Volume 14 – Issue 2 – May 2018

Free and Frank Advice and the Official Information Act: balancing competing principles of good government Andrew Kibblewhite and Peter Boshier A New Approach to Environmental 3 Valuation for New Zealand Grease or Sand in the Wheels of Democracy? Peter Clough, Susan M. Chilton, The market for lobbying in New Zealand Michael W. Jones-Lee and Hugh R.T. Metcalf 50 Thomas Anderson and Simon Chapple 10 Delivering on Outcomes: the experience The Ardern Government’s Foreign of Ma-ori health service providers Policy Challenges Heather Gifford, Lesley Batten, Amohia Boulton, Robert Ayson 18 Melissa Cragg and Lynley Cvitanovic 58 Change and Resilience in New Zealand Aid Cold New Zealand Council Housing under Minister McCully Getting an Upgrade Jo Spratt and Terence Wood 25 Lara Rangiwhetu, Nevil Pierse, Helen Viggers and Reversing the Degradation of New Zealand’s Philippa Howden-Chapman 65 Environment through Greater Government ‘Unfair and discriminatory’: which regions Transparency and Accountability does New Zealand take refugees from and why? Murray Petrie 32 Murdoch Stephens 74 Funding Climate Change Adaptation: ICTs as an Antidote to Hardship and the case for a new policy framework Inequality: implications for New Zealand Jonathan Boston and Judy Lawrence 40 Catherine Cotter 80 Editorial – Free and Frank Advice and the Official Information Act This issue of Policy Quarterly leads with an important becomes known early in the process that they are under co-authored article on the challenge of balancing two active consideration. Volume 14 – Issue 2 – May 2018 of the fundamental constitutional principles embodied In short, ‘speaking truth to power’, while in the Official Information Act (OIA). The first is that critically important, entails risks. Hence, a degree Policy Quarterly (PQ) is targeted at readers governments should be open and transparent, thereby of confidentiality is essential if officials are to have in the public sector, including politicians and enabling effective democratic participation and political the freedom and confidence to tender potentially their staff, public servants and a wide variety accountability. The second is that government officials contentious advice – and if ministers are to be willing to of professions, together with others interested should provide their ministers with ‘free and frank’ receive such advice and take it seriously. in public issues. Its length and style are advice (i.e. advice that is well-informed, empirically Has New Zealand struck an optimal balance intended to make the journal accessible to robust, honest, non-partisan and, when appropriate, between openness and confidentiality? And are officials busy readers. hard-hitting), thereby ensuring that decisions are providing advice that is sufficiently free and frank? Submissions: The journal welcomes based on robust information and analysis. The Such questions are not easy to answer. The contributions of about 4,000 words, written available evidence is patchy and some of it conflicts. On on any topic relating to governance, public article in question is doubly important because of the policy and management. Articles submitted authoritative positions held by the two authors: Andrew the one hand, there have been ongoing concerns over will be peer reviewed. Please submit articles Kibblewhite is the Chief Executive of the Department multiple governments that ministers too often thwart to the Editor: [email protected]. of Prime Minister and Cabinet and Head of the Policy the intentions of the OIA by withholding departmental Although issues will not usually have single Profession for the public service, while Judge Peter advice with which they disagree or which might prove themes, special issues may be published from Boshier is the Chief Ombudsman. That they have joined politically embarrassing if publicly released. On the time to time on specific or general themes, forces to provide insights and commentary on an issue other hand, the case is often advanced that the OIA perhaps to mark significant events. In such that goes to the heart of governmental integrity is most has had a ‘chilling effect’ on the provision of free and cases, and on other occasions, contributions welcome. frank advice. Officials, it is argued, have become too may be invited from particular people. While occupying different institutional roles, the compliant and exercise undue self-censorship; they Subscriptions: The journal is available in two authors agree on several basic considerations: often lack the resolve to ‘speak truth to power’. PDF format on the Institute for Governance first, the principles of governmental transparency and Andrew Kibblewhite, while acknowledging these and Policy Studies (IGPS) website: https:// the provision of free and frank advice are both critically concerns, maintains that ‘much free and frank www.victoria.ac.nz/igps/policy-quarterly important; second, the two principles are sometimes advice is still given by officials – the art is far from Readers who wish to receive it by email in tension – hence, neither can be fully realized across dead’. The problem, he contends, lies in a failure of should register as PQ subscribers igps@vuw. all policy areas without some loss to the other; third, officials to document their advice. But any such lack ac.nz. This service is free. for good government a balance must be struck and this of documentation is, presumably, related to a desire For all subscription and membership requires the exercise of wise judgment; and fourth, in to minimize political risk: after all, oral advice, while enquiries please e-mail [email protected] or striking such a balance it is possible to identify some covered by the OIA, is easier to conceal and more post to Institute for Government and Policy useful criteria. For instance, there is generally a stronger difficult to ‘release’. Interestingly, the results of a survey Studies, P.O. Box 600, Wellington. case for protecting the confidentially of advice provided conducted in 2017 by my colleague at Victoria University Electronic Access: The IGPS directs by officials at an early stage in policy deliberations than Chris Eichbaum, together with Richard Shaw of Massey interested individuals to its website: that tendered towards the end of the process. University, indicate that a substantial number of public www.igps.victoria.ac.nz where details of the What lies behind the tension between transparency servants believe that the appetite for providing free and Institute’s publications and upcoming events and hard-hitting advice? In many ways the problem has frank advice is not what it should be. Such results are can be found. to do with political risk. A brief explanation must suffice. of concern. Permission: In the interest of promoting Democratic accountability requires a high degree What, then, is the way forward? Hopefully, the debate and wider dissemination, the of governmental openness. This includes parliament recent amendments to the Cabinet Manual and the IGPS encourages use of all or part of the and the public having access to official papers and State Sector Act will help strengthen the incentives articles appearing in PQ, where there is no documents, not least those which contain policy for officials to provide free and frank advice – and element of commercial gain. Appropriate advice to ministers from public officials. Only if such for ministers to receive such advice. Likewise, the acknowledgement of both author and source information is publicly available is it possible to new principles-based guidance offered by the Chief should be made in all cases. The IGPS ascertain the basis upon which ministers have made Ombudsman – and summarized in his contribution to retains copyright. Please direct requests their decisions and assess the quality of the evidence Policy Quarterly – will reduce the uncertainties over for permission to reprint articles from this and advice that informed their judgments. Citizens also how the principles embodied in the OIA should be publication to [email protected]. need such information sufficiently early in the policy- interpreted. Editor: Jonathan Boston making process in order to participate effectively in Ultimately, however, much depends on the ethical Editorial Board: Barbara Allen, Guy Beatson, democratic deliberation. norms that guide our political leaders and those who Roger Blakeley, David Bromell, Simon Against this, government officials may be reluctant serve them. While managing political risk is important, Chapple, Jo Cribb, Girol Karacaoglu, Gerald to provide ‘free and frank’ advice – and/or ministers the paramount duty of government officials is to protect Minnee, Anneliese Parkin, Mike Reid and may be deterred from seeking it – if such advice is likely the public interest and safeguard our democratic Andrea Schollmann to become public, all the more so if it will be released institutions. Accordingly, as Dr Ken Henry, the former ISSN: 2324-1098 (Print) soon after its provision. To start with, officials will be Secretary to the Treasury in Australia, once observed, ISSN: 2324-1101 (Online) mindful of the risk of political embarrassment – and officials must provide the government with advice that Volume 14, Issue 2 – May 2018 Copy Editor: Rachel Barrowman hence possible electoral damage – if information is both responsive (i.e. advice that ministers need and Design & Layout: Aleck Yee is released highlighting significant disagreements want to hear) and responsible (i.e. advice that is needed Cover Photography: Aleck Yee between ministers and their advisers on important but may not be welcomed or encouraged, and indeed Production: Alltex Design policy matters. Any such embarrassment will depend, at times actively discouraged). Responsible advice Proof Reader: Vic Lipski of course, on the extent to which the politicians requires a strong moral compass – all the more so in an involved have confidence in, and a sound basis for, era of ‘fake news’, disinformation and the ‘war on truth’. their own judgment. A related risk is that controversial policy options may be rendered ‘dead in the water’ if it Jonathan Boston Andrew Kibblewhite and Peter Boshier

Free and Frank Advice and the Official Information Act: balancing competing principles of good government t may seem novel that the chief Asbtract ombudsman and the chief executive of Concern exists that New Zealand hasn’t struck the right balance Ithe Department of the Prime Minister between two potentially competing principles of good government: and Cabinet are writing an article together; however, this demonstrates our shared officials should provide free and frank advice to ministers, and the commitment to good government. For public should have opportunities to participate in decision making some time we have been discussing how to balance two principles that contribute to and hold the government to account. Steps we have taken to address good government. The first is that public this include: strengthening constitutional underpinnings for free servants should provide free and frank and frank advice (Cabinet Manual changes and issuing expectations advice to ministers. The second is that the public should have timely access to for officials); a work programme to improve government agency official information that enables them to practice in relation to the Official Information Act; and the Office participate in government decision making and hold the government accountable. of the Ombudsman reducing uncertainty about when advice can be We both recognise the potential for withheld by issuing new principles-based guidance and providing tension between these two principles. If more advisory services. public servants give advice that is less than free and frank because of concerns about Keywords free and frank advice, stewardship, official information, its public release, there is a risk to good Official Information Act, expectations government. This has led us to ask: to what extent can and should New Zealand’s Andrew Kibblewhite is the Chief Executive of the Department of Prime Minister and Cabinet and the public servants expect their advice to Head of the Policy Profession for the public service. Judge Peter Boshier is the Chief Ombudsman. ministers to remain confidential? In this

Policy Quarterly – Volume 14, Issue 2 – May 2018 – Page 3 ‘Free and frank advice’ and the Official Information Act: balancing competing principles of good government article we explore this and related questions addition, chief executives are responsible And finally, we have the unique from the different perspectives of our for ‘the stewardship of the department advantage of providing advice from the respective offices. or departmental agency, including of its privileged position of being on the From the Prime Minister’s Department medium- and long-term … capability, and inside. We see the shifting sands that perspective (and that of head of the policy capacity to offer free and frank advice to governments are navigating, how much profession), free and frank advice is successive governments’ (section 32(1)(c)). room they have to manoeuvre, how crucial to government making good In my role as head of the policy stakeholders are reacting, what impacts decisions, and achieving good outcomes profession, I am working to build a the media narrative is having on their for those who live in New Zealand. If common understanding of what this choices, and we have the chance to concern about release of advice under the advisor role means for public servants. position our advice so it can be most Official Information Act (OIA) Some of the points I made in a series of effective. discourages officials from providing free speeches about free and frank advice For these reasons, an impartial and and frank advice – or ministers from between 2015 and 2017 (Kibblewhite, 2015, politically-neutral public service is one seeking it – we need to address that. But 2016) bear repeating: of the strengths of our system of we also need to use all the other means parliamentary democracy: it combines available to us to foster free and frank For the record, I’m not suggesting that deep expert advice with democratic advice and open government. officials are the only experts who advise responsiveness.

In the policy context I believe the State The Cabinet Office revised the Cabinet Sector Act stewardship provisions also give public servants a duty to look ahead and Manual in 2017 ... [making] specific provide advice about the future challenges and opportunities New Zealand faces. This reference to the duty that ministers includes at times offering hard-hitting have, as the recipients of free and frank advice to the government of the day that the current policy mix might not be advice, ‘to give fair consideration and working, or drawing attention to emerging factors that may require existing goals to due weight to free and frank advice be refocused or replaced.1 provided by the public service’ ... Providing advice that is free and frank about immediate and longer-term issues is a demanding ask – and it is an art as much as a science. So it is important that we From the chief ombudsman’s per- ministers, or that we are the only voices understand what it means to be both free spective, the Official Information Act needs they should listen to – far from it. But and frank as a policy advisor. to operate with as much certainty as our advice is important for a number possible. The subject of ‘free and frank of reasons. First, we are trained in how The ‘free’ in free and frank isn’t the same advice’ and when it might be protected or to offer analytically robust, practical, thing as free speech. Public servants are not is a difficult and uncertain matter for apolitical advice to ministers on entitled to their opinions, but it’s not chief executives and ministers. Creating as achieving their goals. Our responsibility part of their day job to share that with much certainty as possible is desirable, is to seek the best outcomes, not the anyone, anywhere. The free part of free because that promotes good government. political advantage of a party, faction, and frank means that public servants or particular sector of society. offer their best advice freely to decision Providing ministers with free and frank Added to that, the best advisors makers, without withholding any key advice – Andrew Kibblewhite build relationships with stakeholders evidence or information. Free also Advising ministers has long been a crucial inside and outside of decision-making means we shouldn’t second guess what public service role in countries with circles so we are well informed about ministers will want to do – it’s about Westminster-style systems of government. how different choices will play out in telling ministers what they need to hear, Our own State Sector Act 1988, as the real world. And we are a professional, not what we think they want to hear. revised in 2013, legally defines the role permanent cadre of advisors. We’ve Frank means we don’t pull our of public servants as ministerial advisors. seen many policies implemented before, punches with ministers. We are honest The act refers to the advisor role in two sometimes successfully, sometimes less about where we think the pitfalls and clauses. Chief executives continue to be so. We’ve learned lessons when policies risks are. However frank doesn’t mean responsible to the appropriate minister implemented against our advice have foolish. As in any relationship there are for ‘the tendering of free and frank succeeded and policies we’ve backed smarter ways of saying things – we need advice to ministers’ (section 32(1)(f)). In have failed. to give the hard truths in the most

Page 4 – Policy Quarterly – Volume 14, Issue 2 – May 2018 constructive and palatable way possible. · delivers any hard truths in the most · improving access to official (Kibblewhite, 2016, p.4) palatable way possible; and information by publishing responses · covers implementation issues. (State to requests on government websites Fostering free and frank advice and better Services Commissioner, 2017a) and developing principles for more public access to official information – We have an active programme proactive release; and Andrew Kibblewhite underway to inform public service advisors · supporting agencies to deliver by We have taken a number of steps, over the last at all levels about the expectations about developing appropriate guidance and few years, to bolster officials’ understanding free and frank advice and policy training. (Open Government of their obligation to provide free and frank stewardship, with the policy project team Partnership New Zealand, 2016, p.11) advice and ministers’ understanding of their most recently holding forums for policy The steps outlined above underscore obligation to receive it. The Cabinet Office managers across the public service on the the commitment of the public service to revised the Cabinet Manual in 2017 so that subject. I will continue to do all I can to lift our game on the transparency of it now, for the first time, makes specific ensure that officials understand what is government and in particular the OIA. We reference to the duty that ministers have, expected of them, and are supported to are working to put our house in order. To as the recipients of free and frank advice, deliver on those expectations. genuinely improve the environment for ‘to give fair consideration and due weight to I am also conscious of the need to providing robust free and frank advice free and frank advice provided by the public strike the right balance between enabling these steps need to be coupled with greater service’ (section 3.8). The state services commissioner, Peter Hughes, and I also took steps last year to The guiding principle [of the Official strengthen public service and ministerial expectations regarding the supply of free Information Act 1982] became and frank advice and policy stewardship. A working group led by the policy project availability: official information shall be team developed an expectations document made publicly available unless there is which was formally issued by the state services commissioner in December 2017, good reason to withhold it. along with a ‘frequently asked questions’ supporting document (State Services Commissioner, 2017a, 2017b). We engaged with ministers before finalising the confidential consideration of free and certainty about the circumstances under expectations, and the prime minister has frank advice, and enabling the public to which free and frank advice can be held in expressed her strong support for them. access official information to support confidence. Advice does not occur in a The new expectations document makes open government. The commitment vacuum, and at times public servants can it clear that public servants are expected to made in the government’s Open be affected by the extent to which they can provide advice that: Government Partnership National Action rely on their candid advice remaining · identifies the nature, scale and Plan 2016–18 to improve government confidential, particularly where they are significance of the policy issue or agency practices around requests for expressing different views from those of opportunity (with supporting official information under the Official the government. This is a subject the chief evidence); Information Act is another important ombudsman and I have discussed at length · is politically neutral while also being development. The State Services over the last year. aware of relevant political contexts; Commission and the Ministry of Justice · recognises the historic, contemporary are leading the actions being taken to The policy settings that govern official and potential longer-term deliver on that commitment by: information – Peter Boshier dimensions or conditions; · ensuring that information about the In the original design of Westminster-style · is comprehensive, objective and OIA (how to make requests, etc) and government, public servants held a unique balanced to cover the range of responses to requests are easy to position as trusted and privileged insiders. options that address the issue(s); access on agency websites; The advice they provided was confidential: · is honest about where the · publishing OIA statistics (how many intended only for the eyes and ears of the opportunities, benefits, costs and requests, time taken to respond, etc); politicians they served. In New Zealand, risks of all options are, and about the · developing a clear statement of the Official Secrets Act 1951 sustained that limitations, assumptions and government policy on proactive position for over 30 years. The general rule information gaps in analysis; release of Cabinet papers and related was that official information should remain · is clear about any trade-offs involved material; secret unless there was a good reason for and which option(s) on balance are · developing a suite of consistent releasing it. This meant that public servants recommended; measures about OIA performance; could provide advice that challenged the

Policy Quarterly – Volume 14, Issue 2 – May 2018 – Page 5 ‘Free and frank advice’ and the Official Information Act: balancing competing principles of good government views of ministers, secure in the knowledge The second ‘good government’ reason a shortage of free and frank advice: ‘There that it was unlikely to end up on the front for withholding official information is to is now, in my view, far too much second page of the newspaper. A connection between maintain the effective conduct of public guessing by public servants of the political the Official Secrets Act and the Crimes Act affairs through the free and frank incentives on ministers – and too much made it a criminal offence to release official expression of opinions – section 9(2)(g)(i) pulling of punches in the provision of information without approval. of the OIA. This section applies where advice’ (Palmer, 2013, p.2). He pointed to The principle underpinning the Official release of the information would inhibit evidence supporting this from the research Secrets Act was turned on its head with the the future exchange of free and frank of Nicola White at the Institute of Policy passage of the Official Information Act opinions that are necessary for the effective Studies, published in the book Free and 1982. The guiding principle became conduct of public affairs. Frank in 2007. Nicola White concluded availability: official information shall be Both of the ‘good government’ reasons from her research that: made publicly available unless there is good to withhold free and frank advice are reason to withhold it. subject to a public interest test: namely, that there is now reasonable evidence that: The OIA identifies two good reasons the need to withhold information is not · blunt advice is offered less easily, for withholding official information that outweighed by the public interest in its and obfuscation and softer language constitutes free and frank advice release. There are two matters of public are widely preferred; (colloquially known as the ‘good interest that are particularly relevant here. · wide-ranging advice is restricted, with written documentation tending to stick to the safe middle ground and more adventurous I am also conscious of the need to strike thoughts being tested in discussion; the right balance between enabling · if issues are delicate or difficult, they are dealt with orally; confidential consideration of free and · many people working at the centre frank advice, and enabling the public or at sensitive levels of government work largely without creating to access official information to support records and, for example, will avoid email completely because of a lack open government. of any assurance that their comments could be protected; · documents that are clearly going to become publicly accessible tend to government’ provisions), in sections 9(2) The first is holding public servants to be written with that fate in mind, so (f)(iv) and 9(2)(g)(i). These provisions account for the advice they provide to the they do not contain anything that reflect the view of the Danks committee government, and holding ministers to could attract a headline or create a (whose recommendations led to the OIA) account for the decisions made on that story in itself – the ‘front page of the that ‘to run the country effectively the advice. The second is enabling public Dominion test’ is becoming a public Government of the day needs nevertheless participation in the development and service norm equal in status to ‘no to be able to take advice and deliberate on administration of laws and policies. The surprises for the minister’; the it, in private, and without fear of OIA balances the public’s right to know public record suffers from premature disclosure’ (Committee on with the government’s need to receive the incomplete documentation and Official Information, 1980, p.19). free and frank advice required to make from papers that are written for the The first of these ‘good government’ good decisions. record rather than for the moment; reasons for withholding official information · relationships can be damaged when is to maintain the constitutional convention Concerns about the practice of free and people, particularly ministers, protecting the confidentiality of advice frank advice – Andrew Kibblewhite perceive a group of officials to be tendered by ministers and officials – section In the last decade, a number of com- ‘writing for the record’ or ‘setting 9(2)(f)(iv) of the OIA. This section usually mentators have expressed concern that them up’ by creating paper trails; applies where the release of confidential despite the ‘good government’ provisions · dissection of the exact role of advice given to ministers or Cabinet would of the OIA, the presumption in favour officials and ministers in any overall hinder the orderly and effective conduct of of releasing official information has piece of government policy work or government decision-making processes. had unintended consequences for the decision-making can destabilise Generally this section of the OIA only provision of free and frank advice. relationships, and create intrigue provides grounds for temporarily In 2013, Matthew Palmer gave an out of the ordinary business of withholding the release of free and frank address to the Public Service Association supporting a politically responsible advice. and Fabian Society in which he pointed to executive; and

Page 6 – Policy Quarterly – Volume 14, Issue 2 – May 2018 · the fishbowl nature of working at will most usefully support the public’s difficulty for those who request and hold senior levels in the public service understanding of the policy decision. As official information (Law Commission, appears to have made it more discussed above, we have taken a number 2012, p.50). difficult to attract and retain staff. of steps to make sure officials understand There are two major contributions I (Wright, 2007, p.271, quoted in what is expected of them in this regard. can make in this area: Palmer, 2013, pp.2–3) I am, however, firmly of the view that 1. clearly stating my view – and therefore ‘hardening up’ is a necessary but not the lead I give to my office – on how the More recently there have been media sufficient condition. Ministers and senior OIA provisions relating to free and reports about the preliminary results officials also need to have confidence that frank advice should be applied. To from a questionnaire that Chris Eichbaum some advice – particularly early stage achieve this, I have recently published of Victoria University and Richard (often discretionary) advice that might detailed guides on the grounds for Shaw of Massey University distributed directly challenge policy settings or the withholding free and frank and through the New Zealand Institute of ideological priors of the minister – can be confidential advice to the government, Public Administration. They received given and received in confidence. While the and how they should be applied to 640 responses, with more than 80% free and frank grounds for withholding information generated in the public from individuals employed in the state advice offer some protection for this sort policymaking process (Office of the sector. More than half of the respondents (53%) indicated some agreement with the statement: ‘Public servants in 2017 are less likely to provide a minister with The [Official Information Act] has lately comprehensive and free and frank advice’ attracted attention related to whether (Eichbaum, 2017). In regard to reversing this trend, or not the act is effective, whether it is Matthew Palmer has expressed the view applied efficiently, and whether reform that we should ‘insist that Ministers, and public servants, harden up. If the job is to is required. give free and frank advice then that is what public servants have to do and Ministers have to like it.’ He envisaged this attitudinal change being achieved through leadership. of discourse, neither ministers nor officials Ombudsman, 2018a, 2018b, 2018c); ‘Both at senior political and senior have felt confident in how those grounds 2. making my office more available to bureaucratic levels, there would need to be will be applied. This uncertainty is officials faced with an official a formal acknowledgement that our system damaging for good decision making information request who are unsure of government and constitution values free because over time it has a chilling effect on whether the withholding of information and frank advice as an objective and that a the provision of free and frank advice. It is is justifiable. I want my office to be paucity of it is a problem’ (Palmer, 2013, to the great credit of the chief ombudsman known not just for investigation and p.6). that he has acknowledged the important recommendation, but also as a first My own experience is that much free role his office plays in creating certainty for stop for advice and guidance before a and frank advice is still given by officials – policy practitioners, and has taken steps as decision is made. the art is far from dead. But I do concede set out below. I am keen to achieve greater certainty, that we have become less diligent about and I think it can be reached on a principled documenting that advice, and Clarifying the application of the OIA’s ‘good basis. Of course, one should never prejudge documentation matters. Without it the government’ provisions – Peter Boshier the outcome of any complaint. But just as rigour of analysis is weakened through less The OIA has lately attracted attention with court work and litigation, it makes sense exposure to subsequent scrutiny. The basis related to whether or not the act is effective, for officials planning to adopt a particular of decisions can also become lost with the whether it is applied efficiently, and whether response to an OIA request to know what passage of time and the Crown’s ability to reform is required. For the most part, the they are heading into and what the outcome defend its decisions, if challenged by way provisions of the act are clear. However, might be. I have therefore instructed my of judicial review, is weakened. commentators have long recognised the office that we must be bold in giving that So what to do? I agree that Matthew elusive nature of clarity in relation to this clarity, while still preserving our ability to Palmer’s prescription – that officials and area of law (in sections 9(2)(f)(iv) and investigate fully if required, and deliver an ministers need to ‘harden up’ – is part of 9(2)(g)(i) of the OIA). For example, the opinion and make recommendations if we the remedy. Robust advice provided to Law Commission considered the ‘good think that an error has occurred. Over time, ministers on the merits of a proposal government’ grounds in its 2012 review this initiative should result in a reduced should first be given, then appropriately of the OIA, and recognised that they are need to make recommendations, as officials released – ideally proactively, at a time that among the grounds that cause the most better understand the circumstances in

Policy Quarterly – Volume 14, Issue 2 – May 2018 – Page 7 ‘Free and frank advice’ and the Official Information Act: balancing competing principles of good government which withholding free and frank advice is reference, and the development plan or I hope that my explanation of what is permissible. stages of policy development ahead appropriate at each stage in the process and A crucial element of good government (including timeframes for any public my reflections on the importance of the is the ability of a chief executive or their consultations and final decisions). beginning phase help to create the certainty staff to be able to give honest and fearless The third phase of the journey will that I am looking for. If it is less clear where policy advice on an issue to ministers at an involve reasonable certainty of the route in the continuum policy advice is at, early stage. Ultimately, the soundness of and likely destination. By this time I reasonable certainty can be instilled through the decision made (and converted into think the principles of participation in a candid discussion with my office to obtain policy and statute) may depend on an democracy should weigh heavily. This is an objective view on whether information initial robust analysis of what a problem is the chance for the public to know about can be protected at that time or not. thought to be and what the best solutions policy and contribute to its development. seem to be. This is a fundamental aspect of Disclosure of any firm options being Conclusions – Andrew Kibblewhite and Peter democracy and must not be lost. considered would usually fall within this Boshier For this reason, where discussion and phase. Detailed advice on the options Good government requires officials to be advice is at a very early stage – it is may require protection to enable the free able to provide free and frank advice to exploratory, or ‘blue skies thinking’, or and frank exchange of opinions and ministers in confidence. And it requires the public to have opportunities to participate in decision making and hold the We agree that the path to fostering government accountable for its decisions. Getting the balance right between these free and frank advice involves the chief two principles matters, as too much of the latter may result in less of the former, ombudsman and his office creating as and vice versa. Between us, we have been much certainty as possible on how the actively using any means in our power to foster free and frank advice, while also ‘good government’ provisions of the OIA encouraging open government. From inside executive government it are applied. has been necessary to strengthen the constitutional underpinnings that influence how free and frank advice is delivered and received. We have done this deliberately provocative – it ought to be orderly conduct of the decision-making through recent changes to the Cabinet protected. If that is not the case, the chilling process. However, a brief outline of Manual and by issuing formal expectations effect of the release of early stage free and options can usually be disclosed without for chief executives. Government agencies frank advice on the provision of such undermining those interests. This allows also need to get better at dealing with advice may undermine the integrity of this the public to participate in the decision- public requests for information in a timely decision process. making process by offering a contestable fashion. We both support the programme If I liken this approach to a potential stream of advice. of work underway to achieve that. journey with four phases, the first phase is Finally, at phase four, where the We agree that the path to fostering free alerting the minister that a journey may be journey is all but complete, there should and frank advice involves the chief needed, and indicating some possible be certainty that information will be ombudsman and his office creating as routes. It is impossible to say at this early released unless some wholly different much certainty as possible on how the stage whether the journey will actually take withholding ground can be established. ‘good government’ provisions of the OIA place, or if it does what route the journey The strong public interest considerations are applied. This greater clarity will be will take. If the minister indicates potential that favour disclosure would be provided by the new guides on those interest in embarking on this journey, the accountability and transparency of the provisions and the office’s better availability second phase is becoming clearer as to what decision on which option was chosen, the to give advice at the start – in both cases, the destination might be. advice provided and reasons why that being as thorough as possible about the During these early stages, advice is decision was made. relevant factors relating to this area of more likely to require protection on the So, when officials are considering how official information. basis that disclosure would prejudice the to apply the ‘good government’ withholding We hope our collective efforts to clarify future free and frank exchange of opinions provisions of the OIA to their free and expectations of officials and to improve necessary for the effective conduct of frank advice, they must always be able to certainty and confidence in the application public affairs. However, general illustrate where in a governmental decision of the OIA can enhance the appetites of information could be released at this time process information is being generated and both ministers and officials to receive and about the policy’s scope or terms of for what purpose. offer challenging stewardship advice – ‘blue

Page 8 – Policy Quarterly – Volume 14, Issue 2 – May 2018 skies thinking’ – that comes early in the We now wait with interest to see what of policies and services, and as enabling policy process. Our aspiration is that both impact these initiatives have on both the digital and other technologies emerge. requesters and the agencies and ministers provision of free and frank advice and the 1 The guidance on policy stewardship issued by the State who receive the requests can operate with release of official information to the public. Services Commissioner in December 2017 explicates increasing confidence. This will enable them We anticipate that the balance between the this understanding (State Services Commissioner, 2017a, 2017b). to increase their speed in handling requests two will continue to evolve, as citizens and disclosing information, or to know expect to be more involved in the design when withholding is more clearly justified.

References Committee on Official Information (1980) Towards Open Government: Office of the Ombudsman (2018c) Free and Frank Opinions: a guide to general report, December, Wellington: Committee on Official section 9(2)(g)(i) of the OIA and section 7(2)(f)(i) of the LGOIMA, Information Wellington: Office of the Ombudsman Eichbaum, C. (2017) ‘Free and frank advice fast disappearing’, Stuff, 8 Open Government Partnership New Zealand (2016) National Action Plan August, https://www.stuff.co.nz/national/politics/95499693/ 2016–18, Wellington: New Zealand Government chris-eichbaum--free-and-frank-advice-fast-disappearing Palmer, M. (2013) ‘The importance of free and frank advice from the Kibblewhite, A. (2015) ‘Free, frank and other F-words: learning the policy public service’, address to Rethinking Public Service, PSA/Fabian road code’, address to IPANZ Free and Frank Policy Advice seminar, 12 Society seminar series, 25 November August State Services Commissioner (2017a) ‘Acting in the spirit of service: free Kibblewhite, A. (2016) ‘Mastering the art of free and frank advice’, speech and frank advice and policy stewardship’, 13 December, Wellington: to IPANZ, 17 August, pp.1–2 State Services Commission Law Commission (2012) The Public’s Right to Know: review of the official State Services Commissioner (2017b) ‘Acting in the spirit of service: information legislation, report 125, Wellington: Law Commission frequently asked questions on free and frank advice and policy Office of the Ombudsman (2018a) The OIA and the Public Policy Making stewardship’, 13 December, Wellington: State Services Commission Process: a guide to how the OIA applies to information generated in the White, N. (2007) Free and Frank: making the Official Information Act 1982 context of the public policy making process, Wellington: Office of the work better, Wellington: Institute of Policy Studies Ombudsman Office of the Ombudsman (2018b) Confidential Advice to Government: a guide to section 9(2)(f)(iv) of the OIA, Wellington: Office of the Ombudsman

Policy Quarterly – Volume 14, Issue 2 – May 2018 – Page 9 Thomas Anderson and Simon Chapple

Grease or Sand in the Wheels of Democracy? The market for lobbying in New Zealand

Abstract What is the nature of the New Zealand market for political lobbying? hat is the nature of the market Is lobbying grease in the wheels of a well-functioning democracy for political lobbying in New WZealand? Is our lobbying – adding to overall societal efficiency – as its supporters suggest? grease in the wheels of a well-functioning Or is lobbying sand, wasting resources in buying redistribution to democracy – adding to overall societal the powerful and damaging the social fabric essential for a well- efficiency – as its supporters suggest? Or is lobbying sand in the wheels, by wasting functioning democratic mixed economy, as opponents of lobbying resources in buying redistribution from believe? And, should we regulate lobbying in New Zealand, and one social group to another and damaging the social fabric essential for a well- why? This article concludes that the question is not whether lobbying functioning democratic mixed economy, should be made more transparent via regulation, but rather how this as opponents of lobbying believe? And, can best be achieved. should we regulate lobbying in New Zealand, and why? Keywords lobbying, vested interests, transparency, OECD, nature of Broadly, lobbying is any effort by lobbying, regulation, parliamentary access individuals or collectives to directly influence decisions of legislators and public officials outside elections. So defined, Thomas Anderson is a student at Victoria University of Wellington and a research assistant at lobbying is an important element of the Institute for Governance and Policy Studies. Simon Chapple is the Director of the Institute for Governance and Policy Studies at Victoria University of Wellington. He has previously worked in the political participation outside the voting OECD in Paris, the Reserve Bank of New Zealand and various government departments in Wellington. booth. This article focuses more narrowly

Page 10 – Policy Quarterly – Volume 14, Issue 2 – May 2018 on the local market for lobbying. Market 2011; Walters, 2017; Edwards, 2017, 2018a, lobbying. The first theory is that vested lobbying occurs via the purchase of the 2018b; Barton Deakin, 2016; Secombe, interests directly lobby policymakers with services of a profit-making lobbying 2015). There are commentaries by money to generate political change which intermediary lobbying for a third party. politicians (e.g. Mallard, 2003). There are rewards their bottom lines (Olson, 1965; Market lobbying also arises where a body, several pieces of postgraduate student or Tollison, 2014). Such ‘rent seeking’ lobbying such as a corporation, a trade federation academic research (Williams, 2014; Tyler, is entirely social sand: it wastes society’s or peak business organisation, a trade 2015; Strong and Tyler, 2017), as well as a resources. A second theory suggests that union federation or a non-governmental useful broader consideration of vested vested interests lobby policymakers with a organisation (NGO), hires a person and interests, including lobbying, by Ellie mix of private information and money (De allocates their time to lobbying activity. Argyle and political commentator Colin Figueiredo and Richter, 2014). Money When analysing a market, the usual first James (Argyle and James, 2014). There are either signals the credibility of their port of call for developing an understanding several investigative works alleging information or buys access to policymakers. is industry statistics. However, such data egregious behaviour by lobbyists (Hager This form of lobbying may be a mixture of does not exist for lobbying. Statistics New and Burton, 1999; Hager, 2002, 2012). grease and sand, if the private information Zealand industry data does not contain an There is one policy article by a professional is of social value. A third theory suggests exclusive industry category for political lobbyist (Unsworth, 2014). Information on that vested interests with similar objectives lobbying intermediaries; the industry is too some lobbyists is available from a list of to policymakers support policymakers to small. Most intermediary lobbyists are access cards to Parliament issued by the allow them to fulfil more of their shared probably included as management advice speaker of the House. There is online objectives (Groll and McKinley, 2015). and related consulting services. The market is also too diffuse. For those corporates that directly lobby government, their lobbying Empirical researchers have had limited activity will be included as measured output in their disparate industries. success in identifying whether lobbyists Additionally, data on NGO, trade union are successful because of what they and business organisation lobbying activity is not available as such. know – their knowledge base – or who In many countries, the regulation of lobbyists provides considerable informa- they know – their connections. tion with which to examine the lobbying market. While this has not resulted in a definitive overseas answer to the grease information provided by lobbying Again, this form of lobbying may be a mix versus sand question, it provides companies to promote themselves to of grease and sand. information pertinent to addressing the potential clients. Finally, there is a body of While the empirical work arising out of issue to the public, and, via a more trans- theory and empirical evidence on lobbying the rational choice paradigm has been parent system, automatically reduces the markets from overseas. It is to this unable to determine the extent to which amount of sand in the system. By contrast, international literature to which we first lobbying generates social value, or has lobbying is unregulated in New Zealand. A turn. chosen not to address these questions Lobbying Disclosure Bill was introduced (Grossman and Helpman, 2001, p.4), it has in Parliament in 2012 by the Green Party, International literature on lobbying established a number of important but it was unsuccessful, with the general There is a vast international literature on empirical regularities about lobbying. view being that it was an ill-considered and lobbying from a wide variety of disciplinary While many of these stylised facts are poorly crafted legislative response perspectives. The surface of this literature unsurprising, it is valuable to have them (Edwards, 2018b). The downstream can be scratched here only, and our focus confirmed by systematic study. These consequence of an absence of regulation is is on the economic literature, which is empirical regularities, for the United States, an ongoing lack of public information on based on a rational choice paradigm which, are as follows (all from De Figueiredo and the local market. while delivering insights (e.g. Grossman Richter, 2014). First, lobbying spending is However, various sources of and Helpman, 2001), may not be the most significantly more sizeable – five times information can be utilised to cast light on appropriate lens through which to consider larger – than private funding of political the local lobbying market, allowing a lobbying. As overseas information comes parties. Second, businesses account for the structured discussion of whether it from different political and economic vast majority – 84-86% – of lobbying provides grease for or is sand in the wheels environments, their conclusions must be spending. In contrast, issue–ideology of New Zealand democracy, if not anything applied with care to New Zealand. Yet that groups, such as environmental groups, approaching a definitive conclusion. There information is far from irrelevant. comprise a small share: between 2% and are a number of media articles on aspects There are several core theories in the 7% of spending. Corporate lobbying is not of the lobbying industry (e.g. Dudding, international literature on the market for cancelled out by the countervailing power

Policy Quarterly – Volume 14, Issue 2 – May 2018 – Page 11 Grease or Sand in the Wheels of Democracy? The market for lobbying in New Zealand

Figure 1: Number and distribution of lobbyists and non-lobbyists with swipe card of acquisition of cards, is unclear. In 2003 access to Parliament, 2012 - 2017 MP Trevor Mallard claimed that ‘[i]n the

100 many years I have spent in Parliament, I have noticed a growth in lobbying. This 90 growth is likely to continue. Lobbying as

80 a practice and a discipline is going to get more sophisticated and more common’, 70 and he repeated this view in 2015 (Tyler, 60 2015, p.18). In 2015 another long- serving MP, Peter Dunne, reported that 50 lobbying activity had shrunk, but agreed

Number of people 40 with Mallard that it had become more sophisticated in its methods (ibid., p.19). 30 After the 2017 election, the new speaker 20 of the House reduced numbers with card access. Lobbyists currently make up fewer 10 than half of those with cards; 22 of those 0 with cards appear to act as lobbyists. In 2012 2013 2014 2015 2016 2017 Post-election 2017 terms of the organisations they represent, Non-lobbyists Lobbyists Year their current number and distribution are as follows: Table 1: Market shares of lobbying · seven holders (32%) represent New Zealand (estimated guess) European Union corporations; Corporates 26% 13% · seven (32%) are intermediary lobbyists; Business Associations and Unions 20% 10% · two (9%) represent industry bodies Consultants (intermediaries) 18% 15% (businesses); NGOs 18% 13% · five (23%) represent trade unions Local government 7% N/A – either the NZCTU or the PSA; Iwi 5% N/A · one (5%) is an incorporated society Government funded advocacy 5% N/A (the New Zealand Taxpayers’ Union). Trade Federations N/A 35% By way of comparison with the card data, Table 1 shows lobbyist Mark Regional representation N/A 8% Unsworth’s impressionistic estimates of International Organisations N/A 5% market share of lobbying by sector, next to Think Tanks N/A 1% his European Union figures. In terms of Source: Unsworth, 2014 the broad dominance by corporations and of issue–ideology groups. Third, large generally generates positive returns to the their proxies, the access card data looks corporations are more likely to lobby lobbyer (Borisov, Goldman and Gupta, similar to Table 1, and the local dominance independently than smaller corporations, 2015; Hadani, Bonardi and Dahan, 2017). of market lobbying by business interests is and they tend to continue lobbying over also similar to the international empirical time. Fourth, lobbying increases when Lobbyists and parliamentary access facts considered above. However, there is a larger financial stake for the Who has swipe card access to Parliament, Unsworth’s data suggests a stronger organised interest. A fifth fact is that other than staff and MPs, also allows representation of NGO lobbying in New lobbyists target two sorts of politicians: the some insights into lobbying, providing Zealand compared to overseas. powerful agenda setters, and those some, albeit imperfect, information A key characteristic common to all wavering at the margins who can most on some market participants and their corporations with cards is their size, again easily be swayed. sectoral distribution. Here we consider consistent with the international literature. Empirical researchers have had limited this data and the qualitative implications Large companies whose bottom line can success in identifying whether lobbyists are of its limitations. The numbers with card be significantly influenced by central successful because of what they know – access are small and those who appear government regulations and policies have their knowledge base – or who they know to be lobbyists is smaller. However, the a strong incentive to lobby. If they do a – their connections. The evidence suggests number of lobbyists grew rapidly from considerable amount, it is rational to both factors are operating (De Figueiredo 12 in 2012, to 41 people in July 2017 employ a person who specialises in this task, and Richter, 2014). Lastly, a large body of (see Figure 1). Whether this represented rather than purchasing lobbying services empirical research shows that lobbying industry growth, or simply higher rates from an intermediary (although

