a normal relationship.  For Bridges it appeared to be all about abasing ourselves (well, himself) and asking only “how high” when Beijing says jump.

Or, when the current government quietly (and embarrassedly) signed up the recent multi-country letter of protest about the Xinjiang concentration camps, did you see words in support from Simon Bridges or his senior spokespeople?  No, it was all quiet on the National Party front.  Nothing about supporting a robust stance on Huawei either.

Has anyone ever heard Simon Bridges utter a critical word about the regime in Beijing, even as ever-more evidence of its excesses (whether political, religious, civil, economic, or whatever) comes to light?  I haven’t.  And I’ve searched and found nothing.  And that despite the values of the regime being antithetical to what used to be the stated values of the National Party.   When something more than deals and donations mattered.  I still recall as a university student in 1980 Don McKinnon coming up to a lunchtime meeting on campus to defend the then National government’s stance discouraging New Zealand participation in the Moscow Olympics. I think we can imagine how Bridges (and McKinnon) would react to any suggestion that a New Zealand government might discourage participation in the next Winter Olympics, to be held in the PRC.   Are there any limits to National’s deference to Beijing?   None have been apparent under Bridges.

Oh, and then there are the donations.  There was the Yikun Zhang business last year, where Bridges was not exactly rushing to suggest that donations from a donor with strong regime-affiliations might “buy” another place on the National list (recall too Jian Ynag’s involvement in getting Yikun Zhang an official honour for –  in effect – services to Beijing).   All Bridges was reduced to was the claim that any donation wasn’t illegal.  Lots of things aren’t illegal, but it doesn’t make them right.   It was much the same story when the Todd McClay donation story came out just recently –  our foreign trade minister had been actively involved in securing a very large donation from a PRC billionaire, routed through a New Zealand registered company.  “It wasn’t illegal” was again the only Bridges line.   As if large donations from known donors don’t create expectations of future relationships etc –  nothing so crass as a specific policy purchase, but cast of mind and all that.

We’ve had no leadership at all from Bridges on the foreign donations issue more generally.  No suggestion that if you can’t vote here you shouldn’t be able to donate.  No suggestion –  proactively –  that the National Party would not seek, and would not accept, significant donations from anyone with close ties to a foreign government (although, of course, the PRC is the main issue).  Bridges seems quite happy to keep the current compromised regime, and the flow of tainted money to the party.

And then, of course, there is the current trip to the PRC.  The timing is pretty extraordinary, and perhaps telling of the National Party’s utter lack of interest in expressing any sort of moral dimension to our foreign policy.  1 October is the 70th anniversary of the Chinese Communist Party takeover.  The tyrants of the Party will no doubt be making great play of their accomplishment – holding onto near-absolute power for that long –  but why would anyone else, anyone of decency, associate themselves with the regime right now.  Do you forget the tens of millions who died in the Great Leap Forward, do they forget the Cultural Revolution, do they forget Tiananmen Square, do they prefer to ignore completely Xinjiang, do they prefer to pretend that the renewed suppression of any domestic dissent, the heightened persecution of religions of whatever stripe just isn’t happening, are they unbothered about the renewed threats to Taiwan, or in the East and South China Seas, or the state-sponsored intellectual property theft (called out by GCSB last year, with not a word from Bridges) just aren’t happening?  Or are no concern of ours, things we can simply walk by on the other side, and trade merrily with the repressors.

Perhaps we will be told quietly that in their meetings Bridges, Brownlee, and Jian Yang will have raised “human rights concerns”.  It is the standard official defence.  But it should be no defence at all.  Embarrassed shufflings and pro forma private comments count for nothing if you aren’t willing to say anything in public.   National doesn’t, and won’t (neither of course does the government, but this post is about the Opposition –  who are freer to talk, freer not to travel etc but who chose the path of deference and submission.  Not so different from vassaldom.    It is all the more extraordinary that they proceed with the trip just after the Todd McClay revelations.  Bridges has been blathering about seeking spiritual blessings on the India leg of the trip, but you can’t help thinking that making obeisance before Beijing and receiving their words of approbation isn’t more the point.

And then, not least, there is Hong Kong.   Freedom is dying by the day in Hong Kong, and there is no doubt that the PRC itself is calling the shots (see, for example, the Carrie Lam tape). Police brutality is rampant, and protestors –  who see only the prospect of complete absorption by the totalitarian PRC (whether now, in 2047, or some point in-between) –  have courageously taken to the streets week after week to stand up against the threat to  the sort of freedoms we take for granted, that National once claimed to stand for.  A decent and courageous political leader –  a man of faith, or morals, of a belief that freedom matters even when it costs –  would have recognised the climate and chosen to call off his trip to Beijing.  The PRC wouldn’t have liked it one bit.  Nor would MFAT.  Nor would Goodfellow and the party fundraisers.   But it is just an idle fantasy anyway, the idea of some leading political figure in New Zealand ever making a stand, be it ever so modest –  from the position of Opposition even.  And never more so, it seems, when Simon Bridges leads the National Party.  And Jian Yang –  CCP membership, misrepresented past and all – remains at his right hand.

Are there any limits?

(And, to repeat, Jacinda Ardern is quite as bad, but this post is about National.)

 

80 years today since we entered World War Two

It is eighty years today since New Zealand declared war on Germany, joining the United Kingdom in responding to the unprovoked aggression of the German invasion of Poland.  Until just now, glancing at one of the government historical websites, this statistic hadn’t occurred to me

New Zealand was involved for all but three of the 2179 days of the war — a commitment on a par only with Britain and Australia.

It is estimated that 11928 New Zealanders died in the course of that conflict, a death rate (per million population) higher than in any other Commonwealth country.  Dreadful as the war was, it still strikes me as something closer to a just war (for our side) than most other conflicts in modern history –  although, of course, the counterfactual is unknowable.

Back in the very early days of this blog, I wrote a short post on some aspects of the New Zealand economy in and around World War Two (while lamenting the absence of a modern analytical book-length treatment).  Here is the gist of a few of the paragraphs from that post

Two things from the period did stand out.

