Why we need an impartial organisation to cost all the parties policy platforms

FFS, just when it sounded like the Greens were going to come up with sensible policy prescriptions we get this absolute piece of rubbish.

If this is how we base policy why don’t people just make plans as follows:

  1. I will talk with people in important tones during very serious meetings,
  2. I will offer to give them money arbitrarily
  3. Therefore:  I will create jobs, income, sustainability, and cute kittens.

Seriously, in what world does a massive building initiative make sense when we are going to be struggling to rebuild Christchurch during the next decade given capacity.

In what world does giving money to green entrepreneurs (I would call many of these people marketers) provide “65,000 additional jobs”. [Pro-tip:  1% of the global market is HUGE - remember that we are less than 0.1% of the global population - so saying "just", especially given foreign subsidies and scale, is ridiculous].

In what world do these policies not crowd out other industries – guess what, skilled workers are already in work, you will be just driving up their wages with your arbitrary industrial policy.

Tbh, this rings of policy made by people who just want to win an election, and have very serious meetings with policy analysts and people who make glossy leaflets.  It shows no reality, and no willingness to think about trade-offs.

When the policy is out fully, I’ll do a write up on it without the angst – but right now I’m pissed.  To think I was considering voting for them – god I wish we had a real choice this election …

UpdateKiwiblog and No Right Turn discuss.

  • Beige

    Matt,
    Don’t forget our dairy sector: While our GDP is less than one per cent of the world’s GDP, and our dairy production is only two percent of world dairy production, our exports account for 33% of the world trade in dairy products. The problem is not the numbers; it’s ambition. The Greens should not apologise for being ambitious. We’ll get nowhere without it.

    • http://www.tvhe.co.nz Matt Nolan

      “While our GDP is less than one per cent of the world’s GDP, and our dairy production is only two percent of world dairy production, our exports account for 33% of the world trade in dairy products”

      Yar, but not of world production.  We are above 1% for that – but that is a massive industry for us, expecting that much is a big big call.

      • Beige

        Matt, that’s called ‘leadership’. It’s good for our leaders to be aspirational for New Zealand. Other economic commentators have been far more generous than you and engaged with the actual content of the Green’s plan.
        We were well placed as a country to take advantage of the boom in wind turbine technology over the last decade and we got almost zip. Let’s not make the same mistake with geothermal.

  • http://www.julieanne.co.nz Julie Anne Genter

    Dear Matt,
    Stop freaking out. It’s an election campaign, so yes, it’s a simple idea that is being used to speak to voters who really aren’t interested in reading detailed policy and who want to be inspired by a positive vision. Even if the Greens had enormous resources to undertake the kind of work we would if we had ministries at our disposal, it would be mostly irrelevant in an election campaign.
    Clearly you have no idea or experience with the kind of messaging it takes to speak to the average voter. The Greens spent the better part of a decade producing in-depth policy documents and campaigning with long winded, rational arguments. It turns out that the vast majority of voters don’t decide who they are going to vote for based on a reasoned analysis of policy. You and I may not think it is ideal for our representative democracy, but it is the reality, and we have to work with what we’ve got.
    Understandably, highly informed rational voters like yourself are likely to be underwhelmed by ambitious policy promises, and feel neglected by our plain and simple documentation with pretty pictures. But I still think you can rationally choose to give us your party vote. The Greens have a lot of serious policy and a lot of good ideas, and we are under-represented at the moment. With 10+% of the party vote, we’ll be able to make a positive impact on whoever next leads the Govt.
    cheers
    Julie Anne
     
     
     

    • http://www.tvhe.co.nz Matt Nolan

      “It’s a simple idea that is being used to speak to voters who really aren’t interested in reading detailed policy and who want to be inspired by a positive vision. Even if the Greens had enormous resources to undertake the kind of work we would if we had ministries at our disposal, it would be mostly irrelevant in an election campaign.”

      Agree regarding the resources – I think a small organisation that could do costing for all the parties would really help make messages more transparent.

      However, if the Greens are unable to provide reasonable numbers then these things are lies.  You have to understand here, for me the most important thing someone can do when selling a policy is be honest and transparent – painting fake tradeoffs is a lie, and being elected on the basis of a lie is immoral.

