Integrity: why NZ needs to lift its game

Getting back to basics and avoiding conflicts of interests in everyday public administration

In an ideal world, the independent Office of the Auditor-General would be always boring and never newsworthy. Credit goes to the present Auditor-General, however, for raising some issues that Kiwis have cause to be concerned about.

The University of Waikato reportedly took a “dismissive” attitude towards justifying why they hired former National politician and former minister for tertiary education Steven Joyce. He was paid more than $1 million all up as a consultant. Other firms or consultants had not been considered as alternatives. And coincidentally, Waikato U. was angling to get the National-led government to sign up to building a new medical school in Hamilton. That project may be a great idea in principle. But the university’s management didn’t think it necessary to give a full account of its choice of the former politician as consultant. Perceptions matter. More effort (not less) was required to record and justify the decision-making process around hiring Joyce, for the protection of all concerned. There was a lapse in “good procurement practice” in this instance. The reputational damage is done, however, as it’s now in the news. At least we have an independent auditor and a free press to bring these things to light.

“In this case the University does not seem to appreciate that it is accountable to Parliament and the public for whether it has followed appropriate processes when spending public money. Relying on a view that the University is ‘entirely satisfied’ with the work produced [by Mr Joyce] does not provide that assurance.” John Ryan, Controller and Auditor-General.

There’s a similar concern about the present fast-track legislation bill. Many people are rightly worried about protection of the environment, but there’s also a shortage of protections for the three ministers who’ll make the decisions, for reasons similar to the Waikato Uni case. The draft bill doesn’t prescribe full and open justification of final ministerial decisions, as the Auditor-General has pointed out. Ministers could use the Cabinet Manual and some administrative measures, but it would be better if transparency around approval, procurement and outcomes were to be written in to the legislation. The public needs to know, for example, whether there are competitive tendering processes, or whether projects, firms and sub-contractors are, in effect, hand-picked – and, if hand-picked, then why. A formal cost-benefit analysis doesn’t seem to be required for projects, while the focus is more on timely and cost-efficient processes, not outcomes. It’s a licence to cut corners. And there needs to be monitoring of how approved projects perform. Any subsequent reputational damage could affect the firms involved as well as the government.

That leads on to political donations. Political parties’ 2023 donations disclosures have been reported by the Electoral Commission. Risk now arises for donors to National, ACT and NZ First who may be connected in any way to companies that get notified by the government about the fast-track consenting. Transparency is needed well before they get approved. The Herald cites one example of such a potential conflict of interests even at this early stage. This fast-track process is inherently problematic and needs transparent reporting built into the law. Political donors could get caught up in conflict-of-interests queries about any involvement in fast-track applications and approvals, which would also affect the three ministers involved, and ultimately drag their leader into awkward questions from journalists. Cabinet ministers in recent times have lost their jobs over such matters.

What’s more, the whole structure of political donations in NZ needs an overhaul. National must feel good about raking in over $10 million in 2023, but how much do they really need? And how much is too much?

Parties could get into a kind of “arms race” as they compete to build up campaign war-chests. Once they’ve spent a fortune on promoting their own brands, the temptation is to spend the remainder on attacking their opponents in an effort to suppress their turnout. Many voters end up feeling confused and disgusted by attack ads and they switch off. That’s not “good for democracy” – quite aside from the risk of perceptions, if not reality, of influence or quid pro quo between donors and decision-makers.

More is not necessarily better when it comes to private political finance.

Experience shows that, on its own, money doesn’t buy seats in parliament. Colin Craig, Gareth Morgan and Kim Dotcom each donated large sums to their pop-up parties and none of them won a single seat. Their millions would have been better given to charities.

For the “serious” political parties, though, there are diminishing returns: the next dollar donated to and spent on a campaign must have a reducing marginal utility. A party ends up spending more and more for each new vote – until the point where they’re just wasting money.

There’s merit, then, in capping donations to political parties by individuals, and even placing a cap on per annum totals per party after which the excess goes to approved charities like the Sallies or the City Mission.

The politician who’s been loudest against proposals to limit or cap private donations is David Seymour. You only have to look at the sources and sums of donations to ACT in 2023 to see why. ACT has some wealthy and generous benefactors. According to Mr Seymour, proposals to exert further control over donations are undemocratic. But a government by or on behalf of society’s most wealthy is commonly known as a plutocracy.

New Zealand risks harming its good reputation for transparency and for low levels of corruption. Governments – not only the present one – have been reluctant to take steps to reverse this. But it’s reckless to erode New Zealand’s international reputation as a “clean” economy in which you can do business with ease and with confidence. The present government’s eagerness to “cut red tape” and “get things done” may have short-term appeal to some business leaders, but it may have irreversible effects on the country’s international reputation as well as its natural environment. NZ doesn’t need a reputation as a place where donating a large sum to a political party might look like a way to get an investor’s project onto the fast track. It’s not too late to reverse this trend.

Shout out for journalists

A lot’s been made recently about a survey showing low trust in media. But today’s column has relied heavily on the work of journalists at the Weekend Herald. They’ve done “the first draft” and deserve acknowledgement. I’ve also linked to documents from the Electoral Commission and the Office of Auditor-General, to which the Herald alerted me.

Shayne Currie’s “Media Insider” column looked into the controversy around TVNZ’s presentation of an opinion poll last week. He was moderate in describing Maiki Sherman’s coverage as “very full-on” and “over the top”.

A principal reason for the public’s low trust in media is the perception that they’re “biased and unbalanced”. Much of the reporting that I’ve read over the weekend, however, has been balanced and informative. A lot of journalists take their obligations seriously.

But they’re being let down by the response from Sherman, which I paraphrase as: her reporting style has flair and it generates levels of attention and feedback that she’s happy with, so she won’t be changing her approach much in future. To me that says: because it’s click-bait, she’ll keep on doing things that annoy people, even if it diminishes their trust in the 6pm news.

If you want to be informed, switch off the TV and read the paper.