Administration things I would like to see from National

Labour did some things that very much improved the accessibility of information about the New Zealand economy – namely make information from Statistics New Zealand free at Infoshare!

However, the removal of health sector productivity statistics was a concern. This concern appeared again in the back of my head when hearing about National’s plans for health.

Now that National is in, there are a couple of major analytical releases I would like them to produce (that they should be able to make without too much hassle):

  1. Productivity measures for different government sectors,
  2. A Treasury created measure for analysing the quality of government spending (as suggested by ANZ),
  3. A independent board/organisation that creates a measure of the quality of government spending.

There has been a lot of talk about taxes, however the purpose of taxes is merely to raise revenue for some target level of government spending. We have been unable to discuss whether the spending is appropriate (especially given the cost of raising the tax revenue) because the benefit of the spending has not been transparent.

Adding transparency here would increase the quality of policy – and would allow the democratic process to properly represent how much government spending society is willing to pay for.

  • Gareth

    I’m all for productivity measures that are focussed on outcomes, and lose the possibly flawed “front office/back office” proxy that ANZ used – there are plenty of ways in which a “back office” role could produce better outcomes. Throwing more people into supposed “front line” roles doesn’t deliver labour productivity either if they’re not increasing output per worker.

    Set bottom-line desired fixed outcomes and then slightly separately measure the productivity to deliver them.

  • Pingback: ezineaerticles » Blog Archive » Administration things I would like to see from National « The …()

  • Kimble

    “Throwing more people into supposed “front line” roles doesn’t deliver labour productivity either if they’re not increasing output per worker.”

    It would be a gain if the removal of back-line workers to offset the gain in frontline workers didnt decrease output.

  • Gareth

    Very true Kimble – I guess my overall point is that the focus should be on outcomes more than the mix. “Working smarter” to achieve those plausibly come from a traditional back office or front office role so getting caught up in that distinction may not deliver the outcome and or productivity for outcome that we want…

  • Pingback: Interest Rates » Administration things I would like to see from National « The …()

  • With the backroom vs frontroom issue, it is important to note that they are both part of the production process. ANZ does make a mistake treating backroom staff as aimless – as they increase the marginal product of frontroom staff.

    I was merely quoting them for the fact that they suggested that Treasury should create some composition measure of efficiency. Measures of productivity would help in this regard.

  • George Bolwing

    There are three things the Government should be worrying about:

    a) effectiveness. Is the programme actually solving the problem? is the problem actually a problem? Cost/benefit analysis is the gold standard, but often difficult because of measurement problems on the benefit side. But at least the issue should be addressed, and not by the people running the programme.

    b) efficiency. Are the outputs (the things that solve the problem) produced with the best mix of inputs? Again hard, because the production function is not always well understood or easy to measure. But again, is something that should be addressed in a conscious and contestable manner, especially on the capital side: why is a new school building a better option than a pay increase for the teachers?

    c) economy: are the required inputs being purchased at least cost. This is easier to do, especially if there is a competitive market and/or the input is used widely across the economy. For example, it is easy to test if Government departments are paying too much for their photocopier paper. Much harder when the Government is a monopsonist, as it is for specialist equipment and staff.

    But despite all of the difficulties, the new government should be putting in place independent bodies to worry about all three of these issues and making sure that the results of their labours are made available to the long-suffering taxpayer.

    Productivity measures for different government sectors,
    A Treasury created measure for analysing the quality of government spending (as suggested by ANZ),
    A independent board/organisation that creates a measure of the quality of government spending

  • Hi George,

    Indeed those are issues that the government should keep in mind when implementing policy.

    The call for more transparent measures of productivity and fiscal performance stems from the fact that it provides the incentive for government to actually focus on these issues – because people will then be able to observe some objective measure of government performance, and reward/punish then accordingly.

    That is of course presuming that analysts interpret the numbers correctly 🙂

  • ghostwhowalks

    Why National will do any about quality of health spending when as in the Herceptin debate they overide the people who rigourously analyse the spending on pharmaceuticals because of their political concerns.

    Their policy in other areas as as new doctors training or even new police numbers was also under funded with any shortfall to magically come from ‘reprioritising’ which is political speak for decisions based on whim.

  • “Their policy in other areas as as new doctors training or even new police numbers was also under funded with any shortfall to magically come from ‘reprioritising’ which is political speak for decisions based on whim.”

    I was saying that they should make transparent measure of government performance and productivity – I wasn’t asking “do they have the incentive to”.