There's more than one elephant in the room in Budget 2019

by Jane Clifton / 31 May, 2019
National Party leader Simon Bridges and Finance Minister Grant Robertson. Photo/Getty Images

National Party leader Simon Bridges and Finance Minister Grant Robertson. Photo/Getty Images/Listener illustration

RelatedArticlesModule - Budget 2019

It's usually the case that there's "an elephant in the room" on Budget Day, but this year saw the pachyderm quota pushed to the limit.

If the Budget “leaks” debacle underlined one enduring myth about Budgets, it’s the belief that all their data must be kept secret because it’s holy writ.

Actually, it’s more like a Bridget Jones’ Diary list of calorie and alcohol units targets. Any Budget’s biggest secret is how hit-and-miss it is. Some of the programmes announced never get under way. And a lot of the money budgeted will not be spent, even within the year, because those to whom it’s allocated are simply not ready to spend it.

For electoral reasons, Governments encourage voters to think of Budgets in a cargo-cult sense, when in reality, their benefits arrive via an unpredictably timetabled flotilla of smaller boats, many of which have to anchor offshore for months before they can deliver. The Provincial Growth Fund is a prime example. Its projects can take months, even years, in the preparation.

The “welfare Budget” was at least a start at doing what it says on the tin: identifying the underlying reasons people don’t have good lives, and targeting policies more intensively toward those problems. It was new, but not that new. This approach is broadly what the previous Government, under Sir Bill English’s stewardship in finance, had been striving for in honing its data-drilling to identify people most at risk of having poor health, education or other social trajectories, and sicking state agencies’ resources onto known risk-predictor issues as early as possible

The “welfare dashboard” is a version of that, and of English’s mission to achieve “joined-up government”, where state agencies “wrap around” those most at risk of bad social outcomes.

Neither side of the House would ever give the other credit for being on the same side of this issue. It’s supposed to be a secret.

But in a rare, unabashed outbreak of cross-party accord, Opposition Leader Simon Bridges couldn’t find a word to say against Robertson’s announcement that mental health treatment was now “front and centre” of the “welfare” franchise’s focus. He welcomed it without reservation.

He then cheerfully blackguarded just about everything else, including defence’s big-budget aircraft purchases, which National would traditionally agree with. After all, what it says on the Opposition tin is oppose.

Perhaps the day’s only surprise for seasoned politicos was that deputy Prime Minister Winston Peters didn’t, for once, repeat his favourite refrain about “the hundreds of thousands of forgotten New Zealanders”. That considerable boost to mental-health funding was the Budget’s most arresting feature and statistics suggest it will, at least over time, benefit hundreds of thousands of forgotten people: both the sufferers of depression, addiction and other such illnesses, and their often long-suffering families.

The other Budget feature the Government regards as a defining early stake in the ground was in child poverty amelioration, which is being tackled by such measures as more money per child for lower-decile schools and the indexation of benefits, as urged by Commissioner for Children Andrew Becroft.

But these days there’s always “an elephant in the room”, and Parliament’s Budget Day debating chamber usually admits several pachyderms the Government pretends not to see. One strapping jumbo was the question of where the staff will come from to do good works with all this new mental health and education money. Some in the health sector estimate their qualified workforce will have to at least double to do justice to the Government’s – greatly welcomed – new ambitions for timely, accessible and free treatment. The money might be there. The means to use it to help all those “forgotten New Zealanders” might not be yet.

But perhaps the most dangerous room-elephant – complete with its own heffalump pit specially for Labour – is the growing teacher shortage and intensifying union militancy. The Budget did not, and had not been expected to, allow for an increase to the Government’s pay offer to teachers. As the Opposition can still gloat, the chronic teacher shortage seems set to continue unless more can be recruited and trained, and little in the Budget looks capable of addressing that in a timely way, if at all.

To be fair, National yesterday renewed its commitment to delivering lower class sizes without committing itself on either teachers’ pay or recruitment issues. For now, it can simply bathe in the Government’s woes without presenting the countervailing maths.

It was significant that Bridges refrained from calling the “welfare” re-focus fluffy or hollow. He might have surged forth with scathing Mike Hosking rhetoric against the Prime Minister’s “kindness ”motif, but resisted the urge. His critique was a whole-of-policy one, specially lasered towards the wins for Peters. NZ First getting $1 billion towards restoration of some KiwiRail capabilities, and the ongoing cheque-fest that is NZ First’s flagship policy trophy, the Provincial Growth Fund, is great political fodder for National.

But there was no ignoring the bad fairy at the christening. The Treasury leaks debacle settled in as determinedly as Wellington’s airport-closing weather over the day’s proceedings.