The first is that, while New Zealand devoted almost as much of its GDP to the war effort as any of the major combatants (at peak similar to that in the UK, although the UK held the peak for longer), material living standards for the civilian population seemed to remain relatively high –  notably the quality of the diet, access to petrol etc.  Perhaps that partly reflects just what a rich country New Zealand then was.  Using Angus Maddison’s data:

1939 GDP pc

New Zealand’s GDP per capita in 1939 was second highest of those countries shown (a year earlier –  the US in recession –  we’d been top of the table).  It may have been easier to devote a larger share of GDP to the war in a rich country like New Zealand than in a relatively poor one like the USSR, where a larger share of resources would have to have been devoted to subsistence.

And the second point is the dramatic transition: New Zealand went from being on the brink of default in 1939 to being, in effect, defaulted on just after the war.  In 1939, in the wake of the imposition of exchange controls, Walter Nash emerged from a humiliating mission to London, with a very onerous schedule of overseas debt repayments.  If the war had not been looming –  which made the British government keen on maintaining good relations with the Dominions –  it is quite possible that New Zealand would have been unable to rollover maturing debt at all, probably ending in a default to external creditors.  By just after the war, New Zealand  –  having markedly reduced its external debt ratios during the war – made a substantial gift to the UK (as did Australia): in reality, Britain was quite unable to meet all its obligations and needed some of them written down.

In a paper a couple of years ago, some IMF economists looked at examples of countries that had markedly reduced their overseas debt.  The New Zealand experience during WWII was as stark as any of those reversals, but is too little studied.  It seems to have mainly resulted from a determination to pay for as much of the war as possible from taxation, together with the controls and rationing that limited private sector consumption and investment.  But it was not because of any strength in New Zealand’s terms of trade:

WW2 TOT.png

New Zealand’s terms of trade fell during the war years –  our import costs rose as global inflation increased, but there was little adjustment in the prices of the agricultural/pastoral products New Zealand sold to Britain.

Notwithstanding the lives lost (and the constraints on consumption, free speech etc) New Zealand’s experience of World War Two was pretty mild.  No combat occurred on our shores –  nor was it ever credibly likely to –  and we didn’t even have anything akin to the bombing of Darwin or of Pearl Harbor.

Of all the countries involved, perhaps Poland’s experience was worst.  I wrote a post here late last year, at the time of the 100th anniversary of the end of World War One (in turn leading to the re-establishment of an independent Poland), in which I noted that

My own reflection on Poland is that it is hard to think of a place in the western world (say, present day EU, other bits of western Europe, and western European offshoots – eg New Zealand, Australia, Canada, US, Argentina, Chile, Uruguay) that wouldn’t have been preferable to live in over the last 100 years or so, at least as judged by material criteria.   Perhaps if you were German, you have to live with the guilt of World War Two, but most of Germany was free again pretty quickly.   Romanians and Bulgarians might have been poorer on average, but they largely escaped the worst horrors of the German occupation.  To its credit, Bulgaria managed to largely save its Jewish population, while the Polish record was patchy at best.  With borders pushed hither and yon, and not a few abuses of other peoples (notably ethnic German) post-war, sanctioned by the state, the place then settled into 40 years of Communist rule.   There is a lot to admire about Poland, but I wouldn’t have wanted to live there any time in the 20th century.

And never more so than during and just after World War Two.

But against that backdrop it leaves the story of the Poland in the last 30 years or so all the more impressive.    Some will be critical of various aspects of Polish governance etc, but they are now bringing up 30 years of democratic government –  and changes of government –  something that would have been hard to imagine when I was young, or –  in the late 30s –  when my parents were young.

And then there is the economic performance.  In 1938, it is estimated that Poland’s average real GDP per capita was just a third of New Zealand’s.    The most recent IMF estimates suggest that this year, Poland’s GDP per capita will be 82 per cent of New Zealand.  New Zealand has, of course, been a poor performer, but relative to Germany over the period Poland’s GDP per capita has improved from 40 per cent to 60 per cent.

And then, of course, there is productivity: real GDP per hour worked.   We don’t have very long runs of data for this variable, but here is the ratio of Poland to New Zealand for the 25 years for which there are data for both countries.

poland real GDP phw

Them doing better doesn’t make us worse off (of course).  Their success is great for them and their people.

But, as we ponder the deeper issues of loss, sacrifice, freedom, the threat of tyranny etc –  all exemplified in the story of World War Two –  it might still be worth reflecting on how extraordinary New Zealand’s relative economic decline  (relative to every single country on that first chart above) would have seemed to our leaders in 1939 if someone could have told them then how poorly New Zealand itself would do over the next 80 years.

 

Obstructionism from SSC

Several months ago now the State Services Commissioner announced the appointment of a new Secretary to the Treasury.   The new appointee finally takes up the position later this month.

When the appointment was announced I wrote a fairly sceptical post, noting that the appointment process had been long and slow, suggesting that there had not been an abundance of high quality applicants, let alone a standout one or two people who might, almost naturally, have succeeded to the position.   That in itself should been enough to raise questions about how well the State Services Commission has been doing its job, given that (a) one of those roles was to nurture and develop talent at the senior levels of the public service, and that (b) really successful organisations tend to promote from within (an element of the success having been in nurturing and retaining talent).

As I wrote then, I am also sceptical about the new appointee herself.   She has no experience in a national economic policy agency (having worked primarily in research at the World Bank, and then in NSW state government roles –  NSW being more than a city council but rather less than a country), has no apparent knowledge of, or background in, New Zealand, and has no obvious long-term vested interest (her own future or that of her family) in the economic success of New Zealand.     At best –  and as I noted at the time, no one in New Zealand willing to comment publicly seems to know her well –  we might have acquired a smart generic public sector manager who would not have been a serious contender for a similarly senior role in her own country, and probably sees herself on a career path back to upper levels of the Australian (or NSW) public service in a few years time.  At best.    And this in a country where (a) The Treasury is the government’s premier economic adviser, and (b) whose long-term economic underperformance has been dire, a situation that shows no sign of reversing.