      I have no problem with having a vision – but making up job numbers that are incredibly sketchy is poor form.  Feeling this way does not make me naive – it means I have a belief I’m willing to stand up for.

      • http://www.julieanne.co.nz Julie Anne Genter

        I’ve no doubt a lot of work went into this and that the Greens believe they are not unreasonable numbers, and certainly not lies. Would help to have more resources to undertake this type of analysis.
        But to be fair, the job creation figures touted by the Government do not really stand up to robust scrutiny. The traffic forecasts and benefit cost analysis of transport projects are very precise, and highly inaccurate. It’s not exactly a hard science, and yet economists and lobby groups throw around job numbers all the time, and they are taken seriously by journalists and the public.
        Here’s a good example. There is a statistic that keeps getting repeated in the media, in the Government’s various infrastructure plans, and transport documents. It says “the freight task is forecast to double by 2040″. This is from a 2008 freight demand study commissioned by MoT. If you look at the report’s GDP projections from 2006-2011, they are way off, and we know that freight volumes have actually declined for the past two years. Yet the conclusion of the study continues to be cited as though it were true, even though we have evidence which suggests it will be wrong.

        Point being, the Greens are doing their best under difficult circumstances to forecast the impacts of some radical new policy ideas. They are doing this because they are competing with other organisations, including the Govt, who are also coming up with numbers. I think it’s unfair to criticise the Greens’s numbers as being dodgy when everyone else (many of whom have access to far greater resources) is using similarly dodgy numbers.
        Is it possible to come up with a jobs forecast or impact statement that is certain? Can you point to an example of a forecast that is much less sketchy?
         
         

    • Jeet

      “. It turns out that the vast majority of voters don’t decide who they are going to vote for based on a reasoned analysis of policy” 

      Julie Ann, that doesn’t mean you shouldn’t use reasoned analysis or policy.  Just present it in a form that’s attractive to the median voter! 

      • http://www.julieanne.co.nz Julie Anne Genter

        I never said we weren’t using reasoned analysis or policy. I believe we are! But the way we present must necessarily be simplified.

  • James Shaw

    Matt, we have 2% of the global dairy market. Why can’t we have 1% of the world’s renewable energy market?

    • http://www.tvhe.co.nz Matt Nolan

      Hi James,

      Dairy is an industry where we have a massive comparative advantage, and heaps of experience and sunk capital. 

      While I have no problem with trying to enter an industry, and making sure the prices and laws faced by entrepreneurs for this industry are appropriate, I find the idea that doing this would lead to “1%” of global output in the industry to be a HUGE reach.

      It smacks of an exaggerated figure being used to sell a platform.  Those sorts of things upset me – as they misinform the public regarding what is actually possible :(

  • James Shaw

    But, by the way, I completely endorse your idea of having an independent body to cost all the parties proposals.

    • http://www.tvhe.co.nz Matt Nolan

      That is definitely worth a post in itself.

      It would really help the small parties out – as they would have their policies costed, and the public could make informed decisions.  It is disappointing that such a scheme does not exist.

    • http://www.julieanne.co.nz Julie Anne Genter

      Yep, me too!

  • http://www.tvhe.co.nz agnitio

    If carbon emissions are appropriately priced, shouldn’t the incentives for green entrepreneurs already exist?

  • WH

    So you would be wanting something like this this maybe? http://www.treasury.govt.nz/publications/guidance/planning/costingpolicies/index.htm

    Costing of Political Party Policies
    Approach to Preparing Economic Costings
    The objective of preparing an economic costing is to model real resource flows at true market value. Modelling resource flows enables comparisons to be made of the social costs and benefits of a proposal using dollars as a common yardstick.
    Economic cost-benefit analysis is important to decision-making. Calculating the economic cost of a policy proposal aggregates all the resource costs over time into a single estimate measured at a common point in time. Ministers can then compare these costs with the benefits, whether quantified or not, when deciding whether to proceed with a policy proposal.
    Good economic cost-benefit analysis practice involves capturing all identifiable costs and benefits and including them in the analysis. However, there may be intangible costs or benefits (including costs or benefits resulting from behavioural changes). Therefore, a case-by-case judgement should be made as to whether to include a particular intangible cost or benefit in an economic cost-benefit analysis.
    For most proposals the common costs and benefits to be included for analysis are:

    direct establishment costs (e.g. staff, information technology, rent, etc.)
    purchase of fixed assets
    indirect establishment costs (e.g. other overheads and negative externalities)
    direct establishment benefits (e.g. reduced operating costs)
    indirect establishment benefits (e.g. positive externalities)
    release of capital
    residual values
    positive or negative changes in outcomes (e.g. reduced traffic accidents)

    A useful rule is to include only those costs and benefits that involve the actual use of resources and that would be affected by the proposal under consideration.
    The specific assumptions that should be used when calculating the economic cost of a policy proposal are outlined below. Any departure from these default assumptions should be clearly stated and explained.