Page 12 – Policy Quarterly – Volume 14, Issue 2 – May 2018 corporations may also do this). lobbying, has several important deficiencies legislative process. One explanation for this Corporations with an employee with an as a data source for the number of lobbyists absence is that NGOs gain political access card currently include Air New employed. What does it miss? First, not all influence through methods other than Zealand, Fonterra, Chorus and Westpac. professional employees of a lobbying parliamentary meetings. How relatively These people have roles as directors or company have swipe card access. For important NGOs are is unclear, and it may managers of ‘external relations’, ‘com- example, according to their website be that Unsworth has overestimated the munications’ or ‘public affairs’; many of Saunders Unsworth has five professional extent of NGO lobbying. them have previous political experience in staff, but only two have cards. A further The card list is also not fully different guises.1 major deficiency is that it does not include representative of the market because MPs Specialist lobbying firms – inter- some firms known to be part of the can be lobbied outside Parliament. mediaries – also appear to be an important lobbying market. Lobbying firms that do Lobbyists can use their contacts to instigate part of the market. These firms provide not have staff currently on the list but have meetings or conversations with politicians lobbying services for multiple clients. Who had previously include Silvereye without needing to regularly enter these clients are is unclear, and it is Communications (employing eight Parliament. Paid people can lobby unknown how much the firms are paid and people), Dart Government Relations (two government through phone calls, email, to what extent clientele engage in one-off people) and Acumen Republic (12). Taking letters, and oral or written submissions. transactions or repeat business. However, into account firms previously with card Thus, the number of paid lobbyists is likely clients are almost certainly access and still operating increases the to be by an order of magnitude larger than disproportionately weighted towards the market by around ten firms and by a much the parliamentary access card data suggests. business sector. Well-known firms such as larger number of lobbyists. Overall, the New Zealand lobbying market Saunders Unsworth, Busby Ramshaw Grice Ltd and Boag Allen SvG all have employees with cards. Many of these specialist All lobbying firms that have previously lobbyists also have extensive experience within the political system. had card access to Parliament consist The organisations representing of small teams of between one and a industries with representatives on the list are peak organisations whose activity is dozen or so employees, with one or two affected regularly by regulations and support staff and the bulk of staff being legislation. A significant number of trade unionists are also on the list. It is unclear professionals. whether union representatives on the list are full-time lobbyists. The card list suggests that a relatively small lobbying market exists in New The true size of the market is even may more closely resemble that of Australia, Zealand. Indeed, the established wisdom is larger. There are many lobbying firms and for example, than New Zealanders probably that the market is both relatively small and communications agencies which have like to believe. unimportant (see, for example, Walters, never had access cards. An internet search Additionally, the trend suggested by the 2017). In order to contextualise this for ‘government relations firms nz’ shows size of the list of people with cards creates conjecture, the per capita number of many such firms, including Exceltium, the impression that local lobbying has been lobbyists in the United States and Australia Boyd Public Relations and Adroite. And through a boom–bust cycle. However, this is of relevance. In 2016 the United States there are a number of recent new entrants perception is probably inaccurate. It is had 11,143 active lobbyists for a population to the market, including Barton Deakin difficult to effectively gauge growth in the of 323 million.2 If New Zealand had a and Hawker Britton. lobbying industry, but it is unlikely to be similar per capita proportion, there would Other significant sectors of the lobbying decreasing in size (as discussed above). be about 164 local lobbyists. Australia has market are not represented. Many major Indeed, an experienced observer suggests 554 registered lobbyists currently and a law firms provide lobbying services (such that it is growing (Edwards, 2017, 2018b), population of about 24 million.3 Having as Buddle Findlay, Simpson Grierson and a view supported by evidence of recent new an Australian per capita figure here would Johnston Lawrence). Chen Palmer, a entrants to the industry. mean about 108 lobbyists. leading specialist public law firm, has never The card data suggests that the New had card access to Parliament but provides How do specialist lobbyists operate? Zealand lobbying market is roughly 13% clients with services which most likely Based on their websites, firms offering the size of the United States’ and 20% the include lobbying (Chen Palmer, 2018). lobbying services appear to be fairly size of Australia’s. However, the access card Another sector absent from the list is uniform in how their services are structured list, while giving an approximation of the NGOs. These organisations are often a and presented to customers. All lobbying distribution of institutions engaging in significant lobbying presence during the firms that have previously had card access

Policy Quarterly – Volume 14, Issue 2 – May 2018 – Page 13 Grease or Sand in the Wheels of Democracy? The market for lobbying in New Zealand

to Parliament consist of small teams of labour is limited by the extent of the market’ translation is so important, do public between one and a dozen or so employees, seriously, the recent market entry of servants, on the other side of the divide, with one or two support staff and the bulk partisan lobby firms Barton Deakin and not hire such translators for all citizens, of staff being professionals. As already Hawker Britton may be a further indication rather than only those who can afford noted, many lobbyists have previous work of the growth of the local lobbying industry, them? experience within government (Tyler, 2015, as it is now large enough to sustain left– Due to the lack of regulation, it is pp.13–14). The Frank Bold Foundation right specialisation. Although their difficult to know both who lobbyists act for, suggests that ‘the single most valuable tool entrance into the market may signal a and whether lobbyists behave ethically. any lobbyist has is their contacts with and swing towards a partisan lobbying model Investigative journalist Nicky Hager has links to politicians and decision-makers’ more closely resembling the American or shed light on the inner workings of (Kwiatkowski, 2016). This experience Australian markets, only time will tell if it government by detailing cases where is a selling point across all lobbying is successful. lobbyists, public officials and organisations firms. Evidently, these ex-government Current charge-out rates for lobbyists have worked together to coordinate employees maintain their contacts inside are unclear, but casual charge-out rates misleading public relations campaigns: this government once they leave, and cultivate were reported as being in the vicinity of is pure sand (see also Tyler, 2015, p.17). their relationships to deliver policy results $400 per hour or $3200 per day in 2011, Hence, the claim that lobbyists always act for clients. For some, this maintenance is which suggests that comparatively high in the public interest is demonstrably aided by refreshing of their connections levels of remuneration are common incorrect. The issue is how much of such behaviour occurs relative to socially useful ‘translation’ services, and how damaging Investigative journalist Nicky Hager the former is relative to the latter.

has shed light on the inner workings Should New Zealand regulate lobbying? of government by detailing cases The OECD has advocated developing non-reactive and coherent regulatory where lobbyists, public officials and approaches to lobbying in order to maintain and enhance public trust in organisations have worked together to the democratic process (OECD, 2009). coordinate misleading public relations The above discussion has examined the limited information on local lobbying. campaigns: this is pure sand ... Acknowledging its limitations, it does not support the notion that the lobbying market in New Zealand is sui generis. Given what we know about local lobbying, via revolving door appointments, from (Dudding, 2011). Pay rates, billable hours, is there then any strong reason why lobby organisations to political staff and overheads and hence profitability are New Zealand should not follow OECD back (Edwards, 2018a). Some lobbyists unclear. recommendations and implement well- make their way in from the other direction: What lobbyists actually do on a day-to- considered, transparency-enhancing current National Party MP Chris Bishop day basis to earn their coin and who they reforms? and former National Party MP Todd do it for is not transparent (see Tyler, 2015, Market-based lobbying is an area of Barclay were both lobbyists before entering pp.33–4 for a discussion of the possible human engagement where two opposing Parliament (Emanuel, 2018). range of activities which may be part of values come into contact and thus into Another notable characteristic of the lobbying). Indications are that most conflict. The first value is that of the market, market is that not all firms solely offer clientele are businesses (Dudding, 2011). where one dollar equals one vote, and lobbying services. Many firms also offer Mai Chen, a public lawyer who prefers not where dollars are unequally distributed public relations, public law, strategic to identify as a lobbyist, says that lobbyists across the population, local and communications or crisis management as offer translation services between two international. The second is that of services. Indeed, perhaps to avoid the groups, public policymakers and businesses, democratic citizenship, where, ideally, one public stigma of ‘lobbying’, firms tend to which speak different languages (Dudding, adult citizen of a nation state has one vote avoid describing their work as such. Instead 2011; see also Emanuel, 2018). From this and votes are equally distributed across the they tactfully choose to describe their work perspective, a large proportion of the work voting population (or, more broadly, hours using terms such as ‘government relations’, lobbyists do is grease, improving available for non-market lobbying activities ‘influencing policy’ or ‘advocacy’. information provided to public officials. are roughly equally distributed across Most firms operate across the political The translator metaphor raises a question citizens). spectrum. However, if one takes Adam of justice: who can and can’t afford to pay There are further contextual factors in Smith’s famous dictum ‘the division of for ‘translation services’? And why, if this conflict that are important. There has

Page 14 – Policy Quarterly – Volume 14, Issue 2 – May 2018 been a worldwide rise in wealth inequality for all elected members of Parliament, as he has rejected clients in the past on ethical and shift in the functional distribution of representatives of the people. Extension of grounds (Emanuel, 2018). Barton Deakin’s income towards corporate profits in recent this form of transparency to elected local website includes an ‘Ethics’ page, which times (Piketty, 2015). This shift has also government officials is also desirable. states that the firm ‘acts in the broader been taking place locally (Rosenberg, 2018). In addition, it is time to again consider public interest in all its dealings with clients At the same time, an increasingly a register of lobbyists and their clients, and governments’ (Barton Deakin, 2017). authoritarian and kleptocratic China is adoption of a formal code of conduct along Ethics statements are uncommon on other flexing its growing economic muscle in the lines of that in Australia, and regular lobbyist websites. The insistence by sophisticated efforts to influence domestic collection and publication of data on who lobbyists that they act ethically and that political processes, including in New spends what on market lobbying. Again, their industry is effectively self-regulating Zealand (Brady, 2017).4 Hence, lobbying this form of policy response is a relatively can be seen, not mutually exclusively, as activities – by increasingly wealthy low compliance cost measure which makes honest, unbiased observation, self- individuals, by increasingly profitable local the process more transparent, and thus interested business protection or cognitive and multinational corporate entities and more consistent with principles of dissonance about what they are doing. The by increasingly anti-democratic nation democratic citizenship. lack of industry transparency means that states – are coming into growing conflict The publication of ministerial diaries, separating the signal from the noise in with notions of democratic citizenship. At and the creation of a register of lobbyists these claims is impossible. the same time, with union membership in and their clients and publication of the However, the creation of low New Zealand declining from 42.9% of the value of their spending would provide the compliance cost regulation, with a strong workforce in 1991 to 17.7% in 2016, organised labour’s countervailing lobbying power has been significantly eroded relative Given New Zealand’s high levels to the corporate sector (Ryall and Blumenfeld, 2017). These shifts in power of transparency and relative lack of have intensified, and likely will continue to corruption ... some might question exacerbate the ongoing conflict between market values and democratic citizenship. whether even light-handed regulation of There are good reasons to believe that lobbying may directly throw sand into the the lobbying market is necessary ... wheels of society, as well as indirectly undermining values underpinning democratic citizenship, and these problems public with a body of pertinent information transparency focus, would likely not be are going to be larger in the absence of to enable them to better understand the strongly objected to by those within the transparency. There are also reasons for decisions made by their elected industry. In the report of the government believing that these problems are likely to representatives. Transparency will help administration select committee regarding become worse over time. Hence, action on citizens to better judge for themselves the 2012 Lobbying Disclosure Bill, it was these matters today is likely to be easier whether lobbying is socially valuable grease noted that most of the 103 submissions than action tomorrow, as growing vested or anti-social sand in the democratic received ‘supported [the bill’s] intent of interests will make stronger efforts to hide wheels. enhancing trust in the integrity and lobbying activities that are privately Some level of regulation of the lobbying impartiality of democracy and political beneficial but socially damaging. industry would also discourage unethical decision-making by bringing more Low compliance cost approaches which behaviour. Given New Zealand’s high levels transparency to political lobbying’ provide the raw material for a better of transparency and relative lack of (Government Administration Committee, informed democratic citizenship and do corruption (Transparency International, 2013). Furthermore, lobbyists Jenna not impose high costs on legitimate 2016), some might question whether even Raeburn and Neale Jones are not opposed lobbying are likely to be the most light-handed regulation of the lobbying to a register similar to those in Australia appropriate policy responses. The OECD market is necessary. One view is that and Canada, since their firms’ Australian has recommended significant change in regulation is unnecessary, because lobbyists operations have not been negatively this area, change which occurs in a are self-regulating and ethical (Dudding, affected by the mandatory register of considered manner, unprompted by the 2011; Emanuel, 2018). Neale Jones, lobbyist lobbyists and their clients (Emanuel, 2018). heat of major scandal (OECD, 2009). for Hawker Britton, believes that because Lobbying may be grease in the wheel of Recent Green Party commitments to Wellington is a ‘small town’, lobbyists can’t politics, or it may be sand, or – perhaps publish details of ministerial diaries and get away with what he calls a ‘breach of inevitably – it may be a complex mixture receipt of perks are to be applauded (Cook, faith’. Barry Saunders of Saunders of both. Although this study has produced 2018). There is no reason why such public Unsworth agrees, again seeing the small some idea of the nature of the lobbying disclosures should not be enforced by law industry as self-policing. Jones insists that market, it is still unclear who lobbyists

Policy Quarterly – Volume 14, Issue 2 – May 2018 – Page 15 Grease or Sand in the Wheels of Democracy? The market for lobbying in New Zealand

work for and how they act, with little hard process. The aim of regulation would also access list. Pages accessed 15 February 2018. 2 From https://www.statista.com/statistics/257340/number- evidence available to illuminate the true be to contribute positively to making the of-lobbyists-in-the-us/, downloaded 20 March 2018. 3 From http://lobbyists.pmc.gov.au/who_register_lobbyists.cfm, nature of the industry. The key point industry more about grease and less about downloaded 20 March 2018. uncovered is that citizens lack convincing sand. With multiple stakeholders, as well 4 In this context, note that Saunders Unsworth advertise their services in a Chinese language section: see http://www. evidence for sand or grease. This is why as the OECD, in agreement that well- sul.co.nz/page/chinese-section.aspx. Whether they have clientele from China, as opposed to Chinese New Zealanders, regulation is needed – to shine a brighter designed regulation is necessary, the and if so who they are and what they may be lobbying about light on a currently shadowy industry question must surely be: why not? is unknown. Silvereye also appear to have an advertised presence directed at China: see http://www.silvereye.co.nz/ which has significant long-term potential 1 Information was obtained by viewing the LinkedIn pages of about-us/ (accessed 20 March 2018). to corrode the integrity of the democratic lobbyists who have been, or currently are, on the swipe card

References Argyle, E. and C. James (2014) ‘A way of thinking about vested interests’, Government Administration Committee (2013) Lobbying Disclosure Bill: Policy Quarterly, 10 (4), pp.53–8 report of the Government Administration Committee, Wellington: New Australian Government (2018) Lobbyist Profile (Barton Deakin), Australian Zealand Parliament Government Register of Lobbyists, 20 February, retrieved from http:// Groll, T. and M. McKinley (2015) Modern Lobbying: a relationship market, lobbyists.pmc.gov.au/register/view_agency.cfm?id=338 Munich: CESinfo DICE Barton Deakin (2016) ‘Barton Deakin Government Relations to open first Grossman, G.M. and E. Helpman (2001) Special Interest Politics, Boston: NZ office’, media release, 8 April, Scoop, http://www.scoop.co.nz/ MIT Press stories/BU1604/S00265/barton-deakin-government-relations-to-open- Hager, N. (2002) Seeds of Distrust, Nelson: Craig Potton Publishing first-nz-office.htm Hager, N. (2012) ‘Bruce Jesson Lecture, Maidment Theatre, Auckland’, 31 Barton Deakin (2017) ‘Our ethics’, bartondeakin.com/about/ethics October, http://www.nickyhager.info/bruce-jesson-lecture-maidment- Borisov, A., E. Goldman and N. Gupta (2015) ‘The corporate value of theatre-auckland/ (corrupt) lobbying’, Review of Financial Studies, 4 (29), pp.1039–71 Hager, N. and B. Burton (1999) Secrets and Lies, Nelson: Craig Potton Brady, A.M. (2017) Magic Weapons: China’s political influence activities Publishing under Xi Jinping, Washington, DC: Wilson Center Hanardi, M., J. Bonardi and N.M. Dahan (2017) ‘Corporate political Chen Palmer (2018) ‘Government, Parliament and law reform’, http:// activity, public policy uncertainty, and firm outcomes: a meta-analysis’, www.chenpalmer.com/expertise/government-parliament-law-reform/ Strategic Organization, 15 (3), pp.338–66 Cook, H. (2018) ‘Green Party to open diaries, refuse lobbyist-funded Hawker Britton (2017) ‘Re-opening of Hawker Britton’s New Zealand perks’, Stuff, 3 March, https://www.stuff.co.nz/national/ office’, November, http://www.hawkerbritton.com/wordpress/ politics/101922537/green-party-to-open-diaries-refuse-lobbyistfunded- wp-content/uploads/2017/11/Re-opening-of-Hawker-Britton-NZ- perks Office-1.pdf De Figueiredo, J.M., and B.K. Richter (2014) ‘Advancing the empirical Hill, D.M., G. Kelly, G.B. Lockhart and R.A. Van Ness (2013) research on lobbying’, Annual Review of Political Science’, 17, ‘Determinants and effects of corporate lobbying’, Financial pp.163–85 Management, Winter, pp.931–57 Drutman, L. (2015) ‘What we get wrong about lobbying and corruption’, Hillman, A.J., G.D. Kei and D. Schuler (2004) ‘Corporate political activity: Washington Post, 16 April, https://www.washingtonpost.com/news/ a review and research agenda’, Journal of Management, 30 (6), monkey-cage/wp/2015/04/16/what-we-get-wrong-about-lobbying-and- pp.837–57 corruption/?utm_term=.0b5a1e6155a2 Hosking, R. (2012) ‘Parliamentary swipe card list tears lid off secret Dudding, A. (2011) ‘Inside political lobbying’, Stuff, 17 July, http://www. society’, National Business Review, 26 July, https://www.nbr.co.nz/ stuff.co.nz/national/politics/5297632/Inside-political-lobbying article/parliamentary-swipe-card-list-tears-lid-secret-society-rh-124483 Edwards, B. (2017) ‘Political roundup: the rise of the hyper-partisan Johnson, V.R. (2006) ‘Regulating lobbyists: law, ethics and public policy’, lobbyists in Wellington’, Stuff, 20 November, http://www.nzherald. Cornell Journal of Law and Public Policy, 16 (1), pp.1–53 co.nz/nz/news/article.cfm?c_id=1andobjectid=11945930 Kwiatkowski, B. (2016) Lobbying: a Risk or an Opportunity? Lobbying Edwards, B. (2018a) ‘More light on revolving door lobbyists’, Newsroom, regulation in the Polish, Slovak, and Czech perspective, Krakow: Frank 23 February, https://www.newsroom.co.nz/2018/02/22/91057/ Bold opinion-why-we-should-know-more-about-our-revolving-door-lobbyists Mallard, T. (2003) ‘Lobbying and the government: speech to the Four Edwards, B. (2018b) ‘Political roundup: the government’s revolving door Winds communication seminar’, 25 November for lobbyists’, New Zealand Herald, 20 November, http://www. Mallard, T. (2017) ‘Speaker reviews list of approved visitors with access to nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11998380 Parliament for the first time’, Stuff, 7 December, https://www.stuff. Emanuel, A. (2018) ‘Selling influence: meet the lobbyists shaping New co.nz/national/politics/99552731/speaker-reviews-list-of-approved- Zealand politics for a fee’, Spinoff, 12 February, https://thespinoff. visitors-with-access-to-parliament-for-the-first-time co.nz/politics/12-02-2018/meet-nzs-new-breed-of-political-lobbyists/ New Zealand Taxpayers’ Union (2018) ‘Our objectives’, http://www. Felli, L. and A. Merlo (2006) ‘Endogenous lobbying’, Journal of the taxpayers.org.nz/our_objectives European Economic Association, 4 (1), pp.180–215 OECD (2009) Lobbyists, Governments and Public Trust, Paris: OECD

Page 16 – Policy Quarterly – Volume 14, Issue 2 – May 2018 Olson, M. (1965) Logic of Collective Action: public goods and the theory of Secombe, M. (2015) ‘Barton Deakin, the coalition’s “evil twin” lobby firm’, groups, Cambridge, Mass: Department of Economics, Harvard Saturday Paper, 4–10 July, https://www.thesaturdaypaper.com.au/ University news/politics/2015/07/04/barton-deakin-the-coalitions-evil-twin-lobby- Piketty, T. (2015) ‘Putting distribution back at the center of economics: firm/14359320002084 reflections on capital in the twenty-first century’, Journal of Economic Strong, S. and F. Tyler (2017) ‘New Zealand media camouflage political Perspectives, 1 (29), pp.67–88 lobbying’, Pacific Journalism Review, 23 (2), pp.144–58 Potters, J. and R. Sloof (1996) ‘Interest groups: a survey of empirical Tollison, R. (2012) ‘The economic theory of rent seeking’, Public Choice, models that try to assess their influence’, European Journal of Politcal 152 (1–2), pp.73–82 Economy, 12, pp.403–42 Transparency International (2016) Corruption Perception Index 2016, Rosenberg, B. (2018) ‘Wages and inequality’, Policy Quarterly, 11 (1), https://www.transparency.org/news/feature/corruption_perceptions_ pp.63–72 index_2016#table Ryall, S. and S. Blumenfield (2017) Unions and Union Membership in New Tyler, F. (2015) ‘Lifting the lid on lobbying in New Zealand: an Zealand: report on the 2016 survey, https://www.victoria.ac.nz/__data/ investigation into how these political players avoid being labelled assets/pdf_file/0006/1235562/New-Zealand-Union-Membership- lobbyists’, Master of Journalism project, Massey University Survey-report-2016FINAL.pdf Unsworth, M. (2014) ‘The Lobbying Disclosure Bill: a solution for a Saad, L. (2015) ‘Americans’ faith in honesty, ethics of police rebounds’, problem that doesn’t exist?’, Policy Quarterly, 10 (4), pp.66–70 GALLUP, 21 December, http://news.gallup.com/poll/187874/ Walters, L. (2017) ‘Lobbying groups have power but not on the same scale americans-faith-honesty-ethics-police-rebounds.aspx as US’, Stuff, 2 November, https://www.stuff.co.nz/national/ Sachdeva, S. (2016) ‘Arrival of Australian political lobbying firm in NZ politics/98469790/lobby-groups-have-power-but-not-on-the-same- raises questions about oversight’, Stuff, 18 April, https://www.stuff. scale-as-us co.nz/national/politics/78650109/arrival-of-australian-political- Williams, L.A. (2014) ‘Regulating lobbyists in New Zealand’, LLM thesis, lobbying-firm-in-nz-raises-questions-about-oversight Victoria University of Wellington

2019 International Research Society for Public Management (IRSPM) Annual Conference ReNewing Public Management for Stewardship, Innovation and Impact Victoria University of Wellington, New Zealand, 16 – 18 April 2019

Call for Panels On behalf of the Scientific and Organising their panel, both through the conference Committees for the 23rd Annual IRSPM web-site and their own networks. Panel Conference, which is being held at Victoria proposals should address either the University of Wellington from 16-18 April conference theme (of which there are full 2019, we cordially invite you to submit detail on the conference website) or another proposals on conference panels key issue in theory and knowledge in public IRSPM uses a two-stage process in management. compiling the conference programme. This first stage is for PANEL proposals. The For detailed instructions about submitting panel Scientific Committee will evaluate these proposals, see the website at: in terms of their contribution both to our http://irspm2019.com/irspm19/call_for_panels research community and to the coherence of the Conference programme. In the second stage, successful panel chairs will then be invited to circulate a ‘call for papers’ for

Policy Quarterly – Volume 14, Issue 2 – May 2018 – Page 17 Robert Ayson

The Ardern Government’s Foreign Policy Challenges

In its briefing document for Winston Abstract Peters, the incoming minister of foreign With pressures growing on international rules, Jacinda Ardern’s affairs, the country’s diplomats made new government faces extra challenges in shaping a principled no bones about the challenges ahead: ‘New Zealand is pursuing its interests in New Zealand foreign policy based on the consistent assertion of a turbulent environment where the risks values. Many of these external challenges are being felt in Asia. Even for small countries are acute’ (Ministry of Foreign Affairs and Trade, 2017, p.6). if force can be avoided on the Korean peninsula, escalating tariff This article provides a snapshot of competition between the United States and China may signal deep some of New Zealand’s leading challenges for the rules of the road that suit New Zealand. As the international policy challenges and what these mean for Wellington’s international wider storm clouds grow, the Ardern government’s focus on the policy preferences. As the reader will note, South Pacific in cooperation with Australia offers some respite. But many of these external challenges are the Labour–New Zealand First coalition may complicate the delivery occurring in the Asia–Pacific region. This is not only the location for many of New of predictable and creditable foreign policy stances. Zealand’s most significant interests. It is Keywords foreign policy, security, trade, Asia, Pacific also the region where the Ardern government will need to work doubly hard ew Zealand general election government. The new prime minister’s to find partners sharing at least some of outcomes are seldom shaped rise was propelled by domestic political Wellington’s international priorities. by foreign policy debates. No concerns about housing, child poverty and N Regional peace exception to this rule is the changed income inequality. But the new coalition political landscape which has produced has also taken office at a time of serious The first of New Zealand’s regional interests Jacinda Ardern’s Labour-led coalition doubt and fluidity in international politics. is the preservation of interstate peace in Asia. To this positive condition is closely linked the regional prosperity which has Robert Ayson is Professor of Strategic Studies at Victoria University of Wellington, where he works in close association with the Centre for Strategic Studies. allowed New Zealand companies to pursue

Page 18 – Policy Quarterly – Volume 14, Issue 2 – May 2018 trade and investment opportunities in a volatile example of Trump’s rhetorical hazardous drawing board. With Trump’s favourable regional environment. But at pressure on North Korea was ‘not helpful’. Cabinet becoming more hawkish since the the time of New Zealand’s general election This sentiment was noticed internationally departure of Gary Cohn, Rex Tillerson and in September 2017, concern was growing (Nelson, 2017). As a middle ground H.R. McMaster, possibly only defense about a possible war over North Korea’s between proper disarmament negotiations, secretary Mattis would stand in the way of accelerating nuclear weapons programme. which have often seemed unlikely, and the a risky use of force by the United States, The United States intelligence community use of violent force, which seems potentially which would likely end several decades of was on the cusp of judging that Kim Jong- catastrophic, New Zealand has supported interstate peace in north Asia. Un’s regime could bring a nuclear-armed the use of economic sanctions to place intercontinental ballistic missile back pressure on Pyongyang. That also means Regional prosperity into the earth’s atmosphere and deliver welcoming any sign of US–China Armed conflict on the Korean peninsula a nuclear weapon onto a continental cooperation to facilitate that sanctions would be a severe test for US–China American target. Newly inaugurated pressure, including in Trump’s early relations. New Zealand’s continuing president Donald Trump had asserted that interactions with China’s leader Xi Jinping. hopes for regional stability have assumed this North Korean breakthrough would In her first speech on foreign policy significant common interests between these not happen on his watch. And he seemed since becoming prime minister, Ardern two great powers. This has been a plausible intent on doing more than matching Kim’s outlandish rhetoric. Trump gave the appearance of being willing to use force to ... both China and the United States roll back North Korea’s nuclear and missile ambitions. have supported pathways to closer Such a violent development could have grave implications for New Zealand and its regional economic integration need not regional partners. Even an initially limited produce an economically competitive use of force by the United States designed to destroy some of North Korea’s missiles environment, forcing New Zealand to and warheads could lead to a quickly escalating armed conflict. Many expect that make all-or-nothing choices. North Korea would respond with a barrage of artillery attacks on nearby South Korea at the very least. But if it believed that an American attack was imminent, North returned to a familiar Labour theme in hope: Beijing and Washington have long Korea might act first. And even if it waited relation to the North Korea–US stand-off: had shared interests in Asia’s remarkable for the US to initiate a conflict, North Korea New Zealand’s commitment to multilateral economic expansion. New Zealand has might decide that it needed to use its nuclear disarmament (Ardern, 2018a). This also benefited from the choices made by nuclear weapons early before it loses the approach, she has suggested, gives the vast majority of Asian economies to chance to do so. Wellington a particular angle on this vexing embrace global trade and investment. As North Korea’s ally, China would face example of nuclear proliferation. Her Some of the most recent and largest of these some very difficult choices in any of these government can be expected to give even benefits have come from China’s increasing scenarios. If Beijing did enter a growing stronger attention to the nuclear participation in global markets. But it has war, this would mean New Zealand’s largest disarmament treaty that the Key–English also been in New Zealand’s interests for trading partner was involved in a violent government supported at the United established Western economies, including conflict with the most powerful of New Nations General Assembly. But there is a the United States, to remain active in the Zealand’s traditional security partners. In long distance between this universalistic region and remain committed to an open the event that Australia came good on (and hopeful) approach and the particular and rules-based international trading and indications that it would support the kind of diplomacy Trump and Kim may investment system. United States should war break out have in mind if a meeting between them That both China and the United States (Dziedzic, 2017), New Zealand would have goes ahead. have supported pathways to closer regional even less scope for staying on the sidelines, Any such discussion is unlikely to economic integration need not produce an militarily as well as diplomatically. resolve the conundrum of North Korea’s economically competitive environment, It is a statement of the glaringly obvious desire to retain nuclear weapons as the best forcing New Zealand to make all-or- that New Zealand’s preference is for a chance of regime survival and international nothing choices. Wellington’s approach has negotiated settlement which avoids leverage. Unless Trump pulls off a miracle been to embrace as many of these options violence on the peninsula. Ardern’s (even less likely it would seem than Ronald as possible. Fears of overdependence on immediate predecessor as prime minister, Reagan’s arms reduction progress with one large partner have been balanced by Bill English, observed that an especially Gorbachev), we may be back to a more the commitment of the other: Wellington

Policy Quarterly – Volume 14, Issue 2 – May 2018 – Page 19 The Ardern Government’s Foreign Policy Challenges would have found it more challenging to threatening to impose tariffs on major itself, which could attract graver concerns endorse China’s Belt and Road initiative, trading partners with whom the United from Wellington. for example, had it not been for America’s States has a deficit. Many of Washington’s active participation in the Trans-Pacific security allies – Canada, many other NATO Who is stepping up and stepping in? Partnership (TPP). partners in Europe, Japan, the Republic of As the United States steps back from This favourable equilibrium was tested Korea and Australia – have been on the international economic leadership, some by the Trump administration’s decision to receiving end of these threats, although of New Zealand’s other leading partners withdraw the United States from the TPP some of them have sought exclusions for have been trying to fill some of the process. In this new situation, Bill English’s themselves. But all along Trump’s big target vacuum. These include the European government was happy to accept the was China, and as this article was being Union (EU) and Japan, who have agreed prospect of Japan, the largest remaining finalised the president was engaged in the between themselves to a major free trade economy in the group of 11, becoming the early stages of what many fearful onlookers agreement. As well as the prospect of TPP’s unofficial leader. But National-led have depicted as an embryonic trade war. New Zealand–Japan free trade relations governments were unencumbered by Even if that more extreme situation is in a completed CPTPP, making progress serious doubts about the virtues of this avoided, almost any level of tariff escalation towards a free trade agreement between high-profile trade agreement. This was not between the United States and China is bad New Zealand and Europe is part of the Ardern’s situation. Labour was unhappy news for New Zealand’s prospects. If these Ardern government’s negotiating agenda. with some of the TPP’s more contentious two leading economies define their But this will take time and it will not be clauses, and its two political partners, New economic relationship through a easy to extract the agricultural concessions Zealand First and the Greens, held even mercantilist lens, disregarding the mutual that New Zealand will be seeking. Unlike greater reservations. benefits of economic interdependence, the the prospects for a bilateral free trade agreement with the United Kingdom, the EU trading relationship was not mentioned As America’s commitment falters and in the prime minister’s big speech (Ardern, 2018a). the United Kingdom is consumed by As America’s commitment falters and Brexit, New Zealand will welcome signs the United Kingdom is consumed by Brexit, New Zealand will welcome signs that other that other liberal democracies are keen liberal democracies are keen to sustain an open trading order. Wellington will not to sustain an open trading order. want its Western partners to leave the stage to China. Many of New Zealand’s regional trading partners will remember China’s In the final negotiations, which signals for the world economy in which important contribution to their economic produced the more inclusively named CP New Zealand makes its living will be futures 20 years ago during the Asian (Comprehensive and Progressive) TPP, the unmistakably negative. When Trump was financial crisis. They would have suffered Ardern government got some, but not all, taking a protectionist line on the campaign even more from the more recent global of the changes it was seeking. This was a trail, Xi claimed that China was the new financial crisis, which began with a typical bargain where nobody emerged champion of economic globalism. But the meltdown in US housing securities, had it completely satisfied with the outcome. more that Trump tries to push China not been for the engine of growth that Even though the coalition has been around, the more that Xi will be inclined China’s economy has become. Like New engaging in a little bit of protectionism of to focus on China’s prestige as a great Zealand, many Asia–Pacific countries are its own, it was able to say that in supporting power which can respond in kind. participating in China’s Belt and Road the revised agreement New Zealand In that sort of tussle, smaller, trade- initiative and Asian Infrastructure remained a friend of economic openness. dependent countries like New Zealand will Investment Bank. These are further signs The risk had been averted that in her first worry about the future of a trading order of China’s growing clout. major regional visit, to Vietnam for the based on restraint around common rules Like its predecessors, the Ardern APEC summit, the new prime minister and understandings. And if Mr Trump government will be attracted to the benefits would signal a significant reduction in New decides that Washington can live without that a growing China provides to New Zealand’s role in regional economic the World Trade Organization – the central Zealand’s region. But the era of American diplomacy. pillar of that system of rules – one of the indifference to its international com- Yet some bigger clouds on the trade foundations of New Zealand’s global mitments poses additional challenges for policy horizon may present New Zealand connections will have been put at risk. It is this approach. If New Zealand’s default with a regional picture unknown to any of hard to imagine a shift by Washington away strategy has been to say yes to initiatives Ardern’s recent prime ministerial from the fabric of global governance, aside from both China and the United States so predecessors. Donald Trump is now from withdrawing from the United Nations as to encourage an equilibrium between

Page 20 – Policy Quarterly – Volume 14, Issue 2 – May 2018 them, that strategy will now need to be international law, negotiated settlements made any easier in this divisive climate of revisited. There are now increased risks to of international crises, a strong United international opinion. That includes, of New Zealand of being seen as beholden to Nations, and multilateral approaches to course, climate change itself – although, in China – and impressions count for a lot in complex issues are all part of the foreign withdrawing from the Paris Agreement, the these matters. But simply cutting back on policy DNA that Ardern has inherited as Trump administration has turned the connections with China is hardly an option. the party’s (and the country’s) new leader. United States into a solitary dissenter rather One can hardly imagine a New Zealand But the international rules, formally than a leader of a strong pack of holdouts. government that would decide, for instituted as well as informally observed, The emerging areas also include cyber example, not to seek an upgraded free trade that have worked so well for New Zealand security, where very different notions of agreement with Beijing. are being challenged in multiple directions. government–civil society relations and Yet New Zealand cannot ignore the Many of these problems were doc- rights are competing for influence. obvious signs that a more powerful China umented by National-led governments of Interstate relations in the Asia–Pacific is producing complex and unsettling effects the Key–English era. For example, New region seldom emphasise formal rules and whose impact will increasingly be felt. The Zealand’s 2016 Defence White Paper drew deeply institutionalised processes of Communist Party of China, which now attention to Russia’s violation of the rules negotiation. One might wonder if appears to have Xi Jinping as its permanent of sovereignty in its annexation of Crimea Wellington can therefore relax in the face head, wants to silence alternative political and intervention in Ukraine (New Zealand of arguments that the rule-making and voices. Its approach to freedom of Government, 2016, p.32). At this time New keeping part of the international order is expression and to the openness of the internet run contrary to the views of New Zealand and other democracies. The more The willingness and capacity of that Beijing, sometimes in conjunction many states to accord refugees and with Moscow, encourages other governments to celebrate non-liberal asylum seekers their full rights under political norms, the less this will work for New Zealand’s interests and values. international law has been reduced New Zealand has been somewhat as populist nationalism rises in many cautious in taking public stands against non-democratic politics, at least when this places, often in tandem with national means criticising great powers on their human rights records. The new prime security concerns. minister’s speech to the New Zealand Institute of International Affairs gave the impression of breaking new ground by Zealand held one of the temporary seats being undermined. But a quick survey of indicating that under her government New on the UN Security Council, where it was regional developments suggests otherwise. Zealand would not hesitate to raise with an enormous struggle to get great power For example, South East Asian China its different views on ‘human rights, consensus on which restraints, rules and multilateralism, to which New Zealand pursuing our trade interests, or the security sanctions should apply to the various attaches great importance in its regional and stability of our region’ (Ardern, 2018a). parties causing humanitarian distress in engagement (McKinnon, 2016, pp.31–3), But any notion that this represents a Syria. And the battlefield defeat of ISIS does prescribes the avoidance of force in significant pushback on China is likely to not mean that transnational terrorism, and international disputes along the lines of the be premature. There is no sign, moreover, the damage it does to basic rules of justice UN Charter. And while China has preferred that New Zealand is willing to join a US-led and civility, has departed from the generally non-violent forms of pressure to chorus identifying China as lying outside international scene. pursue its aims in the South China Sea, its the international order. Other challenges abound. The approach still clashes with widely willingness and capacity of many states to understood views of Beijing’s obligations Upholding international rules accord refugees and asylum seekers their under international law. Washington’s This brings to mind the third main area full rights under international law has been criticism of China’s approach, which has of foreign policy challenge for the new reduced as populist nationalism rises in been stepped up in 2018, would be more government: how Ardern’s team will many places, often in tandem with national convincing if the Senate had ratified approach the promotion and protection security concerns. The fabric of arms America’s signature to the UN Convention of the systems and groups of rules of control, which has helped regulate strategic on the Law of the Sea, whose importance international conduct which have served relations between the United States and will only grow as competition for maritime New Zealand’s interests so well. This sits Russia, is under severe strain. Finding new influence and resources expands. While right in the middle of Labour’s traditional rules for emerging areas of potential North Korea’s nuclear and missile testing foreign policy agenda. Support for cooperation and competition is not being is in violation of obligations to the Security

Policy Quarterly – Volume 14, Issue 2 – May 2018 – Page 21 The Ardern Government’s Foreign Policy Challenges

Council, an American decision to use on international relations since the Second token, the make-up of the Ardern–Peters preventive force against North Korea would World War. This doesn’t mean Wellington coalition may complicate New Zealand’s still be widely seen as contrary to has been unable or unwilling to ability to show solidarity with its Western international law. accommodate new sources and types of partners on the challenges posed by Encouraging rules-based behaviour is rules and institutions. Even more Vladimir Putin’s Russia to the rules of also important closer to home. New importantly, it does not mean that as rising international conduct (Radio New Zealand, Zealand’s hopes for order in the South powers come onto the scene they have 2018). Pacific rest in part on regional consensus necessarily sought to replace existing at the Pacific Islands Forum. This has made systems of rules with brand-new approaches Regional partners? Fiji’s challenge to that institution’s reflecting completely contradictory Quite who the Ardern government’s main prominence an issue of some concern. That interests. Some of the apparent challengers international partners will be is a particular consensus may be an important issue if the to the status quo have done very well out challenge in Asia, where so many polities region is soon faced with unsettling of the existing rules: China’s profitable are becoming distinctly less progressive. political developments in New Caledonia embrace of economic globalisation is one The default answer, resorted to regularly by and Bougainville. In terms of regulating the such example. Another example is the Wellington in the past, is to emphasise New role of powerful external actors, establishing liking that so many newer nation states Zealand’s engagement with the multilateral forums which have grown up around the Association of Southeast Asian Nations. For some time New Zealand has needed But in practice these forums have had a limited purchase on the region’s most to boost and broaden its Asia–Pacific contentious and difficult issues, including bilateral connections in Asia (beyond its maritime territorial disputes. Too many of the hard issues continue to be deflected in strong relationships with China and the the search for consensus. For some time New Zealand has needed United States). to boost and broaden its Asia–Pacific bilateral connections in Asia (beyond its strong relationships with China and the United States). Some of this was beginning rules of the road for the responsible have for old-fashioned ideas about national to take shape in the later years of the Key– distribution of overseas aid monies by the sovereignty, a quintessential foundation of English era, but hardly in a revolutionary major powers (including China) in the the system of states. And even when rising or surprising fashion. Enhancing New Pacific is a continuing priority for powers use the United Nations to pursue Zealand’s already close relationship with Wellington. This was hinted at, rather than divisive objectives, they are still using a set Singapore, a leading interlocutor, has been directly addressed, in Winston Peters’ of institutions that were part of the post- one such priority. This will likely appeal to speech in Sydney at the Lowy Institute for war consensus on the greater need for the new government, with the possible International Policy with the argument that global governance. exception of the idea of basing Singaporean New Zealand, Australia, the US and the EU This external environment poses some fighter aircraft in New Zealand. (i.e. traditional Western donors) ‘need to important questions for the values-based The second priority has been Japan, better pool our energies and resources to foreign policy that Prime Minister Ardern touted in the last white paper as a fellow maintain our relative influence’ (Peters, has been seen to emphasise (Sachdeva, supporter of the rules-based order (New 2018). 2018). On one hand, there is the question Zealand Government, 2016, p.34). This is Further south, New Zealand’s interests of which areas are most likely to be an important country with which New are bound up inextricably with the responsive to a degree of extra engagement Zealand’s security relationship is relatively Antarctic Treaty system, whose regulatory by New Zealand, so that there is some undeveloped. The prime minister has given capacity is being challenged as several large effective action to go alongside the lofty little indication that Japan features states seek greater presence and possibilities rhetoric. On the other hand, there is the prominently in her view of the world for resource exploitation. An echo can issue of who New Zealand’s values-based (Capie, 2018; McLachlan, 2018). How sometimes be heard of Arctic developments, partners are likely to be on any issue. At much her government will focus on Tokyo where climate change is opening up new least on security issues, the Key–English will depend partly on its appetite for risk, navigation possibilities before there is years were marked by a growing emphasis given the competition between Japan and consensus on how the new possibilities for on cooperation with New Zealand’s Five China. It will probably make sense for New competition can be managed. Eyes partners. A Labour-led coalition Zealand to be cautious about one of Shinzo In many of these issue areas New government supported by the Greens Abe’s signature foreign policy ideas: an Zealand is a stakeholder in systems of rules would seem less likely to hold to that Indo-Pacific strategic partnership between that have often reflected Western influence conservative assumption. By the same Asia’s maritime democracies involving