Against that backdrop it seemed reasonable to ask a few questions about the selection process, evem bearing in mind that –  as I wrote when the position was advertised –  the advertisement seemed designed to recruit a safe generic sector manager, and that seems to have been what the SSC found.

The National Party seem to have thought it was worth asking questions in Parliament. That should have ensured that they got decent answers –  after all, parliamentary questions aren’t subject to all the agency protections the OIA provides.   But it seems to have been a hard road even for them.   They seem to have asked eight written questions of the Minister of State Services (in the 2019 series, questions 27398, 27396, 27394, 27393, 27392, 27391, 27390, 27389).

Most of the questions were asking about the applicants for the position of Secretary to the Treasury (not individually, but information such as the male/female split, citizen/non-citizen, resident/non-resident, total number of applicants, economics qualifications of applicants).  Every single one of those questions seemed reasonable and appropriate questions for MPs to ask about the appointment process around the most important public service job.   But on every single one of those demographic questions the Minister of State Services –  Chris Hipkins  –  simply refused to provide a substantive answer, offering this standard response

“I am advised that the State Services Commission does not release information about applicants to chief executive roles in the interest of privact. Information provided by applicants to the State Services Commission is done on a confidential basis.”

Which might have been fine had National been asking for the names and addresses of all applicants, but this was aggregated data they were requesting.  It looked a lot like obstructionism for the sake of it, by a Minister whose government used to claim it would be “the most open and transparent ever”.

Seeing these responses, I was aware that –  for example –  similar data had been requested, and released, in response to OIA requests around the appointment of Reserve Bank MPC members.    And so I lodged an Official Information Act request with the State Services Commission asking for a similar range of information, but not just about the applicants as a group (where there could be all sorts of non-serious people) but about the subset of applicants SSC had chosen to interview.  In my request I pointed out that another public agency had already released similar information around other appointments (ie the Reserve Bank roles), and that I was not seeking any individual personal information, or information that in total might allow the identification of any individual.  It seemed to me inconceivable that the OIA would allow SSC to get away with a blanket refusal.

At around the same time, the National Party lodged a new parliamentary question asking who had advised that releasing the information sought in the earlier questions would be a breach of privacy.  That seems to have helped spark a rethink, whether in the Minister’s office or at SSC.  This was the answer Paul Goldsmith received.

29115 (2019). Hon Paul Goldsmith to the State Services (Minister – Chris Hipkins) (07 Aug 2019): Further to WPQ 27394 (2019), who advised the Minister that releasing the number of applicants for the position of Secretary to the Treasury who were based in New Zealand or overseas at the time of the application breaches the privacy of the applicants?                                                                                                     Hon Chris Hipkins (State Services (Minister – Chris Hipkins)) replied: On 25 July 2019, I was advised by the State Services Commission (SSC) that it does not release information about applications to chief executive roles in the interest of privacy. I did not receive advice that stated releasing the number of applicants information breaches the privacy of the applicants.SSC has subsequently reviewed their advice and have advised they will be releasing the information in response to written parliamentary questions 27389, 27390, 27391 and 27394 (2019) having balanced privacy and public interests.

SSC has advised that 24 applications were received for the position of Secretary to the Treasury and that information provided in the applications indicates that eight applicants for the role of Secretary to the Treasury held a Masters or higher qualification in an Economics based discipline.

They also advised that information provided in the applications indicates that eight applicants were resident in NZ and 10 applicants were not resident in NZ at the time of their application for the role of Secretary to the Treasury. Information for six applicants is not held by SSC.

This is also my response to written parliamentary questions 29116, 29117, 29118, 29119, 29120, 29121, 29123, 29124, 29125 and 29127 (2019).

And last week I got a response to my OIA request to SSC.

I had requested this information

I am writing to request the following information about the recent process to fill the position of Secretary to the Treasury.

  1. How many applications were received?
  2. What proportion of applicants were (as best you can tell) female?
  3. What proportion of applicants were New Zealand citizens?
  4. What proportion of applicants had at least an honours/masters degree in economics?
  5. What proportion of applicants had a PhD in economics?
  6. What proportion of applicants could reasonably be described as long-term New Zealand public servants?
  7. What proportion of applicants were living/working abroad at the time of application?
  8. How many of the applicants were interviewed by SSC?
  9. What proportion of those interviewed were female?
  10. What proportion were living/working in New Zealand at the time of application/interview.

As I took pains to stress, it was inconceivable that even answering all those questions completely could identify any individual (since I wasn’t asking for any cross-tabs –  eg “how many male PhD applicants were living in New Zealand”).

In respect of the applications, SSC gave me much the same answers they provided to the Minister to answer Paul Goldsmith’s questions (which was a little annoying since some of the questions were different –  thus I never found out how many of the 24 applicants had “at least an honours/Masters degree in economics”).

The information on applicants was only mildly interesting because all sorts of people, some wildly unsuitable, apply for all sorts of jobs –  whether because people are deluded about their abilities, or on the remote chance of it helping get a New Zealand visa.  You get the feel there must have been some of that going on with these applications: there were 24 of them, and yet SSC claims not to know where a quarter of the applicants were living/working at the time of the application, which simply isn’t credible in respect of any serious applicant (who will have details of currrent employment as part of their CV and application).  SSC also claims not to have known the citizenship of a quarter of the applicants, even though they were applying for a position requiring a very high level security clearance.  For what it is worth, here is what they did tell me

  • seven applicants had NZ citizenship and 11 did not have NZ citizenship

  • eight applicants were resident in NZ and 10 applicants were not resident in NZ.

NZ residency and NZ citizenship information for six applicants is not held by the State Services Commission (SSC)

I had asked about what proportion of the applicants could reasonably be described as long-term New Zealand public servants. I deliberately framed the question that way to (a) minimise work for SSC, and (b) because I wasn’t interested in whether someone had spent two years as a junior analyst 30 years ago or (indeed) disqualifying them if having spent 30 years in the public service, they had spent the last couple of years getting experience in the private sector or overseas.     SSC claimed not to know the answer to this question –   which looks a lot like obstruction again –  but did tell me that only seven of the 24 applicants (not including the successful applicant) had indicated some experience (who knows when) in the New Zealand public service.

