• Fall Guys

    The cyber-attack on the Waikato District Health Board is a follow-up to similar attacks elsewhere, and notably in Ireland. It has caused untold misery, anxiety and risk to many vulnerable patients, and confusion and worry to health administrators. It seems to be an instance of “ransom-ware”, whose purpose it is to extract money from the institutions affected; and, not content with threatening the lives of the sick, the perpetrators then threaten to publish private information about those whose records are held by the hospital authorities and to demand more money as the price for not doing so.

    It is hard to imagine a more reprehensible instance of pitiless greed or of the exploitation of hi-tech expertise by heartless criminals. Yet, sadly, it came as no surprise that someone could be found to demand immediately the resignation of Andrew Little, on the ground that he is responsible for the debacle because he is the Minister of Health and also the Minister responsible for the country’s security.

    There can be no more telling example of a growing current trend – that whenever something goes wrong or someone is disappointed or displeased by some action or inaction (of whatever kind), and irrespective of what other factors might be involved, a complainant will emerge from the woodwork to point the finger at the government of the day. This kind of knee-jerk version of the blame game is of course meat and drink for the media; they are presented with a ready-made story, with the added bonus of extending what is already a newsworthy story with a kind of “David v. Goliath” element of the “little man” or “ordinary bloke” hitting back against authority – and there is the pleasing additional opportunity to grill the authority figure complained about.

    The syndrome is constantly repeated, however tenuous may be the causal connection between the matter of which complaint is made and the person at whom the finger is pointed. In the case of the cyber-attack on the Waikato DHB, the intervention of international criminals, utilising a specialist knowledge for nefarious purposes, might have been considered not only as the prime cause of the crisis but also as a factor that was by definition difficult to foresee and counter – as other countries have also found to their cost.

    The reaction seems to be endemic in a society that is increasingly inclined to look to government to solve (and forestall) all problems, wherever and however they might arise. The surprising element, however, is that such reactions often come from those who resist and resent, as a matter of principle, the involvement of government in their lives. The best interpretation of the syndrome may be, in other words, that it is those who are hostile to government in general terms who will be the quickest to blame “the government” if they are displeased about something – anything – that could attract attention from the media.

    It may be futile to suggest that the media, in such circumstances, should exercise their own judgment as to whether such a complaint bears scrutiny; but we would all agree, surely, that free and active media are an essential element in a properly functioning democracy and that their role therefore involves more than simply reporting and amplifying attempts from whatever quarter to treat government ministers as Aunt Sallies or fall guys.

    Bryan Gould
    27 May 2021

  • Central Bank Independence?

    I have never understood why the independence of the central bank (in our case, the Reserve Bank) is thought to be so important and beneficial. The practice – and doctrine – were pioneered in New Zealand, and hark back to the era of Rogernomics, monetarism and the priority given to controlling inflation. Today, they reflect outdated views about the infallibility of markets and the weight to be placed on, and mechanistic nature of, monetary policy.

    But it was always essentially anti-democratic in nature and purpose; its effect has been to remove from parliamentary scrutiny, and therefore democratic control, the most important areas of government policy and action. Quite why this was thought to be necessary and why we were urged to trust the Reserve Bank, freed as it was from public scrutiny, to decide these important policy issues has never been clear to me – particularly when the Governor of the institution, over a significant and critical period of its operations, demonstrated repeatedly that he had no understanding of how money is created.

    And furthermore, the Reserve Bank is, as its name demonstrates, a bank; its loyalty is to the banking system, and it views the economy from the viewpoint of a bank. Its principal goal and responsibility is to maintain the viability of the banking system; having established the framework that it sees as necessary, it is then content to leave what it sees as subsidiary issues (that are nevertheless important to the rest of us) to elected politicians.

    It has of course been flattering to bankers and economists to have it established that some issues can and should be decided only by them, because they are too important and difficult to be left to politicians but, if that were accepted, we might as well give up all claims to be a democracy. In fact, it is hard to see why – in the light of all the complex issues that our governments have to decide – it should be only these fundamental economic issues that are to be withdrawn from their remit and handed over to unelected, and supposed, experts.

    So, why should politicians themselves have fallen into line and supported a doctrine that runs so much counter to their own responsibilities? We can only surmise, but my best guess – as a former politician myself – is that they found it quite convenient to shuffle off the responsibility to another body. It was handy for a Minister of Finance, under hostile questioning in Parliament. To be able to say that the issue was nothing to do with him (or her).