Page 22 – Policy Quarterly – Volume 14, Issue 2 – May 2018 Australia, India and the United States be a significant issue for the trans-Tasman The South Pacific: venue for a progressive alongside Japan. The division of the region relationship. But New Zealand’s insistence turn? by regime type does not suit New Zealand’s that Australia agree to its offer to take At that very time, Peters himself was inclinations or interests; nor does the some of the migrants which Australia had speaking in Sydney extolling Australia’s prospect of encouraging the perception located on Manus Island in Papua New role in the South Pacific as New Zealand’s that Wellington seeks China’s containment. Guinea was too easily seen as an attempt preferred partner there (Peters, 2018). Aside from these two partners, there by Wellington to influence Canberra’s This is one part of the world where New aren’t too many other obvious choices in domestic policy in a very sensitive area. Zealand knows Australia depends on its Asia. South Korea has moved in a more This was compounded by concern within involvement. Of course, the reverse is also progressive direction under President Malcolm Turnbull’s government that the true, and it applies beyond the immediate Moon, but is very focused on problems on New Zealand Labour Party and the region, including currently in Iraq, where the peninsula. In April 2018, New Zealand Australian Labor Party (both still in New Zealand forces are working with received a rare visit from an Indonesia opposition) were in some sort of collusion their Australian colleagues. But the profile president. The shortage of attention given at a time when the Liberal–National of Australia–New Zealand collaboration to this important event (Rabel, 2018) indicates that we should not get carried away in any expectations for growth in New ... as students of New Zealand’s foreign Zealand’s relations with South East Asia’s policy history also know, New Zealand’s largest and most important country. Elsewhere the prospects do not seem nuclear free crescendo also benefited especially bright. Malaysia, Thailand and the Philippines are beset by various from the existence of two major-power domestic concerns. By comparison, testers of nuclear weapons, France and Vietnam is remarkably stable, and has precious insights into the art of pursuing the United States. national interests during times of increasing geopolitical competition. But, despite the recent visit of Prime Minister Nguyen, there will be limits as to how much New coalition had a very delicate hold on in their nearer neighbourhood depends Zealand would rely on a partnership with power in the federal Parliament. partly on events. It would be churlish to a one-party state in mainland South East Jacinda Ardern came into office with an suggest that what they both need is a Pacific Asia. even stronger commitment to raise this crisis to remind them of their mutual issue than had been seen under Bill English. dependence. And there are also always Australia’s importance The passions some New Zealanders feel going to be risks of divergence. This could All of this has one obvious conclusion. about Australia’s treatment of asylum occur if an Ardern government is tempted New Zealand’s reliance on its bilateral seekers had been compounded by concerns to burnish its progressive credentials as a partnership and alliance with Australia, that New Zealand expatriates have been South Pacific leader which understands still the most important relationship in treated unfairly in their access to Australian the concerns of small states in a way that a Wellington’s approach to the region and government assistance. Australia’s policies security-focused Australia may not. to the world, is unlikely to diminish. had become a larger factor within New One opportunity, which could also be For the Ardern government, facilitating Zealand domestic politics, and vice versa. a risk in terms of the Australian relationship, trans-Tasman cooperation in many areas An early test of this problem came with is to promote New Zealand as a champion of common interest remains the first Australian foreign minister Julie Bishop’s of Pacific small state concerns about priority for New Zealand foreign policy. visit to meet with her trans-Tasman climate change. This might play well as a This suggests that it will be necessary to counterpart, Winston Peters. Bishop was component of Ardern’s argument that ensure that policy differences between New on record for suggesting before New climate change is this generation’s version Zealand and Australia do not get in the way Zealand’s general election that the Turnbull of the anti-nuclear movement (Ewing, of a broader desire for collaboration. government might find it hard to work 2017). The part of that movement that It is nothing new for Australia and with a New Zealand Labour government. grew in New Zealand drew on concerns New Zealand to adopt different approaches But there were no obvious fireworks. Peters about nuclear testing in the South Pacific. to the same foreign policy issue. If in the made possible an informal Auckland But as students of New Zealand’s foreign lead-up to last year’s general election in meeting between Bishop and Ardern, who policy history also know, New Zealand’s New Zealand, Wellington and Canberra would soon be in Australia to meet Turnbull nuclear free crescendo also benefited from had been taking different views on the and to reaffirm that Australia was the existence of two major-power testers of treatment by other countries of asylum ‘New Zealand’s indispensable international nuclear weapons, France and the United seekers and migrants, this would hardly partner’ (Ardern, 2018b). States. There is no comparable focus for

Policy Quarterly – Volume 14, Issue 2 – May 2018 – Page 23 The Ardern Government’s Foreign Policy Challenges opposition in the case of climate change which their most important decisions will China. We cannot tell from the state of the which can mobilise a corresponding level be made. Who in the Clark government world in 2018 or from the make-up of the of resistance and energy. The problem is when it came into office in 1999 would have new coalition government what the Ardern more diffuse. Persuading Washington to thought that within two years New Zealand era’s main foreign policy contribution will return to the climate change table, for would be joining an international coalition be. It may not be a single thing. And it may example, is absolutely no guarantee of in Afghanistan following a terrorist attack be hardly noticeable. But to have sufficient levels of mitigation of this global on the United States? The resulting encouraged New Zealand’s Asia–Pacific problem. improvement in relations between partners to prefer peace to war, trade to The recent history of New Zealand Wellington and Washington was the most protectionism, and the rule of law to the foreign policy also suggests that important Clark-era diplomatic law of the jungle, even in small ways, might governments don’t often get to choose in achievement alongside the completion of just be enough. advance the crises and challenges around New Zealand’s free trade agreement with

References Ardern, J. (2018a) ‘Speech to New Zealand Institute of International Corporate-publications/briefing-for-incoming-minister-of-foreign- Affairs’, 27 February, https://www.beehive.govt.nz/speech/speech-new- affairs-2017.pdf zealand-institute-international-affairs-2 Nelson, L. (2017) ‘Trump faces backlash over heated North Korea Ardern, J. (2018b) ‘Speech to Australia–New Zealand Leadership Forum’, rhetoric’, Politico, 9 August, https://www.politico.eu/article/united- 2 March, https://www.beehive.govt.nz/speech/speech-australia-new- states-north-korea-donald-trump-faces-backlash-over-his-heated-north- zealander-leadership-forum korea-rhetoric/ Capie, D. (2018) ‘New Zealand’s new idealism’, The Interpreter, 1 March, New Zealand Government (2016) Defence White Paper 2016, Wellington: https://www.lowyinstitute.org/the-interpreter/new-zealand-new-idealism Ministry of Defence Dziedzic, S. (2017) ‘North Korea: Australia would support United States in Peters, W. (2018) ‘Shifting the dial: speech to the Lowy Institute’, 1 conflict, Malcolm Turnbull says’, ABC News, 11 August, http://www. March, https://www.beehive.govt.nz/speech/shifting-dial abc.net.au/news/2017-08-11/australia-would-enter-conflict-with- Rabel, R. (2018) ‘When influential leaders from Asia come calling’, Asia north-korea/8796586 Media Centre, Asia New Zealand Foundation, 21 March, https://www. Ewing, I. (2017) ‘Jacinda Ardern: climate change is my generation’s asiamediacentre.org.nz/opinion/rob-rabel-when-influential-asian- nuclear free moment’, Newshub, 20 August, http://www.newshub. leaders-come-calling/ co.nz/home/election/2017/08/jacinda-ardern-climate-change-is-my- Radio New Zealand (2018) ‘NZ only Five Eyes members not to retaliate generation-s-nuclear-free-moment.html against Russia’, 27 March, https://www.radionz.co.nz/news/ McKinnon, M. (2016) New Zealand and ASEAN: a history, Wellington: Asia political/353512/nz-only-five-eyes-member-not-to-retaliate-against- New Zealand Foundation, http://www.asianz.org.nz/reports/wp-content/ russia uploads/2016/03/New-Zealand-Asean-Historical-Relationships.pdf Sachdeva, S. (2018) ‘Ardern articulates values-based foreign policy’, McLachlan, P. (2018) ‘We need to talk about Asia: the PM’s foreign policy Newsroom, 28 February, https://www.newsroom.co. speech’, Stuff, 2 March, https://www.stuff.co.nz/national/politics/ nz/2018/02/27/92766/ardern-articulates-values-based-foreign-policy opinion/101921450/we-need-to-talk-about-asia-the-pms-foreign- Trevett, C. (2017) ‘Jacinda Ardern’s rallying cry: climate change the policy-speech nuclear free moment of her generation’, New Zealand Herald, 20 Ministry of Foreign Affairs and Trade (2017) Briefing for Incoming Minister August http://www.nzherald.co.nz/nz/news/article.cfm?c_ of Foreign Affairs, October, https://www.mfat.govt.nz/assets/MFAT- id=1&objectid=11907789

Page 24 – Policy Quarterly – Volume 14, Issue 2 – May 2018 Jo Spratt and Terence Wood

Change and Resilience in New Zealand Aid under Minister McCully and Treasury data to describe quantitative Abstract changes in New Zealand aid – specifically, This article studies the New Zealand government aid programme the extent to which New Zealand’s aid volume and effort, and regional and over the years of Murray McCully’s tenure as New Zealand’s foreign thematic foci, changed under McCully. minister. The article uses quantitative and qualitative data to detail We then explore McCully’s impact on New changes in New Zealand aid volume, sectoral and geographic foci, Zealand aid quality, using data from the New Zealand aid stakeholder survey, the and quality. We argue that despite strong rhetoric from Minister OECD and qualitative sources. McCully, change in some areas was surprisingly modest. Yet the Our key findings are that McCully’s impacts were less in some areas than might minister had impacts in other areas, particularly on aid quality, have been anticipated on the basis of either foremost in the form of changes to the purpose of New Zealand aid. the minister’s own rhetoric or the extent Keywords foreign aid, aid policy, foreign policy, international of controversy at the time. The minister did, however, have a significant impact in development, MFAT important ways. His organisational arrangement changes removed the aid n the wake of the 2008 general aid programme. In this article we draw programme’s authority and autonomy in election, Murray McCully became from publicly available data sources to relation to other foreign policy, but they INew Zealand’s foreign minister. He study Minister McCully’s impacts on the did not completely prevent the aid was to stay in this role until May 2017, New Zealand government aid programme. programme from functioning. McCully a term that makes him New Zealand’s We first outline the organisational increased the aid budget, but much more third longest serving foreign minister. As arrangement changes made in rescinding slowly than promised. He had little impact foreign minister McCully took an active the aid programme’s semi-autonomous on aid’s concentration in the Pacific and interest in the New Zealand government’s status. Second, we make use of OECD aid to multilateral organisations, and, while some increase in aid for economic development occurred, it was not a radical Jo Spratt is an independent consultant and Visiting Fellow at the Development Policy Centre, Australian National University. Terence Wood is a Research Fellow at the Development Policy Centre, transformation. However, the quality of Australian National University. New Zealand aid worsened under

Policy Quarterly – Volume 14, Issue 2 – May 2018 – Page 25 Change and Resilience in New Zealand Aid under Minister McCully

Figure 1 – New Zealand aid volume 2017). NZAID, New Zealand’s semi- 700 autonomous aid agency, was integrated back into the Ministry of Foreign Affairs

603 603 602 and Trade (MFAT) (Cabinet Office, 2009a, 590 593 581 600 p.2). The minister indicated that he 566 602 587 592 planned to take a hands-on approach to 529 511 568 557 565 aid programme management, deriding

500 ‘so-called development experts’ and 454 499 490 ‘development specialists’ (McCully, 434 429 474

NZ Aid Actual Spend 2009, p.1, 2011, p.1). On the minister’s recommendation, Cabinet agreed to 400 increasingly concentrate aid in the 392 Pacific region, and to make economic 353 356 development the aid programme’s core 300 6 focus (Cabinet Office, 2009b, p.1). McCully 16 0 also pledged to increase the government 30/6/200 30/6/2007 30/6/2008 30/6/2009 30/6/2010 30/6/2011 30/6/2012 30/6/2013 30/6/2014 30/6/2015 30/6/2 30/6/2017 aid budget (McCully, 2009). He also Aid (Inflation Adjusted - $NZ M 2017) Aid (Nominal - $NZ M) indicated that New Zealand’s aid work Note: data is from Treasury Budget documents. would be changed to ‘be consistent with, Figure 2 – New Zealand aid effort (government aid/GNI) and support, New Zealand’s foreign policy 0.40 and external relations outcomes’ (Cabinet Office, 2009b, p.1).

0.35 From the outset these changes were controversial, prompting critique from 0.30 NGOs, academics, the private sector and 0.30 0.27 0.28 0.28 0.28 0.26 0.26 0.27 0.27 political parties (New Zealand Labour Aid/GNI (%) 0.25 Party, Green Party of Aotearoa New 0.25 Zealand, Progressive Party and United Future, 2009; Coates, 2009; McGregor et 0.20 al., 2013; Banks et al., 2012; Overton, 2009), as well as former aid programme staff (for 0.15 example, Adams, 2011) and the media (New Zealand Herald, 2009). Yet the extent 0.10 and impacts of the changes varied 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 considerably. Note: data is from the OECD’s OECD.stat database (OECD DAC, 2017).

McCully’s tenure, driven in part by his here. To fully investigate changes in New Aid’s organisational arrangements approach to managing the aid programme Zealand aid more qualitative research One area where the minister’s desire and in part by his desire to align aid with would be very useful. Nevertheless, the data for change had a clear impact was the other foreign policy areas. This latter we have compiled enables us to identify organisational structure of the New change saw the purpose of New Zealand important areas of continuity and change.1 Zealand government aid programme. In aid giving become markedly more oriented 2001, following a ministerial review of towards advancing New Zealand’s interests Background to the changes New Zealand’s aid, the Labour–Alliance rather than helping people in developing While opposition spokesperson on foreign coalition government decided to establish a countries. policy, McCully signalled early on that he semi-autonomous aid programme. Called This article, it should be noted, focuses planned to do things differently. In a paper the New Zealand Agency for International on the types of high-level change that can written with National Party colleagues he Development, or NZAID, this agency be tracked with publicly available data. The stated that ‘[f]resh thinking [was] required was still attached to MFAT, but it had article also draws primarily on quantitative on development assistance strategy’, and greater autonomy and authority on aid data. Because of this, subtler changes – that ‘[t]he way ahead is not obvious but it policy. NZAID had an executive director such as shifts in the dynamics of the does not lie in replicating failure’ (McCully who could provide advice directly to the relationships that structure New Zealand et al., 2007, p.8). Upon assuming the role minister, and responsibility for its own aid work – are not captured in our study. of foreign minister, he wasted no time in human resources and policy development. Similarly, other areas for which there is no making his desired changes, requesting In 2009 McCully dismantled NZAID and public data, such as aid programme staff Cabinet papers be produced to justify the aid programme once again became an turnover and staff morale, are not covered change before Christmas 2008 (Spratt, operational group within MFAT.

Page 26 – Policy Quarterly – Volume 14, Issue 2 – May 2018 As we discuss in a later section, some of Figure 3 – Percentage of New Zealand aid spent in the Pacific the negative long-term consequences of 75% this change were less than many feared at 65% 64% the time. However, there is no evidence that 61% 63% 63% these changes improved the quality of New 53% 56% 60% Zealand aid. And in the short term the 50% 50% transaction costs were significant. Human resources and internal systems required 46% realigning. Existing aid and development policies were also removed, and it took until early 2010 for a single international 25% development policy statement to emerge (Spratt, 2012).

Aid volume 0% Figure 1 shows the volume of New Zealand 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 government aid over time. Note: data is from the OECD’s OECD.stat database (OECD DAC, 2017). At the time of writing spending by region was only available from the OECD up to the end of the 2015 calendar year. Initially, McCully pledged to increase the government aid budget to NZ$600 increase New Zealand aid’s concentration have brought with it a decrease in New million in 2012–13 (McCully, 2009). He in the Pacific (Cabinet Office, 2009b, Zealand aid funding going to multilateral subsequently pledged to increase aid to p.1). As Figure 3 shows, New Zealand organisations. $621 million by the 2014–15 financial year aid’s Pacific focus did increase under Figure 4 shows New Zealand (McCully, 2011). However, as Figure 1 McCully’s tenure, yet the increase was government aid broken down by shows, the rate of increase was much slower quite small: four percentage points multilateral and bilateral spending.2 In the than McCully promised, with the non- between 2009 and 2015. (2009 was the years from 2000 to 2009, on average 23% inflation-adjusted aid spend only topping first calendar year in which McCully was of New Zealand aid was allocated via $600 million for the first time in the able to exert an influence on country multilateral organisations. In the years financial year ending 2017. As the inflation- allocations.) Moreover, the increase was since, on average 22% was allocated adjusted line in Figure 1 shows, with a continuation of existing trends. The through multilateral means. McCully may inflation accounted for, the increase across particularly low aid share to the Pacific have held strong views about the efficacy his tenure was only $36 million – a very in 2003, 2004 and 2005 was a product of multilateral organisations, yet these modest 6% in total over nine years. of the Indian Ocean tsunami, and surges views do not appear to have had an effect Plausibly, the minister’s failure to deliver in aid to Iraq (2003) and Afghanistan on spending patterns. on promised growth in the aid budget (2004). Were it not for the tsunami, might be explained by circumstances more than 50% of New Zealand country- Aid for economic development outside the minister’s control, such as allocable aid would have been spent in One of the most controversial aspects overall economic performance and the the Pacific in every year since the turn of the changes that McCully brought Canterbury earthquakes. However, this of the millennium. to New Zealand aid was the decision to explanation does not fit with available make economic development the aid evidence. The New Zealand economy grew Spending on multilateral organisations programme’s core focus. As Figure 5 at a more rapid pace than the New Zealand In his final speech as minister to the shows, McCully’s time as foreign minister aid budget across the years that McCully New Zealand Institute of International did bring an increase in the share of was foreign minister. The government Affairs, McCully spoke of his antipathy for New Zealand aid devoted to economic could have at least increased aid in line with multilateral organisations: ‘These giant development. economic growth, but this did not happen. process-driven bureaucracies generally Economic development’s share of This can be seen in Figure 2, which shows deliver a below-average quality of service spending doubled from 15% in 2009 to New Zealand’s aid spending relative to to the poorer countries of the world, 30% in 2015. Since 2011 economic economic performance, as measured by the especially those in our region’ (McCully, development has been the largest sector. standard international measure of aid 2017, p.1) For some in the New Zealand This is a substantial change, yet the change effort, aid/gross national income (GNI). As media this comment was indicative of a hardly counts as a wholesale trans- a share of GNI, New Zealand’s aid spend hard line that McCully had supposedly formation.3 Change occurred, yet it was crept downwards during McCully’s tenure. taken on multilateral aid organisations less than might have been anticipated on throughout his tenure (for example, the basis of either the minister’s statements Regional focus Watkins, 2017). Given such reported or the public debate at the time. Early in his time as foreign minister, antipathy, it seems reasonable to expect Interestingly, the increased focus on McCully indicated that he wanted to that McCully’s tenure as minister might economic development has not come at

Policy Quarterly – Volume 14, Issue 2 – May 2018 – Page 27 Change and Resilience in New Zealand Aid under Minister McCully

Figure 4 – New Zealand aid spending bilateral versus multilateral means, such as the analysis of aid flows (for

100% a detailed discussion of the method and its strengths and weaknesses compared to other approaches, see Wood, Burkot and 80% Howes, 2017). By far the most positive finding from the 2015 stakeholder survey can be seen in 60% Figure 6. A significant majority of respondents thought the aid programme 40% was effective. Favourable appraisals of the aid programme were less common from NGOs than from the private sector, and 20% when asked in a separate question about trends in aid programme performance,

0% fewer than a quarter of respondents said 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 they thought the aid programme was Bilateral Multilateral becoming more effective. Nevertheless, Note: data is from the OECD’s OECD.stat database (OECD DAC, 2017). Spending type is only available up to the end of the 2015 given the transition the aid programme calendar year. went through with NZAID’s dissolution, Figure 5 – New Zealand aid spending by sector the effectiveness finding is an encouraging 100% one. It also fits broadly with the high-level findings of the OECD Development 90% 27% 27% 24% 27% 31% 29% Assistance Committee’s peer review of the 34% 37% 38% 35% 80% 41% 38% 40% 41% 45% New Zealand government aid programme 8% 70% 7% (Development Assistance Committee, 10% 9% 10% 10% 8% 6% 2015). To be clear, there is no evidence that 9% 60% 6% 10% 6% 7% 8% 8% 8% the aid programme has been made more 3% 5% 7% 8% 10% 10% 7% 9% 9% 50% 5% 7% 12% effective by the changes it has been through. 11% 10% 11% 12% 9% 12% 7% 10% 24% 14% Indeed, it may well be the case that 40% 17% 18% 21% 9% 13% 13% 22% effectiveness has deteriorated since 2008. 14% 15% 19% 30% 17% Yet the finding remains encouraging in that 33% 29% 10% 21% 20% 20% 21% the stakeholder survey data does not 24% 23% 17% 17% 32% provide evidence of a catastrophic collapse 26% 30% 10% 15% 24% 26% 15% in aid programme effectiveness. 9% 9% 11% 9% 9% 12% 8% 8% 5% However, the 2015 stakeholder survey 0% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 also brought more worrisome findings. Other Health Humanitarian Emergencies Governance Education Economic Development Chief among these was the fact that the Note: data are from the OECD’s OECD.stat database (OECD DAC, 2017). Spending by sector is only available majority of surveyed stakeholders thought until the end of the 2015 calendar year. that New Zealand aid was primarily the expense of humanitarian assistance, Aid quality focused on advancing the commercial and or education. The share of spending The 2015 New Zealand aid stakeholder geostrategic interests of New Zealand, devoted to improving governance and, to survey (Wood and Burkot, 2016) surveyed rather than on helping reduce poverty. This a lesser extent, health in developing senior managers in New Zealand aid view was advanced not only by NGO countries fell, but the real loser was the NGOs and private sector contractors who stakeholders, but also by private sector ‘other’ category. This category is an worked regularly with the aid programme. stakeholders (Wood and Burkot, 2016, amalgam of sub-categories. Analysis of It asked them a series of detailed questions p.13). these sub-categories shows that this fall about aid programme performance, both Although geostrategic interests have was driven by a relative fall in aid allocated overall and with respect to specific aid always played some indirect role in guiding to the OECD category of ‘unallocated/ programme attributes. While the sample of aspects of aid policy, in the years unspecified’. What this means is hard to participants was comparatively small (62), immediately prior to McCully’s time as interpret. One possible explanation is that all of the participants were well placed to foreign minister there was no evidence of previously uncategorised projects were assess aid programme performance, owing New Zealand giving aid to advance its recategorised as being related to economic to their regular work with it. Significantly, commercial interests, and the purpose of development. If this has occurred, the the method affords detailed insights into New Zealand aid giving was considered a extent of change in this area may actually aid programme functioning that are not strength (Waring, 2005; Development be less than Figure 5 suggests.4 readily able to be inferred through other Assistance Committee, 2005). The shift

Page 28 – Policy Quarterly – Volume 14, Issue 2 – May 2018 under McCully to an increased focus on Figure 6 – Surveyed views on aid programme effectiveness New Zealand’s commercial and geostrategic 100% interests emerged from the Cabinet decision to align aid with other foreign policy goals, of which, the minister stated, the most important element was the ability 75% ‘to align aid policy with trade policy’ (McCully, 2009, p.1). The use of aid to advance New Zealand’s commercial 50% interests became evident in a number of aid projects. These included: bringing young South East Asian business leaders to 25% New Zealand (New Zealand Aid Programme, n.d.-b); ‘agricultural diplomacy initiatives’ aimed at boosting 0% relations between New Zealand and Very effective Effective Neither effective nor ineffective Ineffective Very ineffective

ASEAN agricultural agencies and Note: survey question was, “How would you rate the effectiveness of the aid programme?” All Stakeholder Survey agribusinesses (New Zealand Aid data can be downloaded from: http://devpolicy.org/wp-content/uploads/2016/03/2015-NZ-for-upload.zip Programme, n.d.-a); and funding a costly Figure 7 – Scholarship spending over total New Zealand education aid dairy farming project in Myanmar which 60% had little development justification but 58% which brought potential commercial 54% benefits for New Zealand (Spratt, 2012, 52% 2013; NZADDs, 2013; Wood, 2012; 50% 49% Ministry of Foreign Affairs and Trade, 47% 2012). An increased focus on New Zealand’s 42% commercial and geostrategic interests came with costs for other aid work. For 40% example, as Figure 5 shows, the share of New Zealand aid devoted to education did not fall during the years McCully was foreign minister. However, the nature of 30% New Zealand’s education spending 2010 2011 2012 2013 2014 2015 changed to increasingly reflect New Note: data are from the OECD’s OECD.stat database (OECD DAC, 2017). Scholarship spending is only available from 2010-2015. Zealand’s non-development foreign policy the other hand, tertiary education increased development focus of aid during aims, something that significantly reduced scholarships are thought to bring benefits the NZAID era, this figure had fallen to the share of funding available for to donors who offer them. Scholarships 41%.5 Figure 7 shows a return to a development-oriented education spending. bring people, often from the families of scholarship focus under McCully. The When McCully took the helm, New economic and political elites, from situation in 2015 was not as bad as that of Zealand’s aid for education was considered developing countries to donor countries, 2000. Nevertheless, the share of education a strength, with systematic work being where it is hoped they will develop ties spending devoted to scholarships was undertaken in a number of Pacific Island and relationships and acquire fond increased rapidly under McCully, rising countries, particularly in primary memories. Through this, it is hoped they 12 percentage points in just five years. This education. This state of affairs reflected a will become potential advocates and rise was accompanied by a concomitant profound shift from the beginning of the supporters, and potentially business decrease in the share of education funding millennium, when most of New Zealand’s partners, in the future, thus bringing going to other education types, education aid was focused on scholarships benefits to donor countries. Tertiary particularly to primary education. for tertiary study in New Zealand scholarships also bring revenue to donor Changes to the purpose of New Zealand (Development Assistance Committee, 2005, country tertiary institutions and provide aid giving was not the only aid quality issue 2000). free advertising in potential markets to emerge during McCully’s term as foreign Tertiary scholarships have some (Development Assistance Committee, minister. One of the least positive findings development merit. However, there is no 2000, p.197). We estimate that at the turn of the 2015 New Zealand aid stakeholder evidence that they are as efficacious in of the millennium about 75% of New survey came from answers to the question fostering development as improving Zealand’s education aid went on about funding reliability. As Figure 8 shows, primary and secondary education is. On scholarships. By 2009, reflecting the while for-profit firms polled were fairly

Policy Quarterly – Volume 14, Issue 2 – May 2018 – Page 29 Change and Resilience in New Zealand Aid under Minister McCully

Figure 8 – Predictability of funding New Zealand runs risks if it is seen to be free-riding in its multilateral engagements. 100% Changing the sectoral focus of New Zealand aid is easier, but even here existing plans with recipient countries and with 75% other donors such as Australia, with whom New Zealand tries to coordinate, place constraints on change. Similarly, the 50% emphasis on aid’s development outcomes that was cultivated within NZAID left an institutional legacy that initially enabled 25% the aid programme to continue functioning quite well in altered political times, although this clearly did not entirely 0% Contractor NGO insulate the aid programme from the new Predictable funding environment, and the potential for further Great strength Moderate strength Neither strength nor weakness deterioration remains. Moderate weakness Great weakness And yet McCully did not fail completely Note: the survey question asked respondents to rank the strengths or weaknesses of a range of aid programme in his desire to transform New Zealand aid. attributes including predictability of funding. All Stakeholder Survey data can be downloaded from: http://devpolicy.org/wp-content/uploads/2016/03/2015-NZ-for-upload.zip He brought major structural change through his reintegration of NZAID into upbeat about funding predictability, the less than the overall growth in the size of MFAT. And with this he shifted the purpose majority of NGOs thought this aspect of New Zealand’s economy. Aid spending was of New Zealand aid, placing increased the aid programme was a weakness or a increased to the Pacific, but once again the emphasis on bringing geostrategic and great weakness. change was not large and a continuation commercial benefits to New Zealand. The response of NGO participants to of pre-existing trends. And, despite the We believe that the changes to the this question is unsurprising. Early in his minister’s own reputed hostility towards purpose of New Zealand aid giving were time as foreign minister, McCully chose to multilateral institutions, the share of New clearly for the worse. Public opinion data dismantle long-standing NGO funding Zealand aid to multilateral organisations shows that most New Zealanders want mechanisms – one for humanitarian did not fall in any meaningful way. The their government’s aid to be given emergency assistance through NGOs, and aid programme did become more focused primarily for altruistic ends (Wood and one for longer-term development projects. on fostering economic development in Burkot, 2016, p.11), and the ethical case The previously well-functioning aid-recipient countries. Yet this shift for the world’s wealthy nations devoting humanitarian emergency fund for NGOs was not so large as to see economic resources to helping poorer countries is was replaced with a fund that was so poorly development completely dominating the compelling. We accept that to some extent configured it took six months to release aid programme’s work. geostrategic concerns need to play some funding in response to famine in the Horn One lesson for scholars of aid policy role in how New Zealand engages as an of Africa, only doing so once stories of its from these facts is that some aspects of aid aid donor, but we believe that in New dysfunction made it into the media (Wood, policy are remarkably resistant to change. Zealand’s case such concerns can usually 2011). The humanitarian fund was Aid forms part of New Zealand’s be met simply by being a good eventually repaired. However, one of the relationships beyond its borders, and these international citizen. Moreover, we see no issues the most recent OECD Development relationships place constraints on both reason whatsoever why New Zealand aid Assistance Committee peer review of New what can change, and how fast. New should be used as a subsidy for commercial Zealand aid highlighted was the fact that Zealand could not, all of a sudden, start interests. New Zealand still does not have a well- focusing all of its aid on the Pacific: doing Looking forward, from our perspective functioning generalised NGO funding so would have damaged other important the resilience of New Zealand aid to change mechanism for longer-term development international relationships, such as with may prove to be both a blessing and a curse. projects (Development Assistance Indonesia and Vietnam, both recipients of Because McCully’s changes were less than Committee, 2015). reasonable amounts of New Zealand aid they might have been in some areas, the and important emerging international need to remedy his impact on the aid Conclusion actors. Similarly, it would have been hard programme is less than it could have been. Given Minister McCully’s stated desire to to cease giving aid to Afghanistan, for However, in the crucial area of the purpose change New Zealand aid, in many ways it example, without straining New Zealand’s of aid giving, he had an impact. And is surprising just how little changed. The alliance with the United States. Dramatically because the aid programme is now aid budget went up between 2009 and reducing multilateral aid is difficult for integrated into MFAT – a government 2016, but its rate of increase was slight, similar reasons. A small country such as department with a mandate to advance

Page 30 – Policy Quarterly – Volume 14, Issue 2 – May 2018 New Zealand’s interests – reversing this 2 The multilateral funding amount is based on the OECD’s When we did this the falls in the share of aid devoted to record of core multilateral funding and does not include some of the non-economic sectors became slightly more particular change may not necessarily funding given to multilateral organisations tagged to specific pronounced, but the differences were not dramatic. projects. When specific project funding is included, the share 5 Our estimates are derived by using the accurate information come easily. Murray McCully’s impact on of funding going via multilateral organisations increases by on tertiary scholarships that has been reported from 2010 New Zealand aid was less than it might about nine percentage points. However, there is no obvious onwards and calculating the average ratio of tertiary change in trends when project-tagged funds are included. scholarships to post-secondary education given in those have been, but his legacy may still outlast 3 The most recent aid programme strategic plan states years. We then applied this ratio to data on post-secondary that 45% of New Zealand aid will be spent on economic education spending, which has been reliably reported on his time as foreign minister. development by the end of 2018. This would represent a since 2000. more radical change. However, the trends in Figure 5 do not 1 All the quantitative data used in this article can be indicate that the target will be met. downloaded from https://nzadds.files.wordpress. 4 In analysis available in the online data set we looked at com/2018/02/change-and-resilience-data.zip. sectoral change with the ‘other’ category removed entirely.

References

Adams, P. (2011) ‘NZ aid programme fails with “quality not quantity” nz/where-we-work/asia/asean-regional/young-business-leaders- creed’, Dominion Post, 16 May, http://www.stuff.co.nz/dominion-post/ initiative, accessed 31 Auguest 2016 comment/columnists/5006822/NZ-aid-programme-fails-with-quality- New Zealand Herald (2009) ‘McCully out of order on foreign aid’, New not-quantity-creed, accessed 13 January 2016 Zealand Herald, 3 March Banks, G., W. Murray, J. Overton and R. Scheyvens (2012) ‘Paddling on New Zealand Labour Party, Green Party of Aotearoa New Zealand, one side of the canoe?: the changing nature of New Zealand’s Progressive Party and United Future (2009) ‘Summit on the future of development assistance programme’, Development Policy Review, 30, NZ’s aid – communique’, joint media statement, 27 March, http:// pp.169–86 www.scoop.co.nz/stories/PO0903/S00330.htm, accessed 10 January Cabinet Office (2009a) Minute of decision: CAB Min (09) 13/3A, 2012 Wellington: New Zealand Government NZADDs (2013) ‘Cows without borders and more!’, NZADDs Info-Update Cabinet Office (2009b) Minute of decision: CAB Min (09) 13/3C, Feb 2013, 17 March, http://nzadds.org.nz/2013/03/17/nzadds-info- Wellington: New Zealand Government update-feb-2013-cows-sans-frontiers-new-strategies-and-policy-report- Coates, B. (2009) ‘Aid is about poverty, not politics’, Dominion Post, 13 on-the-private-sector-in-development-how-to-get-a-job-in-development- March and-more/, accessed 25 February 2016 Development Assistance Committee (2000) ‘New Zealand Development OECD DAC (2017) OECD.stat aid data, http://www.oecd.org/dac/ Assistance Committee Peer Review’, OECD Journal on Development, 1 financing-sustainable-development/development-finance-data/ Development Assistance Committee (2005) New Zealand Development idsonline.htm, accessed 13 September 2017 Assistance Committee Peer Review 2005, Paris: OECD Overton, J. (2009) ‘Reshaping development aid: implications for political Development Assistance Committee (2015) New Zealand Development and economic relationships’, Policy Quarterly, 5 (3), pp.3–9 Assistance Committee Peer Review 2015, Paris: OECD Spratt, J. (2012) A Bolt from the Blue: examining the 2009 changes to the McCully, M. (2009) Speech to the New Zealand Institute of International New Zealand aid programme and what they mean now, NZADDs Affairs, Wellington working paper, Wellington: NZADDs McCully, M. (2011) ‘Development dollars go where we can make the Spratt, J. (2013) ‘New Zealand needs a fence for aid, not aid for fences’, biggest difference’, Dominion Post, 31 May http://devpolicy.org/new-zealand-needs-a-fence-for-aid-not-aid-for- McCully, M. (2017) ‘Address to the New Zealand Institute of International fences-20131010/, accessed 14 January 2015 Affairs’, 15 April, https://www.beehive.govt.nz/speech/address-new- Spratt, J. (2017) ‘Actors, ideas and rules: New Zealand overseas zealand-institute-international-affairs, accessed 13 September 2017 development assistance policy change’, PhD thesis, Australian McCully, M., W. Mapp, T. Groser and J. Hayes (2007) Foreign Affairs, National University Defence and Trade Discussion Paper: focusing on our core strengths Waring, M. (2005) Ministerial Review of Progress in Implementing 2001 and capabilities, Wellington: Office of the Leader of the Opposition Cabinet Recommendations Establishing NZAID, Wellington: New McGregor, A., E. Challis, J. Overton and L. Sentes (2013) Zealand Government ‘Developmentalities and donor–NGO relations: contesting foreign aid Watkins, T. (2017) ‘Machiavellian McCully’s legacy intact’, Stuff, 8 April, policies in New Zealand/Aotearoa’, Antipode, 45, pp.1232–53 http://www.stuff.co.nz/national/politics/opinion/91318049/ Ministry of Foreign Affairs And Trade (2012) Agricultural Diplomacy machiavellian-mccullys-legacy-intact, accessed 4 November 17 Opportunities in Myanmar: scoping mission final report, Wellington: Wood, T. (2011) ‘NZ famine aid delayed’, http://devpolicy.org/nz-famine- Ministry of Foreign Affairs and Trade, obtained under the Official aid-delayed20110830/, 30 August, accessed 14 January 2015 Information Act Wood, T. (2012) ‘Aid? Or a subsidy to New Zealand business?’, http:// New Zealand Aid Programme (n.d.-a) ‘ASEAN regional: agricultural devpolicy.org/aid-or-subsidy-to-new-zealand-business20120305/, diplomacy’, Wellington: Ministry of Foreign Affairs and Trade, https:// accessed 14 January 2015 web.archive.org/web/20130505191409/http://www.aid.govt.nz/ Wood, T. and C. Burkot (2016) The 2015 Aid Stakeholder Survey: a mixed where-we-work/asia/asean-regional/agricultural-diplomacy, accessed review for New Zealand aid, Canberra: Development Policy Centre 31 Auguest 2016 Wood, T., C. Burkot and S. Howes (2017) ‘Gauging change in Australian New Zealand Aid Programme (n.d.-b) ‘ASEAN regional: young business aid: stakeholder perceptions of the government aid program’, Asia & leaders initiative’, Wellington: Ministry of Foreign Affairs and Trade, the Pacific Policy Studies, 4, pp.237–50 https://web.archive.org/web/20130505191819/http://www.aid.govt.

Policy Quarterly – Volume 14, Issue 2 – May 2018 – Page 31 Murray Petrie

Reversing the Degradation of New Zealand’s Environment through Greater Government Transparency and Accountability

his article puts forward a new Abstract integrated approach to greater This article proposes greater transparency in and accountability Ttransparency and accountability for environmental governance, addressing widespread concerns for environmental governance, addressing widespread concerns about the about the degradation of New Zealand’s natural environment. It degradation of New Zealand’s natural assesses national environmental reporting in New Zealand against environment and the sustainability of our a recognised international framework and compares the wider current economic model. There is a wide range of possible approaches and levers governance framework for environmental management with other that can potentially be used to achieve policy domains, particularly fiscal policy. It proposes significant better environmental outcomes (Boston, 2018). The key elements of the proposed changes to the Environmental Reporting Act 2015, together with approach are two-fold: significantly mechanisms to integrate environmental stewardship more effectively augmented arrangements for ex post into the formulation of government strategies, policymaking and the national-level environment reporting; and a package of new requirements Budget cycle, including a new chapter in the annual Fiscal Strategy for ex ante transparency of priority Report on fiscal policy and the environment. environmental policy goals and targets, systematic monitoring and reporting, and Keywords environmental governance, environmental reporting, ex post accountability to Parliament and environmental outcomes, transparency, accountability to the electorate. A number of changes are proposed to the Environmental Reporting Act 2015, together with mechanisms to Murray Petrie is a Senior Research Associate at the Institute for Governance and Policy Studies, Victoria University of Wellington. He is also Lead Technical Adviser to the Global Initiative for Fiscal more effectively integrate environmental Transparency, a multi-stakeholder initiative based in Washington, DC. Email: [email protected]. stewardship into the formulation of

Page 32 – Policy Quarterly – Volume 14, Issue 2 – May 2018 government strategies, policymaking and Figure 1: The DPSIR Framework for Reporting on Environmental Issues the Budget cycle, including a new chapter in the annual Fiscal Strategy Report on Response fiscal policy and the environment.