Also looking like obstructionism, the SSC refused to tell me (or, via Hipkins, the National Party) how many applicants had a PhD in economics.  Again, they claimed this was on the grounds of privacy. But that is simply nonsense.  Whether there were one, five or seven such applicants (the successful applicant has a PhD in Finance) cannot possibly identify any individuals.  Perhaps it would be embarrassing to SSC if the answer was none (although in my view it needn’t be –  a research qualification, which is what a PhD largely is, shouldn’t be a prerequisite for such a position)?

In many respects, I was most interested in the group of applicants SSC interviewed –  after all, they were the people SSC must have regarded as the most credible applicants.  SSC told me that they interviewed five candidates, two of whom (including the successful applicant) were female. But they have flatly refused to answer the final question about what proportion of those they interviewed were living/working in New Zealand at the time of application/interview.  Again this was (allegedly) to “protect the privacy of individuals”.  They went on to say

The SSC information release confidentiality guidelines ensure we allow as much high value information as possible to be released, while ensuring that it is not in a form that could reasonably expect to identify an individual, or at a level of aggregation where the information is still informative.  These guidelines apply to any statistical information that contains private or confidential information and therefore prevent us releasing the exact number of applicants interviewed who were working in New Zealand at the time of their application.     

I’m not sure how they can justify release the share of interviewees who were female and not the share who were living/working in New Zealand.  Neither can possibly disclose individuals.   Perhaps the answer is in that chilling line that they do not release information “at a level of aggregation where the information is still informative” –  which would seem to run directly counter to the letter and spirit of the Official Information Act.

Since we know that one of the five –  the successful applicant – was living/working overseas, the answer to my question can only be 0%, 20%, 40%, 60% or 80%  (living/working in New Zealand).  The answer could be quite revealing about SSC’s priorities, and/or its talent management and development, but it simply could not tell us who these individuals are (and, of course, nor should it).  My suspicion now –  given SSC’s obstructionism –  is that we would find that hardly anyone living in New Zealand, or with a strong New Zealand background, was interviewed: I hope that wasn’t the case, but given SSC’s approach you have to wonder what they are hiding.

I have asked the Ombudsman to review this SSC refusal, both on the grounds that there is no legitimate protection of individual privacy ground available in this case, but also because the wider public interest would be served by the release of this information, in this case in helping to hold SSC to account for the way in which it is doing its job –  developing and selecting the top tier of the New Zealand public service.

In the meantime, what we do know is that we have an incoming Secretary to the Treasury who looks underqualified for the role, who has few/no New Zealand knowledge or networks, and whose incentives are simply not that well-aligned with the long-term interests of the people of New Zealand.  It looks like a poor appointment –  although time may prove otherwise –  but perhaps she was the least bad that was on offer.    SSC and the government don’t seem too keen on allowing us to get a better sense of that.

(As a reminder, I was not the only commentator to raise doubts about the appropriateness of yet another offshore appointment –  can’t we manage to run our own country? –  and there was a lot to agree with in this column from Simon Chapple, director of Victoria University’s Institute for Governance and Policy Studies.)

Political donations, National, and Jami-Lee Ross

Jami-Lee Ross, MP for Botany, appears to be a somewhat odious character.  Between his repeated betrayals of his wife, on the one hand, and his apparently quite-central role in National Party’s large-scale fundraising from PRC-affiliated sources (New Zealand citizens and not), there seems to be little that is at all appealing.  And yet……for whatever reason (and since I’ve never heard an apology to the New Zealand public for his part in the process it is hard to believe it is totally public-spirited) he has been drip-feeding material to the media about the details of several such donations.    The first involved non-English-speaking Auckland businessman and close affiliate of various CCP/PRC groups, Yikun Zhang.  And this week we’ve had some details of the (previously disclosed) large donation from a New Zealand registered company owned and totally controlled by a PRC billionaire.  And, amid these disclosures, he is now calling for law changes, to prevent some of the practices he was formerly so adept at, and apparently untroubled by.   We should be thankful for small mercies, although it would be better if he –  and all those involved –  departed the political scene, and the swamp was drained.

On Twitter yesterday afternoon, Anne-Marie Brady drew her followers’ attention to the fact that Jami-Lee Ross was speaking on this issue in Parliament’s general debate –  presumably one of his rare speaking opportunities, and no doubt the Herald story was timed with this slot in mind.

Two things were striking about this event. The first is that no other MP speaking after Ross even mentioned these issues. Sure, each MP has his or her own barrow to push, but it goes to the apparently general desire among our political parties to avoid confronting what has been, and no doubt is still, going on.

And the second – prompt for this post – was realising that despite the coverage given to the Todd McClay story on Monday, there seemed to be no media coverage at all, anywhere, to Ross’s speech. Perhaps I missed something, but I searched myself, and I checked the Politics Daily email listing compiled by Bryce Edwards, and couldn’t see a single mention. Sure, probably no one has much time for Ross personally, but the issues he is raising aren’t imaginary.

And so, since Hansard is in the public domain, here is Jami-Lee Ross’s speech.

JAMI-LEE ROSS (MP—Botany): A regulation we do need in this country is greater restrictions around foreign donations to political parties. Yesterday, we saw in the New Zealand Herald a very good example of how the current rules around donations do not work for our democracy. I don’t need to go into depth around that particular donation, but what it does highlight is how our current laws around donations are wrong. It’s true—I was one of the sources for that story. It’s true—I was able to outline for the journalists my phone records and email records and contacts around that particular donation, because at the time I was asked by someone who held ministerial office to collect the donation. I did so because I wasn’t “OIA-able”; the person that asked me to do so was subject to the Official Information Act (OIA).

The issue that that donation highlights is that our current laws do not adequately restrict the ability for foreigners to make donations to political parties. It is true that that donation in the Herald yesterday was lawful. It is true no laws were broken, but we’re in the business of making laws and fixing laws where they are wrong. It is wrong, in my view, for a foreigner who has interests in New Zealand, who wants to donate to a political party, to be able to utilise a New Zealand-based company. It is wrong for an individual who has no other links to New Zealand other than business through a company to be able to make a donation, and have influence by making that donation to a political party.