  • Kimble

    JAG-”the Greens are doing their best under difficult circumstances to forecast the impacts of some radical new policy ideas. ”

    MH – “It smacks of an exaggerated figure being used to sell a platform.”

    Which came first, the forecast or the platform?

    P.S. It looks like the concerted Green effort to spam the blogs is in effect here.

    • http://www.julieanne.co.nz Julie Anne Genter

      Two things and then I’ll give up and leave you in peace. :)
      1. In asking which came first, the forecast or the platform: Are you proposing that one should work backwards from job creation and infer the policy? The only way I can conceptualise policy development is to identify opportunities and new markets, come up with some ideas, and then run the numbers to estimate the impacts. There’s no question that we are looking for opportunities for job and wealth creation that aren’t in oil and gas, because we don’t think we have the option to use all the remaining fossil fuel and have a healthy stable climate. So, yeah, we’ve ruled some things out in our identification of new market opportunities. (oh and these are the robust figures we’re up against http://www.med.govt.nz/templates/StandardSummary____44660.aspx). Maybe I’m really dense, but I don’t think you can forecast anything unless you already have a policy platform to test, right?
      2. Is it spam to comment on the content of the blog post and engage in a bit of a debate about the ideas expressed therein? If so, I am genuinely sorry to waste everyone’s time. I thought the purpose of a blog was to engage in some sort of dialogue, and I thought that I was being very transparent about the fact that I am involved with the Greens. But if you don’t want comments like this, happy to not engage, and my sincerest apologies. (I admit to being a little defensive on behalf of the people who worked hard on this policy package).

      • Kimble

        1. The forecast came first because it was a foregone conclusion that any forecast created after the fact would support the policy, no matter what that policy was.

        The fact that the figure was inflated beyond reasonable belief makes it just another ”Really Big Number”. It leaves thinking people in little doubt that the work involved in coming up with the figure was mostly spent in creating analysis that would produce a particular result.

        2. Its spam when we are in a countdown to an election and there are stories floating around about systematic attempts by the Greens to dominate conversation on blogs and forums.

        • Josh

          Kimble, it is hardly spam to engage in debate. I mean come on, when you have David Farrar on both Stuff and NZherald a little comment here and there can hardly compete with kiwiblog’s coup of two major websites.

        • Lana

          Kimble – don’t be a hater – it’s an ugly look. Besides, if that’s spamming, then I guess every single political party is guilty of it which kind of makes your green hate argument quite irrelevant.

          Julie – I think you’re brilliant, as is the Green party and it’s courage to have policy which deals with the real issues that everyone else wants to ignore and shoves aside into the ‘too hard’ basket.  The Green Party have my vote, no worries.

  • JC

    From the Herald cite:
     
    “The Greens would also invest $36 million in planting 665,000 ha of new forests, creating about 3700 jobs.”
     
    If that is correctly quoted its $54 per hectare. Now, the cheapest planting you can do is commercial forestry using relatively cheap P radiata seedlings (abbout 40 cents each) and it costs between $800-1500 per hectare, ie, the Greens are saying they can organise planting at about 5% of the cost of the private sector.
     
    They say the new planting of 665,000 ha will create an additional 3700 jobs.. but a professional planter takes a day to plant a hectare of P radiata.. so rack up an additional 665,000 jobs :)
     
    The only way to keep to a $54 per hectare planting programme is to plant only about 50 trees per ha, and if you are talking about slow growing natives you have an enormous expense in protecting trees for years against weeds, grass and pests, ie, individual fencing for each tree to protect from animals and annual spraying to kill weeds.
    However, on the Greens site the detailed plan says their planting will sequester 40 tonnes of CO2 per hectare by 2020..
    greens.org.nz/greenjobs
    this can only be achieved by mass plantings of 400+/ha  P radiata or the likes of fast growing Eucalyptus.
     