Problem definition There is a broad and deep accumulated body of evidence and assessments that the quality of New Zealand’s environment is Drivers Impact deteriorating. This poses serious risks to the country’s economic sustainability and to wider living standards and is largely due to policy weaknesses and flaws in the systems of governance of environmental management. In brief, key sources of evidence are the Pressures State following: Source: from United Nations Statistics Division (n.d.) • degradation of natural capital: this has been especially pronounced with much lesser extent on environmental key provisions in the New Zealand and respect to fresh water quality and outcomes (Boston, 2018). Australian national environmental biodiversity (species extinction rates reporting laws. are among the highest in the world), as National state of the environment reporting New Zealand and Australia illustrate well as the major challenges New While there is no current international two quite distinctive approaches to Zealand faces in reaching its Paris ‘standard’ for state of the nation environmental reporting: a large exercise Agreement targets for greenhouse gas environmental reporting, a well- only once every five years in Australia; and emissions, and is well documented in established framework is the ‘drivers, frequent reporting by domain in New the briefings to the incoming minister pressures, state, impact, response’ Zealand, with a three-yearly synthesis 2017 prepared by the Ministry for the (DPSIR) model of intervention (Jackson, report. Australian officials are understood Environment and the Department of 2017, p.10). According to this systems to be considering more frequent reporting, Conservation (see also Brown et al., analysis view, human activities or while New Zealand officials are considering 2015; OECD, 2017; Statistics New drivers (underlying natural and human- the desirability of less frequent reporting Zealand, 2017; Au and Van Zyl, 2018); caused forces: e.g. population change and better linkages across domains. There • New Zealand is reaching the environ- and economic activity) exert pressures is also a desire to ensure greater clarity in mental limits to its economic growth (immediate factors) on the environment the New Zealand Environmental Reporting model (Productivity Commission, that lead to changes in the state of the Act on the purpose of environmental 2017; OECD, 2017); environment. These changes result in reporting. • policy weaknesses and inconsistencies: impacts on human welfare and ecosystems One possibility would be to combine failure to appropriately price natural that may elicit a societal response from some domain reports, or even to move to resources and environmental externali- government and non-government actors. a single report every three years covering ties (e.g. fresh water, carbon emissions); Responses (adaptation, mitigation) act all domains and a synthesis. This could be lack of capacity for implementation of on the driving forces, or on the state of combined with brief annual score cards. the Resource Management Act, and lack the environment, or on impacts.1 Figure 1 It is generally agreed that state of the of enforcement of environmental illustrates the framework. environment reporting should exclude regulations; inadequate data (Ministry New Zealand’s first two state of the policy recommendations. The value of for the Environment, 2017; Department environment reports, in 1997 and 2007, environmental reporting is in regular, of Conservation, 2017; Environmental used the DPSIR framework. However, the independent technical data and scientific Protection Authority, 2017; Treasury, Environmental Reporting Act 2015 did not and policy analysis of the state of the 2018b; Brown et al., 2015; OECD, include either the ‘drivers’ or the ‘responses’ environment and the effectiveness of 2017); elements of the DPSIR framework. By responses to date. In 2014 the government • weak policy governance: lack of comparison, Australia and most EU concluded that: ‘it may be difficult to report comprehensive frameworks for member countries use the full DPSIR on policy evaluation in a way that is objective-setting and reporting (OECD, framework. The Australian 2016 state of perceived as politically neutral’ (Ministry 2017). This is the subject of this article. the environment report notes that the for the Environment, 2014, p.20). This The key motivation is that the focus of inclusion of information on drivers suggests that there may be constraints on successive governments has been on provides context for the pressures detailed the ability of officials to provide free and economic and fiscal outcomes, and to a in each of the reports.2 Box 1 outlines the frank advice, and/or constraints on the

Policy Quarterly – Volume 14, Issue 2 – May 2018 – Page 33 Reversing the Degradation of New Zealand’s Environment through Greater Government Transparency and Accountability

Box 1: Environmental reporting in New Zealand and Australia New Zealand’s first environmental report prepared consistent Commissioner for the Environment, 2016). with the processes established in the Environmental Reporting In Australia, every five years the federal government Act 2015, Environment Aotearoa 2015, was published by the commissions an independent review of the state of the secretary for the environment and the government statistician environment, as required under the Environment Protection in 2015 (although the report was published prior to passage and Biodiversity Conservation Act 1999.4 The most recent of the legislation).3 report was in 2016. Reports provide readers with: The framework for environmental reporting, set out in the • a comprehensive review of the state and trends of the Environmental Reporting (Topics for Environmental Reports) environment; Regulations 2016, divides the environment into five domains: • information about the pressures on the environment and air; atmosphere and climate; fresh water; land; and marine. the drivers of those pressures; Ecosystems and biodiversity are cross-cutting aspects that are • information about the management initiatives that are considered in relevant domain reports and covered in each in place to address environmental concerns, and the synthesis report. impacts of those initiatives; A domain report is required every six months, and a • information about the resilience of the environment and synthesis report every three years. The 2015 report was a the residual risks that threaten it; synthesis report across all five environmental domains. Domain • an overall outlook for the Australian environment. reports have since been published on three of the five domains. Information is presented in nine thematic reports: on Reports are due this year on land (April) and air (October), and atmosphere, built environment, heritage, biodiversity, land, the next synthesis report is due for publication in April 2019. inland water, coasts, marine environment and Antarctic The framework used is pressures/state/impacts, but not environment. ‘drivers’ or ‘responses’ from the DPSIR framework. Assessments for different elements are graded. For instance, To provide assurance of independence from the government for pressures there are four grades of level of impact (very low of the day, reports are developed and released in line with the impact, low impact, high impact, very high impact). Similar principles and protocols in place for tier 1 statistics. Under graded systems are used for change over time, for state, section 18 of the act, the parliamentary commissioner for the for trends, for management effectiveness, and for ‘level of environment may choose to prepare independent commentaries confidence’ of conclusions. on the state of the environment reports (see Parliamentary

public interest element of evaluation without looking ahead.’ She recommended potential application to the governance activities. The appropriate approach is not that environmental reports ‘should end with of environmental policy. It also briefly to leave ‘response’ out of the reporting outlook sections as is done in Australia’s considers environmental governance framework, but to include it and attempt state of the environment reports’ arrangements in Sweden. to ensure the technical independence of (Parliamentary Commissioner for the New Zealand has very extensive and the response analysis.5 Environment, 2016, p.45).6 deep outcomes-focused management Finally, Australian state of the frameworks and accountability environment reports are required to contain Comparative policy governance mechanisms for how governments manage information about the resilience of the This section goes beyond environmental fiscal policy and monetary policy. In fact, environment and the residual risks that reporting to consider the wider framework New Zealand was a pioneer in developing threaten it, as well as an overall outlook for for environmental governance, including and implementing these frameworks. Table the environment. These forward-looking ex ante transparency of goals and targets 1 assesses these frameworks against a set of elements are of central importance to and reporting against them. It does so by recognised elements of target setting, understanding the state of the environment taking a high-level view of governance monitoring and reporting. Table 1 also and designing policies. As the New Zealand arrangements in New Zealand for fiscal assesses state of the environment reporting parliamentary commissioner for the policy, and for monetary policy, in order and wider aspects of environmental environment has observed: ‘The significance to identify some fundamental elements of governance in New Zealand, Australia and of an environmental issue cannot be judged policy governance and to consider their Sweden.

Page 34 – Policy Quarterly – Volume 14, Issue 2 – May 2018 Table 1: Comparative policy governance Stage Parameter Public Reserve NZ environmental Australian Swedish in policy Finance Bank Act governance status environmental environmental cycle Act quo governance governance status quo satus quo

Ex ante Legislated outcome targets No Yes No No [yes]7 elements Targets required Yes Yes No No Yes

Milestones required Yes Yes No No Yes

Ex post Technically independent Yes Yes Yes Yes Yes elements monitoring reports

Monitoring reports contain: •Drivers Yes Yes No Yes •Responses Yes Yes No Yes •Forward looking data Yes Yes No Yes •Risks Yes Yes No Yes •Relative priorities Yes Yes No Yes •Effectiveness assessment No No No Yes

Alignment with electoral cycle Yes8 No No No No

Technically independent commentary Yes Yes Yes Yes Yes

Mandated govt. response Yes No No No Yes

Sweden is recognised as a pioneer in objectives and milestones and reporting management and accountability transparency of national environmental against them. While New Zealand frameworks. There are current efforts to goals, targets and progress reports. In 1999 governments have bound themselves in law develop coherent multidimensional Sweden created a system of environmental to a very high degree of transparency and measurement frameworks for environ- quality objectives (EQOs) which are set by accountability in other domains, they have mental management (e.g. natural capital Parliament but do not have legal status generally not done so with respect to accounting, integrated reporting, or (OECD, 2014, p.40). There are 16 EQOs environmental stewardship – although in summary indicators to supplement or that describe the desired state of the 2014 they imposed a requirement on replace GDP as a measure of performance). environment, adopted by the government regional councils to publish fresh water However, while new measurement in 2012, and supported by milestone quality objectives by 2025. One exception frameworks will play an important role, targets that specify concrete actions to this is the framework for fisheries they will take time to be developed, and towards achieving them. In 2010 the management, which contains most of the putting estimates of monetary value on government appointed an All-Party elements in Table 1. The prospective Zero environmental stocks and flows will always Committee on Environmental Objectives Carbon Act will similarly introduce a high involve debatable judgments, limiting their (comprising parliamentarians, external degree of ex ante and ex post transparency value in measuring progress or shaping stakeholder representatives and experts) to and accountability. policy design. On their own, without an ex advise on how the EQOs can be achieved. Of course, the central government’s ante element and accountability The EQO system engages government public finances are to an important extent mechanisms, natural capital accounting agencies at all administrative levels, with under the government’s direct control, in and augmented measures of social progress implementation responsibilities often sharp contrast to environmental outcomes. seem likely to have limited impact on residing at the subnational level. The Most regulation of activities is conducted government decision making and prospects for achieving the EQOs are by local governments – although the accountability.9 assessed each year to inform the annual Crown-owned public conservation lands Accordingly, there is a good case for budget bill and the government’s annual managed by the Department of amending the Environmental Reporting progress report to Parliament. Conservation comprise around one third Act to require governments to respond Table 1 shows that, compared to of New Zealand’s land area. formally to each state of the environment arrangements for fiscal and monetary There are also formidable conceptual synthesis report, stating the government’s policy, there is a lack of requirements for and measurement difficulties and gaps in assessment of the situation, its medium- ex ante transparency of environmental data that help explain this divergence in term and long-term strategies, and

Policy Quarterly – Volume 14, Issue 2 – May 2018 – Page 35 Reversing the Degradation of New Zealand’s Environment through Greater Government Transparency and Accountability

Other amendments to the Environ- mental Reporting Act should include: Box 2: Proposed changes to the · requiring detailed geographical Environmental Reporting Act breakdowns for most environmental indicators, including breakdowns 2015 aligned with regional and territorial government boundaries, to indicate 1. Review the design and timing of missioner for the environment to where environmental outcomes are of reports to ensure a more appropri- indicate, in commentary on each most concern and where they are not. ate balance between frequency, state of the environment synthesis While some environmental issues linkages between environmental report, the critical few outcomes transcend local or regional government challenges, efficiency, effective- for priority government manage- boundaries, many do not. Where they ness, transparency and account- ment in the next period, based on do this can be recognised through aggregated reporting; ability, and review the purpose of transparent criteria and reasoning. · changing the timing of synthesis environmental reporting as set out 6. Require a formal government reports so that each three-yearly in the act. response within a specified time synthesis report is published, in the 2. Introduce the full DPSIR frame- to each synthesis report and to normal course of events, within a work into the act, to include each independent commentary by specified number of months of each discussion of drivers of environ- the parliamentary commissioner general election (say, nine months prior to the last possible date for the election), mental pressures as well as ex post for the environment stating the to promote better informed public assessment of central government government’s assessment of the debate on environmental policies and responses. situation, its medium-term strate- trade-offs with other goals, and stronger 3. Require detailed geographical gies, and priority environmental accountability of government and breakdowns for most environmen- outcomes with interim targets and Parliament to the electorate. tal indicators, including break- milestones, and reporting on recent Box 2 pulls all the suggested changes downs aligned with regional and progress. to the Environmental Reporting Act together. The proposals in Box 2 should territorial government boundaries. 7. Change the timing of synthesis not be viewed as all or nothing. They 4. Require forward-looking informa- reports so that they are published, could be introduced on a phased basis. tion on resilience, emerging risks in the normal course of events, For example, initial amendments could and environmental outlooks. within a specific number of months be made to the act to revise the design 5. Invite the parliamentary com- of each general election. and timing of reports, introduce the full DPSIR framework, require disaggregated geographical reporting, and require a priority environmental outcomes with target setting, management, reporting and formal government response. The other interim targets and milestones, and accountability in the next period. This proposed changes to the Environmental reporting on progress in the period just should be based on transparent criteria and Reporting Act might be subject to further completed. reasoning.10 This is an attempt to draw on deliberation and planning. Note that the proposed approach does the professional expertise and not attempt to impose specific policy independence of the commissioner to Integrating environmental stewardship into targets in law that reflect a particular view promote well-reasoned selection of critical routine government policymaking: a new of how the trade-offs should be made indicators, while leaving final decisions to chapter in the Fiscal Strategy Report on between competing policy objectives. In an the government of the day. The incumbent fiscal policy and the natural environment analogous manner to the Public Finance government could choose additional While government regulation plays a Act, the approach recommended relies on outcome indicators as policy priorities – key role in management of the natural a legislative requirement for target setting the statement would be a political environment, the lack of any overarching, and reporting, with the selection of the document of the government – but would aggregated approach to regulation (such as targets left to the political process. be legally obliged to include at least the an annual regulatory policy cycle), and the It is, however, proposed that the core critical indicators, and to justify lack of any national planning framework as parliamentary commissioner for the elevation of other indicators as priorities. is common in many other countries, means environment be invited to indicate, in This is analogous to the way in which the that the Budget cycle appeals as the best commentary on each state of the Public Finance Act obliges the government mechanism in New Zealand through which environment synthesis report, the critical to justify departures from the principles of to integrate environmental stewardship into few outcomes for focused government responsible fiscal management. government strategy and policymaking.

Page 36 – Policy Quarterly – Volume 14, Issue 2 – May 2018 Furthermore, there are increasingly Similarly, one of the principles of the government’s contribution to well- important interfaces between fiscal and responsible fiscal management in the being, at a whole-of-government level.11 regulatory interventions. Some regulatory Public Finance Act is that, when Accordingly, there is a good case for instruments, such as tradable permits, have formulating fiscal strategy, the government including a new chapter in the annual some of the features of fiscal instruments must have regard to its likely impact on Fiscal Strategy Report, which the Public and require analysis also from a revenue present and future generations (section Finance Act requires be presented with the policy perspective. In addition, some fiscal 26G). This can be interpreted as referring annual Budget, that discusses the multiple instruments, such as green taxes, are to the intergenerational impacts of points of intersection between fiscal complements to regulation. There are also aggregate fiscal policy (e.g. deficits and net policy and the environment. The chapter significant direct interactions between debt). However, it might also be argued would desirably cover both tax and fiscal policy and environmental outcomes, that the environmental and social impacts expenditure policies, the interfaces both on the revenue side of the Budget, and of micro-fiscal policies (expenditure between fiscal and regulatory instruments, on the spending side (e.g. the Department policies and tax system design) are also and the adequacy of funding of regulatory of Conservation’s funding for management covered by section 26G, which would institutions, including local government of the public conservation estate, and support the addition of a new chapter in capacity to implement the Resource environmental protection expenditures). the Fiscal Strategy Report on fiscal policy Management Act and environmental Note that section 26M(2) of the Public and the environment. monitoring functions.12 The chapter Finance Act stipulates that the Budget Finally, the Public Finance Act requires would clearly require significant policy statement must state the broad individual government departments to contributions from the Ministry for the strategic priorities by which the prepare statements of intent with multi- Environment, Statistics New Zealand, the government will be guided in preparing year strategies and non-financial Department of Conservation, Inland the Budget, including the overarching performance information, but the central Revenue and others, in close collaboration policy goals that will guide the government as a reporting entity is only with the Treasury. An outline of the government’s Budget decisions, and the required to publish financial statements. proposed chapter is in Box 3. policy areas that the government will Yet it really only makes sense to attempt to Such a proposal does not imply that focus on in that year. measure environmental stewardship, and fiscal policy is the main influence on

Box 3: Proposed outline of a new chapter on ‘Fiscal Policy and the Environment’ in the annual Fiscal Strategy Report

1. Current government environment strategies, outcome 7. An overview of the Department of Conservation’s perfor- targets and milestones, and actual performance, focus- mance in managing the public conservation estate. ing on the core critical environmental outcomes. 8. An overview of government investments in natural capi- 2. The latest data on trends in key environmental stocks tal, and environmental protection expenditures, in the and flows, and the policy implications; priorities for ad- forthcoming Budget. dressing gaps in data and monitoring systems. 9. The anticipated positive and negative environmental im- 3. An assessment and, to the extent feasible, quantification pacts of the expenditure and revenue policies embodied of the economic impact of recent degradation of eco- in the forthcoming Budget.15 system services (depreciation of natural capital) at the 10. An assessment of the potential for government revenue margin in a selected high-priority sector, or sectors, and and expenditure policies to improve critical environmen- the estimated cost of restoration of ecosystem services.13 tal outcomes.16 4. Relevant case studies to illustrate the principles of inte- 11. The interactions between fiscal and regulatory policies grated environmental management and assess current in terms of environmental outcomes.17 performance, e.g. fisheries management. 12. A discussion of the levels of short- to medium-term risks 5. As feasible, an assessment of environmental resilience, around environmental outcomes in comparison with short- to medium-term risks around key environmental those around fiscal outcomes. outcomes, and threats to long-term sustainability. 13. The consistency of government’s environmental targets 6. Evidence on the environmental impacts of fiscal poli- and announced targets in other domains, e.g. GDP cies.14 growth, growth in agricultural production or tourism.

Policy Quarterly – Volume 14, Issue 2 – May 2018 – Page 37 Reversing the Degradation of New Zealand’s Environment through Greater Government Transparency and Accountability environmental outcomes (regulation is Conclusions governance reforms based on transparency probably the key lever), but a new The proposals advanced here for more appear to be somewhat resilient to political document in the annual Budget effective environmental governance cycles. documents is another ‘hand on the are based on greater transparency, with elephant’, given the challenges and failures ex ante setting of goals, targets and 1. This model was developed by the European Environmental of environmental management and the milestones, and comprehensive ex post Agency: see Smeets and Weterings, 1999. The UN System of Environmental-Economic Accounting (SEEA), a 2012 lack of alternative mechanisms to link monitoring, reporting and accountability. international statistical standard for producing statistics on government strategies, interventions and These have become the familiar tools of environmental stocks and flows and their relationship with public management in New Zealand, and the economy, is consistent with the DPSIR model – see outcomes. United Nations Statistics Division (n.d.) p.4. This initiative would be fully consistent internationally, since the fundamental 2. See https://soe.environment.gov.au/sites/g/files/ with the Treasury’s Living Standards government reforms of the 1980s and net806/f/soe2016-approach-launch6march17_0. pdf?v=1489452161. Framework, which has environmental 1990s, as exemplified in how governments 3. http://www.mfe.govt.nz/more/environmental-reporting/about- quality as one of the key measures of manage, and how Parliaments and the act. 4. Most states and territories in Australia also produce a regular current well-being, and natural capital as public hold governments accountable for, state of the environment report, although approaches to one of the four capital stocks that sustain the conduct of fiscal policy and monetary reporting differ across jurisdictions. well-being over time.18 The proposal would policy. These frameworks have enjoyed 5. To the extent that the response analysis entails judgments about the effectiveness of responses, this should be the also support and reflect the government’s consistent cross-party support and have responsibility of the Ministry for the Environment, not intention for the 2019 Budget to be ‘a well- proved sustainable to date. Statistics New Zealand; the latter does not have a role in evaluation activities. being Budget’. The proposed approach does not 6. See also Warren, 2018, for discussion of the need for attempt to impose specific policy targets forward-looking institutional arrangements and clear Some implications of these proposals in law that reflect a particular view of how objectives for the management of the four capitals (economic, natural, social and human capital). It is recognised that these proposals the trade-offs should be made between 7. Targets are set by Parliament, but not in the form of involve substantial changes to competing policy objectives. In an legislation. 8. A pre-election economic and fiscal update is required by the current governance arrangements for analogous manner to the Public Finance Public Finance Act 20–30 working days prior to a general environmental management. Space Act, the approach recommended relies on election. a legislative requirement for target setting 9. ‘Bear in mind that it will take many years, if not decades, for does not allow for anything more than the various methodologies for measuring and valuing natural brief identification of some of the more and reporting, with the selection of the capital to be refined and properly applied. The full impact important implications: targets left to the political process. The aim on policy making is some time away’ (Boston, 2016, p.365). 10. The parliamentary commissioner for the environment noted • Significant increases would be required is to promote better-informed public and in her 2016 report that: ‘A state of the environment report in the resources devoted to environ- political deliberation over the current state becomes much more useful to the public and decision- of the environment and the policy choices makers when it provides a sense of the relative significance mental monitoring and reporting, the of different environmental issues.’ She recommended development of central guidance, and open to New Zealand; in short, to promote that future reports should ‘contain conclusions on the local government capacity building. ‘more light and less heat’ in the difficult relative significance of different environmental issues. The conclusions should be made transparently on a reasoned These expenditures should be viewed trade-offs, and more sustainable decisions, basis’ (Parliamentary Commissioner for the Environment, as investments in the essential as advocated by Darby (2017) with respect 2016, p.46). 11. These points are due to Ian Ball. infrastructure for environmental to decisions over natural resource 12. Note that this would promote realisation of the high- stewardship. exploitation. level principles of fiscal transparency, participation and • There will be a need for new cross- The proposed initiatives are fully accountability promulgated by the Global Initiative for Fiscal Transparency. High-level principle 4 states: ‘Governments agency integration and coordination consistent with, and indeed strongly should communicate the objectives they are pursuing mechanisms around specific cross- supportive of, a number of the initiatives and the outputs they are producing with the resources entrusted to them, and endeavour to assess and disclose the domain policy analysis and advice and being adopted and considered by the new anticipated and actual social, economic and environmental reports. government, including a Carbon Zero Act, outcomes.’ See Global Initiative for Fiscal Transparency, • There may need to be changes to the the tax review, use of core indicators to 2012. 13. This is conceptually and practically less demanding than structure and/or membership of guide policy, and framing the 2019 Budget constructing estimates of the value of natural capital stocks, parliamentary committees. as a well-being Budget. The proposals and more likely to be relevant to current policymaking. This proposal is due to Peter Clough. • New arrangements for cross-party should not be viewed as all or nothing. 14. Including expenditure policies (direct spending, grants, loans, political deliberation will be desirable, They could be introduced on a phased any contingent instruments); revenue policies (including tax basis. expenditures); and other fiscal opportunity costs (e.g. non- and wider stakeholder and general auctioning of rights to pollute). public consultation and engagement, There may be a prospect of cross-party 15. For example, summary results of full social and to build consensus around the new support for this type of approach – which environmental cost–benefit analysis of any initiatives in the Budget. frameworks over time. relies on transparency rather than putting 16. Including, for example, through changes to the use of • Similar issues arise with respect to the specific policy targets in law – if not on pollution taxes or resource rents. This is related to the introduction of legislation, then through requirement in the Public Finance Act for the government to accountability frameworks and trans- provide, in the Fiscal Strategy Report, details of its revenue parency of social outcomes, and the acceptance of the new frameworks on the strategy, including the government’s objectives for the tax interface between fiscal policy and next and subsequent changes of govern- system and tax policy (section 26L(1)(d)). 17. For example, the adequacy of funding of environmental social outcomes. ment. Once introduced, fundamental regulatory functions, including of regional and local

Page 38 – Policy Quarterly – Volume 14, Issue 2 – May 2018 governments, local communities and iwi; revenue potential of Institute of Governance and Policy Sefton Darby, Tim Irwin, Warren Krafchik, of cap and trade schemes and any foregone revenues from differential treatment of sectors; the fiscal and distributional Studies senior research associates on 3 Todd Krieble, Geoff Lewis, Natasha Lewis, impacts of greenhouse gas liabilities. November 2017, an informal seminar Michelle Lloyd, Marc Robinson and Ken 18. See http://www.treasury.govt.nz/abouttreasury/ at the NZIER on 26 January 2018, and Warren. As always, remaining errors are higherlivingstandards. comments from, inter alia, Jonathan the author’s. Acknowledgements Boston, Ian Ball, Darius Balfoort, This article reflects helpful inputs from a Ferdinand Balfoort, Ivor Beazley, Marie wide range of people, including a meeting Brown, Ralph Chapman, Peter Clough,

References Au, J. and S. Van Zyl (2018) The Start of a Conversation on the Value of Ministry for the Environment (2007) Environment New Zealand 2007, New Zealand’s Natural Capital, Office of the Chief Economic Adviser Wellington: Ministry for the Environment Living Standards Series discussion paper 18/03, Wellington: New Ministry for the Environment (2014) A Framework for Environmental Zealand Treasury Reporting in New Zealand, Wellington: Ministry for the Environment Boston, J. (2016) Governing for the Future: designing democratic Ministry for the Environment (2015) Environment Aotearoa 2015, institutions for a better tomorrow, Bingley: Emerald Wellington: Ministry for the Environment Boston, J. (2018) ‘Investing in New Zealand’s future well-being: protecting Ministry for the Environment (2017) Briefing to the Incoming Ministers: and enhancing our natural capital. Policy Quarterly, Volume 14, Issue environment and climate, November, https://www.mfe.govt.nz/sites/ 1, February 2018, pp. 56-63. default/files/media/About/final-bim-release-overarching-dec-2017.pdf Brown, M., R. Stephens, R. Peart and B. Fedder (2015) Vanishing Nature: OECD (2014) OECD Environmental Performance Reviews: Sweden, Paris: facing New Zealand’s bio-diversity crisis, Auckland: Environmental OECD Defence Society OECD (2017) OECD Environmental Performance Reviews: New Zealand, Chapman, R., A. Thomas, S. Bond, E. Goldberg and C. Livesey (2013) Paris: OECD ‘Supplementary paper: environmental governance’, supplementary Parliamentary Commissioner for the Environment (2016) The State of New paper to the Integrity Plus 2013 New Zealand National Integrity Zealand’s Environment: commentary on Environment Aotearoa 2015, System Assessment, https://www.transparency.org.nz/docs/2013/ Wellington: Parliamentary Commissioner for the Environment, http:// Supplementary-Paper-2-Environmental-Governance.pdf www.pce.parliament.nz/publications/the-state-of-new-zealands- Darby, S. (2017) The Ground Between, Wellington: Bridget Williams Books environment-commentary-by-the-parliamentary-commissioner-for-the- Department of Conservation (2017) Briefing to the Incoming Minister of environment-on-environment-aotearoa-2015 Conservation, October, Wellington: Department of Conservation Productivity Commission (2017) Productivity Commission Briefing to the Department of the Environment and Energy (2016) Australia State of Incoming Minister 2017, November, Wellington: New Zealand Environment 2016, https://soe.environment.gov.au/ Productivity Commission van Dijk, A., R. Mount, P. Gibbons, M. Vardon and P. Canadell (2014) Smeets, E and R. Weterings (1999) Environmental Indicators: typology and ‘Environmental reporting and accounting in Australia: progress, overview, technical report 25, TNO Centre for Strategy, Technology and prospects and research priorities’, Science of the Total Environment, Policy, Copenhagen: European Environment Agency 473–4, pp.338–49 Statistics New Zealand (2017) ‘New Zealand’s greenhouse gas emissions’, Environmental Protection Authority (2017) Briefing to the Incoming October, http://archive.stats.govt.nz/browse_for_stats/environment/ Ministers, October, Wellington: Environmental Protection Authority environmental-reporting-series/environmental-indicators/Home/ European Environment Agency (2015) Sweden Country Briefing: the Atmosphere-and-climate/nz-greenhouse-gas-emissions/nz-greenhouse- European environment – state and outlook 2015, https://www.eea. gas-emissions-archived-19-10-2017.aspx europa.eu/soer-2015/countries/sweden Treasury (2018a) ‘Higher living standards’, http://www.treasury.govt.nz/ Global Initiative for Fiscal Transparency (2012) ‘The Global Initiative on abouttreasury/higherlivingstandards Fiscal Transparency: high-level principles on fiscal transparency, Treasury (2018b) He Puna Hao Pa-tiki: 2018 investment statement, participation, and accountability’, at http://www.fiscaltransparency.net/ Wellington: New Zealand Treasury, http://www.treasury.govt.nz/ giftprinciples/ government/investmentstatements/2018 Jackson, W.J. (2016) Australia State of the Environment 2016: approach, United Nations Statistics Division (n.d.) The System of Environment– Canberra: Department of Environment and Energy Economic Accounts (SEEA), https://unstats.un.org/unsd/envaccounting/ Ministry for the Environment (1997) The State of New Zealand’s Brochure.pdf Environment 1997, Wellington: Ministry for the Environment and GP Warren, K. (2018) ‘Resilience of future well-being’, draft New Zealand Publications Treasury discussion paper, February

Policy Quarterly – Volume 14, Issue 2 – May 2018 – Page 39 Jonathan Boston and Judy Lawrence

Funding Climate Change Adaptation the case for a new policy framework he task of mitigating climate Abstract change (i.e. reducing greenhouse Adapting to climate change poses unprecedented technical, Tgas emissions) has been called a ‘super wicked’ policy problem (Lazarus, administrative and political challenges for which New Zealand’s 2009). But adapting to, and minimising current planning, regulatory and funding frameworks are ill- the impacts of, climate change will be no equipped. Without reform, they will deliver neither efficient nor less daunting (Mullan et al., 2013; OECD, 2015; Reisinger et al., 2014). Indeed, equitable outcomes. Indeed, they will encourage governmental adaptation poses unprecedented technical, delay, incentivise sub-optimal solutions, increase future burdens, administrative and political challenges. In effect, policymakers are confronted and reduce societal resilience. For sound anticipatory governance, not only with an unparalleled, slow- our current frameworks need reform. This article summarises the motion natural disaster, but also one that nature of the adaptation challenges facing New Zealand, outlines is destined to intensify in scope and scale as the century progresses. There will be the problems with current policy settings, identifies principles and multiple negative impacts: rising sea levels; considerations that should guide the reform agenda, and reviews more severe droughts and rainfall events; new biosecurity risks; an accelerated loss of several policy options. On balance, we favour creating a new national biodiversity; and changing human disease institution mandated to fund or co-fund, in accordance with vectors. Many of these phenomena will be statutory criteria, the major costs of adaptation. outside the variability ranges previously experienced. Keywords climate change adaptation, funding, cost effectiveness, As an island nation, New Zealand will equity, anticipatory governance be particularly badly affected over the coming century and beyond by coastal Jonathan Boston is Professor of Public Policy in the School of Government at Victoria University erosion and inundation (Royal Society of of Wellington. Judy Lawrence is a Senior Research Fellow at the New Zealand Climate Change Research Institute at Victoria University of Wellington and co-chair of the Climate Change Adaptation New Zealand, 2016; Stephenson, McKenzie Technical Working Group. and Orchiston, 2017). Tens of thousands

Page 40 – Policy Quarterly – Volume 14, Issue 2 – May 2018 of people – and perhaps more – will Are New Zealand’s current funding, of adaptation measures or protection eventually need resettling on higher planning and regulatory frameworks, and strategies adopted. ground. Large investments will also be their related policy tools and instruments, Based on a study of 136 major coastal required to redesign, reposition and future- well designed to meet the scope, scale and cities, Hallegatte et al. (2013) estimated proof public infrastructure, especially duration of the challenges of climate that, in the absence of additional protective transport networks and water services. change adaptation? In our view, the answer measures, sea level rise and related changes Additionally, the damage caused by climate- is unequivocal: existing arrangements are to storm surges, floods and major storms related natural disasters will impose not fit for purpose. They lack the capacity could cost globally as much as US$1 trillion growing financial burdens – on citizens, to ensure sound anticipatory governance.1 annually by 2050 and multiple times this businesses and public authorities. Already They will not deliver equitable or efficient figure by 2100. Likewise, Hinkel et al. the annual cost of repairing land transport outcomes. This article explains why. In so (2014) estimate that if the sea level rises by networks damaged by weather-related doing, it gives particular attention to the 1.23 metres by 2100, and if no adaptation events has more than quadrupled over the weaknesses in current adaptation funding occurs, then up to 4.6% of the global past decade, while the economic impact of mechanisms and how these might be population would be flooded annually, major floods and droughts is increasing. rectified. Here we highlight only a selection with expected losses of over 9% of global The series of major rainfall events which of issues and consider a limited number of domestic product annually. Losses of this afflicted parts of New Zealand in early 2018 policy options. Our primary purpose is to magnitude would be totally unsustainable. are merely a foretaste of what lies ahead. Likewise, the visibility of recent plant pathogens affecting our native trees (e.g. Based on a study of 136 major coastal myrtle rust and kauri die-back), on top of cities, ... in the absence of additional the stresses our natural ecosystems are exposed to from the combination of exotic protective measures, sea level rise and animal pests (e.g. deer, possums, stoats, rats and mice), are a portend for the future related changes to storm surges, floods and facing New Zealand. major storms could cost globally as much Governments will face numerous policy challenges in seeking to reduce and mitigate as US$1 trillion annually by 2050 ... such impacts. Many of the likely impacts are beset with ‘deep uncertainty’ (Walker, Lempert and Kwakkel, 2012; Walker, Marchau and Kwakkel, 2013), especially underscore the need for reform, rather According to Hinkel et al., effective coastal beyond mid-century. Policymakers will than provide a fully-developed and adaptation measures, including managed be faced with abrupt and unexpected compre-hensive policy approach. retreat (see Box 1), can be expected to biophysical changes; multiple, com- reduce these losses substantially (see also pounding and cascading risks (between The costs of climate change Reisinger et al., 2015). and across sectors and domains of interest); Estimating the likely long-term costs of There are no comprehensive estimates the complexities of planning over extremely climate change poses significant analytical of the costs of sea level rise for New Zealand long time horizons; and complicated intra- and technical challenges. Take, for instance, over the coming century. But an initial generational and intergenerational trade- the costs of sea level rise, which is but one study of exposed residents, buildings and offs (Lawrence et al., 2013; Lawrence et al., of the many anticipated impacts (Boettle, some infrastructure (i.e. roads, railways, 2016). Politically, too, there is an acute Rybski and Kropp, 2016; Hallegatte et al., port and airport facilities, and critical problem: the adaptation strategies needed 2013; Hinkel et al., 2014; IPCC, 2014). The facilities or government buildings) by Bell, to safeguard future interests will often expected costs will depend on numerous Paulik and Wadwha (2015) for the entail significant upfront costs, not least to variables, including: the time frames Parliamentary Commissioner for the ensure that today’s investments can be under consideration; the path of global Environment (2015) provides an indication adjusted depending on the evolution of greenhouse gas emissions; the projected of the scale of costs. For instance, it is climate change. Moreover, while such costs impact of global warming on the polar ice estimated that at least 43,683 homes (or are visible, direct and relatively certain, sheets, ocean currents and storm patterns; about 133,000 people) and 1,448 many of the benefits are indirect and much the assumptions made about the pattern commercial properties are within 1.5 less certain. Concerted public opposition and scale of future human development; metres of the current average high tide in to prudent, proactive, anticipatory the nature and types of risks considered spring (Bell, Paulik and Wadwha, 2015).2 measures is thus inevitable; all the more so and their related costs (e.g. direct and The buildings affected have a replacement if those who face substantial losses are indirect, market and non-market); cost of about $20 billion (in 2011 dollars). unable financially to make the necessary how losses (e.g. of land, buildings and Sea level rise of up to three metres would adjustments in a timely and just manner. infrastructure) are valued; and the kind affect over 280,000 people and damage

Policy Quarterly – Volume 14, Issue 2 – May 2018 – Page 41 Funding Climate Change Adaptation: the case for a new policy framework buildings with a replacement cost exceeding reduced by preventing further housing 2016).3 We address the most obvious $50 billion (in 2011 dollars). Public developments in risky areas, relocating limitations and deficiencies here. infrastructure, including transport existing settlements, and prudent First, while local authorities in New networks, energy systems and water investments in more resilient infrastructure. Zealand have various proactive legislative services, will also be significantly affected Significantly, Local Government New responsibilities to reduce the risks posed (e.g. coastal roads and numerous waste Zealand estimates that $1 spent on risk by natural hazards, including the effects of water treatment plants). Much of this reduction saves at least $3 in future disaster climate change, the relevant statutes (e.g. infrastructure is the responsibility of costs by avoiding losses and disruption the Resource Management Act 1991 subnational government and some of it has (Deloitte Access Economics, 2013). Some (RMA), the Soil Conservation and Rivers not been well maintained (Office of the international estimates of the likely savings Control Act 1941, the Civil Defence Auditor-General, 2014). are substantially higher (Healy and Emergency Management Act 2002 and the Several matters are clear: a) the costs Malhotra, 2009). But there is a problem: Building Act 2004) are poorly aligned. For will increase in a non-linear manner (i.e. public expenditure on pre-event risk instance, whereas the Building Act focuses as seas rise, the costs will rise even faster); reduction is much harder to ‘sell’ politically on a 50-year time frame, the New Zealand b) the costs will be greater if global than the funding of post-disaster recovery. Coastal Policy Statement issued under the emissions peak late and then fall slowly; c) Voters, it seems, reward governments that RMA requires local authorities to look the costs will escalate significantly as the spend money on disaster relief, but not forward ‘at least 100 years’. Additionally, the century advances; d) the costs will be those investing in prevention and various legislative and regulatory requirements are not being applied consistently by decision-makers. Some Fortunately, the impacts of climate local authorities have been much more change and their related costs can proactive than others. Guidance and support from central government has been be reduced by preventing further generally insufficient. Second, notwithstanding their housing developments in risky areas, responsibilities to mitigate long-term risks, relocating existing settlements, and many local authorities, often under pressure from property developers, have prudent investments in more resilient been approving major new subdivisions infrastructure. and other developments in areas that are likely to be vulnerable to rising seas later in the century (see, for example, Gibson and Mason, 2017). This suggests that greater if urban development continues in preparedness (ibid.). This phenomenon is current policy frameworks and regulatory areas exposed to rising seas and inundation; common across advanced democracies. It standards may need adjustment, or at least e) the costs will fall unevenly geographically reflects humanity’s cognitive biases, that ways must be found to ensure that and intermittently; and f) the costs will be including myopia: citizens tend to value councils use their available powers more greater if governments (national and post-event cures over preventative effectively to safeguard future interests. subnational) fail to plan and invest in interventions (Boston, 2017a, 2017b; White Third, the existing policy arrangements effective risk reduction and adaptation and Haughton, 2017). Finding ways to focus too much on post-event responses initiatives. counter such propensities will be crucial (e.g. post-disaster assistance and recovery) Aside from sea level rise, New Zealand over the coming decades. Otherwise, there and too little on pre-event responses – that faces many other climate-related costs. For will be many sub-optimal policy decisions is, public funding designed to enhance instance, insured losses due to extreme – ones that increase and entrench risk societal resilience, minimise risk, and weather events were $175 million in 2013 exposure, thereby placing additional enable cost-effective adjustments and and $135 million in 2014 (Insurance burdens on future generations. This works transitions. Hence, New Zealand has a Council of New Zealand, 2017). The in the opposite direction to what effective Natural Disaster Fund (administered by Treasury estimates that the drought in 2013 adaptation requires, namely to reduce risk EQC) and an Adverse Events Fund cost New Zealand around $1.5 billion. now and for the future. (administered by the Ministry for Primary Meanwhile, the cost of repairing land Industries to assist rural communities), but transport networks damaged by weather- The problems with current funding, planning no equivalent dedicated funds to reduce related events continues to increase, quite and regulatory frameworks risk exposure (i.e. arising from climate apart from the ongoing disruption to New Zealand’s current policy frameworks change). Similarly, there are different people and the economy. are poorly equipped to address the nature, national-level policies for repairing and Fortunately, the impacts of climate magnitude and duration of the problems future-proofing local government change and their related costs can be posed by climate change (Lawrence, 2015, infrastructure. For instance, the national

Page 42 – Policy Quarterly – Volume 14, Issue 2 – May 2018 civil defence plan provides for central base and borrowing limits) to fund perpetuates lock-in of communities in government to contribute up to 60% of the large-scale relocation of affected assets risky areas. Second, it generates a costs of repairing underground water and and communities, the purchase of land potential ‘safety paradox’, where sewerage services after a catastrophic event, for resettlement, and the construction communities are lulled into a feeling of but there are no similar guaranteed of new infrastructure. More generally, safety which can then rebound on contributions for future-proofing many local authorities – and especially public authorities when the next infrastructure.4 those with ageing populations – will ‘disaster’ happens. Fourth, and related to this, the struggle to raise the capital necessary · There is no current consistent and provisions in most household insurance for renewing, upgrading and future- centrally managed mechanism for contracts (and related EQC cover) do not proofing their public infrastructure. funding the costs of managed retreat provide for ‘betterment’. This means, for · The current mechanisms through (see Box 1). As a result, local authorities instance, that an insurer will repair a home which the central government provides are attempting to develop their own which is at risk of future flooding but will financial assistance to communities, approaches. But these will generate not contribute to the relocation of the businesses and households affected by inconsistencies and inequities across home or the construction of a new home natural disasters tend to be ad hoc and New Zealand. Moreover, without a fair, on a safer site. As a result, risk exposures inconsistent. For instance, in response consistent and nationally mandated have become entrenched. Eventually, some residents will be unable to secure adequate insurance for their properties. Adaptation funding arrangements Fifth, regarding the overall role of insurance, it is sometimes argued that which seek to reduce exposure to governments should rely on private insurance markets, the pricing of risk and climate change risks should have individual self-interest to generate the two overarching goals: long-term cost desired adaptive responses by citizens to climate change. But insurance merely minimisation and equitable burden redistributes and transfers risk; it does not lessen it. Hence, while insurance is a sharing. desirable – indeed vital – complement to robust risk management, it is no substitute for it. Moreover, the limitations of to the severe flooding of Edgecumbe in approach to adaptation funding, insurance markets will be exacerbated as the Bay of Plenty in 2017, where around affected residents are likely to resist risk profiles change over coming decades 70% of the town’s properties were locally crafted proposals for managed (IPCC, 2014; Kunreuther and Lyster, 2016; damaged, the government announced retreat. This poses at least three Storey et al., 2017; O’Hare, White and that EQC would be responsible for problems: a) the risk of lengthy and Connelly, 2016; Treasury, 2015). cleaning up and repairing all affected expensive legal proceedings; b) the Finally, aside from the post-event focus properties, including the 100 or so that prospect of prevarication and long of much disaster-related funding, there are were not insured or where the owners delays in decision making, thereby multiple other problems with existing lacked the necessary funds to undertake intensifying risk exposure, exacerbating funding arrangements for adaptation: repairs. Residents in many other future damages, and increasing the · Currently, local government owns and communities similarly affected by overall long-term costs of adjustment; manages at least $120 billion of fixed severe flooding have not always been and c) the likelihood that residents will assets (including 100% of the country’s so fortunate. Meanwhile, special demand the construction of hard drinking water, waste water and storm arrangements were made for the many structures to protect their properties; water assets, and 88% of the roads) thousands of Christchurch residents in many cases such structures will not (Office of the Auditor-General, 2014). whose properties were ‘red-zoned’ as a be cost-effective and will offer only But there is a gross mismatch between result of the major earthquakes in temporary protection. the resources and capabilities available 2010–11. · There are no mechanisms to ensure that to local authorities and the scale of their · Leaving aside the inequities caused by the costs of climate change adaptation adaptation challenges. For instance, inconsistent Crown ‘bailouts’ following are shared equitably, whether many communities (e.g. Dunedin, the natural disasters, bailouts cause several intergenerationally or intra- eastern Bay of Plenty and the West other problems. First, they raise public generationally. Coast of the South Island) face the expectations of continued structural In short, current regulatory, planning prospect of relocating significant protection and funding assistance. This and funding arrangements are not numbers of people by mid-century, but creates a high degree of path adequate for the policy challenges posed they lack the capacity (via their rating dependence, at least politically, and by climate change. This applies not only

Policy Quarterly – Volume 14, Issue 2 – May 2018 – Page 43 Funding Climate Change Adaptation: the case for a new policy framework