Our laws are wrong. In my view, if you are unable to influence an election by voting, you should be unable to influence an election or our democracy by making a donation. It’s a fairly simple concept, and it’s one that we should be looking at in this House. Correct, the donation was not unlawful; our law is wrong and needs to be changed.

When we talk about foreign interference, it’s very easy to look at donations, and look at the way in which we interact with people that have connections to foreign States, and just dismiss what might be going on. But when we look at it very clearly and carefully, when we try and understand the connections and the influences that people from offshore are trying to have on our democracy, it can be very chilling. Does anyone really believe that a Mongolian oligarch wants to, out of the goodness of his heart, make six-figure donations to a political party after meeting the person who has responsibility for the very policy that he’s interested in, when it comes to the exporting of livestock? I don’t think he did so out of the goodness of his heart. I don’t think any laws were broken, but I think we need to fix the system. We need to ensure our democracy is safe from foreign influences, and ensure that we tighten up the rules.

I’ve heard that there is a lot of support in the House for banning foreign donations. That’s great, but simply lowering the threshold from $1,500 down to zero will do nothing, because any foreigner, at any point in time that they wish, can set up a New Zealand company or use an existing one to make a large donation. We have politicians in this House, and those seeking election, that have a lot of connections to people that have offshore influences and offshore interests. We should ensure our democracy and our electoral laws are much tighter.

There is a foreign interference inquiry under way, through the Justice Committee. Unfortunately, that inquiry is going very slow. Unfortunately, the committee that is looking at that inquiry may report back too late for us to make changes to our electoral law. It’s important we move now and we move swiftly because election year is very close. That same committee is also looking at the Electoral Amendment Bill right now. Unfortunately, that Electoral Amendment Bill is too tight and does not allow the committee to consider foreign donations or consider donation laws at all. The very same people sitting on the inquiry are also considering that bill. It’s my view that the House should give that committee the power to look at donations; give those same people doing the inquiry around foreign interference and around elections the power to make recommendations around amendments to the Electoral Act, with regards to donations. We need to move on this. Election year is not far away. There is a very good example out there, and there will be many others, that foreigners—and we heard directly from the spy agencies yesterday at the select committee, in both an open session and then in much more detail in a secret session—about—

SPEAKER: Order!

JAMI-LEE ROSS: —influences in our democracy, and we need to take them seriously.

I’m going to seek leave in a second to have a Supplementary Order Paper (SOP) in my name—SOP 324—which does seek to make some changes referred to the Justice Committee.

I seek leave for Supplementary Order Paper 324 in my name to be referred to the Justice Committee, and for the committee to, in its consideration of the Electoral Amendment Bill, have the power to consider, and if it thinks fit, adopt the amendment set out on SOP 324 or any other amendments relating to electoral donations.

SPEAKER: Is there any objection to that process? There is objection.

I thought the central line was this one

In my view, if you are unable to influence an election by voting, you should be unable to influence an election or our democracy by making a donation. It’s a fairly simple concept, and it’s one that we should be looking at in this House. Correct, the donation was not unlawful; our law is wrong and needs to be changed.

It isn’t clear how anyone could reasonably take a different view but –  based on their comments this week –  Simon Bridges (now heading off to Beijing) and Todd McClay do.

But the other key aspect was the Supplementary Order Paper Ross intends to introduce at the Committee stage of the Electoral Amendment Bill currently before the House.  The link is here.   As I understand it, the proposed amendments would prohibit anonymous donations and would allow donations only from registered electors in New Zealand (thus prohibiting donations to political parties from companies, unions, or any individual not eligible to vote in New Zealand).   All of those sorts of changes make a great deal of sense to me.  I hope Ross is able either to bring these amendments to a vote –  which would force individual MPs to make an on-the-record choice about what influences they regard as acceptable –  or perhaps up the pressure on the government – which has done precisely nothing about these issues, and was never keen on an open inquiry by the Justice Committee on foreign interference (government departments would tell the Committee all they needed  to know, or so the PM’s office told us) –  to propose serious reforms of its own.   As you’ll see in the record from Hansard there was objection –  apparently from National –  which blocked Ross’s SOP being referred to the Justice Committee.

Perhaps I shouldn’t be surprised, by I still am anyway, that none of this seems to have been covered by our media.   But I imagine that the PRC embassy will have taken note, and the welcome accorded to Bridges and Brownlee in Beijing will be a little warmer for knowing they are not willing to be pro-active and initiate or champion steps to fix these gaping holes in our electoral law.

And we are left wondering whether Todd McClay’s defence of the PRC’s conduct of Xinjiang was because of the large donations from regime-affiliated sources (including the Inner Mongolian one he was directly involved with) or because he genuinely believed it.  It isn’t clear which option would be worse.   Either way, the whole business reflects very poorly on McClay, his leaders, and his party.   (And not much better on Ross.)

Immigration and NZ economic performance

Geoff Simmons, the economist who is leader of The Opportunities Party (TOP), invited me to come along to their monthly Wellington event to talk about my views on New Zealand’s immigration and the likely connections between high target rates of non-citizen immigration, extreme remoteness, and New Zealand’s long-running productivity underperformance.    Geoff has run a series of these conversations –  including one fairly recently with Arthur Grimes on the “wellbeing Budget”, and another on aspects of the tax system with Andrew Coleman.   They seem to be the party of policy wonks  (TOP’s own immigration policy –  much of which I’m fairly sympathetic to – is here).

Monday evening’s conversation with Geoff, and the follow-up Q&A session, was recorded and is now available (the title is their own –  I rather winced when I saw it this morning)

I haven’t listened to it again so am not sure how the story comes across in this format.  Like, I’m sure, almost every speaker ever I came away conscious of lines that could have been run better, or useful analogies that I forgot to include.  But for anyone interested, there it is.

I’ve done various presentations, articles, and so on on elements of my story, tailored for different audiences.  Some of those from recent years are

speeches

Links to all those are available here.

For the gist of the story, here are the last couple of paragraphs of one of those speeches.

