If for some ghastly reason you wanted to hit two birds, and you had two stones, trying to hit both birds with each stone would be pretty silly. You can throw both stones, so why not target things a bit more closely? Keep it simple. It will work better.
Too often, government demands that each of its policies hits far more than two birds.
American pundit Ezra Klein called the general problem ‘Everything-Bagel liberalism”, referencing a movie in which too many tasty toppings added to a bagel created a black hole “from which nothing, least of all government’s ability to solve hard problems, can escape.”
In short, too many American states tried to make each policy area try to solve every policy problem – and made it far harder to solve any of them. Requiring housing developers to load a pile of other objectives into their housing developments stopped anything from being built, for example.
The omnicause to fight the omnicrisis created an omnishambles. Because a shambles is all that you get when each thing has to try to solve everything and each stone has to hit every bird.
Klein’s recent book with Derek Thompson, Abundance, covers the problem in more detail; Danyl MacLauchlan’s recent review in The Listener superbly applied it to a range of New Zealand policy problems.
I want to focus on just one: government procurement.
Government procurement should be about only one thing: getting the most cost-effective supply of whatever the government is trying to purchase.
Some procurement is reasonably straightforward. When the police commission new cruisers, they need to weigh whole of life costs against performance. It isn’t that different to the decision private companies make when buying their own fleets.
In other areas, like social service delivery, the simplest version of the task can get remarkably complicated, even without loading up the bagel.
And in the 2000s and 2010s, that’s basically what government procurement was about: trying to figure out the best ways of getting value for money when the government needs to buy things.
Iterations of the rules brought greater focus on whole-of-life costs. They also tried to make sure local suppliers could bid on projects: transparency and open-access rather than preference.
Value-for-money is a good guiding principle, especially when we’re talking about $51 billion in annual procurement spending. If government cannot be trusted to deliver value for money, it may not be trusted to deliver in important areas at all.
New Zealand thus avoided problems like those in Canada, where insistence on making defence procurement also be about regional economic development has been to the substantial detriment of its navy.
Those neutral, value-for-money rules changed in 2019 when the Labour-led government began loading up the bagel with broader outcomes. Procurement would have to consider environmental, social, and cultural benefits; encouraging opportunities for targeted groups like Māori, Pasifika and women; and other toppings like waste reduction.
Each of those goals may well be worthy. But environmental goals should be achieved through environmental policy that applies broadly. They shouldn’t be loaded onto the government procurement bagel. Neutral rules would apply regardless of whether government or business is doing the purchasing.
Government agencies will be allowed to purchase petrol or diesel vehicles if they have the lowest whole-of-life cost of meeting requirements. They won’t be required to purchase recyclable office supplies. And living wage mandates will be gone as well.
But other toppings remain and, strangely, are being given more weight.
The 2019 rules had a lot of things that procurement must consider. The bolding here mirrors the bolding in the documents. Agencies are supposed to pay attention to must. The bold letters help.
But those rules did not say how to weigh the various things that must be considered. With a lot of musts to choose from, agencies had leeway.
The new proposed Rule 8 requires at least a 10% weighting on “economic benefit to New Zealand” considerations like paying taxes in New Zealand, creating export opportunities for NZ goods and services, using NZ businesses, including SMEs, regional businesses and Māori and Pacifica businesses in delivering goods and services – and more.
Every item in Rule 8 is an everything-bagel topping. Together they make government less effective in purchasing goods and services, which makes government less effective overall.
They also violate the spirit of trade agreements requiring governments to play fair in contracting. Many agreements have carve-outs allowing preference for Māori firms under Treaty of Waitangi exceptions, so those parts are straightforward. And I expect that the government’s trade lawyers will have found a way to thread the needle otherwise.
Removing this part of the proposed procurement rules would help demonstrate New Zealand’s ongoing support for not just the letter of its trade agreements, but also their spirit.
And it would help government procurement hit its target, leaving other targets for other policies.
To read the full article on The Post website, click here.