Box 1: Managed retreat Technically, ‘managed retreat’ has been defined in a coastal purchase was offered within an inclusive participatory process setting as ‘the application of coastal zone management and across the community which linked environmental, social, mitigation tools designed to move existing and planned economic and cultural goals by providing new public resources development out of the path of eroding coastlines and coastal and accommodating those who moved to other areas. The hazards’ (quoted in Hino, Field and Mach, 2017, p.1). It is availability of a regional fund enabled the retreat from flooding deliberate, coordinated and planned. The aim is to reduce to be implemented. natural hazard risk permanently, rather than temporarily. Managed retreat options are being considered currently as According to Hino, Field and Mach, over the past three part of a suite of adaptation options in two coastal localities. In decades approximately 1.3 million people in 22 countries Matatä in the Bay of Plenty a voluntary retreat option has been have been relocated – in both pre- and post-disaster contexts included after ten years of investigations following a weather- and both voluntarily and involuntarily – through managed induced debris flow that engulfed a coastal community.5 For retreat. While significant, this is a tiny number compared to voluntary retreat, landowner support will be essential for any the scale of displacement expected during the 21st century property purchase arrangements. If retreat were to be enforced, and beyond (which will affect hundreds of millions globally). empowering legislation is likely to be required. Funding to Understandably, managed retreat is often viewed as complex incentivise implementation is beyond the means of most district and controversial, partly because of the financial costs, but also councils, which means that regional and central government because of the more intangible costs – the loss of ‘place’, the funding would be required. Other issues make implementation social, emotional and psychological challenges of displacing difficult: rating equity; confirmation of retreat boundaries; people from their homes, the disruption to community life, availability of affordable alternative building sites; existing use and the loss of buildings or land of architectural, aesthetic or rights; planning issues; and property purchase criteria. spiritual value. However, managed retreat can be implemented In the second case, the Clifton to Tangoio Coastal Hazards in a staged and progressive manner, as ‘managed’ suggests, Strategy 2120 in Hawke’s Bay included managed retreat within preferably through community engagement processes that can adaptive pathways for the medium-to-long term in a year- address the sense of loss of place and value. long community engagement process that has recommended An example in New Zealand where managed retreat has adaptive pathways to the three participating councils for been implemented is Twin Streams in Waitäkere, Auckland implementation.6 (Vandenbeld and MacDonald, 2013). Voluntary property to the problems generated by sea level rise have two overarching goals: long-term (e.g. the risk of giving individuals, and more severe rainfall events, but also cost minimisation and equitable burden companies or other organisations to many of the other impacts that climate sharing. incentives to act in ways that are likely change will generate (e.g. the impacts on 1. Long-term cost minimisation – funding to increase overall adaptation costs and/ agriculture, aquaculture and fishing arrangements should seek to minimise or shift costs inappropriately onto resulting from warmer temperatures, the long-term net costs of climate taxpayers or ratepayers). more severe droughts and ocean change adaptation by encouraging 2. Equitable burden sharing – funding acidification). Without appropriate cost-effective decisions regarding arrangements should be consistent reforms, existing policy frameworks are district planning and investment in with widely accepted principles of destined to increase, rather than reduce, public infrastructure. The aim would social equity (or distributive justice) risk exposure, exacerbate future be to reduce the likely costs of climate- (Kunreuther and Pauly, 2017). Such adaptation costs, and contribute to related impacts (e.g. from major floods) principles include the fair opportunity multiple inequities. In the interests of through cost-effective measures to requirement. This is the idea that sound anticipatory governance, a better future-proof infrastruc-ture and people should not be discriminated framework is required. undertake managed retreat. Successful against or suffer disadvantages for adaptation will, in turn, help to reduce things over which they have little or Funding climate change adaptation – future insurance (including EQC) costs, no control. Such a principle provides guiding principles thereby keeping insurance more an ethical basis for funding assistance Any new policy framework for climate affordable and available. Consistent for people who suffer an accident or change adaptation must be guided by with this, funding arrangements, and are harmed by a natural disaster which sound principles. Adaptation funding related planning and regulatory could not have been reasonably arrangements which seek to reduce frameworks, must be well-coordinated foreseen or avoided. Another relevant exposure to climate change risks should and designed to minimise moral hazard principle is that of ‘comparative justice’

Page 44 – Policy Quarterly – Volume 14, Issue 2 – May 2018 or ‘like treatment’: cases that are alike · ensuring a high level of transparency affordability. Perhaps the strongest in all relevant respects should be in relation to revenue collection and objection, however, is the claim that future treated alike; where cases differ, funding allocations; and generations will be better off than current ‘material principles’ of justice can be · ensuring fiscal sustainability. generations, at least in terms of real applied to determine the extent to Applying these principles to the incomes per capita. Hence, they will be in which, and the means by which, question of who pays, for what and when a better position than those alive today to differential treatment is justified. raises some practical questions. First, is cover the long-term costs of adaptation. These include considerations of need, there a case for pre-funding some of the Also, if the costs are much less than some the capacity to pay, and various expected costs of adaptation? Second, are fear, future governments will have little notions of moral responsibility (Miller, there grounds for the central government difficulty covering them from normal 2007). One of the latter, known as to contribute to the adaptation costs facing ongoing revenues. ‘outcome responsibility’, is the idea that subnational governments? Third, is there But there can be no guarantee that people (and public authorities) should a case for public authorities compensating future generations will be better off, bear responsibility for their own those harmed by the impacts of climate however ‘better off’ is defined. After all, actions and decisions. Another is the change: for instance, by funding some or humanity’s failure to live within safe and idea of ‘remedial responsibility’: this all of citizens’ private property losses sustainable planetary boundaries may curb responsibility arises whenever there is (including land) or funding some or all of future economic growth. And even if per a situation needing a remedy. If those who have caused the harm are in a position to rectify the problem, then ... even if per capita incomes continue to they have a moral responsibility to do rise, there remain strong moral grounds so. If they unable to, but there are others with the requisite capacity (e.g. for those who have caused climate- a central government), then the remedial responsibility falls to those related harm to bear part of the cost. who are most capable. Regarding the costs of climate change adaptation, the relevant principles of distributive justice should be applied both the costs of managed retreat (e.g. moving capita incomes continue to rise, there intergenerationally and intra- expenses, the loss of business income, remain strong moral grounds for those generationally. providing risk-free land, etc.)? who have caused climate-related harm to Any adaptation funding framework bear part of the cost. Societies do not, after (and related institutional arrangements The issue of pre-funding future adaptation all, avoid prosecuting and penalising and policy instruments) should also take costs criminals who are poorer than their victims. into account a range of other considerations The case for pre-funding rests primarily In our view, there is a plausible prima (Boston, 2017a), including: on the principle of responsibility, namely facie case for proportionate pre-funding of · making the best possible use of the that those who have caused a harm should future costs of climate change adaptation. available scientific evidence and be required to contribute to alleviating the This suggests that any overall adaptation relevant expert advice; damage they have caused (or will cause funding framework should include a · minimising administrative and in the future). This principle of justice is mechanism – perhaps similar in concept compliance costs; embodied in the idea of polluter pays. In to the New Zealand Superannuation Fund · ensuring procedural fairness and the case of climate change, the damage – to help cover future climate-related thereby minimising the likelihood of that will be inflicted on current and liabilities. A potential source for pre- costly litigation; future generations (and hence the costs of funding could be revenue generated via an · ensuring sufficient policy clarity, adaptation that they will bear) is largely additional levy on fossil fuels, with the consistency and stability over time to due to the activities of recent generations. pooled funds invested and then drawn facilitate effective long-term regional Accordingly, there is a strong case for down progressively later in the century. spatial planning and infrastructure taxing current citizens (e.g. taxpayers and investment, thus generating an ratepayers) and building up a public fund National cost sharing adequate degree of certainty for (or funds) which can be deployed to help There are multiple grounds for sharing affected households, businesses and cover the financial costs of adapting to the costs of adaptation across central and other organisations; climate change later in the century. subnational government, including the · enabling sufficient policy flexibility to Against this, the scale of the costs of considerations of efficiency and equity accommodate changing risk profiles; adaptation remains uncertain. Also, future (including the principle of remedial · disincentivising policy responses that technological innovations may significantly responsibility). As noted earlier, adaptation create path dependence; reduce them, thus enhancing their costs are bound to vary – often significantly

Policy Quarterly – Volume 14, Issue 2 – May 2018 – Page 45 Funding Climate Change Adaptation: the case for a new policy framework

– across different households, communities, and how readily those affected can bear government pronouncement that regions and economic sectors. Many of the the expected losses. In practice, many of compensation will not be provided (e.g. costs will fall in arbitrary ways, with little or the situations that will arise over coming to those who build in certain vulnerable no regard to the extent of each citizen’s (or decades are likely to be complex, not least areas) is unlikely to be believed. In region’s) contribution to climate change because of rapidly changing risk profiles short, a credible commitment problem (i.e. via their cumulative greenhouse and unpleasant surprises. For instance, seems bound to arise. gas emissions) or their capacity to pay increased drought risk will have impacts · There will be strong pressures, in the either for the damages inflicted or for the on the range within which current land interests of overall fairness, for any measures required to minimise future uses can operate, triggering potentially compensatory arrangements to be risks (e.g. by relocating to safer locations). disruptive changes if inadequately broadly consistent, both across the Importantly, the resources available to anticipated and planned for, stranding country and over extended periods of subnational governments to implement assets and livelihoods. Similarly, coastal time. This points to the need for a prudent and cost-effective adaptation areas previously deemed to be safe may nationally mandated framework with measures vary (depending on their relative unexpectedly face the risk of inundation cross-party support. wealth, demographic structure, etc.). Some or the sea level may rise much faster in · In the absence of a well-designed, may face only modest costs, yet have ample certain areas than previously projected. In principled and consistent system of resources; others will face very large some cases the relevant authorities may compensation, there will be political costs, yet have limited resources. Without be obliged to force people to relocate to pressures for governments to implement some form of national cost sharing, the safer areas. Where compulsion is involved high-cost engineering ‘solutions’ to protect vulnerable properties (and also threats of legal action). Yet many of these ... it might seem inequitable to provide potential ‘adaptations’ will provide only temporary respite. compensation to ... people who have · Pre-event compensation could generate moral hazard (e.g. by encouraging risky purchased second or third homes on investments). It will be imperative to vulnerable coasts in the full knowledge mitigate such risks through well- designed regulatory and planning that climate change might render their frameworks. Any compensatory regime will be properties uninhabitable at some future controversial and its implementation open date. to fraudulent claims.7 As indicated, there are many relevant principles and considerations, and some of these will be in tension. It will be important, therefore, principles of need and ability to pay will in acquiring land, there has been a long to design any regime carefully, with proper almost certainly be violated. Equally, it will history in New Zealand (and elsewhere) of public engagement on the relevant issues be hard for poorer communities to find providing compensation to those directly and options, and detailed stakeholder the resources necessary to fund proactive affected (and sometimes those indirectly involvement. measures to mitigate future risks. affected). The provisions relating to such compensation in New Zealand are set out Reforming the funding of climate change Public compensation for losses in considerable detail in the Public Works adaptation – the broad options The question of whether those faced with Act 1981. In terms of the future funding of climate the loss of property (including land) and/or While designing compensatory change adaptation, there are at least four income should receive public compensation arrangements is beyond the scope of this possible options: is challenging (Sprinz and von Bünau, article, several matters deserve emphasis: 1. expand and modify existing local 2013). There are various, often conflicting, · Given the long-standing practice in government funding instruments; principles. For instance, it might seem New Zealand of societal risk pooling 2. expand and modify existing central inequitable to provide compensation to and cost sharing for natural disasters, government funding instruments wealthy people who have purchased second the public are likely to expect (excluding EQC), albeit in the context or third homes on vulnerable coasts in the governments to compensate (at least of annual appropriations; full knowledge that climate change might partially) those suffering loss and 3. amend the legislative mandate of EQC render their properties uninhabitable at damage from climate change, including so that it becomes responsible for both some future date. Against this, it is often those facing significant costs in order pre-disaster funding (i.e. for protective hard to determine whether particular to reduce climate-related risks (e.g. and preventative measures) and post- risks could have reasonably been foreseen relocation). In these circumstances, any disaster funding; and

Page 46 – Policy Quarterly – Volume 14, Issue 2 – May 2018 4. establish a new national Climate adequately funded to undertake such do not pay the EQC levy. Yet many of these Change Adaptation Fund with a interventions, it could reduce the households and businesses will stand to statutory mandate to fully fund, part- commission’s future liabilities and the gain significantly if the EQC becomes a fund or co-fund various specified overall financial costs of climate change pre-event funder of managed retreat and adaptation-related costs. impacts. Further, under such an approach other large-scale, area-wide adaptation In our view, the first three options are responsibilities for (some aspects of) responses. Lastly, effective pre-event unlikely to satisfy the relevant funding funding adaptation would be assigned to planning and adaptation will require principles discussed above. Hence, the an independent body operating in extensive public consultation and fourth option is the one that could be accordance with statutory criteria. deliberation. Such processes and developed further, potentially to apply to Potentially this would increase the procedures are far removed from those the full range of climate change impacts. likelihood of funding decisions being currently undertaken by EQC. This, in turn, Regarding option 1, as previously evidence-informed and principled, and would entail very different skills and argued, existing local government funding broadly consistent over time, thus expertise. For such reasons, we do not arrangements will not be sufficient to meet increasing the fairness and legitimacy of favour option 3. the expected costs of climate change the policy regime. A modified EQC could The final option would be to create a adaptation, including large-scale managed also incorporate an element of pre-funding new funding entity – such as a Climate retreat and major infrastructure for future adaptation costs. Change Adaptation Fund – and modify investments. Only central government has the necessary resources and mechanisms to undertake such tasks. The primary aims [of a new funding entity] Regarding option 2, central government would be to enhance the capacity for could, at least in theory, rely on existing funding instruments, using annual sound anticipatory governance through appropriations to co-fund some of the costs of climate change adaptation. the funding of cost-effective and equitable Potentially, it could also fund specific responses ... adaptation projects (including managed retreat) directly, rather than funding local authorities to do it. The funding of ‘red- zoned’ properties in Christchurch provides Against this, giving EQC major other policy settings accordingly. The a possible model (Canterbury Earthquake responsibilities for pre-event adaptation primary aims of such an entity would be Recovery Authority, 2016). But such funding would fundamentally alter the to enhance the capacity for sound arrangements would be ad hoc and thus commission’s current role as an insurer. It anticipatory governance through the unlikely to generate the desired level of would result in the commission having funding of cost-effective and equitable consistency, certainty, stability, credibility multiple and potentially conflicting responses, thereby reducing climate change or long-term durability. Moreover, as the objectives – serving simultaneously as an risk exposure over time and minimising scale of the adaptation challenges increases insurer of residential properties (with a future damage and loss. Ideally, such a fund over coming decades, there are bound to primary focus on seismic events), a would complement existing post-event be political pressures – from subnational mechanism for mitigating a wide range of funding mechanisms, such as EQC and governments, civil society and affected risks, and a funder (or co-funder) of often private insurance arrangements, so long as citizens – for the central government to large-scale adaptation projects, including conflicting outcomes between them were develop more comprehensive, principled major infrastructure investments and addressed at the same time. As with the and tailored approaches. Aside from this, residential relocation. Among other things, Natural Disaster Fund, a funding pool there would be limited scope under current it would raise questions over whether the could be built up over several decades for fiscal arrangements for specific pre-funding insurance mandate of EQC should be allocation increasingly over the century, of future adaptation costs, except via more extended (e.g. to include public property thereby enabling the burden of climate concerted efforts to reduce net Crown debt. and businesses). It would also pose the risk change adaptation to be shared more fairly Option 3 would involve amending the that any fund that was built up over time to across several generations. legislative mandate of EQC and extending help pay for the future costs of adaptation An advantage of such an approach is the role of the Natural Disaster Fund to could be depleted (unless quarantined that it would enable policymakers to include proactive, pre-event adaptation separately from the post-disaster fund) establish a purpose-built institution with funding. Arguably, this would provide EQC every time a major natural disaster occurred. a specific and enduring statutory mandate. with both a stronger incentive and a greater Aside from this, questions would arise Creating any new statutory funding entity, capacity to reduce post-disaster costs about how EQC should be funded. however, raises multiple and complex through cost-effective adaptation measures. Currently, those who are not insured, design issues. These include its institutional Assuming that the commission was together with commercial property owners, form and mode of governance and the

Policy Quarterly – Volume 14, Issue 2 – May 2018 – Page 47 Funding Climate Change Adaptation: the case for a new policy framework nature and scope of its funding post hoc, inadequately proactive and 2 This study covered only the more populated regions of New Zealand. It included only some infrastructure assets. responsibilities (e.g. whether these should preventative, and poorly integrated. Not 3 See also recent contributions from the Society of Local Government Managers (2015) and Local Government New cover the full range of climate change only are overall resources insufficient for Zealand (2016a, 2016b). impacts or only specific types, and whether the required adaptive responses – such 4 Note that a Housing Infrastructure Fund was announced in early February 2017. This is designed to assist councils there should be transitional assistance as building resilient public infrastructure, in high-growth areas with significant housing pressures to fund new public infrastructure (including water supply, available for industries or regions facing undertaking large-scale managed retreat, storm water, waste water and roading). Funding of around large-scale, compounded climate-related and transitioning to more sustainable rural $1 billion is available to eligible councils via a competitive bidding process. impacts). Similarly, there is the question of land uses as the frequency and magnitude 5 ‘A process towards a settlement framework to mitigate debris flow risk – Awatarariki fanhead, Matatä’, https:// what specific costs should be funded, to of impacts increase – but in many cases www.whakatane.govt.nz/sites/www.whakatane.govt.nz/files/ what extent and in accordance with what there is a gross mismatch between the documents/about-council/council-projects/debris-flow-and- landslide-hazards/policy_committee_2_july_2015.pdf. criteria. Different types of responses (e.g. resources and capabilities available to 6 Clifton to Tangoio Coastal Hazards Strategy, http://www. hbcoast.co.nz/strategy-development/. investment in public infrastructure, the local authorities and the scale of the 7 So far in Christchurch, for instance, EQC has identified funding of managed retreat, transitional task in hand. For such reasons, current fraudulent claims following the earthquakes worth about $4.6 million, and 979 fraudulent claims have been assistance, etc.) would require very different arrangements will not achieve the goals of prosecuted. criteria. At the same time, any large-scale cost minimisation and equitable burden relocations will require new infrastructure sharing, whether intra-generationally Acknowledgements investments, so the two functions would or intergenerationally. Instead, they will This article is based on our IGPS/NZCCRI need to be properly integrated. contribute to sub-optimal decisions working paper (2017). The authors Related to this, concomitant changes to and outcomes, thereby unnecessarily acknowledge the valuable contributions to current regional and district planning burdening future generations. As part the development of this paper from those arrangements would also need to be made. of any comprehensive plan to enhance attending two workshops in Wellington on If the central government becomes a major the country’s adaptive capacity, there is a 24 February and 21 July 2017. We would funder of adaptation – albeit via an arm’s- good case for establishing a new national, particularly like to thank Hilary Blake, length statutory entity – it would require publicly administered fund that is pre-event Roger Blakeley, Marie Brown, Bryce Davies, a greater influence over long-term spatial and preventative. Such a fund would need Blair Dickie, Tim Grafton, Mike Reid, planning, not least to minimise the risk of to be carefully designed, with the relevant David Robson, Detlef Sprinz and Ruth moral hazard. But this raises important criteria for its funding responsibilities Stokes for their advice and substantial constitutional issues regarding the clearly prescribed in enabling legislation. comments on earlier drafts. We are also respective roles of central and subnational Creating such a fund would require most grateful to the New Zealand Society government, some of which are bound to potentially significant changes to current of Local Government Managers, the be politically sensitive. Consideration of spatial planning rules, building regulations, Greater Wellington Regional Council, and such institutional design issues raised here insurance arrangements and the funding the School of Government and the New deserves rigorous analysis and public of local infrastructure. Accordingly, any Zealand Climate Change Research Institute deliberation. move in this direction will need thorough at Victoria University of Wellington for independent scrutiny, extensive public their financial and in-kind contributions. Conclusion deliberation and a concerted political New Zealand’s existing institutional effort to achieve a durable cross-party arrangements are poorly designed for consensus on the new policy framework. the adaptation challenges posed by 1 For analyses of ‘anticipatory governance’, see Boston climate change: they are too ad hoc and (2017b), Guston (2014) and Quay (2010).

References

Bell, R., R. Paulik and S. Wadwha (2015) ‘National and regional risk Committee on Climate Change (2015) Progress in Preparing for Climate exposure in low-lying coastal areas’, Hamilton: NIWA Change: 2015 report to Parliament, London: Committee on Climate Boettle, M., D. Rybski and J. Kropp (2016) ‘Quantifying the effect of sea Change level rise and flood defence: a point process perspective on coastal Deloitte Access Economics (2013) Building our Nation’s Resilience to flood damage’, Natural Hazards and Earth System Sciences, 16 (2), Natural Disasters, Australian Business Roundtable for Disaster pp.559–76, https://doi.org/10.5194/nhess-16-559-2016 Resilience and Safer Communities, http://australianbusinessroundtable. Boston, J. (2017a) Safeguarding the Future: governing in an uncertain com.au/assets/documents/White%20Paper%20Sections/DAE%20 world, Wellington, Bridget Williams Books Roundtable%20Paper%20June%202013.pdf Boston, J. (2017b) Governing for the Future: designing democratic Gibson, E. and C. Mason (2017) ‘Drowning dreams: apartment block institutions for a better tomorrow, Bingley: Emerald where the waters meet’, Newsroom, 12 December, https://www. Canterbury Earthquake Recovery Authority (2016) Land Zoning Policy and newsroom.co.nz/2017/12/11/67387/drowning-dreams-apartment- the Residential Red Zone: responding to land damage and risk to life, block-where-the-waters-meet Wellington: EQ Recovery Learning Guston, D. (2014) ‘Understanding “anticipatory governance”’, Social Climate Change Adaptation Technical Working Group (2017) Adapting to Studies of Science, 44 (2), pp.218–42 Climate Change in New Zealand: stocktake report, Wellington: Climate Hallegatte, S. et al. (2013) ‘Future flood losses in major costal cities’, Change Adaptation Technical Working Group Nature Climate Change, 3, pp.802–6

Page 48 – Policy Quarterly – Volume 14, Issue 2 – May 2018 Healy, A. and N. Malhotra (2009) ‘Myopic voters and natural disaster O’Hare, P., I. White and A. Connelly (2016) ‘Insurance as maladaptation: policy’, American Political Science Review, 103 (3), pp.387–406 resilience and the “business as usual” paradox’, Environment and Hinkel, L. et al. (2014) ‘Coastal flood damage and adaptation costs under Policy C: Government and Planning, 34 (6), pp.1175-93 21st century sea-level rise’, PNAS, 111 (9), pp.3292–97 Parliamentary Commissioner for the Environment (2015) Preparing New Hino, M., C. Field and K. Mach (2017) ‘Managed retreat as a response to Zealand for Rising Seas: certainty and uncertainty, Wellington: natural hazard risk’, Nature Climate Change, 7, pp.364–70 Parliamentary Commissioner for the Environment Insurance Council of New Zealand (2017) ‘Cost of distaster events in New Quay, R. (2010) ‘Anticipatory governance: a tool for climate change Zealand’, http://www.icnz.org.nz/statistics-data/cost-of-disaster-events- adaptation’, Journal of the American Planning Association, 76 (4), in-new-zealand/ pp.496-511 IPCC (2014) ‘Summary for policymakers’, in C.B. Field, V.R. Barros, D.J. Reisinger, A. et al. (2014) Climate Change 2014: impacts, adaptation and Dokken, K.J. Mach, M.D. Mastrandrea, T.E. Bilir, M. Chatterjee, K.L. vulnerability. Part B: regional aspects, Cambridge; New York: Ebi, Y.O. Estrada, R.C. Genova, B. Girma, E.S. Kissel, A.N. Levy, S. Cambridge University Press MacCracken, P.R. Mastrandrea and L.L. White (eds), Climate Change Reisinger, A., J. Lawrence, G. Hart and R. Chapman (2015) ‘From coping 2014: impacts, adaptation and vulnerability. Summary for policymakers, to resilience: the role of managed retreat in highly developed coastal Cambridge; New York: Cambridge University Press regions of New Zealand’, in B. Glavovic, R. Kaye, M. Kelly and A. 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(2015) ‘The adequacy of institutional frameworks and impacts’, Weather, Climate, and Society, 5, pp.210-20 practice for climate change adaptation decision making’, PhD thesis, Stephenson, J., L. McKenzie and C. Orchiston (2017) ‘Sea level rise and School of Government, Victoria University of Wellington vulnerable communities’, discussion paper, Centre for Sustainability, Lawrence, J. (2016) ‘Implications of climate change for New Zealand’s University of Otago natural hazards risk management’, Policy Quarterly, 12 (3), pp.30‒9 Storey, B. et al. (2017) Insurance, Housing and Climate Adaptation: current Lawrence, J., P. Blackett, N. Cradock-Henry, S. Flood, A. Greenaway and knowledge and future research, Motu note 27, Wellington: Motu A. Dunningham (2016) Climate Change Impacts and Implications for Economic and Public Policy Research New Zealand to 2100. 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Institute for Governance and Policy Studies Event

Title Speaker Date Investing for Wellbeing – the Tim Ng, Chief Economic Advisor & Sam Tuesday 29 May, 12:30pm – 1:30pm future of public investment and King, Team Leader 2018 Investment Government Buildings, lecture theatre 2 management Strategy, The Treasury RSVP: [email protected] For further information on SOG Events visit our website http://www.victoria.ac.nz/sog

Policy Quarterly – Volume 14, Issue 2 – May 2018 – Page 49 Peter Clough, Susan M. Chilton, Michael W. Jones-Lee and Hugh R.T. Metcalf A New Approach to Environmental Valuation for New Zealand hile the Resource Management Abstract Act 1991 (RMA) attracts New Zealand’s Resource Management Act is frequently criticised Wfrequent criticism for imposing for the costs and delays it imposes on activities, but less attention costs and delays on activities, less attention is paid to whether it consistently accounts is given to the consistency of values it applies to environmental for the environmental effects of its effects through its decisions. The wide variety of parties who exercise decisions across the country. Could a more coherent approach be adopted, rather decision roles under the act lack guidance on the economic value of than relying on the vagaries of particular the environment, and non-market valuation studies are too costly councils, courts or individual decision to be widely used and too few and varied to infer reliable generic makers? Our answer is ‘yes’ – by applying the approach proposed and developed in values. Drawing on experience in estimating the public value of this article, which avoids the limitations of safety improvements, this article proposes an alternative approach current evaluation approaches. Although the RMA’s purpose includes that measures people’s aversion to the risk of environmental impacts providing for ‘economic well-being’ of different scales and severity which could yield values sufficiently (section 2), the idea that environmental generic to be widely used, and outlines its uses both within and condition is part of the ‘consumption set’ that determines peoples’ well-being is not beyond the RMA applications. commonly considered in economic terms Keywords Resource management, non-market valuation, risk, within the act’s evaluation processes. These environmental accidents are legislated by politicians, administered by planners and adjudicated by courts which emphasise legalistic and scientific Peter Clough is a Senior Economist at the New Zealand Institute for Economic Research. He specialises in economics of the natural environment, resource management, energy and transport. aspects, with economic assessments largely Susan Chilton is Professor of Economics at Newcastle University, specialising in environment, safety focused on job creation and economic and health economics. Michael Jones-Lee is Emeritus Professor of Economics at Newcastle University. growth. Hence, the environment is valued He has pioneered the development of the theory and practice of safety economics, both in the UK and internationally. Hugh Metcalf is a Senior Lecturer in Economics at Newcastle University with research in an ad hoc manner, implied through interests in applied welfare economics. Corresponding author: [email protected]. project approvals and other decisions.

Page 50 – Policy Quarterly – Volume 14, Issue 2 – May 2018 This is unlikely to result in an optimal level less than the opportunity cost of forgoing energy and minerals, water, fisheries and of environmental protection across New the project that alters it. Leaving decisions forestry (recently updated in Statistics New Zealand since it leaves unanswered the to be made without explicit focus on Zealand, 2018). economic question of how much is it worth economic value by a variety of decision More recently, the notion of ecosystem to avoid adverse environmental effects? makers is not a recipe for efficient resource services has received prominence through The new and alternative approach use. the UN-initiated Millennium Ecosystem combines the principles of environmental These issues are not unique to New Assessment in 2005, and the United and safety valuation to deliver a flexible Zealand and can be placed in a wider Kingdom’s National Ecosystem Assessment mechanism for environmental decision context. Since the 1990s international in 2011. The ecosystem services framework making, applicable not just to RMA agencies such as the World Bank, the draws direct links between the condition decisions, but to other processes, such as OECD and the United Nations have steered of the natural environment’s ecosystems biosecurity assessments, that consider a more consistent approach to placing and the beneficial services of value it environmental values. We term this a values on the natural environment, driven supplies to human activities, under four VMAEE (value of a major adverse effect on by the premise that in the absence of a distinct categories of service: provisioning the environment), the reasons for which monetary value, the natural environment (supply of materials and energy), regulating are considered below. The VMAEE sits within a wider context of economists’ varied attempts to place The [value of a major adverse effect on monetary value on things which do not have prices revealed in market trades. The the environment] is primarily aimed at natural environment has numerous deriving marginal values that can inform ‘missing markets’, sometimes because it is impractical to regulate the use of decisions at individual project or policy environmental resources (like the quality of the air we breathe) and sometimes change level. because of what might be called ‘administrative failure’ to define and enforce entitlements to use resources that could may not be properly taken into account in (such as carbon sequestration and water reveal value through trade. Markets can be public policy deliberations at national or flow moderation), cultural (settings for created for some resources: tradable quotas regional level, nor in private corporate recreation, tourism and cultural heritage) for commercial fishing, for example, and decision making. The World Bank has and supporting (nutrient cycling and emissions trading to tackle climate change. developed frameworks for comprehensive pollination). However, many environmental effects are wealth, inclusive wealth and genuine The UN’s SEEA, capital accounting and too diffuse to enable well-functioning savings indicators which treat the ecosystem services frameworks are all markets to be established. environment as a source of natural capital attempts at a more interdisciplinary Various methods have been devised to to be measured alongside the produced approach to economic valuation, but address this problem – e.g. non-market capital of machinery and infrastructure, integration of science and economics is not valuations of environmental resources – human capital (capabilities and skills), yet fully resolved. All have received official which have sometimes influenced resource institutional capital (laws and governance) endorsement and are being implemented use decisions (see, for instance, Harris and and net foreign assets. by governments to varying degree, but they Meister, 1983). But applications of such In parallel with this, the United Nations are primarily oriented towards measuring methods can be time-consuming and has developed a System of Environmental stocks of natural resources, rather than the costly, they address particular clients’ Economic Accounting (SEEA), which sets changes in environmental condition and concerns, and in New Zealand at least there standards for preparing natural resource flows of effects that result from individual are too few estimates employing too widely accounts consistent with (but not part of) policies, plan changes or consenting varying methods to infer generic values for its System of National Accounts which decisions. A further limiting feature is that environmental resources such as water records national economic aggregates like the average values inferred from them are quality, biodiversity or natural settings. The GDP. Its latest SEEA guidelines issued in not the marginal values needed to assess cost of generating bespoke values has been 2012 included a core framework covering individual policy changes or projects, prohibitive, so decisions will often be taken resources that give rise to marketable goods which will vary with the conditions of with no explicit economic values attached (such as hydrocarbon and mineral stocks) abundance or scarcity in each situation. to environmental impacts. In such cases, and an experimental framework that The principal use of these aggregate stock economic values are implied by the covers non-market resources (like measures is in comparing periodic decisions taken: for example, if a decision recreation space and biodiversity). Statistics snapshots of the position of natural causes an environmental resource to New Zealand has prepared satellite resources in the national economy, rather contract, that resource is implicitly valued accounts using SEEA’s core framework, on than in assessing whether a particular

Policy Quarterly – Volume 14, Issue 2 – May 2018 – Page 51 A New Approach to Environmental Valuation for New Zealand project or plan change would produce willingness to pay, summed over a large reduction in the risk of a fatality that is benefits in excess of its full social costs, group of individuals, for small reductions valued, not the certain death of an including costs of environmental changes. in each individual’s risk of premature death, identified person. Our framework The VMAEE is primarily aimed at where the risk reductions are such that they incorporates this principle, unlike standard deriving marginal values that can inform will reduce the expected number of environmental valuation, which often decisions at individual project or policy premature fatalities in the affected group by posits (certain) changes in environmental change level. It complements and serves a one and hence prevent one ‘statistical fatality’ attributes. different purpose to the valuation of in the forthcoming period. Applying the The distinction made above between a aggregate stocks in the SEEA. VPF means that the benefit of avoiding multi-layered, complex environment and fatalities can be directly compared to its simpler preferences for protecting human Valuing the seemingly priceless: the marginal costs, unlike in environmental life should not preclude the adoption of a conceptual underpinnings of the VMAEE assessment where the benefits of reducing VPF-style approach to environmental framework the risk of environmental harm are only valuation. A VPF is a single clear entity The VMAEE combines two pre-existing implicitly considered, or, worse, effectively which becomes a benchmark value which economic frameworks: the total valued at zero. can be adjusted for use in other contexts. economic value (TEV) model of natural The VPF is portable across any policy In environmental matters, there is no such environmental resources with public good domain that has an impact on human benchmark value except in rare cases such characteristics, which includes current safety. This is a particularly useful feature as global carbon credits, leaving councils, use values, future use (or option) values and provides the rationale for incorporating Environment Court judges and even and non-use (like existence and bequest) it as the second stage of our framework. It sometimes central government values;1 and the value of preventing a is conceptually simple in respect of how it policymakers without guidance on economic value when deciding what weight to place on protecting or allowing change Although the VMAEE framework is in the natural environment. In many pitched at a higher level than individual situations, it is difficult to build up a tailored layer cake of values that reflect all species, sites or attributes, it also has an the facets of environmental change, inbuilt flexibility that can accommodate without resorting to values transferred from elsewhere or averages that do not differing severities of environmental accurately reflect the marginal choices. Seeking public preferences to avert the risk harm. of different scales of impact, without being precise on details, may have its limitations, but does have the advantage that it replaces the zero price implicitly applied to fatality (VPF) approach2 to valuing safety treats the policy output – the prevention environmental change in much RMA improvements in public sector projects. of a fatality – as no effort is made to decision making, which must surely be a However, while we retain the essence of distinguish between different accident gross underestimate. At the very least it the TEV approach, we avoid the most types or different ways of dying in such an removes the current anomaly in New trenchant criticism of environmental accident. This contrasts with environmental Zealand whereby the transport sector valuation studies – in New Zealand3 and valuation, which often has multiple, diverse explicitly values the protection of humans elsewhere – which have focused on specific units of output measures – for example, and directly embeds it into policy while species or habitats, resulting in a myriad of particular species saved from extinction, environmental protection remains site-specific values generated from one-off characteristics of water quality, ill-defined unquantified. (costly) studies that risk overstating value ‘amenity’ of landscapes – making it difficult in one context by under-accounting in to generalise any damages away from a Value of a major adverse effect on the others, and which sometimes have specific site. environment (VMAEE) framework (mistakenly) been applied to valuing the VPF also permits public preferences to Although the VMAEE framework is current stock.4 VMAEE achieves this by be incorporated into appraisals in a pitched at a higher level than individual adopting a multi-site approach, mirroring transparent manner, consistent with species, sites or attributes, it also has an the VPF approach currently applied in economic theory. This contrasts with inbuilt flexibility that can accommodate transport appraisal of the value of current RMA process, under which, even differing severities of environmental preventing fatalities, which provides a if the public is consulted, it is unclear how harm. It explicitly recognises that, for utility-theoretic measure for safety. these consultations affect the final decision. some aspects of environmental value, In that approach, safety has a clear unit The final distinguishing feature of the protection of existing features may be of measure, whereby the VPF is the aggregate VPF is its integral treatment of risk. It is mission-critical (e.g. habitat essential

Page 52 – Policy Quarterly – Volume 14, Issue 2 – May 2018 for species survival), but for others Figure 1: A VMAEE incorporating decreasing severity of environmental impact some level of change may be acceptable because of substitution possibilities (e.g. MAJOR MODERATE MINOR recreation transferring from native to VMAEE VMAEE VMAEE planted forests). It also requires a bridge Characteristics Characteristics Characteristics between the valuation both of safety Major Environmental Serious Environmental Minor Environmental and of environmental impacts. This Loss (EV) Detriment (EV) Impairment (EV) is provided by the concept of a major accident to the environment (MATTE), Nationally Significant Nationally Significant Locally Significant which underpins the Control of Major Impact (OV) Impact (OV) Impact (OV) Accident Hazards (COMAH) Regulations 1999 in the UK,5 but has no equivalent in Irreversible Loss (OV) Loss Recoverable in Loss Recoverable in New Zealand. In RMA language it might Long Term (OV) Short Term (OV) be termed a major adverse effect on the No Close Substitutes Substitutes at High Substitutes at low environment (MAEE). An MAEE would (UV) Cost (UV) cost (UV) be flexible enough to cover both the risk of immediate catastrophic loss and the Examples Examples Examples ‘accident by stealth’ of continued exposure Species extinction Habitat reduction Minor habitat change to risk of degradation. Loss of unique Loss of nationally Loss of locally cultural artefacts significant recreation significant recreation space space Applying the MAEE Major landscape loss Loss of mature Minor landscape Defining major environmental ‘accident’ and transformation landscape features change scenarios in terms of scale, long- and Contamination of land, short-term effects and the extent of water or biosphere impact on human population centres or natural areas allows non-market valuation (e.g. global extinction of a species, or the reduces one or more of option value (OV), techniques to be applied to establish extinction of a keystone species in a habitat existence value (EV) or use value (UV). people’s preferences for reducing the of national significance), but others might The value of reducing the risk of MAEEs risk of different combinations of effects have a different scale and significance – e.g. of different severities is captured by the at a range of prices, thus capturing the serious but without the irreversibility of public’s willingness to pay (in the same way reduction in TEV from an MAEE. The potential losses (localised extinction of a as VPF is calculated). This will result in a arguments for and against different species abundant elsewhere). Quantifying range of indicative values for differing valuation methods and the often-voiced the VPF is straightforward: it is calculated environmental effects and how the values reservations about their validity are well by dividing mean willingness to pay by change at the margin. rehearsed elsewhere and are not repeated the risk reduction.7 The environmental This differs crucially from existing here (see, for instance, NZIER, 2010; analogue value – the VMAEE – would approaches to project appraisal. Rather Pearce, Atkinson and Mourato, 2006). This be calculated in similar manner, with less than having to determine the weight to be does not negate the conceptual framework serious adverse effects scaled accordingly. applied to individual environmental effects, underpinning VMAEE elicitation but Defining a VMAEE requires overlaying the impact of these adverse effects is will undoubtedly have an impact on its the VPF concept with the components of combined and assigned to varying empirical application. A VMAEE elicited TEV. As an illustrative, not prescriptive, categories of severity, determined by using state-of the-art methods will clearly example, Figure 1 delineates a VMAEE in scientific/ecological characteristics. be less prone to error and bias than one terms of the degree of severity of Economics can also inform this elicited under outdated practices. environmental damage, and demonstrates categorisation: for instance, scarcity and how each environmental outcome maps to irreversibility enhance value, whereas Operationalising the VMAEE value. We restrict this to three types of abundance, availability of substitutes and The VPF is the value of reducing the risk MAEE, although more could be included ease of reproduction have the opposite of the most severe life ‘event’, death, but and gradations could exist between these effect. But the VMAEE is inherently reducing the risk of non-fatal injuries three types: for instance, an effect with interdisciplinary in approach. Economists of varying severity is also used in characteristics of a major VMAEE except need to draw on other disciplines’ experts regulatory analysis, requiring a value of for the availability of close substitutes in characterising the nature and preventing injury (VPI).6 Likewise, our elsewhere would attract lesser value than a probabilities of accidental outcomes for the framework also accommodates adverse full major VMAEE, but perhaps higher environment in the different severity environmental effects of differing severity. value than the moderate VMAEE. In simple scenarios, but once the values have been Thus, an MAEE might be so serious that terms, environmental degradation that has estimated they can be entered into the any environmental losses are irreversible a negative impact on human well-being wider policy process, which includes both

Policy Quarterly – Volume 14, Issue 2 – May 2018 – Page 53 A New Approach to Environmental Valuation for New Zealand

Figure 2: An Example VMAEE Choice Set ATTRIBUTE CHOICE A CHOICE B STATUS QUO

Risk: Habitat loss Reduced by 10% No change High

Risk: Landscape Change increased by 2% Increased by 5% Low

Risk: Contamination No Change Reduced by 10% Medium

Recreation Improved trails (10%) Improved trails (15%) No improvement

Location 100 km away 1 km away 50 km away

Cost NZ$30 NZ$50 NZ$0

Note: Risk reductions could be presented as 1/100, for example Location can be expressed in distance bands to a site for a representative New Zealand economic and non-economic considera- informed by deliberative processes or focus This mirrors the VPF, which is the value of tions. groups which examine potential trade-offs preventing one fatality on average in the in depth, and which can be used to refine next period. Deriving and applying a VMAEE in resource the questions before applying them to a A VMAEE in this form could management wider sample survey representative of the complement rather than supplant other Derivation population at large. forms of environmental valuation, by Here we illustrate a hypothetical In a VMAEE context, people’s utility is indicating public value of protection application of the framework at national a function of the different environmental against the risk of adverse effects that level, although it could be amended attributes and the reduction in risk to these cannot be valued in other ways. This is to a smaller operational scale. Under attributes. To facilitate generalisability and similar to the VPF, which is sometimes this scenario, the government, through avoid the site-specificity problems called the human cost of accidents, and the RMA, sets the frame for regulating discussed above, broad sets of attributes at combined with other accident cost environmental harm (or preservation) risk of damage are defined in TEV terms. estimates such as the cost of property across the country. A priori, it is unknown Respondents would first be made aware of damage, emergency services attending the which particular site will be affected; the current conditions with respect to scene, policing, and justice system costs instead there is a small risk at all sites. Thus, biodiversity significance, recreational that may follow if fault is established. Thus, any value which reflects this risk can be opportunities and so on. They would then the VMAEE would not preclude the use of applied to any proposed project (or to any face a series of choice sets (see example in biodiversity offsets as a means of mitigating site that might be vulnerable to adverse Figure 2) consisting of two or more the environmental impacts: if a choice set effects). differently specified, but related, sets in includes offsets, the reduction in risk to To be applicable at the national level we which they indicate their most preferred biodiversity would be assigned a less major assume that at least some people derive option.9 By varying the attributes, levels of VMAEE than it would if offsets were not existence value and/or some people would risk and price across choice sets, marginal feasible. adopt an altruistic stance (Aldred, 1994), values for each attribute can be recovered and hence be prepared to contribute to the directly via econometric procedures Applications prevention or reduction in the risk of an (Freeman, Herriges and Kling, 2014), while We now consider how the VMAEE MAEE elsewhere in the country as well as estimates of overall welfare gains from the approach could inform decisions made on in their immediate neighbourhood. This intervention as a whole can also be biosecurity, freshwater management, the allows us to draw directly on the conceptual estimated (indirectly). RMA and national living standards. framework in Appendix 1 to inform the Moving forward, assume that a mean design of any empirical study to estimate willingness to pay for a reduction in a risk Ecosystems a VMAEE.8 to the environment has been estimated In biosecurity, a key issue is what value Willingness to pay values could be from a sample of New Zealand households. should be placed on avoiding risks to derived from various methods: e.g. hedonic Appendix 2 considers a simple example of species or habitats that are unique to New pricing methods, random utility travel cost reducing the risk of an MAEE by 1 in Zealand. There are periodic incursion models, contingent valuation or choice 100,000 per site and shows how this can be risks, such as myrtle rust which threatens modelling (Freeman, Herriges and Kling, aggregated into a societal value for this risk indigenous trees such as mänuka and the 2014). We develop our example in the reduction – i.e. a VMAEE. This ex ante red-flowering pöhutukawa. There are also context of a choice experiment (based on measure assumes that at the time of chronic risks from established introduced Lancaster’s (1966) model of consumer enactment the policy will be expected to predators like stoats and possums, against preferences and widely applied in health prevent one adverse event in the which the government has granted (Ryan et al., 2006), transportation (Hensher forthcoming period, although in some initial funding of $28 million towards and Rose, 2005) and the environment periods more than one adverse event may making New Zealand predator-free by (Adamowicz et al., 1998)). This could be be prevented and, in some periods, none. 2050. Diminishing returns and increasing

Page 54 – Policy Quarterly – Volume 14, Issue 2 – May 2018 marginal costs may make eradicating the communities to enable them to reach a priorities. Experts on ecology, visual last breeding specimens prohibitively higher basic standard. amenity and recreation may assess the expensive, but policymakers are still A VMAEE could also inform the significance of an affected site from their interested in how much the public is National Policy Statement for Freshwater own perspectives, but consideration of willing to pay for more intensive predator Management, which in 2014 set a national economic consequences is often limited to management than is currently achieved.10 objective of improving the quality of all potential impacts on jobs and incomes, not Protecting more habitats and wildlife freshwater bodies to safely ‘wadeable’. This the potential losses people face from communities lowers the probability of their was amended in 2017 with a new target of changes in the environment and their being driven to extinction. A VMAEE could 90% of all rivers and lakes being safely willingness to pay to reduce the risk of loss, help infer societal values for risk and help ‘swimmable’ by 2040 (Ministry for the as captured by TEV. This can result in prioritise how much habitat to protect and Environment, 2017). At what point would perverse outcomes: for instance, where, informing the trade-off between the costs incurred exceed the benefits authorising the destruction of very rare social and scientific objectives, although in gained? A VMAEE could help determine habitats to enable a project that would some cases, such as risks involving pivotal this by providing a comparable monetary create jobs and outputs that could be keystone species, scientific considerations value of benefits to assist in identifying readily replicated by relocating the activity may continue to dominate. For example, in where to prioritise improving water quality. elsewhere.11 A VMAEE would provide a New Zealand context, the Department of Conservation may have some scientifically determined bottom lines in terms of the The VMAEE framework developed in this portfolio of sites it needs to secure the survival of species, a representative article combines the existing frameworks diversity of habitats and the supply of of TEV and the VPF applied to safety ecosystem services. But the VMAEE could show the relative public value of securing and adapts them to derive valuations environmental condition above those levels, which could assist the department with its of public aversion to risks to the priority setting and in demonstrating environment. public value from extra investment funding.