40 years ago, Sir Robert Muldoon, Bill Birch and the rest of that government launched the series of incredibly costly energy projects known as Think Big.  It was, with the best will in the world, an utter disaster.  But it came to end after only a few years.   By contrast, our immigration programme, which has now run this way for almost 30 years is really much more deserving of the label Think Big: it is bigger, has skewed the economy more, has lasted longer, and has done much more to damage the prospects of New Zealanders living here.  There has been a central planners’ conceit that we can simply ignore what NZers are doing –  leaving, typically in large numbers –  and bring in lots of (modestly skilled) foreigners, and concentrate them in Auckland.  Do so, so the implicit story goes, and new highly rewarding industries and opportunities will arise –  the wonders of what economists call agglomeration.   It has proved to be an incredibly flawed strategy.  In successful big cities abroad, GDP per capita far exceeds that in the rest of the respective countries, and the gaps are growing.  Think London, or Paris or Shanghai, or San Francisco or Amsterdam.  But just don’t think Auckland.  Despite really rapid population growth over decades, Auckland’s GDP per capita exceeds the New Zealand average by only a modest margin.  And worse, for the 15 years for which we have data, that gap has been shrinking, not widening.    British exports are London-based, but it is hard to think of a material export industry that is based in Auckland (or Wellington).

We need to start taking more seriously the terrible disadvantages our distant location imposes.  That means it is time to give up the big (population) ambitions that have guided –  probably subconsciously –  most political leaders since at least Julius Vogel, and instead make the most of the strengths we already have: smart and energetic people and strong institutions.  Perhaps one day we’ll have exceptional productivity growth, and so many opportunities here that we simply can’t make the most of with the people we have.  For decades, it hasn’t been that way.  It isn’t now.  So we should stop the mythmaking, and revert to being a normal country –  one that makes its own prosperity, with its own people –  rather than endlessly hankering (as our officials and ministers constantly seem to) after some better class of people over the water who, if only we could get them, in enough numbers, might finally reverse our century of decline.  It simply won’t happen.  We need to change course.

National on the economy

On Monday the National Party released their “The Economy” discussion document, the latest in a series of such documents they’ve published in recent months as they move towards setting policy for next year’s election.    The documents actively invite feedback, and if one should be sceptical of crowd-sourcing policy programmes mostly it seems like a worthwhile initiative.

A few weeks ago I was quite critical after Simon Bridges’s conference speech about the apparent lack of recognition of the structural failings of the New Zealand economy, let alone of any hint of a serious strategy that might reverse the decades of underperformance.

But, for all the almost ritualised mentions in Simon Bridges’s speech of the importance of a strong economy (even the Prime Minister mouths those sorts of line from time to time), there was nothing –  not a word –  to suggest that he recognises that the biggest obstacle to higher material living standards (whether in the form of cancer care or other public or private goods and services) is the woeful productivity record that successive governments –  led only by National and Labour –  have presided over.    There is plenty of talk about cyclical issues, but nothing about the structural failures, and nothing about what National might do that would conceivably make a real difference in reversing that performance.

Sure, it wasn’t primarily a speech about economics, but there has been nothing from Bridges or his colleagues elsewhere, and no hint of a recognition here, that much-improved productivity performance is the only sustainable path to much better material living standards.  And not a hint of a recognition that these failures were already well apparent in the government in which he served (latterly as Minister of Economic Development)

I went on to note that National appeared to be glossing over the fairly woeful overseas trade performance: exports and imports have been shrinking as a share of GDP.

I’m much less critical of the discussion document.   This line appeared on the first page, the leader’s own statement

New Zealanders’ productivity and income levels have fallen behind countries we once had similar income levels to, like Australia, the United States and leading European economies.

And from Paul Goldsmith’s opening

Improving productivity remains New Zealand’s most important economic challenge and the ideas discussed in this paper provide ways to meet that challenge, with the goal of raising incomes for all New Zealanders.

National understands that significantly lifting productivity is the only way to materially improve New Zealanders’ living standards. Increasing productivity means we can produce and sell more of what the world wants, at better prices, using fewer resources.

Good stuff.  And he goes on

New Zealanders’ living standards will not improve by simply redistributing what we
already have. Instead, we need to be absolutely focused on lifting New Zealand’s relatively weak productivity levels.

and

New Zealand’s core economic challenge is to lift our relatively weak productivity. To do that, our economy needs to become more internationally competitive. The world does not owe us a living. We are a small, isolated country far from global markets, which creates both opportunities and challenges.

and

The only way to materially improve the living standards of New Zealanders over time is to become more productive. Higher productivity means more in the back pockets of New Zealand families. New Zealand’s productivity is a more productive and competitive economy that lifts household incomes approximately 30 per cent below the top half of the OECD and 25 per cent below Australia.  New Zealanders also work more hours a year than any countries in the top half of the OECD. In 2017, for example, workers in Denmark, Germany, the Netherlands and Norway worked 300 hours less than New Zealanders.

Since the late 1990s, New Zealand’s productivity growth rates have been similar to that of the top half of the OECD. We need to be doing better to catch up and close the gap. That’s hard. It requires a relentless focus on productivity growth.

National is ambitious for New Zealanders and believes we should target higher rates of productivity in order to close the income gap with countries like Australia, the United States, Canada and leading European economies.

There was even talk of adopting a productivity growth target.

On foreign trade, we read this

New Zealand is a small country with a domestic market of only about five million people – so we depend on trade for generating greater prosperity. Trade supports over 600,000 jobs across our country, and is responsible for a higher standard of living and better quality of life for New Zealanders.

However, New Zealand has a relatively low exports-to-GDP ratio compared with other small, advanced economies. Lifting our exports will take further improvement but create new jobs and raise incomes.

So the rhetoric and some of the framing isn’t bad at all.    They could have made the same points even more brutally:

  • relative to the top tier of OECD countries (US, and leading half-dozen north European economies), productivity (real GDP per hour worked) has kept on slipping (in the last 25 years, productivity here has fallen from around 65 per cent to 60 per cent of those in the top-tier OECD countries while in, for example, Poland it has risen from around 30 per cent to around 55 per cent),
  • New Zealand has managed hardly any productivity growth at all over the last five years, and
  • not only are foreign trade shares (exports and imports) low for a country our size, but they’ve been shrinking.

