15 March 2012

Ministry of Dumb Ideas

Today's admission that the Government will not implement its election promise to introduce competitive private-insurer provision of workers compensation represents a humiliating defeat for National. But it also represents (inadvertently) a return to some common sense. See my previous post.

Competition, in this particular sector, was such a bad idea for so many reasons that I'd need a lengthy essay just to explain them all. The Herald article only outlines a few of the problems. I'd speculate too that the insurers themselves were getting cold feet as their reinsurance backers have probably sunk too much into NZ Inc lately, they are jacking up their fees accordingly, and they are still afraid of investment losses (especially with the trouble in Europe) so they are not keen on new long-tail risk.

John Key's speech today set out some very unambitious goals, what's more. First, they've set the cap on public-service employee numbers at a lower level, but they are already below that cap now, so that's one box easily ticked. Secondly, Key has set out 10 'results' that government departments have been beavering away on to achieve (with fewer staff) for ages already. Yawn. Thirdly, he proposes to amalgamate a few departments to create one great big bureaucracy. Are we getting excited yet?

I'm still waiting for news about that 'step-change' that was going to lift our productivity up to the level of Australia's...


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