Freshwater management Deteriorating freshwater quality has The RMA objective guidance on the relative value of recently risen in public awareness, due The RMA has come under increasing different potential losses and improve partly to agricultural intensification, scrutiny over whether it appropriately consistency of decisions. which increases nutrient discharges to the balances the needs of development environment, and partly to one-off events and environmental protection. Since The government like the 2015 gastroenteritis outbreak in coming into force, there have been 21 The Treasury could adapt the VMAEE Havelock North, attributed to intrusion amendment acts and 34 regulations approach to its Living Standards of faecal matter from sheep pastures into issued to give direction for more consistent Framework to place monetary values on bores during rainstorms. These raise implementation by the 16 regional natural capital (see van Zul and Au, 2018) questions about the value of protecting authorities and 68 district and city and changes in environmental outcomes surface water quality and groundwater councils that exercise powers under the act. over time. The VMAEE approach could against contamination, reducing the risk Disputes under the act have recourse to also be used to provide a monetary of infection from contact with water. the Environment Court, whose decisions overlay to the initiatives of Ministry for the The question is whether the costs of so can be appealed in the High Court, so the Environment and Statistics New Zealand doing are justified by the benefits of judiciary also influences implementation. in environmental reporting (see Ministry reducing the frequency of such There are unavoidable trade-offs for the Environment, 2015), and be a step contamination. Risk of contamination between environment and economic towards more explicit consideration of the varies with localised factors, such as the outcome in every decision under the act, economic value of (changes in) natural depth of aquifers, the location of recharge but little guidance exists on how to make stocks than the natural resource satellite areas and the population potentially at risk these trade-offs in economic terms. For accounts prepared using the UN SEEA – all matters which could be reflected in a RMA applications for local plan changes guidance for fisheries, forests, minerals and VMAEE. Where water contamination has or consents for new land uses or discharges water (see Statistics New Zealand, 2018). wider ramifications – e.g. affecting New into air and water, the decision makers are The approach can also be used by other Zealand’s reputation as a tourist destination left to weigh the benefits of approval government departments, e.g. the Ministry – a VMAEE could be informative in against the localised environmental for Primary Industries and agencies considering national assistance to poorer changes and an overlay of national wherever there are environments at risk

Policy Quarterly – Volume 14, Issue 2 – May 2018 – Page 55 A New Approach to Environmental Valuation for New Zealand

of degradation, and to which measures 1). There is potential to develop this linkage consumer surplus values with GDP without adjusting for consumer surpluses on non-environmental consumption, is can be applied that affect the probability in future as both the VMAEE and ecosystem Costanza et al. (1997). While this approach allows society to track the value of stock over time, it is not appropriate to of adverse effects occurring. services approaches evolve. the type of natural resource management addressed in this The advantages of the VMAEE are that article. 5 The mechanism by which the UK implements the Seveso Concluding comments it generalises the object of valuation Directive (82/501/EEC). 6 For example, the NZ Transport Agency values the reduction The VMAEE framework developed around the scale and characteristics of in risk of serious injury (requiring hospitalisation) at 10% of in this article combines the existing environmental risks, rather than valuing the VPF. 7 For instance, if the average willingness to pay to reduce frameworks of TEV and the VPF applied specific environmental features, which may the risk of fatality by 1 in 100,000 is $20, society’s to safety and adapts them to derive affect the non-market valuation responses willingness to pay to avoid one anonymous fatality, the VPF, is $20÷0.0000001=$2 million (Lindhjem and Navrud, valuations of public aversion to risks to (for example, charismatic ‘mega-fauna’ 2010). 8 Further assumptions would be required to enable the the environment. It complies with the attract higher survey response values than VMAEE to be used in economic regulation, although we do economic principle of marginal values, do less visible but rarer species more not develop them formally here. As in the VPF, we assume financial risk aversion and prudence with respect to current but also meets policymakers’ needs for pivotal in ecosystem functioning). It would wealth. The environment is considered a normal good, so a person places higher value on a larger than a smaller flexibility, consistency and transparency. It be less prone to ‘focus illusion’, which lifts reduction in a particular environmental hazard. can generate a small number of values that the values of subjects by bringing attention 9 Following standard practice, such surveys are subject to extensive pre-testing and piloting to ensure that respondents can be applied in any domain, ensuring to them, and which also contributes to the understand the information and tasks, while retaining their that environmental resources are given the widely reported ‘part–whole bias’, in which scientific validity. 10 By comparison, in 2014 the Department of Conservation same weight across different sectors, while respondents indicate similar value for spent $31 million on pest control, mainly on reserve areas, and Operational Solutions for Primary Industry (OSPRI) acknowledging that some Department environmental attributes of greatly spent $47 million on control of bovine Tb vectors on of Conservation preservation activities different scale and significance. And having farmland and interstitial bush areas. The cost of ridding the country of introduced predators has been estimated at with hard-to-ascertain probabilities and a single suite of values for effects of between $9 billion and $31 billion. 11 For example, on the Escarpment mine on the Denniston involving potentially irreversible outcomes different severity derived by a common Plateau, the Environmental Court granted consent for can still be determined separately. In method would be more widely applicable, an opencast coal mine that would destroy habitats that ecological experts for both sides agreed were extremely rare, providing such a framework, we place and ultimately less costly to obtain, than although the economic benefits of jobs and incomes could the environment at the heart of, rather the assortment of current ad hoc valuation be obtained from extraction elsewhere, as coal is not scarce in the region. than adjunct to, economic decisions over estimates of specific issues. natural resources in New Zealand. Acknowledgements The VMAEE serves a different purpose 1 Built on ideas attributed to Krutilla, 1967. 2 VPF is equivalent to the value of statistical life (VSL) seen in The authors acknowledge and give thanks from the valuations of stocks in the SEEA. some literature. We use VPF here following practice in the UK, where it is considered a more accurate description of for comments and suggestions to Dr But it has some overlap with the ecosystem what it does: see Clough, Guria and Bealing (2015). Andy Large (Newcastle University) and services approach, which provides a 3 For example, Lincoln University hosts a New Zealand non- market valuation database with summary details of over 150 anonymous reviewers (Wellington) on an typography for identifying services from empirical studies applying various methods to recreation, pollution, aesthetics, risk, transport and environmental earlier draft of this article. the natural environment that can be valued protection; however, these provide insufficient estimates on and mapped against TEV (as in Appendix particular topics to infer reliable generic estimates. 4 An example of this, which combines environmental

References Aldred, J. (1994) ‘Existence value, welfare and altruism’, Environmental Krutilla, J. (1967) ‘Conservation reconsidered’, American Economic Values, 3 (4), pp.381–402 Review, 57 (4), pp.777–86 Adamowicz, W., P. Boxall, M. Williams and J. Louviere (1998) ‘Stated Lancaster, K.J. (1966) ‘A new approach to consumer theory’, Journal of preference methods for measuring passive use values: choice Political Economy, 74 (2), pp.132–57 experiments and contingent valuation’, American Journal of Agricultural Lindhjem, H. and S. Navrud (2010) Meta-analysis of Stated Preference Economics, 80 (1), pp.64–75 VSL Studies: further model sensitivity and benefit transfer issues, Paris: Clough, P., J. Guria and M. Bealing (2015) ‘Approaches to valuing injury OECD and mortality risks in transport assessments’, NZ Transport Agency Ministry for the Environment (2015) Environment Aotearoa 2015: data to research report 571, Wellington: NZ Transport Agency, https://www. 2013, Wellington: New Zealand Government, http://www.mfe.govt.nz/ nzta.govt.nz/assets/resources/research/reports/571/docs/571.pdf publications/environmental-reporting/environment-aotearoa-2015 Costanza, R., R. d’Arge, R. de Groot, S. Farber, M. Grasso, B. Hannon et Ministry for the Environment (2017) ‘What the government is doing’, al. (1997) ‘The value of the world’s ecosystem services and natural http://www.mfe.govt.nz/fresh-water/freshwater-management-reforms/ capital’, Nature, 387, pp.253–60 clean-water-package-2017 Freeman, A.M. III, J.A. Herriges and C.L. Kling (2014) The Measurement NZIER (2010) ‘Realistic valuations of our clean green assets’, NZIER of Environmental and Resource Values, Washington, DC: Resources for Insight 19, 15 October, https://nzier.org.nz/publication/realistic- the Future Press valuations-of-our-clean-green-assets Harris, B.S. and A.D. Meister (1983) ‘The use of recreation analysis in Pearce, D., G. Atkinson and S. Mourato (2006) Cost–benefit Analysis and resource management: a case study’, Journal of Environmental the Environment – recent developments, Paris: OECD, http://www. Management, 16, pp.117–24 oecd.org/env/tools-evaluation/cost-benefitanalysisandtheenvironmentre Hensher, D.A. and J. Rose (2005) ‘Respondent behavior in discrete choice centdevelopments.htm modeling with a focus on the valuation of travel time saving’, Journal Ryan, M., A. Netten, D. Skatun and P. Smith (2006) ‘Using discrete choice of Transportation and Statistics, 8 (2), p.17 experiments to estimate a preference-based measure of outcome – an

Page 56 – Policy Quarterly – Volume 14, Issue 2 – May 2018 application to social care for older people’, Journal of Health van Zul, S. and J. Au (2018) http://www.treasury.govt.nz/publications/ Economics, 25, pp.927–44 research-policy/dp/2018/18-03, Wellington: Treasury, http://www. Statistics New Zealand (2018) Environmental–Economic Accounts 2018, treasury.govt.nz/publications/research-policy/dp/2018/18-03 https://www.stats.govt.nz/reports/environmental-economic- accounts-2018 Appendix 1: Total Economic Value And Ecosystem Services Total Economic Value approach Value Category Sub-­Category Value from… Ecosystem services Existence value Retaining species, sites, habitats for their own sake Cultural services Bequest value Retaining unique natural features for future generations Scientific value Potential for new scientific and educational understanding Deeper experience of a place that transcends amenity, Non-­use Value Spiritual/culture value associative and commemorative values Non-­material services obtained Commemorative value Connections with a significant event, idea or person from ecosystems Associative value Essential element of wider identity Amenity/aesthetics Visual qualities of physical attributes Quasi-­option value Retaining potential until better informed Future Use Value Option value Retaining potential to use in future Regulatory services services Benefits from regulating services Indirect use value Use supports other activities of ecosystems Direct use value Provisioning services Non-­consumptive Use does not deplete resource Products obtained from Current Use Value ecosystems (food, materials, energy, water) Consumptive use Use extracts or depletes resource Supporting services underpinning all other ecosystem

Appendix 2: Calculating And Applying A Vmaee For Policy Aggregate. annual WTP = $V x 1.47 x 106 (1) Table A2.1 Implied VMAEES for Different ..Discounted present value of aggregate WTP over 20 years at public sector discount rate of 4% Household Mean WTP per annum Mean annual Value of 20 year = $V x 1.47 x 106 x 14.2 (2) household risk reduction per = $V x 20.9 x 106 (3) willingness to pay MAEE site $’000 Expected number of MAEE prevented over 20 years as a result of risk reduction = 1000 x (10-4- 10-6) x 20 (4) $2.50 51.9 = 1000 x (99 x 10-6) x 20 (5) $5.00 103.9 = 1.98 (6) $10.00 207.8 This is typically referred to as the prevention of 1.98 “statistical” MAEE. Hence from (3) and (6) the $20.00 415.5 aggregate WTP-based value per statistical MAEE prevented = $50.00 1,038.8 $V x 20 x 106 (7) 19.8 $100.00 2,077.7 = $V x 10.1 x 10 (8) $200.00 4,155.4 However, the overall reduction in risk per MAEE site = (10-4- 10-6) x 20 (9) = 99 x 10-6 x 20 (10) = 1.98 x 10-3 (11) Hence the WTP-based value of the 20 year reduction in risk per MAEE site = ($V x 10.1 x 106) x 1.98 x 10-3 (12) = $V x 0.020 x 106 (13) = $V x 0.020 million (14) It is then easy to calculate the value of a 20 year risk reduction for a MAEE site for different mean WTP amounts. If mean annual WTP per household was $2.50 a VMAEE would be $51,900 while a $200 mean annual household WTP would generate a VMAEE of over $4.0 million. Table A1.1 contains implied VMAEES for WTP amounts between these two values. Note that this value applies to each MAEE site.

Policy Quarterly – Volume 14, Issue 2 – May 2018 – Page 57 Heather Gifford, Lesley Batten, Amohia Boulton, Melissa Cragg and Lynley Cvitanovic Delivering on Outcomes the experience of Ma-ori health service providers Abstract models as a primary vehicle for exploring how MHSPs are evidencing that their This article explores the service delivery experience of Mäori service delivery is contributing to positive health service providers within the context of contracting. It draws outcomes for whänau. We begin by outlining the characteristics on selected findings from a three-year Health Research Council- of MHSPs and their unique role in chronic funded study and discusses how Mäori health service providers conditions prevention. We then overview are evidencing that their service delivery is contributing to positive recent key shifts in the state’s approach to service provision and consider the impact outcomes for whänau. Although generally outcomes contracting of these for MHSPs. Issues we explore appears to be fraught for providers, the foundations of a policy include contracting, and the more recent platform for effective outcomes contracting ‘by Mäori for Mäori’ introduction of contracting for outcomes and commissioning for outcomes in the has been established through the Whänau Ora policy. specific context of MHSP Whänau Ora Keywords Mäori health service providers, outcomes contracting service provision. Finally, we outline study data collection methods, before presenting his article explores the service funded study. In the first phase, we results and discussion. delivery experience of Mäori health partnered with three MHSPs, in Taranaki, Tservice providers (MHSPs) within Whanganui and on the West Coast of the Background the context of contracting, particularly South Island, to define the specific chronic Boulton et al. (2013) observe that contracting for outcomes. It draws on conditions prevention model of service MHSPs are typically ‘owned’ by a tribal selected findings from the final two phases delivery being developed by each (Gifford or community-based group, and have of a three-year Health Research Council- et al., 2017). We have since used these inextricable links to their communities and a focus on putting in place services Heather Gifford, Ngäti Hauiti and Te Ätihaunui-ä-Päpärangi, is the Senior Advisor Business and responsive to the cultural needs of Mäori Research, Whakauae Research for Mäori Health and Development, Whanganui. Lesley Batten is a Senior Research Officer, Research Centre for Mäori Health and Development, College of Health, Massey service users. MHSP governance and University, Palmerston North. Amohia Boulton, Ngäti Ranginui, Ngäi te Rangi and Ngäti Pukenga, is service delivery reflect tikanga Mäori, or the Director, Whakauae Research for Mäori Health and Development, Whanganui.Melissa Cragg is Mäori-defined, frameworks (Crengle, Principal Consultant with Karake Consultancy, Renwick, Malborough. Lynley Cvitanovic is a Research Practitioner, Whakauae Research for Mäori Health and Development, Whanganui. Corresponding author: 1999). The combination of these factors email [email protected] is likely to enhance MHSP efficacy for

Page 58 – Policy Quarterly – Volume 14, Issue 2 – May 2018 Mäori. Across New Zealand there are a The growth in MHSP numbers reflects the shifts in attitude, behaviour or well-being range of MHSPs: some with a few, small state’s acceptance that, in some instances (Nowland-Foreman, 2015). contracts with state agencies, and others at least, services developed and delivered Although attributing causality in this holding much larger contracts and offering ‘by Mäori for Mäori’ are best placed to meet way may sound simple enough, Boston services including medical, allied health the needs of Mäori (Crengle, 2000; Ellison- (2017) observes that understanding of and community care (Abel et al., 2005). Loschmann and Pearce, 2006). causality in the social sciences, in terms of MHSPs are uniquely placed to promote Tension exists, however, and it appears identifying the relationships between input, Mäori well-being, including through that much of that tension can be traced to outputs and outcomes, remains addressing the critical gaps in chronic the nature of the relationship between the underdeveloped. Nowland-Foreman in conditions prevention (Gifford et al., 2017). state and providers inherent in contracting turn cautions that the measuring of There is some urgency around the arrangements. Key characteristics of that outcomes ‘is neither simple nor prevention-related work they do, given the relationship include its formality and straightforward, but a sophisticated and devastating impact on indigenous peoples narrow parameters (Nowland-Foreman, specialised skill, and inherently difficult’ of chronic conditions, which is significantly 2015). For MHSPs, additionally, balancing (Nowland-Foreman, 2015, p.13). Moore contributing to health disparities the demands of state contracts that do not and Moore add that the preferred service (Anderson et al., 2016). In the New Zealand necessarily take account of a Mäori world outcome measures of the contract context, health outcomes for Mäori are view with a commitment to indigenous purchaser and the provider may well be poorer than for non-Mäori, with pronounced disparities related to chronic condition outcomes (Ministry of Health, Ma-ori concepts of well-being, including 2013). MHSPs are responsible for tracking, broader social, cultural and economic assessing and reporting on the impact of their service delivery for whänau, including indicators, are utilised which focus on prevention interventions related to chronic collective, wha-nau-level outcomes, conditions. That activity does not occur in isolation; it is influenced by the broader ensuring an approach ‘that is intimately approach of the state, and state agencies, to - determining the needs of populations, connected to Maori values and practices’... along with related service provision, funding and success measurement. Since the mid-1980s New Zealand, along with other Western nations, has adopted a neo- philosophy and practice is particularly markedly different: whereas the former liberal approach to social service provision, challenging (Boulton, 2007; Walsh-Tapiata may seek ‘evidence which “scientifically” which has been extensively documented cited in Rickard, 2014). proves efficacy’ (Moore and Moore, 2015, (Cheyne, O’Brien and Belgrave, 2008; Accountability in contracting arrange- p.5), a provider may prioritise the narratives O’Brien, 2016; Ryan, 2011; Stace and ments was initially focused on the outputs and feedback of service users (Boulton, Cumming, 2006). Defining characteristics generated by providers, but more recently 2005; Moore and Moore, 2015). Whether of neo-liberalism include a focus on outcomes-based contracting has re- contracting for outcomes can readily contracts-based funding (O’Brien, Sanders emerged as a state preference in contracting accommodate the diverse interests of the and Tennant, 2009), along with limited arrangements (Nowland-Foreman, 2015; contracting parties is contentious. public provision and an emphasis on O’Brien, Sanders and Tennant, 2009). Contracting for outcomes thus appears individual responsibility for personal well- Outcome priorities are predominantly fraught with challenges, primarily in being (O’Brien, 2016). determined by the state rather than by relation to determining how outcomes are While neo-liberalism brought with it communities using services or by providers measured, by whom and for what purpose. unsettling changes for the social services themselves (O’Brien, 2015). Moore and Nevertheless, there has been some non-profit sector generally, it can be argued Moore (2015) observe that the move to development in the use of an outcomes that for MHSPs new opportunities outcomes-based contracting is influenced approach that is confronting these emerged. MHSPs burgeoned in number by the state’s ongoing commitment to a challenges: namely, the Mäori-specific during the 1990s precisely because of the market-led approach to service provision. outcome measures that have been more neo-liberal preference for devolution of Outcomes contracting requires services to formally adopted at all levels of the health service provision beyond the state sector, effectively evidence the positive changes system in the last decade, and, most notably, which allowed a more diverse range of occurring within their client groups as a the outcome framework associated with the organisations to enter into contractual ‘product’ of their intervention. Change in Whänau Ora policy. Whänau Ora as an relationships for provision (O’Brien, this context may include increases in client approach to service provision emerged Sanders and Tennant, 2009; Rickard, 2014). knowledge and skill acquisition, along with from the work of the Whänau Ora Taskforce

Policy Quarterly – Volume 14, Issue 2 – May 2018 – Page 59 Delivering on Outcomes: the experience of Ma-ori health service providers

(Taskforce on Whänau-Centred Initiatives, model of Whänau Ora commissioning as for services with a focus on funding for 2010). It includes MHSP capability an approach for the purchasing of outcomes. building, integrated contracting and outcomes. They found that the indigenous Multiple data sources informed the government agency support for whänau principles outlined in the Whänau Ora analysis in these phases of the study, integration, innovation and engagement policy, and their underlying values, including a review of the outcomes (Office of the Auditor-General, 2015). The benefited overall commissioning practice. literature in relation to MHSPs, Whänau Ora Outcomes Framework was There was some evidence, for example, of complementing the broader review of the developed jointly by iwi leaders and Crown service design by consumers, of working literature conducted in phase one; face-to- ministers under the auspices of the Whänau closely with providers towards shared goals, face MHSP key informant and focus group Ora Partnership Group, building on the of a focus on agreed outcomes and on interviews with whänau participants, work of the taskforce. Mäori concepts of flexibility, of being whänau-centred and of kaimahi, practice supervisors and well-being, including broader social, adopting a concerted cross-sector managers; case study organisational cultural and economic indicators, are approach. Despite a broadly positive document review; observations; and field utilised which focus on collective, whänau- assessment of the Te Pou Matakana notes, along with the detailed internal case level outcomes, ensuring an approach ‘that commissioning model, however, Boulton record (Patton, 2015) prepared by case is intimately connected to Mäori values and et al. also draw attention to challenges study site lead researchers. practices’ (Moore, 2014, p.iii). Dwyer et al. inherent in commissioning, including The data were independently analysed discuss the accountability attributed to responding effectively to providers’ by all eight members of the research team. The team then met face to face to carry out - a mahi a röpü process, further refining the We found evidence of the Whanau Ora independent analyses. The mahi a röpü process involves the thematic analysis of Outcomes Framework not only being data at a group level (Boulton and Gifford, implemented by MHSPs, but also being 2014). Data synthesis was later conducted by two senior research team members, with adapted to suit local settings. the synthesis being taken back to the research team for final mahi a röpü consolidation. Analysis of the data, at each stage in the process, was carried out across MHSPs for outcomes under Whänau Ora, expectations of greater levels of financial three interrelated nested environment identifying an opportunity here for and performance information transparency. levels (Berkeley and Springett, 2006): policy effectively ‘rebalancing accountability to Inadequate resourcing of the model, along (government), practice (provider) and funders with accountability to community’ with inordinate levels of state scrutiny, were whänau (community). Multi-level analysis (Dwyer et al., 2014, p.1102). identified as having a negative impact on included exploring understandings of Commissioning has now emerged as a both the commissioning agency and its service delivery outcomes; outcomes model for the purchasing of outcomes commissioned providers in a variety of expectations, including reporting under Whänau Ora. The state has ways. requirements; diversity in perspectives; and established three Whänau Ora Having now set the wider policy stage experiences among informants. commissioning agencies, with the for exploring the ways in which our MHSPs documented aims of reducing the provider are experiencing relationships with funders, Findings and discussion compliance burden as well as improving we present the study itself, our data Utilising all data sources, we defined five funding and accountability mechanisms, collection methods, results and discussion. key theme areas when reviewing the data to support the success of Whänau Ora on outcome frameworks within the MHSP (Whänau Ora Partnership Group, 2014). The study case study sites. Data is considered under These commissioning agencies are Informed by a kaupapa Mäori approach,1 the areas defined as: control, complexity, contracted to invest directly into their and using a case study design, our conscience, consideration and capacity. communities. Unique within the non- preventing chronic conditions research Themes are presented using a nested profit sector, MHSPs and Pasifika providers drew on qualitative and evaluation- environments approach, discussing how are the primary organisations contracted based research methods (Patton, 2015) outcomes have an impact at various levels by the commissioners, with the contracting to examine three prevention models. The of the system, including policymakers, focus being specifically on outcomes. All preventative principles and emerging providers and whänau. three agencies are developing their own practices manifested by each case study commissioning styles. have previously been delineated (Gifford Control Boulton et al. (2017), in recent research et al., 2017). Phases two and three of the In contrast to some of the concerns with Te Pou Matakana, the North Island study include an examination of the recent identified in the literature, which commissioning agency, examined a specific MHSP experience of state contracting highlight state control in determining

Page 60 – Policy Quarterly – Volume 14, Issue 2 – May 2018 how outcomes are measured, we found Mäori well-being. O’Brien, Sanders and development, and other state initiatives to at least one example where control was Tennant (2009) suggest that outcomes- promote integrated contracting for largely in the hands of Mäori at policy, focused contracting could potentially outcomes, the MHSPs we partnered with provider and whänau levels. We found provide a vehicle to ‘achieve an improved, in the preventing chronic conditions evidence of the Whänau Ora Outcomes more consultative engagement between research continued to hold multiple Framework not only being implemented government agencies and non-profit contracts, including output-focused by MHSPs, but also being adapted to suit services’ (O’Brien, Sanders and Tennant, contracts, across the health and social local settings. For example, each of the 2009, p.24). The recent work of Boulton et services sector; sometimes, even, several seven outcome domains for Whänau Ora al. (2017) identifies some level of outcomes- contracts were held with a single funder. are clearly described in the overarching focused progress with specific reference to The multiplicity of contracts in turn creates Whänau Ora Outcomes Framework Whänau Ora commissioned services. For a multiplicity of accountability lines, with (Whänau Ora Partnership Group, 2015). our MHSPs, it would appear that the MHSPs being required to report in various Te Pou Matakana has in turn conducted a potential of Whänau Ora outcomes ways, and many times, often against similar significant amount of work to incorporate contracting may be beginning to be measurements, creating a sometimes these outcomes into their own outcomes realised. We are mindful, however, of the overwhelming sense of duplication. matrix, noting the need to develop a myriad issues surrounding influence in O’Brien, Sanders and Tennant (2009) note shared framework in collaboration with relation to outcomes, including who that state initiatives to promote contracting whänau and with service providers (Te Pou Matakana Commissioning Agency, 2015). Two of our case study sites hold contracts For our MHSPs, the complexity of with Te Pou Matakana. One of these sites has a strong history of developing outcome measurement is further Whänau Ora service models and outcome measurement prior to the work occurring exacerbated by the recent addition of nationally under the taskforce (Boulton, Wha-nau Ora commissioning to the mix. Tamehana and Brannelly, 2013), and has continued this work under the now widely adopted Whänau Ora policy. The site is continually adapting to more closely align determines what outcomes are meaningful for outcomes had been expected to simplify outcomes with local need and to better and how, as outlined above in the the process of contracting, as well as reduce support whänau to realise their Whänau background section of this article. the reporting burden for providers. For our Ora aspirations. MHSPs, however, the contracting The overarching framework therefore Complexity environment was akin to that described, appears to be able to accommodate some Outcome measurement, within the almost a decade ago, by the non-profit level of flexibility without losing its context of the case studies, is complex not sector as being both ‘onerous and integrity. The values underpinning the only for providers but also for funders demanding’ (O’Brien, Sanders and framework include, but are not limited to, and policymakers. There are multiple Tennant, 2009, p.28), suggesting limited notions of collective well-being at a whänau competing demands at a variety of levels. progress is being achieved. level, strengths-based practice that looks These include the state’s need to ensure for solutions to complex issues, being accountability in relation to the use of Conscience whänau driven through self-identification public funds and to satisfy expectations Conscience, in the context of this article, of outcome goals, and a cross-sector that services will deliver clearly identified refers to the overarching values and approach required to resolve what are outcomes (Moore and Moore, 2015); the principles informing the implementation complex issues facing Mäori whänau. requirement for funders, or government of policy such as that concerned with This theme of control is significant in agents, to develop a range of outcome outcome frameworks. As has been the context of our findings. There is some measurement tools appropriate for noted above, outcomes definition and evidence that for MHSPs, Whänau Ora operationalising across multiple sectors; measurement is neither neutral nor reflects initial progress towards enhanced and the pressure on providers to implement value free. Indeed, over the last decade Mäori control over what counts as the various measurement frameworks. the emphasis on measuring outcomes outcomes and how outcomes are measured. For our MHSPs, the complexity of has been imposed largely in a top-down Within the specific context of Whänau Ora outcome measurement is further manner, informed by priorities including contracting for outcomes, we recognise the exacerbated by the recent addition of accountability in the use of public funding potential opportunity for Mäori despite Whänau Ora commissioning to the mix. and the requirement for data to assist also having some misgivings with respect These new additions to the outcome in prioritising services and purchasing to the neo-liberal approach to social environment do create yet another layer of services at a time of fiscal constraint. provision generally and its impact on accountability for MHSPs. Despite that The top-down drive to generate data for

Policy Quarterly – Volume 14, Issue 2 – May 2018 – Page 61 Delivering on Outcomes: the experience of Ma-ori health service providers outcomes tends to focus at a personal level, that outcomes are largely determined at room for improvement in the outcome/ assuming an individualistic responsibility funder level. Reports are then populated reflection cycle. by at-risk groups for demonstrating from the bottom up, with little interaction outcomes. There is a tension between the and reflection on the data as it moves Capacity principles underpinning this approach, through the system. Whänau and Our study identified variable capacity and a broader systems-level view which individuals provide information to their across the three MHSPs to develop, measure sees the responsibility for change coming provider, and case-level workers collect and utilise outcome data for analysis. Some from a need to improve social cohesion, the data and feed it up through the system of that variability was due to provider enhance environments and improve to provider managers, who collate the data size and maturity, with larger providers system responsiveness to individuals. across a range of contractual reports and managing the complexity and demands of That broader systems-level view sits then deliver this to district health boards outcome reporting more confidently than more comfortably with the principles (DHBs) and government ministries. There smaller, less well-developed providers. Two and whänau-focused Mäori well-being are multiple points at which the data can of the cases had internal capacity both to aspirational goals of He Korowai Oranga, be used for reflection and improvement. respond to outcome data requests and to be involved in the design and development of locally tailored outcome measurement MHSPs are well placed to work tools specifically in relation to Whänau Ora effectively with Ma-ori, including through services. However, for providers struggling - with outcome measurement it was a addressing critical gaps in Maori chronic challenge to collect data, and there appeared to be virtually no in-house capacity for conditions prevention. analysing and utilising outcome data for service improvement. Four components were identified as influencing outcome measurement capacity at the provider the Mäori Health Strategy (King and Turia, However, it appears that the lack of level: financial resources, training 2002), and indeed with the aspirations of engagement with, and reflection on, the opportunities, workforce capacity and Whänau Ora. data is driven by a strong ‘reporting to information technology capacity. Some The narrow descriptors favoured by funders’ ethos, as opposed to an iterative providers struggle to fund the purchase state agencies, somewhat a necessity in quality improvement process, where data of the tools necessary for collecting and outcome measurement, do not capture the is included as part of a cycle of reflection, collating data for outcomes, along with richness and depth of change over time for change and reassessment. Both approaches the training required to strengthen the collectives such as whänau, nor do they are needed. workforce capacity to collect outcomes capture the breadth of the work undertaken Concern around the dearth of feedback data. Two of the three MHSPs had no in- by MHSPs in contributing to social change from DHBs to non-profit service providers house specialist analyst capacity that could for whänau. We note, too, a concern about is not new. For example, over a decade ago enhance regular review of the data. privacy issues regarding the use of that very concern was highlighted in individual and whänau data to measure response to a survey by the working group Conclusion and issues for further outcomes. Some of the ‘stories’ collected of member non-government organisations consideration from whänau are being used as exemplars regarding their relationships with DHBs MHSPs are well placed to work effectively to demonstrate outcomes; this type of data (Stace and Cumming, 2006). Boulton, with Mäori, including through addressing used in this way is potentially traceable similarly, in the Mäori mental health critical gaps in Mäori chronic conditions back to specific whänau. Further discussion provider context, found that DHBs rarely prevention. The work they do takes place is therefore required to ensure that whänau used reporting information, whether within the broad context of the neo-liberal are fully informed about, and consent to, output or narrative outcome reports, to transition, from the mid-1980s, that has the potential wider use of their personal address or respond to provider concerns seen varying degrees of state focus on information in the process of the (Boulton, 2005). Tight time frames for market-driven solutions, limited provision refinement of outcomes measurement in reporting, which are often quarterly, the and individual responsibility for personal services provision beyond Whänau Ora. workloads of individuals at all levels in the well-being. Contracts-based funding system, the capacity for analysis and the opened up doors to forge relationships Consideration restrictive narrow measures used in with a diversity of non-state actors, There are significant missed opportunities, outcomes discourage the use of outcome including MHSPs. Tensions for MHSPs at all levels of the system, to review outcome data as a quality improvement tool. With exist, however, despite the opportunities data more regularly and consistently to respect to the outcomes reporting required afforded by neo-liberalism. Much of that improve health service delivery. Generally, of the MHSPs to Whänau Ora tension can be traced to the nature of our research with the three MHSPs showed commissioners, we similarly noted some contracting itself, with contracts still being

Page 62 – Policy Quarterly – Volume 14, Issue 2 – May 2018 time-bound, formalised, prescriptive and providers, the foundations of a policy invariably associated with outcomes predicated on compliance. For MHSPs, platform for effective outcomes contracting reporting. Others are likely to be balancing the demands of contracts that ‘by Mäori for Mäori’ has been established considerably disadvantaged in relation to do not necessarily take account of a Mäori with the advent of the Whänau Ora services effective outcomes reporting. world view is particularly challenging commissioning model. We found evidence In response to these findings, we note (Boulton, 2007). of the Whänau Ora Outcomes Framework that if MHSPs are to actively participate in In recent times, contracting for being implemented by MHSPs and being the outcomes space it is critical that: outcomes has become increasingly popular, adapted to suit local circumstances. For our · the work already being done, under raising its own set of challenges for MHSPs, MHSPs, the potential of Whänau Ora Whänau Ora, to enhance Mäori given the tensions around who gets to outcomes may be beginning to be realised. control of outcomes decision making determine what outcomes are important, We are mindful, however, of the many be consolidated and extended beyond how these outcomes are ‘measured’ and by issues surrounding competing interests in Whänau Ora; whom. While it appears that the state is relation both to Whänau Ora outcomes · a simplified contracting and reporting driving much of the outcomes decision and to outcomes generally. Our findings environment, more commensurate making across contracting with the health highlight complexity of outcomes with funding levels, is established; and social services sector, contracting for measurement, and of contract reporting · they be adequately resourced to Whänau Ora is apparently forging a unique overall, that remains problematic. MHSPs usefully reflect on results, at all direction. The high-level outcomes the continue to juggle multiple contracts and organisational levels, and can benefit Whänau Ora Outcomes Framework experience ‘report fatigue’, despite state from improved contractor feedback identifies have been directly influenced by resolutions, initiated almost a decade ago, loops; and Mäori leaders, with commissioning to simplify contracting.The potential for · they be appropriately supported to emerging more recently as a model for the ‘unbundled’ contracts and of cross-sector access and effectively utilise purchasing of these outcomes. Whänau and ‘high trust’ contracting remains far measurement tools; this is especially Ora commissioning agencies have the from being realised. so in the case of smaller providers. documented aim of reducing the The outcomes space is clearly values 1 Meaning that the study was Mäori-driven, focusing on compliance burden, as well as improving driven and is vigorously contested, issues of concern to Mäori; drew on methods and practices funding and accountability mechanisms, including by the state, Mäori interests and consistent with tikanga, Mäori knowledge and contemporary realities; privileged Mäori research aspirations; and looked to to support the success of Whänau Ora. The the broader non-profit sector. Making build Mäori research capacity (Gifford et al., 2017). indigenous principles outlined in Whänau explicit the values driving state outcomes Ora policy, and their underlying values, contracting, and taking account of these, is Acknowledgements may potentially benefit overall important if the work of MHSPs is to be Thank you to the case study sites for commissioning practice. Recent research adequately and safely framed and committing time, energy and information with one of the commissioning agencies recognised. We note the ongoing lack of to the research; we appreciate the (Boulton et al., 2017), for example, opportunities being utilised to reflect on partnerships with you that have been highlighted service design by consumers, outcomes data at all levels of the system, formed over the years. These relationships close work with providers towards shared from central government through to flax- have enabled research to be carried out goals, a focus on agreed outcomes and root service delivery. Our study reinforces focused on the needs of the whänau using flexibility, being whänau centred and that there continues to be a lack of useful MHSP services. We acknowledge the adopting a concerted cross-sector and timely feedback to MHSPs from state Health Research Council of New Zealand approach. Despite a broadly positive sector service contract purchasers, along for funding the research (HRC 14/146). assessment, however, significant with an ongoing tendency for outcomes to commissioning challenges were also be largely determined in a top-down highlighted. manner. Finally, we note that larger and Though the overall outcomes more mature MHSPs may be in a better contracting space appears to be fraught for position to absorb some of the costs

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Boulton, A. (2007) ‘Taking account of culture: the contracting experience Nowland-Foreman, G. (2015) ‘Outcomes, accountability and community of Mäori mental health providers’, AlterNative, 3, pp.124–41 and voluntary organisations: holy grail, black hole or wholly possible?’, Boulton, A and H. Gifford (2014) ‘Conceptualising the link between retrieved from http://www.communityresearch.org.nz/wp-content/ resilience and Whänau Ora: results from a case study’, MAI Journal, 3 uploads/formidable/Outcomes-Accountability-and-Community- (2), pp.111–25 Voluntary-Organisations-G-Nowland-Foreman.pdf Boulton, A., H. Gifford, H. White and T. Allport (2017) Commissioning for O’Brien, M. (2015) ‘Setting the scene: current policy direction’, paper Outcomes, report to the board of Te Pou Matakana: Wai Research and presented to the Welfare for Families in a Changing World Summit, Whakauae Research for Mäori Health and Development, Auckland: Te University of Auckland, retrieved from http://www.cpag.org.nz/assets/ Pou Matakana Summit/151029SummitProceedings Boulton A., J. Tamehana and T. Brannelly (2013) ‘Whänau-centred health O’Brien, M. (2016) ‘The triplets: investment in outcomes for the vulnerable and social service delivery in New Zealand: the challenges to, and – reshaping social services for (some) New Zealand children’, Aotearoa opportunities for, innovation’, MAI Journal, 2 (1), pp.18–32 New Zealand Social Work, 28 (2), pp.9–21 Cheyne, C., M. O’Brien and M. Belgrave (2008) Social Policy in Aotearoa O’Brien, M., J. Sanders and M. 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Management Review, 16 (8), pp.1091–112, doi: massey.ac.nz/handle/10179/5768 10.1080/14719037.2013.868507 Ryan, B. (2011) ‘The signs are everywhere: “community” approaches to Ellison-Loschmann, L. and N. Pearce (2006) ‘Improving access to health public management’, in B. Ryan and D. Gill (eds), Future State: care among New Zealand’s Mäori population’, American Journal of directions for public management in New Zealand, Wellington: Victoria Public Health, 96, pp.61–-7 University Press Gifford, H., L. Cvitanovic, A. Boulton and L. Batten (2017) ‘Constructing Stace, H. and J. Cumming (2006) ‘Contracting between government and prevention programmes with a Mäori health service provider view’, the voluntary sector: where to from here?’, Policy Quarterly, 2 (4), Kötuitui: New Zealand Journal of Social Sciences Online, doi: pp.13–20 10.1080/1177083X.2017.135252 Taskforce on Whänau-Centred Initiatives (2010) Whänau Ora: report of the King, A. and T. 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Page 64 – Policy Quarterly – Volume 14, Issue 2 – May 2018 Lara Rangiwhetu, Nevil Pierse, Helen Viggers and Philippa Howden-Chapman