In a rare black-is-white moment in politics, Robertson and Bridges have both turned out to be right in their furious run-in over this debacle on Wednesday: it was National that repeatedly tried to access the Treasury Budget data, as Robertson implied, but it wasn’t doing anything unlawful, just as Bridges maintained.

Lawyers differ on whether National’s actions were, as the police have ruled, not unlawful. As another former minister of finance, Steven Joyce, might have said, “It’s pretty legal.” The Treasury left a porch door ajar in a website where Budget-secret material is parked, and National, to its astonishment, found it and was able to nip in and look around while it was getting up to speed with the Budget data from last year stored in the vicinity.

A useful analogy is, someone in the household leaves a door unlocked and a passer-by, nosing around in the neighbourhood, notices this and wanders in for a look-see. The nosy parker would probably not be pinged for that. But the right thing for him/her to do next is tell the householders their security is compromised. A scathing social media post/press release slamming the household’s lack of responsibility and competence would also be legal, and in the context of politics, a lip-smacking win.

What’s less clear is whether the sticky-beak can photograph the house’s contents and share it with tout le monde. Or, by some lights, as data is property, give some of the household chattels away.

Wellington lawyer Felix Geiringer has made the point that it is unlawful to take data that you know you are not entitled to. Pausing a second to align that with the habit of his most famous client, peace activist Nicky Hager, to use data he has known was not intended for him to access, National well knew that data was Budget secret. How much more leaderly for Bridges to have said, “We have been able to see this data, but we’re not going to be irresponsible and bandy it about”.

It’s telling that few people, beside Don Brash, made a fuss when Hager received and used his clearly private communications to write a book heavily critical of him and others. Why is National being denounced by the centre-left for simply picking low-hanging fruit that was the product of some Treasury incompetence?

As for the Treasury’s culpability, someone in IT is for the high jump. But secretary Gabriel Makhlouf, whose highly debatable decision to call the police over this matter made the security hole 10 times as controversial as it needed to be, has already resigned. He has only has a couple of weeks’ tenure before heading off to Ireland to be its central bank chief. The State Services Commission could sack or censure him, but it would be rather a hollow gesture

No reasonable judge would fire him because he failed to micromanage IT. It was his decision to call the police in, and his subsequent decision to criticise National for breaking what he termed the “convention” of Budget secrecy, that have made his position so much worse. Never mind the claimed convention on Budget secrecy, the convention Makhlouf has broken is much more serious: the maintenance of strict impartiality, and of the appearance of neutrality, by public servants. A Treasury secretary simply cannot criticise the probity of a politician, as Makhlouf by clear inference did. As concerning is his decision to call in the police, rather than deal with what he initially represented publicly as an aggressive mega-hack attempt, by requesting the intercession of the rather more equipped Government Communications Security Bureau.

To call in the police, who rarely dive into suspected hacking with such alacrity, given neither lives nor sovereignty were at stake, seems at the least an over-reaction.

Also concerning in retrospect was the tone of his initial statement about the multiple attempts to access the data, which connoted a hostile assault along the lines of Russian hackers’ attempts to disrupt the US elections. If he knew at that stage it was nothing of that magnitude, his judgment was extremely poor. It certainly agitated Robertson, who has expressed “disappointment” – a political synonym for distancing oneself from a poor judgment with extreme prejudice.

Perhaps the most infuriating thing is that in this whole affair, the state, Parliament, the executive and the entire political firmament have squandered so much energy on the absurdly outmoded principle of Budget secrecy.

It’s a conceit long past its expiry date. In the days when New Zealand had a more command, fortressy economy with import licensing, tariffs and a plethora of sales taxes, it was vital to keep a lot of decisions secret. Leaks could mean people unfairly losing or making a fortune.

There’s very little of this fare in today’s Budgets. The secrecy is only maintained because it suits the government of the day to commandeer the news agenda by dropping tantalising hints for weeks in advance and then having a big “reveal”, with great pomp and ceremony, all on its own terms. 

Even the convention of lock-ups, where analysts and journalists are sequestered to have the Budget details explained to them in advance of its reading in Parliament, is as much a propaganda boon for the Government as it is a convenience and an education for those being locked up.

And we can’t leave this without a word about sausage rolls. The media, for one, have been prepared to go along with the charade of the need for Budget secrecy lock-ups, because they get to hit up normally no-speakies Treasury experts in person for detailed explanations of decisions. And also – and this may be the superior caveat – they put up with it because there’s a decent supply of coffee and sausage rolls to ease their internment.

This year, the tucker ran out before the lock-up was over. Given that this Budget contained not a sniff of the much-lobbied-for fat tax, this just has to be a sign from the Gods of democracy that High Budget Secrecy has run its course.

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