Assessing government’s fitness for purpose in New Zealand

Dr Bryce Wilkinson
Insights Newsletter
31 August, 2018

New Zealanders have come to rely a great deal on government. The proportion of national income taken by taxes more than quadrupled in the 20th century and the number of Parliamentary Acts increased 50-fold.

How good a job is it doing? Could it achieve more with the same resources, or do as well with fewer?

I am assessing this issue in a report the New Zealand Initiative will release in mid-September.

To examine the issue should not be controversial. Government performance matters. Unnecessary waste in government harms New Zealanders. It does so regardless of one’s ideology. No one would prefer worse outcomes to better ones.

Some preach complacency about this issue, seeking to defend the status quo.

To be fair, they can point to the high self-assessed wellbeing of most New Zealanders. They can also point to New Zealand's top tier world rankings in many important respects. For example, we enjoy greater economic freedom than almost anyone else. Our laws and regulations can't be all bad.

Some also assert that New Zealand is a low tax country. And so it is – relative to many European countries.

Such observations invite the complacent and dismissive conclusion – “nothing to see here, move on.”

Yet averages can conceal deep problems. Self-assessed well-being is low for a significant proportion of New Zealanders.

Our news media daily record public dissatisfaction with government. Housing affordability and quality are ongoing concerns. So are crime rates, child abuse and neglect, inequality, poverty, hardship and low wages.

Likewise, there are weak aspects within our high overall international rankings. Our report focuses on aspects in the “could and should be doing better” category. One example is a humiliating ranking for the quality of our judicial processes. We should not be too proud to learn from others. In this case it looks like Australia.

There is further reason for rejecting complacency. One cannot establish that one is slim by comparing oneself to the most obese.

The claim that New Zealand is a low tax country does exactly that. European countries are the high tax outliers on the world stage. New Zealand is close to being one too.

On the evidence, government could and should be doing better in some important areas. We do not see this finding as controversial. But we look forward to debating the issues regardless. 

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