    In short, the Greens are producing amazing savings in the costs of planting and making heroic assumptions on carbon sequestation.
     
    JC

  • MH

    Okay, let’s face it … the numbers are shonkier than a really shonky thing rolling down Shonky Street. They are clearly based on poor analytics and wild assumptions.

    There doesn’t seem to have been much debate about whether these are new jobs or merely transfers, it is highly unlikely that it’s the former (but if so, have the costs of education, training, etc. been factored in? My guess is no) … and if it’s the latter then which industries will these workers be transferred from? Construction? Hope not given that we’re supposed to be rebuilding ChCh. Dairy farming? Hope not given the productivity gains there. I suppose there are a few policy analysts knocking around …

    Very poor from the Greens; I actually expected better.

  • Kimble

    Josh, DPF has been blogging for years. That’s his thing. He also has columns. Again, thats his domain.

    The Greens are trying to get their faithful out into the comments sections of blogs and forums to spread the campaign message and support the policies. They want to be a loud voice.

    They have tasked people with going to the blogs and forums to run interference for Green policies. Just look at the first response here. It doesnt debate anything. It defends the policies lack of info by saying it was due to a lack of resources,  tries to rewrite history by claiming a decade of rational dfiscourse, and blames the ’abandonment’ of this on voters for being stupid. It ends with a solicitation for a party vote.

    The next comment complains that a lot of hard work was done to generate the figure (labour theory of value anyone?), and that all other forecasts are rubbish anyway. It uses as an example, a 40 year forecast that has failed to accurately predict what was to happen in the following 2 years! And that one ends with a claim that it is unfair to call the Greens figures dodgy because other people use dodgy figures too!

    Thats not debating the issue.

    • http://www.julieanne.co.nz Julie Anne Genter

      Ok Kimble, I admit you’re right. I didn’t do a good job of laying out my points (and I may just be digging myself into a deeper hole here). But I swear I’m a person, not a spambot. There’s not a conspiracy. No one directed me to go comment on blogs. This has nothing to do with MaxCoylegate. My friend is subscribed to this blog and forwarded this post to me and I felt compelled to respond, because I’m a candidate who is passionate about the Greens and about sound economic policy, and I have a great deal of intellectual respect for RN and the researchers in the Greens office.
      My first point wasn’t meant to debate the substance of the plan, because neither of us had seen it. I was responding to what I read in the post as “The Greens are trying to get elected, how dare they…I can’t vote for a party that’s trying to get elected”. I just don’t think it is realistic or fair for policy wonks (of which I consider myself one) to expect political parties to educate the electorate during an election campaign. In order to implement policy you need to win enough seats to be influential, and to win seats you need to speak to people in language that resonates with them and inspires them. Once you’re there, you can be as wonky as you want — all Green policy is transparently published on the web. How many other parties have that much policy detail available? Recently I’ve heard similar criticisms from people who are really passionate about responding to climate change who think the Greens aren’t emphasizing it enough in the campaign. Our Climate policy hasn’t changed, it is a priority for us, but not many people are going to be voting on climate change this election. So if we only have limited bandwidth, we’ve got to choose the messages that are important to us that are also most important to the electorate. I just think that’s the Realpolitik, but I still think wonks have good reason to vote Green.
      The next comment was simply to say, I know these numbers were not just cynically made up, as was being suggested here. Now we can debate the merits of the assumptions made (if anyone bothers to check the sources), but my other point was that when you start examining any forecast you see that it relies on some sort of assumption, and one can always call it into question. The best thing we can do is be transparent about the assumptions used.
      The only way to prove or disprove any of this is to try it, and see what happens.
       

      • Kimble

        People can be spambots.

        “to win seats you need to speak to people in language that resonates with them and inspires them”

        Even when that means lying to them, or inventing figures to convince them that ‘science’ proves your policies are good.

        “The only way to prove or disprove any of this is to try it, and see what happens.”

        Lets not try it and see if it was a problem to begin with.

        Seriously, though, is that your line? Forecasts are rubbish so why not just do what we want and see how it plays out?