But even if Simon Bridges in his introduction did note of the previous government “we didn’t everything right”, to have done so might have prompted too many hard questions about National’s own record.

What of the policy proposals and ideas?

I found a reasonable amount to like:

  • they haven’t fixed on a public debt target yet, but I liked the articulation of the flow fiscal goal (“Governments should aim for balanced budgets over time, so that surpluses in the good times offset the bad times”).  With little evidence of an overheating economy at present, that should have them arguing for a balanced budget now, not for surpluses,
  • I was pleasantly surprised that they remain committed to lifting the NZS eligibility age, and to introducing a somewhat more demanding residence requirement.    They should have gone further on both fronts (my thoughts on NZS here) –  said from the perspective of a household where my wife is 10 years younger than I am and still won’t be affected by National’s proposed change.  But we should be thankful for small mercies: on this issue, National has moved decisively on from the Key irresponsibility.
  • I like the idea they are toying with of adjusting for inflation the interest earnings and interest payments that are tax assessable/deductible.   Various people, including at times the Reserve Bank, have argued for this for years.  It is just and right to do so, but……there isn’t that much in the issue.
  • I like the mention of possibly using congestion pricing on some parts of the roading system.
  • I am encouraged that they are willing to think seriously about the possibility of lowering the company tax rate (although disquieted by talk of favouring small businesses through the tax system).  That said, given our imputation system, a lower company tax rate benefits foreign investors (we would generally benefit from more of such investment), and if they are serious about addressing this issue –  and productivity growth –  substantively then they need to think about options for lowering the taxation of capital income earned by New Zealanders as well.  Whether they have the political skills to manage the narrative around that sort of proposal is, at very least, an open question.
  • The talk –  not specific in this document –  of a proper overhaul of the RMA and serious liberalisation of the urban land market is encouraging.  The ability of the next generation to afford decent houses (and gardens etc –  the sort of place most New Zealanders seem to want) depends on it.
  • And I like the idea of a much tougher approach to new regulation, and some sort of commitment to reducing the overall volume of economic regulation.  On that count, I like the (adopted first in parts of Canada) idea of eliminating two old regulations for each new regulation (ie a shrinking cap on the volume of regulation itself).   There are risks around such an approach once it in turn becomes bureaucratised –  ministers and bureaucrats will game the system skilfully, so it would need serious leadership from the top, and sustained follow-through –  but for now the value is in the signal it sends.

And there is other stuff I like, often undoing bad calls by the current government (eg the ban on new oil and gas exploration and the planned labour reforms  – I found this note valuable on the latter).  There was even talk of possibly unilaterally lifting all remaining New Zealand tariffs, recognising that tariffs tax New Zealanders.

They were even surprisingly muted on immigration.  I thought this line from early in the document was quite cleverly drafted, with the focus on creating a climate in which New Zealanders no longer want to leave permanently.

New Zealand is also competing with the rest of the world for skills. If we aren’t internationally competitive our best and brightest leave for overseas and our living standards worsen relative to the rest of the world.

And if I disagree, quite firmly, with their paragraph on immigration itself  – after all, we have one of the highest levels of workforce skills among natives of any OECD country

Immigration can help to deliver a more skilled and willing workforce. National understands the benefits of sound immigration policy from an economic, social and cultural perspective. The skilled migrant levels should match industry needs and the administration of visas needs to be prompt and predictable. New Zealanders must be at the front of the queue for the jobs created by our growing and changing economy, but immigration will remain an important complement to that growth.

at least the “critical economic enabler” gung-ho rhetoric is gone, and this paragraph is a long way down the document.

Of course, there is other stuff I didn’t like.    Their section on regional development is about as devoid of a serious framework –  real exchange rate anyone? –  as anything from Shane Jones.  They still seem enamoured of big taxpayer subsidies to “glamour” industries (screen grants), and when they talk of privatisation it is never about efficiency or competition or accountability or things like that, but rather silly arguments about freeing up cash to spend on other things (when, as they know, the Budget is in surplus and the debt is low).   And they seem tantalised by the idea of more infrastructure spending without offering much assurance that the sort of schemes they might proceed with would be any better –  in economic return terms – than those of the previous National government.   Perhaps I’ve mentioned that there was next to no productivity growth economywide over the last five years or so?

But when I got to the end of the document, I guess my overriding reaction was a bit similar to my reflections on the reports of the 2025 Taskforce (the body set up by the previous National government to provide analysis and recommendations on closing the income and productivity growth gaps to Australia  –  by 2025, a date that mocks us now).  I had quite a lot of involvement in that process, and largely wrote the first report.  I also largely agreed with most of the recommendations the Taskforce themselves made –  very few of which were ever adopted.   And yet, as I reflected on the report in the months after it was released, I became increasingly convinced that, sensible as many/most of the recommendations were, they weren’t enough to make a decisive break in New Zealand’s economic and productivity performance.  Some important things were missing (although at the time I wasn’t really clear, even in my own mind, what they were).

Quite a few of things National is proposing look sensible. The general direction looks sensible.   The rhetoric is better than it was –  although, by itself, such rhetoric is cheap, and is the sort of thing most Oppositions for 25 years have eventually come round to saying.  But the scale of the policy response they are talking about is simply incommensurate to the scale of the problem (much of the policy mix they are suggesting is carrying on a broad approach they adopted in government, and productivity growth was very disappointing then).  For New Zealand average labour productivity to match that in top-tier OECD countries would require a 60 per cent lift from where we are.    That is simply huge.  Huge problems are rarely successfully answered with small changes (even a succession of them).

And so my challenge to National is along the lines of that the rhetoric is great, and I hope it reflects a shared sense that New Zealand’s long-term economic performance really is deeply disappointing, and has not sustainably improved –  relative to other advanced countries –  for any prolonged period for many decades now.  As they say, that has real implications for us, our children and our grandchildren, for the material living standards –  and public and private services –  we can achieve for the population as a whole.