Cold New Zealand Council Housing Getting an Upgrade ew Zealand housing is cold. New Abstract Zealand houses are often poorly Nconstructed and heated, and As people spend most of their time at home, residential thermal indoor temperatures tend to be colder than conditions are important. Central government debate about 18°C, the World Health Organization’s (WHO) recommended minimum minimum temperature requirements for rental properties requires an (Howden-Chapman, Viggers et al., 2009). evidence base of indoor temperature data. We collected temperature, In other temperate countries, such as the humidity and energy data from 49 council housing dwellings in United Kingdom, 91% of homes have central heating, compared to only 5% of Wellington over winter, and self-reported thermal comfort and New Zealand homes (Isaacs et al., 2010). heating behaviour. Mean indoor temperature was 14.9°C, colder In the latest New Zealand national study, than the national average, with 67% of readings under 16°C, which conducted in 1999–2005, the mean living room temperature recorded was 15.8°C the World Health Organization associates with health implications. during the day in winter (ibid.). In the With New Zealand’s high rate of excess winter mortality and children evening, average living room temperature rose to 17.8°C, but this is still below the hospitalised for housing-related diseases, cold housing should be recommended minimum level. Typically, addressed. rental housing is in worse condition than Keywords temperature, thermal comfort, building performance, owner-occupied houses (White et al., 2017). energy use, public health, council housing Household temperature is a topical issue in New Zealand politics. In 2016 the Lara Rangiwhetu is a PhD candidate with He Kainga Oranga evaluating social housing regeneration. Labour Party’s Healthy Homes Guarantee Corresponding author: email [email protected]. Nevil Pierse is a statistician and Bill (No 2) proposed a set minimum indoor Deputy Director of He Kainga Oranga. Helen Viggers is a research fellow with He Kainga Oranga; her work focuses on the reasons for New Zealand’s cold housing. Philippa Howden-Chapman is the temperature for all rental properties, and Director of He Kainga Oranga and Professor of Public Health at the University of Otago, Wellington. a number of councils are undertaking a

Policy Quarterly – Volume 14, Issue 2 – May 2018 – Page 65 Cold New Zealand Council Housing Getting an Upgrade

Table 1: Impact of Temperature on Health is particularly important to investigate low- Indoor temperature Effect income housing conditions, specifically 21ºC People suffering from Chronic Obstructive Pulmonary Disease should temperatures and tenants’ thermal comfort maintain temperatures at this level for at least 9 hours to avoid in social housing. deteriorating health 20ºC To prevent health risks in the elderly and the very young a 1987 WHO Background to the research report recommended this minimum temperature Wellington City Council, with co-funding 18ºC To prevent health risks in the general population, WHO has from central government, has undertaken recommended this as a minimum indoor temperature since 1982 to upgrade its council housing (Stitt, 2013). An assessment of the council’s housing Under 16ºC Resistance to respiratory diseases may be diminished in 2006 found moisture problems in 6 – 12ºC Blood pressure rises and increases risk of cardio-vascular disease dwellings in Arlington, the largest council *Information sourced from Ormandy and Ezratty (2012) housing complex, and tenants complained quasi-experimental study with researchers There is growing evidence of cold of being cold. to introduce a rental warrant of fitness housing increasing health risks, and Arlington is the focus of our study. (Telfar-Barnard et al., 2017). Despite this, international guidelines are currently being Stage one of the complex was built between little has been published on indoor finalised by the WHO (Telfar-Barnard et 1971 and 1976, and the final stage was temperature measurements in New al., 2017). Increased risk of respiratory and completed between 1981 and 1984. Before Zealand homes to inform the policy debate. cardiovascular disease is associated with the upgrade began there were 269 dwellings To the authors’ knowledge only two low indoor temperatures (see Table 1). In on the site: 75 apartments in a high-rise national studies on residential temperature New Zealand, 42,000 children are tower, 172 medium-density apartments, have been completed, the 1971/72 hospitalised annually with housing-related two apartments above the community Household Electricity Survey and the diseases (Hansard, 2016a). According to house and 20 townhouses, ranging in size Household Energy End-use Project (HEEP) Davie et al. (2007), New Zealand also has from studios to five-bedroom dwellings. conducted between 1999 and 2005 (Isaacs one of the highest excess mortality rates in This differs from the average New Zealand et al., 2010). Eight more concentrated the world. The excess winter mortality home, which is a stand-alone house. studies which utilise temperature (EWM) phenomenon is where a greater Arlington’s redevelopment commenced measurements are listed below by date of proportion of deaths occur in winter in 2016. At least one section has been data collection: compared to summer. New Zealand data demolished and will be rebuilt to create · nearly 1,350 homes in eight shows excess hospital admissions in winter ‘warm, healthy and efficient housing’ with communities, from the North and for those with lower household income and the aim of ‘safeguard[ing] people from South Islands, in 2001 and 2002 in certain housing types (Hales et al., 2012; illness caused by low temperature and high (Howden-Chapman, Matheson et al., Telfar-Barnard, Baker and Hales, 2008). In moisture levels’ (Wellington City Council, 2007); comparison, when outdoor temperature 2016, pp.21, 92). The council’s City Housing · 111 state housing upgrades in Dunedin, dropped below –20.0°C in Siberia the Design Guide states that a heater is to be Invercargill and Gore in 2003 and 2004 average indoor temperature was noted to provided in each living space, with a target (Lloyd and Callau, 2006); be 19.6°, and no evidence of overall EWM indoor temperature of 16–19°C. Insulation, · 40 low-income private rentals in was found (Donaldson et al., 1998). double glazing and curtains will be installed Dunedin in 2004 (Povey and Harris, In New Zealand, those of lower socio- to increase thermal performance and 2005); economic status are more vulnerable to mechanical/forced ventilation in · 409 homes in Porirua, Hutt Valley, most health effects (Taptiklis and Phipps, bathrooms and kitchens to reduce Christchurch, Dunedin and Bluff in 2017). On average New Zealanders spend dampness. 2006 (Howden-Chapman, Pierse et al., 70% of their time at home indoors, with The intervention provided an 2008; Pierse et al., 2013); vulnerable populations (such as babies, the opportunity to investigate the temperature · nine homes in Papakowhai and elderly and those on low incomes) spending of the dwellings and the upgrade’s impact. Wellington between 2006 and 2008 up to 90% of their time at home (Baker et This article looks at the condition of the (Burgess et al., 2008); al., 2007), making them even more housing before the upgrade. · 500 homes in Whanganui, Wellington susceptible to housing-related health risks. and Christchurch between 2010 and Fuel poverty, where a household spends The research 2012 (Viggers et al., 2013); more than 10% of its income on energy, is Objectives · 15 homes in Auckland, Palmerston recognised as an issue for a substantial The objectives of this research were to: North and Dunedin in 2011 and 2012 proportion of New Zealand households, 1. determine indoor temperatures at (Rosemeier, 2014); and further exacerbates potential health Arlington and contribute to indoor · five upgraded council houses in issues for low-income households temperature data for New Zealand; Wellington in 2015 (Rangiwhetu, Pierse (Howden-Chapman, Viggers et al., 2012; 2. provide a baseline for understanding and Howden-Chapman, 2017). Statistics New Zealand, 2017). Therefore, it the impact of upgraded dwellings;

Page 66 – Policy Quarterly – Volume 14, Issue 2 – May 2018 3. look at how temperatures compared Table 2: Temperature Readings Compared to WHO Recommendations with New Zealand homes and WHO Readings Proportion of time Percentage of dwellings that recommendations. experienced these temperatures Less than 10ºC 1% 20% Method Less than 12ºC 9% 73% We surveyed tenants about the warmth of Less than 14ºC 33% 94% their home and monitored temperature, Less than 16ºC 67% 98% humidity and energy usage of dwellings. Less than 18ºC 87% 100% Heating, house age, thermal insulation and outdoor temperatures influence Less than 21ºC 97% 100% indoor temperatures and were taken Figure 1: Distribution of living room temperatures into consideration (French et al., 2006; 10% Giancola et al., 2014; Howden-Chapman, 9% Matheson et al., 2007). We intend to collect follow-up data after the upgrade. 8% 7%

Recruitment 6%

A list of eligible dwellings was provided by 5% the landlord, City Housing. The research

Percentage 4% was introduced to tenants at a community meeting and in a tenant newsletter. The 3% study was fully explained to tenants when 2% recruiting participants via door knocking 1% and an information sheet was provided. 0% 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Living room temperature (ºC) Sample The study’s inclusion criteria were Figure 2: Distribution of bedroom temperatures Arlington tenants willing to answer a face- 10% to-face survey and allow temperature 9% monitoring of their dwelling. Viable temperature data were collected from 49 8% dwellings. Seventy-eight tenants, over the 7% age of 16, who lived in these dwellings 6% Percentage completed face-to-face surveys about 5% indoor thermal comfort. 4%

3% Temperature and humidity measurement Ibuttons and HOBO data loggers were 2% installed in participants’ homes over the 1% winter months, June, July and August 0% 6 7 8 9 2015. These are small, robust data loggers, 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Bedroom temperature (ºC) programmed to record temperature and humidity every hour within ±0.5°C and Hourly outdoor temperature and Data analysis ±5.0% RH accuracy (Maxim Integrated, humidity was sourced from MetService’s Data collected from data loggers, energy 2014; OneTemp, 2015). Wellington airport climate monitoring meter readings and surveys were compiled In total 124 data loggers were installed, station, located less than 5km from the together. Data were then analysed to explore typically in the living room and the main complex. the distribution of indoor temperatures, bedroom. If children were living in the and tenants’ thermal comfort and heating dwelling a third data logger was placed in Energy usage information behaviour. We examined the strength the youngest child’s room. In studios, only Electricity information was sourced as a of the relationship between the indoor one data logger was placed in the main proxy for heating behaviour. Valid energy temperature and influential factors such room. One hundred and two data loggers meter readings were obtained for 48 of the as outdoor temperature and energy usage. produced viable results from 49 dwellings. 49 dwellings with viable temperature data Results were also compared with the most Other data loggers were lost, had been for a five-week period over winter. Gas recently recorded New Zealand indoor moved, or the tenants had moved out. Two is not permitted on City Housing sites temperatures. were faulty. (Wellington City Council, 2015a).

Policy Quarterly – Volume 14, Issue 2 – May 2018 – Page 67 Cold New Zealand Council Housing Getting an Upgrade

Figure 3: Minimum and maximum temperatures recorded another bedroom. For seven of the 49 dwellings the maximum temperature did 35 not reach the WHO recommended minimum of 18°C. No minimum 30 temperatures reached 18°C. Analysis of survey data found that 42% 25 claimed their homes were ‘often’ or ‘always’ cold throughout the year, 51% ‘sometimes’ 20 and 8% ‘rarely’ or ‘never’ cold. In comparison, a city-wide survey found only 15 15% of Wellingtonians thought their homes were ‘often’ or ‘always’ cold, 44%

Maximum temperature (ºC) 10 ‘sometimes’ and 41% ‘rarely’ or ‘never’ cold (Wellington City Council, 2015b).

5 Participants’ reports of thermal comfort at Arlington were compared with

0 temperature readings (see Table 3). There was a slight decrease in the proportion of 0510 15 20 Minimum temperature (ºC) time dwellings were at lower temperatures

Note: Size of bubble refers to number of data loggers that recorded the same minimum and maximum temperatures. The further the across those rating their homes as ‘always’, bubbles are perpendicularly from the line, the larger the range. ‘often’ and ‘rarely’ cold. The proportion of Table 3: Temperatures Experienced by Participants Reporting Different Levels of time dwellings were at lower temperatures Thermal Comfort in households rated as ‘sometimes’ cold by Thermal comfort rating* the occupants disrupted this trend. This is Proportion of Always cold Often cold Sometimes cold Rarely cold likely to be because respondents who did temperature not know what to select chose the middle readings that response option. were Ten per cent of all respondents did not Less than 10ºC 3% 1% 0% 0% use heating when it was cold, 44% used Less than 12ºC 13% 10% 0% 6% heating ‘sometimes’, 22% ‘often’ and 24% Less than 14ºC 40% 34% 0% 21% ‘always’ when cold. The most commonly given reason for the home being colder Less than 16ºC 72% 64% 24% 53% than participants would like was to keep Less than 18ºC 86% 83% 77% 84% the cost of heating down. Twenty-eight per Less than 21ºC 94% 94% 98% 98% cent of respondents also claimed their homes were ‘often’ or ‘always’ hard to heat, Mean 14.8ºC 15.2ºC 15.2ºC 15.6ºC but the majority (54%) claimed their home Range 6.5 – 27.5ºC 6.0 – 28.0ºC 14.0 – 24.5ºC 8.0 – 26.0ºC was ‘rarely’ or ‘never’ hard to heat. In N** 18 14 39 6 comparison, only 14% of Wellingtonians Dwellings*** 17 14 16 5 claimed their homes were ‘often’ or ‘always’ Note: household temperature data was pooled together from the loggers in each dwelling hard to heat, with 57% reporting that their An example of how to read the table is as follows - those who considered their dwelling to be ‘often cold’ had 83% of their home was ‘rarely’ or ‘never’ hard to heat temperature readings below 18ºC * 0 respondents claimed their home was ‘never’ cold (Wellington City Council, 2015b). **77 out of 78 participants answered the question about how often their home was cold ***dwellings sum to more than 49, as some participants lived together Temperatures fluctuated during the day. On average, dwellings were coldest in the Results disease. This issue is widespread, as almost morning and warmest in the evening (see Indoor temperatures ranged from 6.0°C to all dwellings experienced temperatures of Figure 4 and Table 4). The average living 28.5°C, with a mean temperature of 14.9°C. less than 16°C and close to three quarters room and bedroom temperatures had a Most of the time (87%), indoor temperatures of the dwellings experienced temperatures moderate but significant correlation with were lower than WHO recommendations below 12°C. outdoor temperature (r=0.599 and 0.621 (see Table 2 and Figures 1 and 2). Two thirds Temperature ranges for each individual respectively, p<00.5). of the time indoor temperatures were less data logger varied substantially (Figure 3). Average energy meter readings ranged than 16°C, where resistance to respiratory The smallest temperature fluctuation was from 31.20 to 345.80kWh per week. On disease is diminished, and 9% of the time 5.0°C, measured in the bedrooms of two average energy usage was 127.20kWh per dwellings were at temperatures of less than dwellings. The largest temperature week. Pearson correlation showed that 12°C, with increased risk of cardiovascular fluctuation was 18.5°C, measured in mean indoor temperatures for dwellings

Page 68 – Policy Quarterly – Volume 14, Issue 2 – May 2018 had a significant moderate positive Figure 4: Average temperatures during winter correlation with electricity usage 18 information (r=0.576, p<0.05). The 16 strength of correlation with indoor 14 temperature was similar for both heating 12 and outdoor temperature. Humidity readings ranged from 34%RH 10 to 93%RH, with an average humidity 8 6 reading of 68%RH. Approximately three Temperature (ºC) quarters of humidity readings were over 4 60%RH, with a quarter of humidity readings 2 over 75%RH. This is not ideal, as high 0 humidity levels encourage growth of mould and bacteria and should be avoided (Environmental Protection Authority, n.d.). 1-1.59a m 2-2.59a m 3-3.59a m 4-4.59a m 5-5.59a m 6-6.59a m 7-7.59a m 8-8.59a m 9-9.59a m 10-10.59a m 11-11.59a m 24-24.59a m 12-12.59pm 13-13.59pm 14-14.59pm 15-15.59pm 16-16.59pm 17-17.59pm 18-18.59pm 19-19.59pm 20-20.59pm 21-21.59pm 22-22.59pm 23-23.59pm Thirty-one per cent of participants reported Time of day that their homes were ‘often’ or ‘always’ Average living room temperature Average bedroom temperature Outside temperature damp, 33% ‘sometimes’, and 36% ‘rarely’ or Table 4: Mean Temperatures at Arlington Over Winter ‘never’ damp. In comparison, 10% of Wellingtonians reported that their homes Mean temperatures (ºC) were ‘often’ or ‘always’ damp, 21% Room Overall Morning Day Evening Night ‘sometimes’ and 70% ‘rarely’ or ‘never’ damp (7 – 9am) (9am – 5pm) (5 – 11pm) (11pm – 7am) (Wellington City Council, 2015b). Arlington living room 14.9 14.1 14.8 15.6 14.7 Discussion Arlington Independent readings found council bedroom 15.0 14.5 14.9 15.3 15.1 housing, before the upgrade, both colder and more humid than recommended, Outdoor 10.2 10.1 11.1 10.1 9.5 which is concerning for tenants’ health. Compared to city-wide findings, Arlington Table 5: Mean Temperatures in NZ over winter from the HEEP study was also rated as colder, damper and harder Mean temperatures (ºC) to heat than Wellington housing in general. Room Morning Day Evening Night Although thermal comfort had a complex (7 – 9am) (9am – 5pm) (5 – 11pm) (11pm – 7am) relationship with temperature data, this study found that, overall, comfort tended Living room 13.5 [0.6] 15.8 [-1.0] 17.8 [-2.5] 14.8 [-0.3] to decrease with lower temperatures. Bedroom 12.6 [1.9] 14.2 [0.7] 15.0 [0.3] 13.6 [1.5] Like Arlington, the average New Outdoor 7.8 [2.3] 12.0 [-0.9] 9.4 [0.7] 7.6 [1.9] Zealand home does not meet WHO Source: adapted from Isaacs et al., 2010 temperature recommendations the Note: Difference in temperature from the current study is reported in square brackets. Negative figures indicate the national figures are majority of the time. Arlington’s mean greater than those at Arlington. indoor evening temperature in the living room, usually the living room, in the with heat transfer potentially easier room (15.6°C) was considerably less than evening (Isaacs et al., 2010). This accounts between rooms in Arlington, which are the mean national temperature in the for the difference of 2.8°C between living typically apartments, compared to HEEP study (17.8°C). This is despite mean room and bedroom temperatures in the predominantly stand-alone houses in the evening outdoor temperature being HEEP study in the evening. In our study HEEP study. relatively similar between the studies (see there is little variation between evening Comparing energy usage, participants Table 5). In the morning, Arlington’s mean living and bedroom temperatures (0.3°C). in our study appear to use less energy than temperature was 0.6°C warmer in the living This difference could be due to a lack of those in the HEEP study. The bottom 20% room and 1.9°C warmer in the bedroom heating, with 10% of participants stating of energy users in the HEEP study than the mean national temperature, but they never used heating when cold, consumed approximately 175kWh per outdoor temperature was 2.3°C warmer in compared to around 2% of New Zealand week over winter,1 nearly 40% more energy our study. households who do not heat their homes than the average weekly use in this study Heating behaviour may explain the at all (Howden-Chapman, Viggers et al., (127.20kWh per week) (Isaacs et al., 2006). difference in evening living room 2009). This may be due to the low income Using less energy could be to do with temperature noted. The HEEP study found of social housing tenants (Statistics New affordability. After deregulation, power that New Zealanders typically heat one Zealand, 2017), or to the size of dwellings, prices increased 85% nominally or 41% in

Policy Quarterly – Volume 14, Issue 2 – May 2018 – Page 69 Cold New Zealand Council Housing Getting an Upgrade

Table 6: Mean Indoor Temperatures in Southern North Island In other temperate climates, such as the Study Mean indoor living Outdoor temperature United Kingdom, average indoor room temperature differential* temperatures have been increasing and are above WHO recommended levels. In 1971/72 Household Electricity Survey (August – September) 16.6ºC 5.6ºC national household surveys there, average winter living room temperatures were 1999, 2002 – 2004 HEEP Study recorded as 18.3°C in 1978 and 19.1°C in (August – September) 16.1ºC 6.9ºC 1996, an increase of 0.4°C per decade 2015 Arlington Study (Mavrogianni et al., 2013). Average (June – August) 14.9ºC 4.7ºC bedroom temperatures increased to a Note: Data on other studies from Isaacs et al. (2010) greater extent by 1.8°C per decade, from * Living room temperature less outdoor temperature 15.2°C in 1978 to 18.5°C in 1996. Policies real terms when adjusted by the consumers respect to house age, the HEEP study also should be enacted to ensure that New price index between 2003 and 2016 found that on average temperature fell Zealand indoor temperatures are also (Ministry of Business, Innovation and 0.20±0.05°C per decade (French et al., 2006). improving. Employment, 2017), the approximate time Given that Arlington is obviously between the studies. However, again it considerably colder than desired, it is Limitations could be that the size of the dwelling means positive that Wellington City Council is This study focused on low-income council less energy is required to heat Arlington trying to remedy the situation for its housing tenants. However, out of necessity dwellings to similar temperatures. vulnerable tenants. It is recommended that we compared our findings with nationally New Zealand has a diversity of climates, all new council housing has a targeted representative studies. with the far north warmer than the far minimum temperature of 18°C to meet Average temperature changes south. Therefore, it is important to try WHO recommendations. demonstrate the overall trend, but hide a and compare temperatures in similar When the Labour Party’s Healthy wide variation between individual locations where possible. The 1971/72 Homes Guarantee Bill (No 2) was put dwellings, as demonstrated by the range of Household Electricity Survey and the forward, the then building and housing temperatures recorded. Minimum HEEP study (1999, 2002–04) reported minister, Nick Smith, claimed that a temperatures ranged from 6.0–14.5°C, mean living room temperatures, and minimum temperature requirement for with maximum temperatures ranging from temperature differentials with the rental homes was ‘impractical and stupid’, 15.0–28.5°C. outdoors, for the southern part of the as landlords cannot control tenants’ heating Participants had varying definitions of North Island, where Wellington and the behaviour (Hansard, 2016a, p.1). John Key, what they perceived as cold. Homes where Arlington dwellings are located (see Table then prime minister, added that the bill temperatures ranged from 6.0–15.0°C in 6). Arlington dwellings were colder, and only attempted to regulate indoor one dwelling and 17.0–27.0°C in another had a lower temperature differential temperatures, as regulation could only be were both rated by occupants as ‘always’ between indoors and outdoors. This enforced after ‘walking around other cold. Occupants in the same household implies that the council housing was people’s living rooms and bedrooms with also rated the warmth of their home colder than the average New Zealand a thermometer’, which is impractical differently. household, although readings were taken (Hansard, 2016b, p.1). Our research shows An individual’s exposure to different at slightly different times of the year. that temperature measurements can be temperatures and therefore the health In New Zealand, houses built after 1 April taken in an unobtrusive manner. Work by impact based on indoor temperature is 1978 required a minimum level of insulation. He Kainga Oranga, the Housing and Health unknown, as it is uncertain how much, For the section of the Arlington complex built Research Programme has also identified when, and in what rooms individuals after 1978, the mean temperature was 15.2°C, structural means to address the issue of spend time at home. The notion that on compared to 14.6°C in the pre-1978 section. cold housing. average vulnerable New Zealanders spend This difference aligns with findings from Late in 2016 the Residential Tenancies 90% of their time at home indoors, when other studies about the effects of insulation Amendment Bill came into effect, requiring 87% of readings do not meet WHO and house age. On average, indoor rental properties to be insulated to at least recommendations, implies that residents temperature increased by 1°C after retrofitting 1978 standards. The debate continues, are exposed to less than ideal temperatures a small amount of insulation to the subfloor though, as the initial proposer of the bill, for a substantial portion of time. and ceiling of uninsulated New Zealand Andrew Little, claimed erroneously that homes (Howden-Chapman, Matheson et al., there was no point in insulating homes if Policy implications 2007; Howden-Chapman, Pierse et al., 2008). they are not heated properly (Sachdeva, The council dwellings studied are thought The HEEP study found that post-1978 homes 2016). It is noted that insulation by itself is to be colder than the average New Zealand had on average 1°C warmer living room insufficient to meet WHO indoor houses. This aligns with expectations temperatures in the evening compared to temperature recommendations, but it is a that owner-occupied houses are in better pre-1978 homes (Isaacs et al., 2010). With necessary precondition for effective heating. condition than rental housing. However,

Page 70 – Policy Quarterly – Volume 14, Issue 2 – May 2018 on average social housing is in better fitness scheme to ensure that all rental Act 1995 requires local councils to have an condition than private rentals (Buckett, properties meet acceptable health and action plan to improve the energy efficiency Jones and Marston, 2011; Howden- living standards. The scheme is currently of housing in their area and report back to Chapman, Baker and Bierre, 2013). With voluntary in Wellington, supported by the the government on progress (Test Valley home ownership rates falling in New Wellington City Council. With respect to Borough Council, 2017; UK Government, Zealand, more active government policies temperature-related interventions in 2017). A first report was to be completed are needed to address housing conditions dwellings, it looks at insulation as well as by councils by 31 March 2017 and of rental properties. To be most effective a double glazing, effective curtains or blinds biennially after this. It will be interesting range of interventions to improve indoor and weathertightness. Components need to see the impact on housing temperature temperature are required. to meet adequate standards to pass (Telfar- and whether it should be adopted in New As a first step, information should be Barnard et al., 2017). Zealand. provided to those in high-risk dwellings Labour should implement its Healthy The temperature of New Zealand about how to reduce damp and cold. Homes Guarantee Bill (No 2), make changes housing should be monitored on a Housing New Zealand’s graphic, ‘Keeping to the building code, and adopt the winter systematic and ongoing basis, in order to your home warm and dry’, is a good resource energy payment it proposed (New Zealand determine whether the issue of cold (Housing New Zealand Corporation, 2017). Labour Party, n.d.), underpinned by research housing is improving and in response to Such information can be particularly useful (Viggers et al., 2013), so that tenants are able what initiatives. Temperature measures are to people unfamiliar with New Zealand’s to maintain their dwelling at 18°C at currently being planned in conjunction climate and housing. reasonable cost. Wellington City Council and with the next New Zealand General Social A free home energy assessment is Housing New Zealand already build housing Survey in 2018. available for Wellington and Upper Hutt city to a higher standard than the current building ratepayers. This educates people on the code, indicating it is insufficient. Conclusion energy performance of their home and how The winter energy payment is intended New Zealand still has a way to go to meet they can adjust their behaviour to be more for superannuitants and beneficiaries to minimum temperature recommendations. energy efficient, and provides a small spend on improving the warmth of their With New Zealand’s high rate of excess subsidy for products such as draught housing through heating and investing in winter mortality and 42,000 children stoppers and window insulation kits. Such draught-stopping and insulation. This is hospitalised every year for diseases an initiative could be rolled out across the similar to the UK’s winter fuel payments associated with unhealthy homes, this country. introduced in 1997, which provide is something that should be addressed The government should provide household grants to improve energy sooner rather than later. adequate subsidies for insulating housing. efficiency, non-means-tested winter fuel 1 This has been derived from Isaacs et al.’s (2006) finding Instead of wrapping up the Warm Up New payments for those over 60, and warm that the bottom 20% of households use 4,860 kWh/yr of Zealand: Healthy Homes insulation grants home discounts and cold weather payments electricity. On average this equates to 93.46kWh per week. However, Isaacs et al. also state that household energy programme in June 2018 as planned by the for those on low incomes. The payments consumption varies seasonally and often rises by a factor of previous government, this should be for older people have been criticised as nearly three from summer to winter. extended and the eligibility criteria unfocused and poorly targeted at those expanded so that all housing is properly suffering from fuel poverty (Thurley and Acknowledgements insulated. Insulation has been shown to Kennedy, 2017). However, research has We would like to acknowledge the have a positive benefit–cost ratio of five to attributed a reduction in deaths of 12,000 Wellington City Council, City Housing one, with health benefits for occupants annually to the payments (Age UK, 2015; tenants and Zhang Wei with their help in (Grimes et al., 2012). Iparraguirre, 2014). carrying out this study, as well as funding The government should also support a With respect to other related UK from the Health Research Council of New national roll-out of the rental warrant of initiatives, the Home Energy Conservation Zealand, grant 15-429.

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Page 72 – Policy Quarterly – Volume 14, Issue 2 – May 2018 Taptiklis, P. and R. Phipps (2017) Indoor Air Quality in New Zealand 2F%2Fresearchbriefings.files.parliament.uk%2Fdocuments%2FSN060 Homes and Schools: a literature review of healthy homes and schools 19%2FSN06019.pdfandusg=AOvVaw2Cm-5j-YtzLFCV3sEEqAXJ with emphasis on the issues pertinent to New Zealand, Wellington: UK Government (2017) ‘Guidance to English energy conservation BRANZ, retrieved from http://www.branz.co.nz/cms_show_download. authorities: the Home Energy Conservation Act 1995’, retrieved from php?id=c847ab66383cfa20a355b2679cf75f3d1faee6c4 https://www.gov.uk/government/publications/guidance-to-english- Telfar-Barnard, L., M. Baker and S. Hales (2008) ‘The role of housing type energy-conservation-authorities-the-home-energy-conservation- and socio-economic status in New Zealand excess winter act-1995 hospitalisation patterns’, paper presented at the fifth Warwick Healthy Viggers, H., P. Howden-Chapman, T. Ingham, R. Chapman, G. Pene, C. Housing Conference, University of Warwick Davies et al. (2013) ‘Warm homes for older people: aims and methods Telfar-Barnard, L., J. Bennett, P. Howden-Chapman, D.E. Jacobs, D. of a randomised community-based trial for people with COPD’, BMC Ormandy, M. Cutler-Welsh et al. (2017) ‘Measuring the effect of Public Health, 13 (176), doi:10.1186/1471-2458-13-176 housing quality interventions: the case of the New Zealand “rental Wellington City Council (2015a) City Housing Design Guide warrant of fitness”’, International Journal of Environmental Research Wellington City Council (2015b) Wellington City Council 2014/15 Annual and Public Health, 4 Report, retrieved from https://wellington.govt.nz/~/media/your-council/ Test Valley Borough Council (2017) ‘Home Energy Conservation Act plans-policies-and-bylaws/plans-and-policies/annualreport/2014- (1995) (HECA) report’, retrieved from https://www.testvalley.gov.uk/ 15/2014-15-annual-report.pdf housingandenvironmentalhealth/housing/private-sector-housing/ Wellington City Council (2016) City Housing Design Guide energyefficiency/home-energy-conservation-act-1995-heca- White, V., M. Jones, V. Cowan and S. Chun (2017) BRANZ 2015 House report?displaypref=large Condition Survey: comparison of house condition by tenure’, study Thurley, D. and S. Kennedy (2017) Winter Fuel Payments Update, briefing report 370, Wellington: BRANZ, retrieved from http://www.branz.co. paper, retrieved from https://www.google.co.nz url?sa=tandrct=jandq nz/cms_show_download.php?id=a1efff0a2fd9885ecf878ce475631df =andesrc=sandsource=webandcd=1andved= 0ahUKEwjvpcjDyrDXA 7025cf3b8 hWGjpQKHQ1cAnAQFggnMAAandurl=http%3A%

THIRD INTERNATIONAL CONFERENCE ON WELLBEING & PUBLIC POLICY Wednesday 5th – Friday 7th September, 2018 New Zealand Parliament Buildings & Victoria University of Wellington

his third in the series of Organization, the Netherlands), • Culture, indigeneity and wellbeing international conferences on Jan-Emmanuel De Neve (University of (incorporating Māori wellbeing) Wellbeing and Public Policy will (1) Oxford, United Kingdom) and Carla • Wellbeing, hope and perceptions of critically evaluate the rapidly Anne Houkamau (the University of the future expanding field of wellbeing research Auckland). Ministers and senior • Sustainability, capital stocks and across a range of disciplines; (2) share officials from the New Zealand wellbeing the work of leading international Government will participate in the • Children and young people’s organisations; and (3) distil ideas and conference as will members of leading wellbeing practices which will aid governments international organisations, including • Wellbeing, utilitarianism and the in developing a wellbeing approach to the OECD. capabilities approach public policy. Conference themes: • Technology and wellbeing Our four plenary speakers are • Wellbeing and inequality • Wellbeing – cause or effect? Edward Diener (the University of Utah • Wellbeing – policy and practice and the University of Virginia, USA), Martijn Burger (Director, Erasmus Early bird registration is available through to 25 June 2018. Happiness Economics Research See more on the website: http://www.confer.nz/wellbeingandpublicpolicy2018

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Policy Quarterly – Volume 14, Issue 2 – May 2018 – Page 73 Murdoch Stephens

Unfair and discriminatory which regions does New Zealand take refugees from and why?

Abstract Official Information Act. I have analysed This article considers changes to the regional composition of New this approach in Stephens (2014), which Zealand’s annual refugee resettlement quota under the fifth National gives some insights into changes in the refugee quota under the fifth National government. The method is based on an analysis of material collected government. The present article forms across four years of Official Information Act requests and further the most in-depth analysis of the regional changes yet. It adds to already published research conducted in the course of the Doing Our Bit campaign Twitter threads, press releases, interviews to double New Zealand’s refugee resettlement quota. The article and editorials discussing these policies. outlines changes to the regional composition, the stated rationale Whereas previous discussion had aimed at highlighting concerns with the policy in behind them, and the effect of these changes. It concludes with an an attempt to embarrass the government argument that these changes be reversed by the new Labour-led into a change, the current article takes a different approach. Here I seek to bolster government. the arguments against the policy which Keywords refugees, racism, New Zealand, religion, Africa, have already been made by a range of Middle East government departments.

n this article I consider changes to the and the effect of the changes, and provide What is the refugee quota and why is it regional composition of New Zealand’s an argument for them to be reversed. important? Iannual refugee resettlement quota The refugee quota is an annual intake under the fifth National government. The Approach of refugees, the number and regional article draws from research conducted in I draw primary material from a range make-up of which is decided by New the course of the successful Doing Our of Ministry of Business, Innovation and Zealand, which then works with the Bit campaign to double New Zealand’s Employment (MBIE), Ministry of Foreign United Nations High Commissioner for refugee resettlement quota. I outline these Affairs and Trade and Office of Ethnic Refugees (UNHCR) to fill those places. changes, the stated rationale behind them Affairs documents released under the The people who become quota refugees are assessed, interviewed and ultimately selected in their first country of protection. Murdoch Stephens leads the Doing Our Bit campaign to double New Zealand’s refugee quota and recently received a PhD from Massey University for his research into critical theory and climate change. For example, Syrian refugees from our

Page 74 – Policy Quarterly – Volume 14, Issue 2 – May 2018 most recent intakes have been assessed in certain number of people gain protection. journey by boat to Australia from Indonesia. Lebanon, their first county of protection, The Doing Our Bit campaign was By resettling people from South East Asia, before being flown to New Zealand as part occasionally confronted with people who the government hoped that this would of our annual quota. wanted to abolish the refugee quota, create hope that the refugee quota system The refugee quota is one of three main thinking this was the equivalent of opening might be the best avenue for registered ways that a refugee can gain protection in our borders to all people seeking protection. refugees to find protection in a resettlement New Zealand, alongside making a successful By way of comparison, that would be like country like New Zealand. claim for asylum, which requires them to hoping the abolition of a minimum wage The final reason behind a restructure be in New Zealand, or being welcomed as would lead to higher wages. was described as ‘broad security concerns’. part of a family reunification programme. I will give attention here to this reason as Internationally, the vast majority of What is New Zealand’s regional refugee ban it is the one that focuses on the refugees who gain a new residency receive and what is its effect? characteristics of those not from the Asia– protection as asylum seekers: this was the In 2009 the incoming National-led Pacific rather than the characteristics of case for the refugees who sought protection government worked with MBIE’s those who are. One might also be inclined in Europe during the peak of the refugee predecessor, the Department of Labour, to devote more attention to this reason crisis of 2015. Whereas asylum seekers are to streamline the assessment of refugees because it is the most sensitive of the three, assessed, and either accepted or rejected, in Immigration New Zealand offshore as indicated by the persistent redaction of once they’re in the country from which they seek protection, quota refugees have already gone through that process before Legal advice suggested ... that only taking they arrive. To think of it another way: some people use the term onshore to refugees from the Asia–Pacific region may describe asylum seekers, as they are granted protection only once they have already result in a breach of the New Zealand Bill arrived; offshore is used to describe quota of Rights, as it may restrict the ability of refugees and those coming under the family reunification programme, as they already resettled refugees to use the quota are recognised as refugees before arriving. The refugee quota is important as it as one avenue for family reunification. provides a vehicle for the most vulnerable, as selected by the UNHCR, to receive protection. While asylum is more often claimed by those with the skills, resources interviews. This led a year later to a three- discussion of it in OIA responses. Similarly, or will to get to a country that may accept year planning and implementation stage scholars have devoted considerable them, the refugee quota protects those who for selecting who would arrive under the attention to the ‘securitisation’ of forced are least likely to survive prolonged refugee quota. In the first analysis of what migration, which focuses on the threat of displacement and who have the least that three-year quota would look like the refugees to the country accepting them, prospects for either voluntary repatriation new government sought to refocus New rather than on the risk to refugees (for or local integration (UNHCR, 2017a). The Zealand’s refugee quota on the Asia–Pacific example, see Hammerstadt, 2014 for a quota tends to be used most by countries region.1 The initial proposal suggested critical reading). Those risks are twofold: that are a long way from conflict zones moving the entirety of New Zealand’s those posed by the circumstances of forced where large numbers of refugees originate refugee intake to this region as a response migration, such as the original war and (UNHCR, 2017b). Resettlement through to ‘regional pressures’.2 persecution, and then the dangers the refugee quota is particularly strong in Three core reasons emerged for this associated with displacement, such as North America and Australasia, with some refocus. The first reason was cost: it was smuggling, disappearances and the lure of nascent programmes in Europe. both cheaper to fly people in from South dangerous journeys to claim asylum. We might think of the quota as the way East Asia, where the majority of these From the texts available, it appears for countries who don’t receive a large people would arrive from, and to focus just ‘broad security concerns’ are threefold. First, number of refugees applying for asylum to on this area would allow economies of scale there may be a ‘risk to New Zealand’s do their bit for refugee protection. In that in the process where New Zealand international reputation’. This concern sense, while the quota is technically a limit immigration officials interview potential focuses on the potential for New Zealand on the number of people who can come, it quota refugees referred to us by the to accept refugees whom we may one day places no limit on the number of asylum UNHCR. The second reason expands on find were not eligible to be refugees. This seeker places. A better way of thinking of the notion of regional pressures: specifically, concern also speaks to a broad description the quota is as an artificial minimum – like the aim was to stem the number of people of people who may pose a risk to New a minimum wage – which ensures that a who might attempt to make the dangerous Zealand. The second concern is over

Policy Quarterly – Volume 14, Issue 2 – May 2018 – Page 75 ‘Unfair and discriminatory’: which regions does New Zealand take refugees from and why? credibility issues with the statements and need, ‘the majority of which are in Africa the agreement on the composition of the claims made by prospective refugees. The and the Middle East’. Prior to the Asia– refugee quota explicitly stated that the final concern is based on the difficulties Pacific focus, the regional intake was split at ministers of immigration and foreign affairs potential refugees might have resettling in around 30% each for Africa, the Middle East would decide on the new allocations. New Zealand, which one document and the Asia–Pacific.4 Without fail they redirected the percentage describes as ‘insurmountable’. Of the three, of refugees originally allocated to Africa and the final two are elaborated upon in the The family link criterion as restriction the Middle East to the Asia–Pacific region documents – with no specific mention of If the new regional quotas were the extent when insufficient family-linked places were African and Middle Eastern refugees. of the rearrangement of New Zealand’s found. Over the years, a lack of people Almost all of the elaboration on security refugee quota they might escape scrutiny. qualifying for the family link criterion concerns has been redacted, which, despite However, a proviso was also placed on became the norm, with intakes from both some persistence, was not overturned in a refugees from the Middle East and Africa Africa and the Middle East dwindling to lengthy appeals process with the that they would only be accepted if they single figures. This was not due to a lack of ombudsman. already had family in New Zealand. This possible family to bring to New Zealand, but Legal advice suggested, however, that proviso was not extended to refugees because these potential quota refugees only taking refugees from the Asia–Pacific from the Americas, so we might deduce needed to be outside their country of origin region may result in a breach of the New that what became known as the ‘family link and registered with the UNHCR, which did Zealand Bill of Rights, as it may restrict the criterion’ is less a function of cost or helping not have the facilities or resources to ability of already resettled refugees to use with pressures in the Asia–Pacific and specifically seek out these cases. the quota as one avenue for family more about the broad security concerns One way around these restrictions was reunification. An alternative to the 100% identified earlier. A rosier interpretation found when 100 Syrian refugees were Asia–Pacific intake was suggested, agreed to might be that as it was only in 2007 that the welcomed in 2014–16 in an emergency and put into practice: 50% of quota refugees Americas was introduced as a resettlement category from within the quota. This intake were to come from the Asia–Pacific, 15% region, the exemption from the ‘family preceded the 600 extra places granted at from the Middle East, 17% from Africa and link criterion’ for the Americas might be the height of the refugee crisis. These 18% from the Americas.3 This alternative, it intended to build a sustainable community Syrians bolstered the numbers coming was argued, would also help assuage ‘likely among this recent intake. from the Middle East; without it, the concerns’ from the UNHCR, which, it was Regardless of the reason for placing a number of refugees from the Middle East noted, has a global objective to focus family link criterion on refugees from Africa would be almost as low as of those from resettlement on those refugees in the greatest and the Middle East and not the Americas, Africa. So, while we have proposed intakes Figure 1: 2014/15 agreed and actual intake from the Middle East and Africa in the double digits, our actual intakes are much smaller. Consider the 2014/15 intake5 in Figure 1, which shows both the actual, in contrast to the proposed, intake.6 Thanks to the enthusiasm for blocking out large amounts of text in OIA releases, researchers are forced to speculate as to what the middle column in this table might represent. Given that the reason cited is to do with information having been entrusted to the government by an international organisation, and that the UNHCR in Canberra was the only group asked about our quota composition, it is fair to guess that the missing column is a recommended intake from them. From my dealings with the UNHCR in Canberra I would expect these recommendations to have a much more even split between regions. While New Zealand has not explicitly banned refugees from the Middle East and Africa, the policies implemented by the National-led government have effectively led to that outcome for refugees from