    It is in the light of these ponderings that I view the recent discussion as to whether Grant Robertson, in asking Adrian Orr to consider unemployment and house prices when deciding monetary policy (principally, interest rates), has somehow crossed a sacred line.

    I can only say that I think we should be grateful that we at last have a Minister of Finance, and a Governor of the Reserve Bank, who have an accurate understanding of their respective roles. Welcome back, democracy!

    Bryan Gould
    2 May 2021

  • Health Reforms Long Overdue

    The Government’s (that is, Andrew Little’s) far-reaching health reforms have been – predictably and rightly – well received by most health professionals.

    I judge them – and welcome them – on the basis of my own experience in chairing a Primary Health Organisation over a period of some years. My experience led me to the conclusion that the problems of the health service were the consequence of flaws, not only in the organisational structure of health service delivery, but also in the funding arrangements.

    The decision to entrust the country’s health policy to a national body and to abolish District Health Boards is long overdue and gives us a chance to end the “postcode lottery” produced by the different standards and piecemeal levels of achievement in different parts of the country. It allows the possibility of a national policy, applied across the whole country, and one that does not depend on the vagaries implicit in having a range of district health boards, each one of which has its own local priorities, levels of expertise, and differing sensitivities to the presumed (and often widely varying) needs of their local communities.

    The variability created by having twenty District Health Boards was not, however, the only cause of difficulties. Problems also arose as a result of a confusing set of funding arrangements. Funding came originally, of course, from the government, that is the Ministry of Health. The total funding for the region, – that is, funding to cover both primary and secondary health care – was paid initially to the DHBs. They then had to allocate a proportion of the funding to primary care – that is, to general practitioners – and the remaining proportion they then retained for secondary care, – that is, for hospitals, the sector which they themselves administered.

    This unnecessarily complicated system of funding inevitably gave rise to uncertainty and suspicion. The primary sector would always suspect that they were being underfunded by the DHBs whose priority was, naturally enough, the funding of the hospitals for which they were responsible.

    But this was not the only cause of tension between the DHBs and the primary health organisations. Performance standards in primary health care were set by the Ministry, which looked to the DHBs, as the funder, to ensure that the standards were being met. The DHBs in turn would in turn monitor the performance of the primary health organisations, and would react strongly if they felt that the standards were not being met – and since they held the purse strings, this was a constant source of tension between the two sectors.

    The primary health organisations found themselves having to serve two masters – first, the Ministry, that set the standards, and secondly, the DHBs, who controlled the funding. The DHBs also found themselves in a difficult situation, having to account to the Ministry for meeting the required standards, but having to delegate to another body or bodies the practical responsibility for the work needed to meet the standards.

    The reforms seem likely to cut through these unnecessary and confusing complexities, so that funding will be provided directly to those bodies that will be responsible for delivery, and those bodies will have a direct line of accountability and reporting to the body that both sets the standards and holds the purse strings.

    The second major reform – the establishment of a Maori Health Authority – is also strongly to be welcomed. Anyone with any experience of health service delivery to a population containing a substantial proportion of Maori will have learnt that the take-up and effectiveness of health care provision is greatly improved if the delivery of that service is seen to be in Maori hands. The learning of that lesson is long overdue and should at long last lead to the improvement of shamefully bad Maori health statistics.

    Bryan Gould
    22 April 2021

  • The Government v. the People?

    We can all agree that a free press (and free media more generally) are important factors in a well-functioning democracy. But I am beginning to wonder if they provide us with an unalloyed benefit.

    I am an avid consumer of daily news – whether delivered by the press or by the broadcast media. And I have begun to notice what seems to be an increasing trend. What is regarded as “news” seems increasingly to fall within a particular category.

    Most news bulletins these days seem to comprise items of one particular kind. It seems that any individual or organisation can guarantee coverage as an item of “news” if they make a complaint – any complaint – to the effect that “the government” has somehow failed – has somehow done something that it should’t have, or has not done what it should have, or has acted, but “too little, too late”, or has listened to the wrong people, or has spent too little or too much, or has displeased them in some way.

