|
Skip to comments |
Skip to comment form |
 Skip
to this weeks poll |
Send to friend
11 November 06
Big
government is the problem,
not the solution.
Printer
friendly version (PDF) 
View >>>
It
was a Professor of History at the University
of Singapore, Cyril Northcote Parkinson, who first developed the law that
explains the relentless growth in public sector bureaucracies.
Parkinson’s Law states that work expands so as to fill
the time available for its completion.
Through
his extensive experience with the British Civil Service, Prof
Parkinson observed that in spite of the decline of Britain's ‘overseas empire’, the number of employees at the
Colonial Office continued to grow. That line of inquiry lead
to the finding that bureaucracies expand relentlessly at a
rate of between five to seven percent a year
"irrespective of any variation in the amount of work (if
any) to be done".
He
believed there were two key reasons for bureaucratic growth.
The first is that officials do everything in their power to
avoid rivals, employing multiple subordinates rather than
equals or someone better, in order to retain their position in
the hierarchy. And secondly he believed that officials focus
their efforts on making work for each other. (Click here to
read his article which first appeared in the Economist in 1955
view
>>>)
In
his new book “Out of the Red”, Richard Prebble, this
week’s NZCPD Guest Commentator, provides a fascinating
insight into the
New Zealand
public service as he shares his experiences of being appointed
as the first Minister of State-Owned Enterprises back in 1987.
His challenge was to turn around twenty-one government
businesses, from loss-making “disasters”, into profitable
corporations. In the end, this remarkable public sector
transformation was achieved in just three years (click to read
his article >>> … and to
order his new book).
Richard
describes the public service mindset in this way: “The
bureaucrats who propose the rules have as their incentives to
make more and more rules that require more and more
bureaucrats”. He gives a poignant example: “The general
manager of New Zealand Rail, when he was losing one million
dollars a day, was the third highest paid civil servant. Why?
Because he had so many staff. The more he employed, the more
he was paid. If some general manager had reduced staff to a
third and doubled the freight being carried at lower rates, a
pay cut would have been his reward”.
When
we look at the present state of the public service, we can see that Parkinson’s Law is alive and well. Back in 1999, when
Labour was first elected, there were 29,000 public servants.
Today there are more than 40,000. With such a massive
bureaucratic army focused on generating new laws and
regulations to better control our lives, it is little wonder
that the average Kiwi is feeling increasingly over-governed as
each day goes by.
The
pay in the public service is not too shabby either. There are
2,651 public servants who earn over $100,000, their 32 Chief
Executives earn between $200,000 and $500,000, and 13 other
state employees, like the Commissioner for the Environment,
earn over $200,000. The top earner was the former Commissioner
of Police whose remuneration was between $680,000 and $690,000
a year.
Few
would disagree with the view that "… state power has been on
the rise since the year 2000, reversing the trend during the
1990s towards a dominant market. Many signs point towards
this: an expanding state budget, a growing number of
government bureaucrats, increasing and now overwhelming state
ownership of national … resources, growing engagement by
government in the running of large private businesses, a
stalling of reforms designed to reduce bureaucratic tape and
inspections, and the control by the government over much of
the television media…"
In
particular, with government spending having risen to 42
percent of GDP (in comparison to Australia’s 35 percent) and
tax surpluses having reached a record $11.5 billion - the
equivalent of $8,000 per household - readers could be excused
for thinking that the above quote is about New Zealand. It’s
not. It is about Russia! The article “State versus Market: Forever a Struggle?”
by Johannes Linn of the Brookings Institution, is a rather
grim indicator of just how far down the socialist path New
Zealand has strayed under this Labour government (to read the
article click
>>> ).
The
point is, that there are a myriad of examples from all around
the world to show that the way to make a nation prosperous and
to increase the wealth of citizens, is not through a bloated
bureaucracy delivering more and more central planning and
regulatory controls, but through lower taxes, a smaller
government, and lightly regulated markets.
We
need to continually to remind ourselves that low taxes and
productive businesses are what really make a country
prosperous. That is why Labour’s on-going claims that tax
cuts are unaffordable, when the tax surpluses persist in
exceeding forecasts by hundreds of millions of dollars a
month, are disingenuous.
If
our goal is to raise the living standard of every New
Zealander in order to improve our quality of life, then our
priority must be to improve productivity throughout the
economy. It is only a productive economy that can pay high
wages, and generate a first world quality of life.
The
key to achieving this goal is to ensure that
New Zealand
businesses are as productive as they can be. This can be
achieved by lowering company tax, reducing compliance costs,
and creating a more flexible labour market. It also means
ensuring that the current critical shortage of labour, that
has now become such a serious constraint on national
productivity that the government is planning to bring in
unskilled migrant
Pacific
Island
workers, is addressed.
With
this week’s Household Labour Force Survey indicating that
over 83,000 people are unemployed and looking for work, it is
beholden on the government - who has a monopoly in running the
welfare services - to ensure the unemployed take the available
jobs. A failure to do this will not only compromise the
productivity of those businesses that need workers, but it
will prevent New Zealand
from achieving the high living standards that we so urgently
deserve.
The poll this week asks whether you
believe that increasing the core public service improves our
quality of life?
Click
here to vote >>>
Printer
friendly version (PDF)
View >>>
Skip to top |
Skip to comment form |
Skip
to this weeks poll |
Send to friend
Your
Comments:
Reader's
comments will be posted on the NZCPD Forum page click
to view >>>.
Skip to top |
Skip to comments | Skip
to this weeks poll |
Send to friend
To
leave a comment:
NOTE: The forum moderator
reserves the right to edit material that may be objectionable
or offensive.
Skip to top |
Skip to comments | Skip
to this weeks poll
Skip to comment form
Send this
page to a friend:
|
