One Review To Bind Them All

In response to current economic circumstances, all Government Ministries and departments are conducting a 'line by line' review of expenditure to identify where savings - of around 10 percent - can be made.

At first glance, this appears to be a prudent measure and is certainly less politically-charged than large-scale changes in the public sector. As many know, surgery must be followed by planned post-operative care and rehabilitation - my concern is that, in the absence of any clearly-articulated end-state, we might well see a successful operation but a dead patient.

Beyond cost-saving, what are the principles being applied to this exercise? Certainly they are not self-evident. While smaller departments may not easily find 10 percent, some others could probably save much more. I have long proposed a set of principles for Government reform and there has never been a better time to apply them. These principles are outlined below:

1) What are the core functions of the State (i.e. those that people cannot provide for themselves)?

2) How much money must be raised to support these functions?

3) What is the fairest tax system to raise that amount?

4) What is the most efficient Government structure needed to administer the country? (remember the 100 MPs referendum?)

5) How do we transition from the current to the desired state?

An excellent example of this, at the functional level, is national security. This is the collective term to describe the first role of Government: to protect the people. Kiwis have a reasonable expectation of being safe in their homes, when moving around the country and when travelling overseas.

Equally, the State must have the capability to protect its citizens from external threats - be they military, resource-based or less tangible risks like biosecurity. Newspapers and other media outlets are constantly reporting stories about crime, regional instability, piracy and the like.

The new National/ACT Government has announced that a Defence Review will be done this year, and planning is currently underway. Meanwhile Police, Corrections, Customs and many other security agencies are working on short, medium and long-term initiatives.

No doubt, these reports will all produce a raft of relevant recommendations and these agencies will then compete for a slice of a significantly reduced budget 'cake'. This is self-defeating. Without an over-arching, principle-based review of national security, individual departments can only guess as to what the end-state should be. In the worst case, they will leave gaps, duplicate capabilities or work on divergent paths.

A case in point is the ongoing attempt to pass laws against gangs and organised crime groups. In a true whole-of-Government approach, only one principle is necessary. It is based on Article 5 of the NATO Treaty - an attack on one is an attack on all. Those who choose to organise themselves to prey on New Zealand citizens would find that the full power of the State would be brought to bear on them, not just the police. IRD would track the money and local government would strictly enforce by-laws. Police, the Defence Forces, intelligence agencies, Customs and every State security agency would act together in exactly the same way that they do in time of war.

I believe that there are only eight core functions of Government, and I will discuss these in a later Diary. There is no doubt in my mind, however, that a country of four million people can be easily governed by 100 MPs and a Cabinet of 10 - Prime Minister, Deputy Prime Minister and eight Ministers supported by Under-Secretaries as necessary. This is the starting point for fundamental reform of expenditure in New Zealand.

Lest We Forget - February 12 1866
OThe New Zealand general election of 1866 was held between February 12 and April 6 1866, and was held to elect MPs to the fourth session of the New Zealand Parliament.

During the election, four Maori seats were created as a temporary measure for five years, with universal suffrage for all Maori males aged over 21.
From a total 29, 320 registered voters throughout the country, 13,196 votes were cast to elect 70 MPs to Parliament.