The Letter
Monday April 11th, 2005

ALL BETS ARE OFF

The latest revelations from the Wishart interview with Tamihere have given the PM just the ammunition she needed. Tamihere is now toast. She didn't want to be seen beating up a guy who the public see as telling the truth about her government. But the revelation that he's "sick and tired of hearing how many Jews got gassed" allows her to deal to him, and deal to him she will.

LAST WEEK'S PROBLEM

Clark was suffering last week from considerable opposition within her caucus to the deal she and Labour President Mike Williams brokered with Tamihere. Most upset was Maharey. He believes Tamihere's interview has damaged his reputation and his chances of succeeding Clark. But last week Clark was torn between the danger of having Tamihere outside the tent versus keeping him in.

BUT IS IT TRUE?

While the Herald's John Armstrong says that "parts of the Investigate interview ... are patently absurd", the other former Labour cabinet minister Tariana Turia says that while she would not have used Tamihere's language the interview is true. Putting money into an election year package and calling it "Working for Families" doesn't mean Tamihere is not right when he says Labour is anti family, anti fathers and is run by "butch lesbians" who favour trade unions that have their own social agenda.

SPEAKER COMPROMISED

Cullen threw the biggest temper tantrum anyone can remember in parliament. Having lost control completely he stood and shouted at National's Gerry Brownlee. He was angry Speaker Wilson had called Brownlee even though he had not been standing when he said point of order. Wilson was standing when she called Cullen to order - he ignored her. As Leader of the House he has destroyed the new Speaker. First he took advantage of her inexperience to question opposition MPs integrity in Ministerial answers to questions. Question time has become a battle-ground with 5 MPs being ejected on Thursday. On Wednesday night Cullen abused the requirement in the Standing Orders that a minister must always be in attendance when the House is sitting by withdrawing all ministers to halt parliament. He mused he would do this if ACT didn't agree to rise early – we didn't and he did. An experienced Speaker like Hunt would have reminded him of the government's duty to provide a minister. Wilson rebuked National MPs for their use of Standing Orders but refused to admonish Cullen.

BLOW OUT

Cullen had a bad week. As his spokeswoman put it "The initial run of the Budget numbers didn't play out to a sufficiently credible long-term debt track consistent with the government's long-term fiscal objectives." In other words the government's budget has blown out and if massive cuts are not agreed to before the budget Treasury in its figures will show Labour really has spent the surplus. Cullen's been busy with meetings, most with ministers, looking to cut $400 million from a budget that cabinet thought was put to bed.

WHAT HAS GONE WRONG?

Income is up but expenditure is rising faster. The number of public sector employees has risen from 217,900 at the beginning of 2000 to 266,000 at the end of 2004 – an increase of 48,100 or 22%. That's just the start. Extra staff means extra costs, office space etc. In the private sector the total cost of another employee in often reckoned as about double the salary. In the public sector the cost is greater. In the private sector firms don't usually add another employee unless the person is going to add more than the cost of employing them. There is no such discipline in the civil service. It is Treasury's experience extra staff often don't deliver more service or efficiency. A recent Treasury study on the effect of extra staff in hospitals could find no improvement in output, indeed in elective surgery there has been a reduction. Treasury warned ministers extra staff means extra expenditure and demand for more staff, who produce more reports, use more paper, need more computers, and more office space. All prime office space in Wellington has gone even though the corporates have left town. More staff require more supervisors and as salaries are adjusted according to the number of staff reporting, higher wages. It's a spiral.

NOT NEW

National in order to stop the expansion of bureaucracy put in staff ceilings. New jobs could only be created by eliminating old jobs. Unions hated it but it worked. Labour has removed all such controls so very few positions have been removed in the last five years.

CAPITAL SPENDING CHOPPED

The new $200 million Waikato hospital was one of many capital spending proposals to be axed last week. Officially it is still proceeding but will now be built in stages. Yeah right! Schools were also deferred. Cullen has indicated that government will also target private tertiary learning. While it is hard to justify classes in witchcraft the private sector has done a much better job in giving Maori an education than the state sector. Labour will continue funding the traditional tertiary sector that Clark, Cullen and Labour voters empathise with ahead of putting in some simple results based funding. There is no sign Labour will introduce real reviews of government spending. As former finance minister Roger Douglas used to say "The best way to save money is to stop doing things". There are many activities carried out by this government which if stopped tomorrow would never be missed.

POLL

90% of respondents don't support National's proposal to keep the 5-cent fuel tax. This week "Is Tamihere right in saying this government is out of touch with families, favours trade unions and runs a social agenda set by a cabal of homosexuals." Vote at http://www.act.org.nz/poll. We will send the results to the New Zealand Herald.

ENDS

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