But if you are serious, and you really mean what you say – all those good quotes I posted earlier –  you need to keep thinking harder, digging deeply, consulting broadly and testing and evaluating the proposals and analysis put to you.   Great ambitions need to be matched by excellent analysis, courageous policy, and skilful management of the political challenges.   Perhaps for many in the National caucus, winning the next election is all that matter, but I’d urge the party, and its members, not to focus on the small ambitions, but on the really big challenge that, successfully confronted, would so much transform New Zealand for the better, for almost all New Zealanders.

Monetary policy speeches and conferences

This week marks 17 months since Adrian Orr took office as Governor of the Reserve Bank.  In that time, there has been not one consequential on-the-record speech from the Governor on the areas of his core responsibility: monetary policy and financial regulation/stability.  It is a quite extraordinary record.  It is probably not matched by any of his predecessors for decades, if ever –  and for the most of the period prior to 1989 Governors had little formal power, and thus perhaps there were fewer expectations about scrutiny/accountability etc.  It is all the more puzzling in an individual who doesn’t seem shy of the limelight on other matters and who, if the substance is often lacking, is never short of a good turn of phrase.

The Governor currently wields great power personally, and alone, on bank regulation.  The bank capital review is proceeding, and yet we’ve had not a single speech from the Governor about this most consequential judgement that he alone will take –  nothing, for example, on his framework for thinking about the issues and risks, nothing about key uncertainties, just nothing.

On monetary policy, legal responsibility is now shared around a bit.   There are now three external (part-time) MPC members, and not a word has been heard from any of them. whether in interviews or in speeches.  There have been a couple of sets of remarks by Assistant Governor, Christian Hawkesby, but it looks as if central bankers have to leave New Zealand before they are allowed to give speeches: both sets of panel remarks were to groups of central bankers at overseas conferences.  Of the first of those, I noted

it was disappointing, to say the very least, how much political spin suffused the speech, and how lacking in analytical substance it was. 

The more recent effort was better, but still with little to suggest senior people with a really good grasp of the issues and challenges, or willing to make themselves accountable for their analysis and reasoning.

Oh, and you will recall the Bank’s apparent reluctance to engage openly on any of the issues, or work they are undertaking, around potential issues and options if the OCR reaches the effective lower bound (on current laws and technologies).

And all this while they repeatedly try to tell us how open and transparent they are.

On Friday a press release from the Reserve Bank dropped into my email inbox.    The subject line was, no doubt, designed to impress

RBNZ and IMF join efforts on the future of inflation targeting

The Reserve Bank –  constantly complaining it is short of money –  and the International Monetary Fund are, we were told, this week hosting an international conference (“delegates from around the world”).  There was LOTS of enthusiastic rhetoric.

From the Reserve Bank

While inflation targeting has had a history of success in delivering low, stable inflation and substantial macroeconomic stability over the past several decades, the last 10 years have proven to be challenging for monetary authorities.

RBNZ Assistant Governor and General Manager of Economics, Financial Markets and Banking Christian Hawkesby says: “We are now faced with stubbornly low inflation and low interest rates, driven by structural and cyclical factors. If monetary policy is to be successful for a further 30 years, we need to confront these challenges.

“This is what this conference is about — understanding the big questions about inflation targeting and considering how we need to adapt to continue being as successful as possible.”

And from the IMF

The IMF’s Director of the Office for Asia and the Pacific, Chikahisa Sumi, says that the conference is a timely event.

“New Zealand pioneered inflation targeting three decades ago. Most recently, the RBNZ has again been among the pioneers in the central bank community when revisiting its monetary policy framework.

“Discussions about these frameworks currently happen not only in advanced economies but also in many emerging market countries. This conference is happening in the right place, at the right time, and with the right participants.

“We are delighted to work closely with the Reserve Bank of New Zealand in providing this opportunity for experts from both advanced and emerging economies to share and gain cutting-edge insights about the future of monetary policy making.”

Which all sounds rather impressive, even if one couldn’t help wondering about exercises like this going on behind closed doors –  rather than, say, open speeches – as they debate things safely with those on the approved list.

And yet for all the fine rhetoric, the conference programme –  there was a link attached –  didn’t really seem to match up.   Once again, the Governor isn’t speaking.  Neither are any of the external MPC members.     There are eight quasi-academic papers being presented, only one (on a non monetary policy topic) by a relatively junior Reserve Bank researcher (who is also the only Reserve Bank discussant).   Perhaps more interestingly, despite all that talk about “confronting the big questions about inflation targeting”, not one of the eight academic papers looks as though it is likely to do anything of the sort (judging by the titles).  There are a couple of panel discussions in which the Assistant Governor and the Deputy Governor are participating, but an hour and four panellists suggests something more akin to once-over-lightly  – even if important issues might get briefly mentioned –  than in-depth scrutiny.

Remarkably, as the advanced world is now in a renewed easing phase, and the worrying scenario of going into a new downturn with little or no conventional monetary policy capacity is now an immediate issue, not a single paper at the conference looks to be addressing any of these issues, or whether (for example) differently-specified targets might have avoided the current predicament or might help emerge from it.

In sum, it looks as though they will be spending a lot of taxpayers’ money on a series of very detailed papers, looking at issues of (at best) second-order importance, while trying to spin the conference as something “cutting edge about the future of monetary policy making” when there is little sign of it being anything of the sort.  In that respect, the conference –  despite the hype –  looks like a pallid imitation of one held here five years ago that really did attempt to address at least some of the bigger-picture issues.

I was intrigued by the IMF Director’s comment

This conference is happening in the right place, at the right time, and with the right participants.

Dissidents, critics, and sceptics seem not to the “right participants”, but I have lodged an Official Information Act request with the Reserve Bank to find out who was invited and who has accepted the invitation.

For New Zealand, it is hard not to think that a more open forum, engaged with the specifics of the New Zealand economy, and the issues and options facing policymakers in New Zealand (informed, of course, by overseas experience) would have been a better, and more legitimate, use of public money.    Perhaps even a speech on monetary policy by the Governor.