Page 76 – Policy Quarterly – Volume 14, Issue 2 – May 2018 Africa, and to a significant decrease for refugees from the Middle East and Africa, This denial was indicative of what I Middle Eastern refugees, augmented by the with a few small exceptions – was retained. speculate to be embarrassment felt by the emergency places for Syrians. If American Even though the minister was by now fully government about the policy, as evidenced president Donald Trump’s rejection of aware that the proposed percentages would by their OIA redactions, obfuscation in the Middle Eastern and African refugees has not be met, no suggestion was made to House of Representatives, and inflated been evidenced by a series of smoking gun remove the family link criterion or make proposals for regional intakes that they had tweets, New Zealand’s move away from the the proposed percentage more reflective of repeatedly been told would not be met. same regions is a purposeful, but difficult- the difficulty of filling these family-linked to-prove death by a thousand cuts. places. If the community concerns about What is the problem with the ban? the unfair and discriminatory aspect of the There are four significant problems with the Resistance to the ban from government family link criterion were included in the family link criterion that has banned new departments and political opposition final aide-memoire that went to Cabinet, refugees from Africa and the Middle East This policy has not gone without comment they are in the redacted portion of the from being settled in New Zealand, with from the relevant government departments. document. the three exceptions of an emergency intake, From 2013, MBIE has noted their inability to fill the African percentage of the quota and suggested that the minister of There are four significant problems with immigration approach Cabinet about removing the family link criterion so that the family link criterion that has banned the full percentage of the quota from new refugees from Africa and the Middle Africa might be welcomed. Ignoring the advice from MBIE, as well as advice that East from being settled in New Zealand, the current situation means New Zealand will not meet its proposed regional goals, with the three exceptions of an emergency Cabinet has retained the family link criteria. intake, family link or if they have been The only successful challenge to the restrictions was made in 2013 when the able to escape the region. Ministry of Foreign Affairs and Trade and MBIE, contrary to earlier claims of pressure in the Asia–Pacific region, noted that they were likely to struggle to find At the 2017 election, the restrictions family link or if they have been able to enough refugees in the Asia–Pacific to fill became the subject of parliamentary escape the region. These problems have all a regional intake that had become more discussion when the Greens took a stand been touched on already, but I want to focus than two thirds of the quota. They against the family link criterion, on each one in more depth. The problems successfully argued for allowing Afghan campaigning to remove it (Green Party of are how the changes (1) undermine the refugees who were living in Pakistan to be Aotearoa New Zealand, 2017). When James UNHCR focus on the most vulnerable; classified as part of the Asia–Pacific region. Shaw questioned the then prime minister, (2) compromise the universalism of The Afghan refugees are predominantly Bill English, about the criterion, English human rights that underwrites accepting from the Hazara group, a minority group referred to the Syrian emergency intake as refugees; (3) discriminate against existing in Afghanistan persecuted for their Shia a way to suggest that the restrictions do not communities; and (4) represent a de- faith. Hazara have had a long connection exist: basement of the political process. with New Zealand, with a large number First, the ban on these new refugees of the Tampa refugees being Hazara. They James Shaw: Can he confirm that his undermines the UNHCR’s focus on using also have connections forged with the Government cut the number of the scant resettlement places for those most New Zealand Defence Force’s provisional refugees New Zealand takes from Africa at risk. While New Zealand has maintained reconstruction team in Bamiyan, the and the Middle East when it is precisely a commitment to resettling women at risk, heartland of the Hazara people. those people who are in the most one of these core categories, it is clear that During the 2016 triennial review of the precarious and needy situation? the greatest regional need has been in Africa refugee quota, the Office of Ethnic Affairs Rt Hon BILL ENGLISH: There will and the Middle East, where conflicts – responded to a request for comment by be a range of opinions about the including but not limited to those is Syria, noting that ‘some of our community relative need among refugees, but the Iraq and South Sudan – have created stakeholders from former refugee Government did respond to the very substantial crises. While the recent escalation backgrounds perceive the current family large number of refugees from Syria by of displacement of Rohingya from Myanmar link criterion is unfair and discriminatory’. opting to take several hundred more of has created a new need for resettlement Despite these concerns, the family link them over the next few years. (Hansard, from the Asia–Pacific region, it would still criterion – the effective ban on new 2017) be difficult to justify taking more than 50%

Policy Quarterly – Volume 14, Issue 2 – May 2018 – Page 77 ‘Unfair and discriminatory’: which regions does New Zealand take refugees from and why? of our quota from this region. Similarly, the struggle to maintain members in the face Commentators who take positions level of need in the Asia–Pacific has no of larger communities in Australia and opposed to the refugee quota tend to relation to the policy of only taking family- elsewhere abroad. The message from the either focus on opposition to certain linked refugees from Africa and the Middle government that these refugees are not kinds of refugees and on their likelihood East, while accepting those from the seen as capable of resettlement success of integrating into New Zealand society, or Americas regardless of a family link. creates a self-fulfilling prophecy for those erroneously assume that New Zealand’s The second problem with the ban is communities already resettled. refugee resettlement programme is the more philosophical, but is no less Finally, there is something same as the asylum seeker movements important. By placing caveats on who we fundamentally dishonest in the descriptions across Europe that they have seen on will or won’t take based on generalised and reasons employed by the previous the six o’clock news. See, for example, concerns about potential security risks, the government in their restrictions of refugees Cameron Slater on his blog Whale Oil, who universalism of human rights is from these two regions. Where Trump was says, ‘I have no problem with the concept undermined. If human rights only apply very direct about banning people from of refugees, or even the doubling of a to people outside the regions where the certain countries from entering the United quota’ (Slater, 2016). Similarly, Karl Du Fresne focuses on Islamic asylum seekers, the inclination of liberals to welcome them, Commentators who take positions and the need to avoid giving asylum in case this leads to an ‘ugly Far Right’ resistance opposed to the refugee quota tend to in New Zealand (Du Fresne, 2016). either focus on opposition to certain kinds Pro-refugee advocates tend to focus their attention on the latest conflict that of refugees and on their likelihood of has received media attention, from Syria through to the more recent focus on integrating into New Zealand society, or Rohingya refugees. While this focus on erroneously assume that New Zealand’s those most in danger is important, it also fuels a short-term focus on emergency refugee resettlement programme is the intakes that struggles to lead to long-term same as the asylum seeker movements or systemic solutions. This approach also rarely discusses systemic racism (or even across Europe that they have seen on the mention race at all, except to denounce those like Slater and Du Fresne), accepting six o’clock news. the premises by which particular refugee situations lead to media coverage, while others do not. greatest needs and challenges are, a state of States, giving the rationale for it as religion, The kind of plain talking about race exception is created that undermines the our government was not so clear. The and refugees that would offer truly liberal very basis of human rights.7 Persecuted tendency to describe this policy as outcomes – that is, outcomes not groups are rarely made refugees in a one- providing ‘opportunities’ for family determined by race, religion or anything off act; first, their status as deserving of reunification might strike the uninitiated other than immediate need – is rare. Ann human rights is undermined and their very reader as positive. But these opportunities Beaglehole, in both Refuge New Zealand being debased.8 When New Zealand buys are merely the reuniting of families from (2013) and in interviews, provides a into this generalised debasement and previous intakes while slamming the door striking example of acknowledging the role penalises all potential refugees from both on any new resettlement from those of race in refugee resettlement. In a Africa and the Middle East under the rubric regions. This kind of doublespeak does discussion with myself and Wallace of security concerns, then we are buying nothing to endear politicians or the Chapman on RNZ’s Sunday Morning into the process of persecution. democratic process to the general public, programme, she noted the ease of her own The third problem is that raised by the leading to cynicism and disengagement experience as a refugee arriving in New criticism made by the Office of Ethnic from the political process. Zealand in the 1950s: ‘Hungarians on the Affairs, and is an extension of that originally whole had a very good reception because used as a justification against taking the Speaking of race, refugees and migration we were white and I had blue eyes’. Speaking full quota from the Asia–Pacific region: Assumptions and stereotypes based on of newer refugees, she notes, plainly ‘there discrimination against potential refugees race and religion contribute to how people would have been some prejudice against based on their region discriminates against view New Zealand’s refugee resettlement them because they didn’t have white skin’ existing resettled communities. The small programme. Opposition to refugees as a (RNZ, 2016). size of New Zealand’s refugee quota has whole has not been coherently expressed While contemporary mutations of meant that resettled communities already in the mainstream media in New Zealand. racism may be more sophisticated than

Page 78 – Policy Quarterly – Volume 14, Issue 2 – May 2018 overt talk of skin colour, this does not of profiling based on religion or belief that, even prior to the 2019 refugee quota mean that racism has gone away. that the world has come to expect in an review, the new government will accept the Commentators like Slater generalise age of Trump, which has rarely been the advice of MBIE (or whatever new ministry terrorism to all 1.3 billion of the world’s New Zealand way, a close reading of the it becomes) and remove the family link Muslims; Du Fresne expresses specific multiple documents, across nine years criterion. Doing so is the only way for our concern about Muslims from North Africa of the previous government, shows that refugee quota to truly play our little part and the Middle East. At the softer end of this government systematically used the in meeting the world’s humanitarian needs. the spectrum, a spokesperson for New logic and language of risk and security 1 While the quota is planned to cover a three-year block (e.g. Zealand Customs explains why returning to minimise the number of African July 2010–June 2013), it is also planned and implemented Syrian New Zealanders are being regularly and Middle Eastern refugees accorded on a year by year basis, hence the annual quota is the block of time most commonly referred to. submitted to extensive post-travel protection in New Zealand. It ignored the 2 As the documents referred to here are spread across many OIA responses, each consisting of multiple papers and screening: ‘A range of indicators are advice of its departments and turned the working papers, I won’t reference specific papers. Instead considered when deciding to interact with protection of refugees into a question of I would point interested parties to two ways of seeing the original documents: first, all of the OIA responses passengers – from nationality (to determine our security, with little consideration for have been collected at https://fyi.org.nz/user/m_stephens; second, a Twitter thread shows the original selections if a passenger has originated travel in, or theirs. of documents here: https://twitter.com/DoingOurBitNZ/ status/825554122938081281. passed through, a region of risk), through But this is not the whole story. Given 3 Note that these regional allocations were not for the regions to body language and general demeanour. the overwhelming opposition to the family refugees originated from, but where they had applied for protection. For example, a Somalian making a claim in Customs does not profile passengers based link criterion in advice on the refugee Malaysia would be considered under the Asia–Pacific quota. 4 The last ten years of refugee quota arrivals are recorded by on religion or belief’ (Vance, 2017). Where quota from MBIE and other government Immigration New Zealand at https://www.immigration.govt. Slater and Du Fresne are clear and precise departments, there is reason to hope the nz/documents/statistics/rqbarrivalsstatpak.pdf. However, for a longer term view see the useful archive at http://www. about who they are opposed to coming to new government will reject the regional refugee.org.nz/stats.htm. 5 Intakes run from 1 July–30 June, so overlap two calendar New Zealand, New Zealand Customs and allocations and restrictions of its years. the National-led government have predecessors. Just as Nicky Hager 6 I have left in the sections redacted from this OIA release to give some sense of the difficulty knowing the exact reasons obscured the basis of the securitisation concluded his Other People’s Wars (2011) for these restrictions on African and Middle Eastern refugees. 7 Giorgio Agamben has offered a rich critique of this which has taken precedence over with praise for the New Zealand Defence circumvention of rights in his State of Exception (2005). humanitarian concerns and universal Force soldiers who confiscated a rifle from 8 For an excellent contemporary documentation and analysis of this process see Steffen Krüger’s ‘Barbarous hordes, brutal human rights in their work. an Afghan farmer rather than simply elites’ (Kruger, 2017). shooting him, I am heartened by the Conclusions and recommendation commitment to the universalism of human While a surface reading of the official rights underwriting their consistent advice documents might not show the kind to reject the family link criterion. I hope

References Agamben, G. (2005) State of Exception, trans. Kevin Attell, Chicago: journal/83/142185/barbarous-hordes-brutal-elites-the-traumatic- University of Chicago Press structure-of-right-wing-populism/ Beaglehole, A. (2013) Refuge New Zealand: a nation’s response to RNZ (2016) ‘Ann Beaglehole and Murdoch Stephens – refugee quota’, refugees and asylum seekers, Dunedin: University of Otago Press Sunday Morning, http://www.radionz.co.nz/national/programmes/ Du Fresne, K. (2016) ‘Western freedom repaid with vile acts’, Dominion sunday/audio/201787486/ann-beaglehole-and-murdoch-stephens- Post, 22 January, http://www.stuff.co.nz/dominion-post/comment/ refugee-quota, accessed 2 November 2017 columnists/76068008/western-freedom-repaid-with-vile-acts, Slater, C. (2016) ‘Tolerance, in excess, is treason’, Whale Oil, 16 June, accessed 2 November 2017 https://www.whaleoil.co.nz/2016/06/255375/, accessed 2 November Green Party of Aotearoa New Zealand (2017) ‘Welcoming more refugees: 2017 for a fairer society’, https://www.greens.org.nz/sites/default/files/ Stephens, M. (2014) ‘Pacific Insoluble: contemporary issues in New policy-pdfs/Green%20Party%20Refugee%20Full%20Policy%20 Zealand’s refugee quota policy’, New Zealand Sociology, 29 (2), Wording.pdf, accessed 2 November 2017 pp.55–77 Hammerstadt, A. (2014) ‘The securitization of forced migration’, in E. UNHCR (2017a) ‘Resettlement criteria’, UNHCR, http://www.unhcr.org/ Fiddian-Qasmiyeh, G. Loescher, K. Long and N. Sigona (eds), The protection/resettlement/558c015e9/resettlement-criteria.html, Oxford Handbook of Refugee and Forced Migration Studies, Oxford: accessed 2 November 2017 Oxford University Press UNHCR (2017b) ‘UNHCR resettlement fact sheet 2016’, UNHCR, http:// Hager, N. (2011) Other People’s Wars: New Zealand in Afghanistan, Iraq www.unhcr.org/59364f887, accessed 2 November 2017 and the war on terror, Nelson: Potton & Burton Vance, A. (2017) ‘Exclusive: Syrian Kiwis forced into giving passwords, Hansard (2017) ‘Tuesday, 20 June 2017, oral questions’, New Zealand underwear searched by NZ Customs’, TVNZ One News Now, https:// Parliamentary Debates, vol. 723, https://www.parliament.nz/en/pb/ www.tvnz.co.nz/one-news/new-zealand/exclusive-syrian-kiwis-forced- hansard-debates/rhr/combined/HansD_20170620_20170620, into-giving-passwords-underwear-searched-nz-customs, accessed 2 accessed 2 November 2017 November 2017 Kruger, K. (2017) ‘Barbarous hordes, brutal elites: the traumatic structure of right-wing populism’, e-flux, 83, June, http://www.e-flux.com/

Policy Quarterly – Volume 14, Issue 2 – May 2018 – Page 79 Catherine Cotter1

ICTs as an Antidote to Hardship and Inequality implications

case in point (see Statistics New Zealand, for New Zealand 2018; Wilson, 2018). Yet discussion about ICTs as a form of government assistance Abstract to improve the lives of the digitally disadvantaged in developed countries Contemporary ICTs such as mobile phones and the internet, are is largely absent. This article focuses on increasingly viewed as potential solutions to some of humanity’s most the government’s role in creating and complex and pressing problems, including poverty and inequality. providing new kinds of ICT-related safety But in New Zealand the evidence shows there are large gaps in the nets and services for New Zealand’s poor. It begins by introducing a model from the ICT-related resources and support available to New Zealand’s digitally development literature that enables analysis poor. Among the shortcomings are a profound lack of integration of of the rationale and achievements of ICT ICT needs into social policy design and implementation, the absence investment aimed at public goals (Heeks, 2010, 2014). The model’s domains are of a programme of ongoing policy review and update, and insufficient applied to arrangements in New Zealand research. today, guided by the objective of using Keywords digital divide, digital inclusion, ICTs, social policy, poverty, ICTs to achieve greater social and economic equality and less hardship. The ensuing inequality discussion examines who is doing what to support the digitally excluded, with a odern information and com- for a growing proportion of the world’s focus on the role of the government. Public munication technologies (ICTs) population. Among the consequences of this policy consequences and options for New are credited with improving pervasiveness is heightened debate about so- Zealand conclude the article. Because some M 2 the lives of people everywhere. They are called digital divides: New Zealand’s ‘digital data were initially collated in early 2016, also increasingly a part of everyday life first’ national census in March 2018 was a brief comment is also able to be made on relevant changes since then. First, however,

Catherine Cotter has worked in and around New Zealand and Australia’s public services for more is the need to define key terms and describe than 20 years. Her current interests are government and society in the information age, and public the nature and magnitude of digital divides sector governance, strategy and change. in New Zealand today.

Page 80 – Policy Quarterly – Volume 14, Issue 2 – May 2018 Key terms The rapid pace at which digital Box 1: Features of the ICT for technologies, such as laptops, the internet, apps and mobile phones, are evolving and development value chain converging means there are advantages to Domain Features referring to them collectively. Here the ICTs Readiness • Precursors are the systemic prerequisites to any initiative. They are under discussion are the broad assortment predominately national-level and can be technological (eg, electricity, of ‘tools to collect, store, analyse, and share telecommunications infrastructure), data systems, human capabilities information digitally’ (World Bank, 2016, (eg, skills), institutional (eg, organisations or policies), vision, or drivers p.2). Poverty is taken to mean a lack of (eg, demand) money or other resources ‘to participate • Strategies turn precursors into inputs fully in life’s opportunities’ (Boston and • Inputs feed into individual initiatives, and can be technology, data, Chapple, 2014, p.21). Inequality is used in labour and knowledge, motivations, goals and objectives, money, incentives, leadership and political support the dictionary sense to mean unevenness or lack of equality. Among the many kinds Availability • Implementation can occur via projects, programmes or policies • Intermediates and deliverables are tangible products arising from of inequalities (see Boston, 2013, for an implementation of an initiative, and can be locations (eg, public overview), this article has a focus on social libraries), ICTs (eg, computers, phones) or software applications and material ICT inequalities. Enablers (accelerators) and constraints (brakes) occur outside, and act on, the availability and uptake domains. They usually signify the presence or absence of Digital divides necessary precursors and inputs from the readiness domain3 A definition of New Zealand’s digital Uptake • Adoption is the rate at which a target audience takes on a deliverable, divides is more elusive. Many explanations eg, by purchasing an initiative or going to or connecting to it. Adoption resort to lists of ‘digitally excluded’ may depend on the audience finding the deliverable acceptable population cohorts, circumscribed by (Figuères & Eugelink, 2014, p. 216) or a degree of enforcement their physical location, socio-economic (Heeks & Molla, 2009) • Use relates to a deliverable’s actual usage by a target population circumstances, age, ethnicity, lack of (Heeks, 2010) uptake or use of specific ICTs or digital • Sustainability is to do with mechanisms that ensure a deliverable ICTs in general, and so on. Others rely continues to be used over time. It may depend on the continued supply on descriptions of ‘digitally engaged’ or and reliability of precursors and inputs (Figuères & Eugelink, 2014, p. ‘included’ cohorts or individuals, the 202) corollary being that whoever does not • Scalability to large numbers of people is required for the adoption and fall within these categories constitutes the use of a deliverable to be sustained information or digitally poor. Impact • Outputs are behavioural changes associated with use, eg, new In practice, however, any purported communication patterns, new information and decisions, or new actions or transactions digital divide is a complex, multi-layered • Outcomes are wider costs and benefits associated with ICTs, and can and evolving phenomenon (see Sylvester, be financial and other quantitative or qualitative benefits, or disbenefits Toland and Parore, 2017, for a recent and • Development impacts are the contribution of ICTs to public goals and comprehensive review of the literature and other impacts, whether intended or unintended, and may be positive analysis of the issues in marginalised or negative communities in New Zealand). Further, not all aspects of the divide are cause for current Source: based on Heeks, 2018, pp.38–9, with other sources as indicated societal concern. Nearly three quarters of lines, and compound when these factors Perry (2017, p.95) reports that 12% of New Zealand children aged 11 years and overlap. Those who are older, live more children do not have good access at home over own a mobile phone, for example, but rurally, have a lower household income, to a computer and the internet for for the bulk of children who do not, the and who are not New Zealand European homework; for children living in New reason is other than cost (Perry, 2017, p.97). or Asian use the internet less widely and Zealand’s materially poorest households, But concern about divides is justified less frequently. the figure is 57%. when the absence of access to, and ability Briefly, to give a sense of the numbers to use, ICTs hinders everyday activities that involved, 9% of New Zealanders surveyed ICTs for development create social and economic value for the in 2015 aged 16 years and over do not use New Zealand’s new Labour–New Zealand clear majority of New Zealanders, such as the internet (Crothers et al., 2016). Using First government announced the goal of finding information and communicating Statistics New Zealand population closing the country’s digital divides by with others. Smith et al. (2016) find that estimates with data from the first quarter 2020 in November 2017 (Curran, 2017a). these divisions, as far as use of the internet of 2016, this equates to approximately And, as the minister for government goes, occur in New Zealand along 319,250 people. An additional 11% very digital services, Clare Curran, stated a household income, geographic and ethnic rarely use the internet (ibid.). Separately, month later, international examples can be

Policy Quarterly – Volume 14, Issue 2 – May 2018 – Page 81 ICTs as an Antidote to Hardship and Inequality: implications for New Zealand

Figure 1: ICT for development value chain

Enablers

Adoption Use Intermediates Development Precursors Strategy Inputs Implementation Outputs Outcomes /Deliverables Sustainability impacts Scalability

Constraints

READINESS AVAILABILITY UPTAKE IMPACT

Adapted from Heeks, 2018, p. 38 instructive in achieving such an objective multiple sources obtained using different were split across the chain’s domains, (Curran, 2017b). Usually ideas are sourced methodologies (Heeks and Molla, 2009) according to whether the lead actor was from richer countries (see, for example, and data at different levels, from national central or local government, non- recent analyses by Zwimpfer et al., 2017, to households and individuals. government organisations or individual and Innovation Partnership, 2017). But But there are weaknesses in the chain citizens, or the private sector, including another overlooked resource are the lessons itself or its application here. These include businesses’ philanthropic activities.4 A two- from decades-long experimentation by a suggestion of linearity ascribed to what year cut-off date was used, and the search international aid agencies and donor could be characterised as complex confined to New Zealand initiatives aimed and developing countries with emerging adaptive systems, even in the instance of at reducing poverty or social or material ICTs and the alleviation of poverty and apparently simple ICT initiatives (see, for inequality, with at least one ICT as a central inequalities (see Figuères and Eugelink, example, Eppel and Lips, 2016). Further, enabler or driver of change, that were 2014; Heeks, 2018, ch.5; May, Waema and measuring and evaluating poverty, underway rather than concluded or Bjåstad, 2014). inequality, outcomes and achievement of planned. The analysis did not attempt to Heeks (2010) charts the evolution of broad public goals is not straightforward. take in all initiatives aimed at all divides, huge annual expenditure on ICT-related Also at issue can be variability in the nor all New Zealand research. development in poor countries over the quality, specificity and availability of Only a fraction of the data can be previous 15 years. He finds that, broadly secondary data, and problems with presented here, although where possible it speaking, focus shifted from technical aggregating and comparing data from has been updated. Samples have been aspects of ICTs (including infrastructure) different sources (van Thiel, 2014, p.112). selected that enable discussion of central to their availability, to ICTs’ uptake by Finally, the novelty of the analysis, government’s role, what more it could or targeted communities, and, most recently, especially for developed countries, means should do, and on what grounds, and to their developmental impact. Heeks has there are few comparators. possible policy mechanisms to extend more also developed an ‘ICT for development’ ICTs to digitally disadvantaged New value chain. Figure 1 shows a simplified Use of the framework Zealanders living in hardship. But the version of the chain; Box 1 defines its Use of Heeks’ chain requires a goal or impact development and examination of features (Heeks, 2018, p.38). to be defined. To address the increasing alternative scenarios, such as market-based problem of ICT-induced inequalities and solutions, and discussion about the Applying the framework exclusion, McKinsey and Company has relativity of digital poverty in New Zealand Choice of framework suggested more ICTs for the poor (Manyika is largely precluded. Box 2 shows the data In what follows, Heeks’ model is applied et al., 2016, p.100). The World Bank according to Heeks’ four readiness, to New Zealand. But first a note on the recommends upskilling employees into availability, uptake and impact domains. choice of framework. Heeks designed it to non-routine occupations in the ‘race’ against show how ICTs can deliver development evolving digital technologies’ disruption of Who is doing what? outcomes, illustrate the requirements for labour markets (World Bank, 2016, pp.20–1). The government’s role the creation of deliverables that enable The solution here is taken to be McKinsey’s The government has a large and active role development, and help identify which ICT one of more ICTs, and the desired outcome in Heeks’ readiness domain. It establishes elements and relations to focus on, given a to be less hardship. systemic precursors, devises strategy, and desired outcome (Heeks, 2018, p.42). The During the original research, the sources and allocates inputs to policies chain is sufficiently generic that any public framework’s definitions were employed as and programmes. Since the previous, goal can be ‘plugged’ into it and provides prompts for sourcing documents and National-led government’s election in the chance to analyse simultaneous websites for analysis. Relevant ICT 2008, focus has been on faster and better initiatives. It also accommodates data from investments, activities and programmes network infrastructure, primarily for

Page 82 – Policy Quarterly – Volume 14, Issue 2 – May 2018 Box 2: ICTs for social development in New Zealand Readiness domain - precursors, strategies and inputs participating in the upgrade of network infrastructure and NGO- • The Labour-led government’s ICT goals include closing New led digital inclusion programmes (Johnson et al., 2017, p. 106) Zealand’s digital divide by 2020, strengthening social inclusion • The 20/20 Trust (2017, pp. 4, 5) has several programmes, eg, and cohesion, and protecting New Zealanders’ digital rights Family Connect, a pilot digital literacy programme for adults (Curran 2018a) with few or no qualifications funded by the Tertiary Education • In August 2017, contracts were signed for the second phase Commission of the Rural Broadband Initiative, which will extend improved • The Spark Foundation’s Jump programme supplies free pre- broadband to over 70,000 rural households and businesses pay wifi modems to families with school-aged children, each (Ministry for Business, Innovation & Employment [MBIE], 2017) preloaded with 30GB and which cost from $10 per month to • From term 1 2018, schools and kura began teaching from top up7 curricula updated with new digital technologies content, with two years provided for full implementation of the changes (Ministry Uptake domain - adoption, use, sustainability and scalability of Education, n.d.) • As at 31 December 2017, 112,805 rural households and • In 2016/17, the Ministry of Education funded delivery of digital businesses had adopted upgraded broadband internet (ie, 40.3% inclusion programmes by the 20/20 Trust (2017, p. 3) to 1,805 of the 304,574 who had the option to connect) (MBIE, 2018) families with children in low-decile schools and refugee families • In 2016/17, 375,000 registrations for MyMSD had been made • Some libraries offer free internet access (MSD, 2017a, p. 5) • The 20/20 Trust (2017, p. 86) has a vision of “New Zealanders • Over 98% of students apply online for financial support and fully participating in the digital world” assistance (MSD, 2017b, p. 23) • In 2015, SeniorNet (2016, p. 6) introduced 29,202 enrolees, • 80% of families graduating from the Computers in Homes digital 96% of whom were aged 60 years and over, to computers, inclusion programme took up the offer of a subsidised internet portable touchscreen devices and emerging technologies connection in their home (20/20 Trust, 2017, p. 27) • Of people surveyed by Crothers et al. (2016) who did not use the • One third of principals report their school accesses philanthropic internet, the main reason was 33% were not interested or did support for learning with digital technologies, one third’s schools not think it was useful, 20% did not know how to use or were are considering it, and one third’s schools do not and are no confused by technology, 18% did not own a device capable of considering it (Johnson et al., 2017, p. 26) accessing the web, 13% had no connection, 11% found it too • The 2020 do not and are not Trust’s (n.d.) digital inclusion map expensive and 5% did not have the time plots the availability of community wireless networks, computer access and training, digital champions, and digital initiatives Availability domain - implementation, intermediates and across the country; InternetNZ’s (n.d.) Trust’s digital divide map deliverables adds correlations between social well-being and digital inclusion • The remit of Minister Curran’s ministerial advisory group includes providing advice on a “blueprint for digital inclusion and digital Impact domain – outputs, outcomes and development impacts enablement” (MBIE, n.d.) • In 2016/17, 66% of applications for financial assistance from • As at 31 December 2017, 304,574 rural households and MSD (2017a, p. 2) were completed online, up 10% from the businesses had the choice to connect to upgraded broadband previous year internet (MBIE, 2018) • MSD (2017a, p. 17) saw the greatest online uptake increase • Work and Income pays household ICT costs in some circumstances in 2016/17 in the Sole Parent Support category, followed by for some allowances, eg, Sole Parent Study Assistance guidelines supplementary benefits and Jobseeker Support designate internet or landline telephone expenses as allowable • 60% of MSD’s (2017a, p. 34) clients who work part-time use costs, provided a connection is necessary for course participation MyMSD to advise their weekly income and not already in place5 • Nearly one third of participants in Computers in Homes reported • The Ministry for Social Development (MSD) made its MyMSD 12 months after course completion that it had helped them find app available in September (2017a, p. 34) See http://www. paid work (20/20 Trust, 2017, p. 19) scoop.co.nz/stories/PO1604/S00369/mymsd-puts-clients- • Half of surveyed principals rate the impact of digital technologies in-the-driving-seat.htm. The costs to clients of data to use on student learning outcomes as moderate; another third rate it some of the app’s services6 are negligible due to a deal with as significant (Johnson et al., 2017, p. 75) telecommunications companies • Decile 1 to 3 schools are significantly less likely to publish • The overall ratio of students per school-provided digital device for website information, use email between teachers and parents, learning remains the same as 2011 levels (Johnson, Macguire email newsletters and use parent portals (Johnson et al., 2017, & Wood, 2017, p. 28) p. 101) • Decile 1 to 3 schools are significantly more likely to report economic reasons. These programmes Central government inputs are near- instance, public library resources), while are set to continue under the Labour-led universal (for example, appropriations to non-government organisations’ and coalition, but with an additional focus on build infrastructure) or highly targeted (for businesses’ philanthropic inputs are digital inclusion and rights. Schools are example, the few instances of payment of targeted, by focusing on children and the main vehicle through which the state household ICT costs). Local government their families or older New Zealanders, is modernising the nation’s ICT skills. inputs tend towards the universal (for for example.

Policy Quarterly – Volume 14, Issue 2 – May 2018 – Page 83 ICTs as an Antidote to Hardship and Inequality: implications for New Zealand

Table 1: Policy options POLICY MECHANISM TARGET POPULATION STRENGTHS WEAKNESSES TARGET ICT(s) 1. Community Services Card • Low income households • Sufficiently flexible to apply to • Blunt cut-off point subsidy-type arrangements (ie, • Hardware, such as laptops, sole parents, the elderly, urban • Higher administration and vouchers), sufficient to offset computers or smartphones and rural dwellers, low-income compliance costs, relative to some costs but not unlimited • ICT-related services, such as wage earners, and a range of overall assistance provided setup and maintenance costs ICTs (Boston & Chapple, 2014, p. • Well established in other 101) sectors (eg, health) • Less expensive than universal assistance (Boston & Chapple, 2014, p. 100) 2. Subsidies for access • Low income households, via • International examples to learn • The levies are already to ICTs, allocated from discounts on monthly bills from (eg, United States, South being used for fast internet telecommunications and/or higher data caps from Korea) infrastructure, a new development levies designated providers • No overall increase in social emergency caller location • Household broadband internet assistance costs system, and services for the access and/or mobile voice, • Levies and telecommunications deaf (MBIE, 2017) text or data services service obligations are already in place in New Zealand 3. Higher families tax credits • Low income families • Sound evidence of a link • No guarantee funds will be • Any ICT between income and ICT spent on ICTs (Boston & • Also housing, electricity and adoption and uptake (Crothers Chapple, 2014, p. 100) data access et al., 2016; Statistics New • Less effective in the event Zealand, 2015) of information asymmetry • Families can determine their or uncertainty (Boston & own needs Chapple, 2014, p. 99) • Highly targeted 4. Substantial subsidies to • School children and schools • Highly targeted and highly • If devices cannot be targeted schools, based on • Computers, software and meritorious transported home, or there decile ratings or other defined broadband • Helps ameliorate schools’ is no internet at home, wider need • Also data access and electricity concerns about hardware, educative benefits may be software and online services foregone costs (Johnson, et al., 2017, • Staff ICT professional p. 83) development is also needed (Johnson et al., 2017, p. 83) 5. Higher student loan thresholds • Tertiary education students • Students can determine their • Higher indebtedness at for course-related costs and • Any ICT own ICT needs graduation has risks and living costs • Also data access • Well established in the consequences (Shaw & education, social services and Eichbaum, 2011, p. 261) tax systems that the disadvantaged may be least capable of bearing

Having made ICT deliverables available, use and influence of ICTs on social and New Zealanders would have the option of central government activity largely educational policy outputs and outcomes. connecting to higher-speed internet (Curran, concludes, and in the uptake and impact 2018b). By the end of 2017, 40% of those with domains the market takes over (see Many gaps, few overlaps access had chosen to connect (Ministry of Commerce Commission, 2017; InternetNZ, Looking across Heeks’ domains in Box 2, Business, Innovation and Employment, 2017). But the work of public libraries, and still concentrating on the government, 2018). But current policy settings preclude schools and non-government organisations the biggest gap is between the delivery of the Ministry of Social Development’s one continues to support New Zealanders’ intermediates (such as internet fibre) and million-plus clients receiving direct support, adoption and use of ICTs. The government ensuring that there is effective non-market above their present eligibility, to act on this re-emerges in the impact domain in the support for their equitable and wide choice. Online interactions are wanted by its form of many organisations that, like the adoption and use in the uptake domain. clients, and arrangements have been made so Ministry of Social Development, want to A second large gap in the data relates to that the cost of data for some interactions is transact digitally with New Zealanders. government agencies’ activities in and negligible. The benefits for its clients who Also active in the impact domain are a between the uptake and impact domains. transact in this way are said by the ministry handful of government agencies, non- The ultrafast broadband programme to include savings of time and money, as well government organisations, and researchers illustrates both points. Curran’s expectation as it being more convenient (Ministry of collecting and examining evidence of the in February 2018 was that by 2022, 87% of Social Development, 2017b, p.27). First,

Page 84 – Policy Quarterly – Volume 14, Issue 2 – May 2018 however, the precursors suggested by Heeks’ functions, it is arguably time New Zealand availability, and does nothing new to framework, such as possession of a added at least some basic ICTs and the safeguard its equitable uptake. smartphone, tablet or desktop computer, support to ensure their effective use. must be satisfied. As discussed shortly, for Third, the available evidence is silent ICTs, target groups and options for many New Zealanders this is non-trivial. about many major questions to do with life New Zealand Then support must be extended to others, so in New Zealand today. What of One immediate place New Zealand could they can experience the same benefits and disadvantaged young people and adults start is with existing institutions and new divides are not created. searching for work or enrolled in tertiary policy mechanisms. Table 1 presents five education, for example? Is it any longer options for meeting the basic ICT needs Public policy implications possible, practically speaking, to undertake of school-aged children from low-income Heeks’ framework is designed to provide tertiary study without access to a computer families, disadvantaged adults enrolled guidance on decisions and actions in the or the internet at home? Can work be in tertiary education, and low-income pursuit of ICT-enabled goals, including found without access to a mobile phone or adults more generally. Each row contains a those with social, economic or educational the internet? And what are the additional policy mechanism, a target population and aims (Heeks, 2018, p.38). Three major costs incurred by the absence of these suitable ICTs (and sometimes enablers, observations about past and current technologies and, in an era of social such as data access), and its strengths and government ICT policy decisions and investment, who bears them?9 For these, weaknesses. The table does not estimate disadvantaged New Zealanders arise. and numerous other, questions there are the potential costs or cost-effectiveness for First, by concentrating most of a decade’s sinsufficien answers. each option, but these can be calculated, public ICT investment on infrastructure, preferably using the most up-to-date ICT the previous government in effect took Minimum ICT thresholds data possible. New Zealand ‘back’ to the beginning New Zealand’s contemporaries are The options, which are not mutually of the value chain. This, of course, has responding to digital divide issues in exclusive, are intended to illustrate how happened in many other countries, and a variety of ways. In some instances, some ideas in this article might be put into perhaps must occur periodically when countries are adding new ICTs to their action. None alone nor all of them would new technologies – railway, electricity – regulatory universal service obligations. eliminate the incidence of digital poverty fundamentally change the order of things. Until recently, for many governments, in New Zealand, even if that was a realistic, The commensurate evolution of social including those of New Zealand, Australia, workable or desirable goal. The domestic policy, however, has been neglected by the United Kingdom and Japan, that and international evidence shows, for successive governments to the extent that generally meant providing citizens with instance, that the targeting of families, it is profoundly unfit for the digital age. reasonable access to a connection for a children and individuals living in hardship, ICT-related allowances and benefits that landline telephone, payphones and the and encouraging their take-up of newly predominantly focus on access to landline like (Calvo, 2012). Achieving agreement available ICTs, can be challenging. Reasons telephones,8 for example, require radical on changes to universal services is not include the lived realities of some poor, overhaul and ongoing review. easy. The European Commission’s current such as a high degree of transience (20/20 Second, education features as a reforms, for example, focus on updating Trust, 2017, p.12), competition at home continuous thread throughout the chain. affordability safety nets. But even as these towards children or young people’s access Actors are at work in all four domains, from changes, a decade in the making, were being to devices (Hartnett, 2016; Lips et al., 2017, readiness to impact. There are, however, finalised before the European Parliament’s p.33), lack of awareness about ICTs’ benefits still major gaps. The issue of school involvement, they were judged outdated or the motivation to adopt them (Sylvester, children’s universal access to devices and and lacking relevance in the context of an Toland and Parore, 2017), vulnerabilities the internet at school and at home has not evolving internet (Renda, 2017). of some kinds of policies to abuse by been resolved, for example. Until it is, ICT- Other challenges range from the recipients and fraud (Davies, 2016), and induced inequities and inequalities in New ideological to the technical, and include ongoing concerns about the real and Zealand’s education system are expected to at-times irreconcilable views on the perceived costs of accessing and using ICTs. persist and compound (Starkey, Sylvester relationships between ICTs and human Also no doubt at play would be the and Johnstone, 2017). More striking still is progress, an unstable policy environment influence of broader societal views, such as the apparent absence of the direct provision as new ICTs and research findings emerge, ideas that anyone who wants an ICT should of public services at scale that support and large gaps in current data. The United pay for it, or that the poor are differently digitally-disadvantaged New Zealanders, in Kingdom, however, declared in December and especially ill-equipped to deal with the the same way that youth, families, working- 2017 an intention to make citizens’ ability downsides of ICT’s (see Britz, 2004, for a age people, students, those with disabilities to choose to connect to fast broadband a survey). Objections from anti-poverty and seniors are helped into secure housing legal right by 2020 (Department for Digital, campaigners that money and other and employment (Ministry of Social Culture, Media and Sport, 2017). But resources are being diverted from food and Development, 2017a, p.6). For these viewed using Heeks’ framework as applied housing to ICTs could be rivalled by welfare population cohorts, and to these core here, this merely shores up broadband opponents’ concerns about increases to

Policy Quarterly – Volume 14, Issue 2 – May 2018 – Page 85 ICTs as an Antidote to Hardship and Inequality: implications for New Zealand social assistance. But some or all of these families and low-income adults, including more systemic and solved not by focusing on technologies but on adequate minimum levels of income, equality of and may prove spurious arguments for students. The entirety of the framework achieving equity in education, and so on. See Dutton and Graham, 2014, pp.5–8 for a survey of different possible withholding from the poor ICTs that must be revisited often, more frequently perspectives. Where this is especially relevant to New benefit many other people, and few are than many others are, and not solely for Zealand is the effects that higher minimum wages, fee-free tertiary education, and other enablers planned by the Labour- insurmountable. The evidence shows economic development motives. Further, led coalition will have on otherwise unassisted ICT take-up by the poor. increasing demand for more ICTs from new core social development functions and 4 In practice, of course, this split quickly breaks down. New Zealanders who receive social services, public services should be considered that 5 At https://www.workandincome.govt.nz/map/employment- and-training/specific-employment-related-assistance/sole- and, when all elements of Heeks’ framework enable digitally-excluded New Zealanders’ parent-study-assistance/internet-01.html on 18 March 2018. are tended to, their sustained and successful sustained adoption and use of modern 6 For exclusions, see https://www.workandincome.govt.nz/ about-work-and-income/our-services/cheap-as-data/what- take-up of ICTs is possible. ICTs at scale. To support these changes, services-can-be-used-with-cheap-as-data.html. 7 See https://www.sparknz.co.nz/what-matters/spark-jump/. investment in ongoing research to expose, 8 See, for example, the guide to telephone costs for the Conclusion explain and address gaps in current disability allowance at https://www.workandincome.govt. nz/map/income-support/extra-help/disability-allowance/ New Zealand needs a full and complete knowledge is also required. telephone-01.html on 18 March 2018. 9 By one account, being online can benefit individuals by ICT policy framework that reflects social, nearly $1,000 annually (see Zwimpfer et al., 2017, p.2). 1 This article is based on research undertaken by the author economic and educational goals for as part of a Master of e-Government at the School of all New Zealanders. An explicit aim of Government at Victoria University of Wellington. The research Acknowledgements was awarded the 2017 Holmes Prize in Public Policy. the framework must be the creation of 2 This article is necessarily based on assumptions that remain I would like to thank Elizabeth Eppel unexplored here about the relationships between society, modern, complementary and cost-effective ICTs and the role of democratically-elected governments in and Jonathan Boston for their helpful ICT social policies. Among the first target welfare states. In fact, many aspects of these relationships comments on an earlier version of this are unfolding rapidly and highly contested. See Gluckman, populations for these initiatives should 2018, for recent commentary on some of the issues. article. be children and young people from poor 3 For example, some would have it that the issues are wider,

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