Celebrating Sisyphean Labours

Dr Eric Crampton
Insights Newsletter
28 September, 2018

Today we offer thanks and praise to those undertaking the most thankless of bureaucratic tasks, forever rolling good policy advice uphill only to watch it roll back down again, seemingly ignored. The country would be far worse in the absence of their labours.

This week, MBIE released its advice about the coming ban on new offshore petroleum exploration permits.

The government did not make it easy for MBIE to do the work. Time limits imposed by the desire to legislate in haste, and constraints imposed by the government around MBIE’s consultation process, meant the advice came with more limitations and uncertainty than we might expect in more normal policy processes.

MBIE knew the advice would be unwelcome. The government committed to the policy without any serious consideration of the consequences. Any subsequent demonstration that the costs were substantial would be at least somewhat embarrassing.

The Regulatory Impact Statement suggests the Crown will lose out on royalties and tax revenue through 2050 with a present value of $7.9 billion (at a 3% discount rate) or $1.8 billion (at a 10% discount rate). As the revenue projections are far from certain, Treasury’s generally recommended 6% discount rate might have been a better choice – but MBIE’s choices may here have been constrained.

MBIE also warned that the policy could even increase global emissions, although that would depend on carbon policies in the countries to which production might shift.

On Wednesday morning, the Deputy Prime Minister lashed out at MBIE on Radio New Zealand, criticising the broad range of MBIE’s estimates. Sisyphus had rolled his rock uphill, to the jeers of its government master, then got to watch the rock tumble back down again.

Last week, Treasury’s Sisyphean labours in advising government about the proposed Fair Pay Agreements were released under the Official Information Act.

Treasury warned that there was no basis for thinking the Agreements might do anything to improve wages or productivity, and that international experience shows how easy it is for these kinds of arrangements to go badly wrong.

Even if government policy does not change with either bit of unwelcome advice, producing it was far from futile.

Voters are better informed about the quality of these policies and will hopefully weigh them against the good this government does in other areas.

Just imagine how much worse policy would be if the government knew no independent civil service advice about policy consequences would be forthcoming.

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