Politics - The Great Quango Hunt (26 October 2009)

In 1985, New Zealand’s Attorney General, Sir Geoffrey Palmer, launched the ‘great quango hunt’. He threatened to strangle many of the useless ‘quasi autonomous national government organisations’. According to political reporter Jane Clifton, “Geoffrey got so excited about this, it was all staff could do to persuade him not to wear a pith helmet and safari suit to the press conference. Geoffrey had counted up hundreds, nay thousands of quangos – rabbit boards being among the most emblematic – wasting money. He was going to grub them out, root and branch. He was positively kittenish in his excitement. And what happened? The little buggers multiplied.”[1]

Appointments to quangos have traditionally been regarded ‘jobs for the boys’, a way that governments reward supporters for their loyalty and generosity. Most of the jobs are not advertised; instead the positions are filled largely from the recommendations of government MPs. This, of course leads to accusations of cronyism, especially when the appointments go to high profile party political activists.

In 2003, Finance Minister Michael Cullen flirted with the idea of hunting quangos, suggesting that some of the thousands of taxpayer funded jobs on quangos - that cost taxpayers millions of dollars each year - should be “axed”. At that time more than 3,000 people were serving on more than 400 tax payer funded quangos, with almost 1,000 appointments to these boards being made each year. Some of these positions were extremely lucrative, attracting salaries of more than $100,000 a year, while others provided meeting fees of almost $1,000 a day.[2]

However, Michael Cullen’s tough talk turned out to be just talk, as by July of last year, National MP Murray McCully reported on a “tsunami of cronies” being appointed by Labour to quangos ahead of the general election. With established constitutional convention preventing governments from making appointments to boards and public bodies in the three months before an election, the Labour Government had gone into overdrive filling 140 board positions in just five weeks.[3]

Included in this rush of appointments was then Labour Party President Mike Williams, who was being rewarded with a directorship of the New Zealand Transport Agency. This added to his directorships with GNS Science, Genesis Energy, OnTrack and ARTA, all of which earned him a tidy $140,000 a year of taxpayer’s money.

Other appointments made at the time included those to The Growth and Innovation Advisory Board, which read like a veritable who’s who of left wing activism: NZ Council of Trade Unions President Helen Kelly, former UK Labour MP Brian Gould (also a director of TVNZ), and Deloitte’s chair, Nick Main, “who has been doing the Clark Government’s bidding over the Emissions Trading Scheme as chair of the Business Council for Sustainable Development”. They joined former Labour candidate David Shand on the Board, who also held positions on the Tertiary Education Commission, Meridian Energy and the Royal Commission into Auckland Governance.

Following her “voluntary retirement” from Parliament, former Labour MP Diane Yates was rewarded with four appointments - worth around $80,000 - on the Boards of Food Standards Australia New Zealand, Trust Waikato, the Waikato Institute of Technology, and Learning Media Ltd.

And the former Race Relations Commissioner, Gregory Fortuin was also generously rewarded by Labour with appointments to the boards of NZ Post, Kiwibank, the Crown Forestry Rental Trust, Transpower, Industry New Zealand, and ACC (which, at the time, was chaired by the former head of the Council of Trade Unions, Ross Wilson).

While the new Government has made changes to some of the Board positions since taking office, the Cabinet Manual still specifies the appointments “should achieve appropriate gender, age, geographical and ethnic balance”. It explains that the Government “is particularly committed to appointing Maori, Pacific peoples and women to government bodies to improve balance in representation. Ministers preparing papers on appointments are invited to seek nominations for vacancies on boards from the Ministers of Maori Affairs, Pacific Island Affairs and Women's Affairs. Te Puni Kokiri and the Ministry of Women's Affairs have databases of suitable candidates that should be consulted, and the Ministry of Pacific Island Affairs is able to suggest suitable candidates.”[4]

With ACC having recently announced what has been described as the biggest corporate loss in New Zealand’s history at $4.8 billion, it is vitally important that people are appointed to government boards on merit. That means the priority should be skill and expertise, not gender and race. However, the reality is that since we have just had nine years of Labour’s politically correct focus on ethnic and gender considerations rather than merit, not only should all boards and appointments, go under the microscope, but so too should departments and ministries.  

In fact, in this time of economic constraint, Dr Greg Clydesdale, this week’s NZCPR Guest Commentator - an economist and senior lecturer in the Department of Management at Massey University - believes that a number of government agencies operating as tax-payer funded lobby groups, are long past their used-by date. He explains, “The National government is now considering areas where they can reduce government expenditure.  I would like to draw attention to a class of government departments that have been created with the intention of maximizing welfare for certain groups of New Zealanders.  These departments have admirable goals which they aim for by providing information and policy advice.   They have now been in existence long enough to give us an idea if they have been successful in achieving their goals, or have they just become tax-payer funded lobby groups”.