    Complaints about the government seem to be manna from heaven to the news reporters. They require very little work – that can be left to, and has presumably already been done by, the complainant. All that is necessary is to offer the complainant a platform and – hey presto! – you have a news story.

    And there is always the even more welcome opportunity to put a government spokesperson on the spot, and to require them – whether or not the complaint has any substance – to account for themselves.

    I should make it clear that, although I am a supporter of the present government, the trend seems to have established itself over recent years, whatever colour the government of the day might be.

    But, you might say, isn’t that the role of the news media, to hold those who govern us to account?

    Yes, of course, but if it becomes the mainstay and staple diet of the news media, it can deliver an unwelcome injury to our democracy and convey a mischievous, damaging and inaccurate picture of its operation .

    It can offer, all too easily, a view of public affairs as, essentially, “the people” against, and the victims of, “the government” – and that would do no one any good. The proper functioning of democratic government is subject to quite enough challenges, not least from the social media, without concocting a false dichotomy between the popular will and the functions of government.

    The USA offers us an uncomfortable picture and warning of what happens when large numbers lose confidence, not just in a particular government, but in the whole concept of government in general. And that state of affairs dates back much further than Donald Trump – probably as far back as Ronald Reagan.

    It was “the Gipper”, after all, who famously said that “government is not the solution – government is the problem” and that “the most frightening phrase one can hear is “I’m from the government.”

    We (and our media) need to grasp that, in a democracy, government is the one actor we can rely on to protect and advance the general interest. There is all the difference in the world between holding government agents to account for failures on particular issues, and allowing an anti-government sentiment to take root. Without an effective government, we are all at the mercy of the powerful, the selfish and the ruthless.

    Bryan Gould
    16 April 2021

  • Minimum Wage? Property Investors? Don’t Touch Our Profits

    It has never ceased to surprise me that those who profit at the expense of others are so unaware of the harm suffered by those they exploit, and are so convinced that they have a right to do the exploiting and that their profit is a proper and justifiable reward for doing so.

    There have been two cases in point over recent days. The first was the introduction of measures to restrain the impact of property investors on the housing market. The government extended the “brightline”test for property investors, (so that their tax exemption in those cases where they made a quick profit by selling on was reduced), and the government removed the concession whereby investors could set interest costs against their tax liability. The squeals of protest that greeted these measures were matched only by the unlikely claims of investors that their activities in reality provided a social service and that their real concern was not for their own interests but for their tenants and for first-home buyers.

    Do they not realise that an investor could typically use the rules (as they previously existed) to walk into any auction room and effortlessly outbid a roomful of first-time buyers? Property investor could obtain virtually unlimited and cost-free credit from their banks, and use it to buy almost any property, secure in the expectation of a substantial and tax-free capital gain – which was virtually guaranteed as a result of their own activities – within a short time. Little wonder that first-time buyers stood little chance.

    The consequence was that first-time buyers were increasingly priced out of the market and that there was constant upward pressure on prices. When investors squeal about how hard done-by they have been, do they not realise that the government correctly recognised that there could be no relief for first-time buyers and no slowdown in property prices unless the advantages enjoyed by investors were limited?

    Their response shows instead that they believed that their “right” to go on making large tax-free profits at the expense of others should remain intact and take precedence over the distortion of the housing market that was inevitably the consequence. They were angry that a government elected to serve the needs and interests of the whole population should step in to alleviate a problem that was bringing misery and disappointment to many young families.

    The second instance was the raising of the minimum wage. The air was thick with warnings about the damage to the prospects, not just of small businesses, but also to employees themselves (whose jobs, it was said, would be lost) and to shoppers, who would have to pay higher prices – and all because employers would be obliged to pay their employees something approaching a wage that could support a family.

    As with investors, the response was one of outrage – how dare the government intercede in an attempt to mitigate the shocking child poverty that disfigures our society? The mindset – again – was one of entitlement – our ability to maintain our own living standards must be left untouched, even if the price of that is the impoverishment of others.

    In both cases, terms like “communism” were carelessly and inaccurately flung around. It is evidently hard for those with vested interests to understand the democratic concept of a government that is ready to act in the general interest. Differential privileges, arising from the ability to bid up house prices or to take profits from a business that cannot afford to pay its employees a living wage, must, it seems, be maintained at all costs.

    Bryan Gould
    3 April 2021