In his article Dr Clydesdale focuses on the Ministry of Women’s Affairs, the Ministry of Pacific Island Affairs, and the Ministry of Ethnic Affairs. He explains, “These departments have many things in common.  First, they are created in the belief that their existence will solve social and economic problems, but have failed to do so.  Second, the continued existence of these problems is used as a justification for these departments to get tax payer money.  Third, their role of advising the government places them in an advocacy role which is too frequently not neutral.  This puts them in the role of tax-payer funded lobby groups.”

Back in July, John Whitehead, the Secretary of the Treasury, stated that some $40 billion of the government’s $65 billion budget could be better spent. He was essentially calling for massive cuts in government expenditure. Clearly this makes sense in the current economic climate – New Zealand is massively over-governed and this is an appropriate time to reduce government spending down to a level that will drive growth and prosperity rather than impede it.

To that end, Dr Clydesdale has pointed to taxpayer funded lobby groups as a good place start, but in addition, resurrecting Sir Geoffrey Palmer’s great quango hunt would certainly yield bountiful results. However, to hunt quangos, you must know what they look like, so in order to assist readers who may wish to advocate for an open season on quangos, I have visited Schedule 4 of the Public Finance Act 1989 - where most of them lurk - and listed them below![5]   

Public Finance Act 1989 Fourth Schedule Organisations:

Agricultural and Marketing Research and Development Trust; Asia NZ Foundation; Auckland Transition Agency; Leadership Development Centre Trust; The Maori Trustee; National Pacific Radio Trust; NZ Fast Forward Ltd; NZ Fish and Game Council and Fish and Game Councils; NZ Game Bird Habitat Trust Board; NZ Government Property Corporation; NZ Lottery Grants Board; Ngai Tahu Ancillary Claims Trust; Pacific Co-operation Foundation; Pacific Island Business Development Trust; Research and Education Advanced Network NZ; Reserves Boards; Road Safety Trust; Sentencing Council; Accident Compensation Corporation; Accounting Standards Review Board; Agricultural Pests Destruction Council; Alcohol Advisory Council; Area Health Boards; Arts Council; Asia 2000 Foundation; The blood transfusion trust; Career Development and Transition Education Service; Careers Services;  Casino Control Authority; Children's Commissioner; Crown health enterprises; District health boards; Early Childhood Development Board; Earthquake Commission; Electoral Commission; Electricity Commission; Energy Efficiency and Conservation Authority; Environmental Risk Management Authority; Families Commission; Fish and Game Councils; Government Superannuation Fund Authority; Guardians of NZ Superannuation; Health and Disability Commissioner; Health Funding Authority; Hillary Commission for Sport, Fitness, and Leisure; Hospital and health services; Housing NZ Corporation; Industry NZ; International Year of the Family Trust; Land Transport NZ; Land Transport Safety Authority of NZ; Learning Media Ltd; Legal Services Agency; Management Development Centre Trust; Māori Trustee; Maritime Safety Authority of NZ; Mental Health Commission; NZ Antarctic Institute; NZ Blood Service; NZ Fast Forward Ltd; NZ Fish and Game Council; NZ Game Bird Habitat Trust Board; NZ Milk Authority; NZ Sports Drug Agency, NZ Symphony Orchestra Ltd; NZ Symphony Orchestra; NZ Teachers Council; NZ Trade and Enterprise; NZ Trade Development Board; NZ Venture Investment Fund Ltd; Ngai Tahu Ancillary Claims Trust; Noxious Plants Council; Office of Film and Literature Classification; Pharmaceutical Management Agency; Power Company Ltd; Power Company Ltd; Public Health Commission; Public Trust; Queen Elizabeth the Second Arts Council of NZ; Race Relations Conciliator; Radio NZ Ltd; Regional health authorities; Residual Health Management Unit; 1993 Suffrage Centennial Year Trust; The Retirement Commissioner; Residual Health Management Unit; Sentencing Council; Skill NZ; Social Workers Registration Board; Special Education Service; Specialist Education Services Board; Sport and Recreation NZ; Takeovers Panel; Teacher Registration Board; Te Reo Whakapuaki Irirangi; Television NZ Ltd; Tertiary Education Commission; Tertiary Research Board; Transfund NZ; Trustees of the National Library; Valuation NZ Ltd; Wellington International Airport; Maritime NZ; Maritime Safety Authority of NZ; Research and Education Advanced Network NZ Ltd.

Read more from New Zealand Centre of Political Research.

FOOTNOTES:
All articles can be found on the NZCPR RESEARCH PAGE
1. Jane Clifton, The Great PC Hunt
2. Colin Espiner, It’s time for another quango hunt
3. Murray McCully, Tsunami of Cronies
4. CabGuide, Candidates for Appointments
5. Public Finance Act 1989, Fourth Schedule

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