The tragedy of state penny-pinching

00:39, Jan 21 2013
Finance Minister Bill English.
Bill English.

New Zealanders are a thrifty lot. Many of us grew up with parents or grandparents who suffered through the Great Depression and saw thrift as a highly laudable quality.

I can almost see the sentimental tears in the eyes of my parents when they wax lyrical about Depression-era bread-and-dripping sandwiches.

When it comes to painting their house or building a deck, most Kiwis would rather do it themselves than pay an expensive professional.

So when our finance minister tells us that we've been spending too much and outlines plans to cut inefficient government spending, it falls on largely sympathetic ears.

Never mind that his spending cuts savings are relatively minor compared with the amount of money his Government has spent bailing out profligate financial institutions, or delivering tax cuts to the wealthiest few.

For most of this century, government ministers have been trying to nurture a culture of thrift into their organisations. And it makes perfect sense - mostly. Why hire expensive contractors 11 months of the year when it would be far cheaper to hire one person to do the job fulltime? Trouble is, organisations such as the Treasury have led the charge for other departments to be thrifty, greatly increasing their spending on consultants.


But has this current mania for cost-cutting turned into fiscal bullying, with tragic results? The 2010 Anzac Day helicopter crash which killed three soldiers occurred when the helicopter was flying in darkness. According to two reports, the crew were not properly trained to do this, but their superiors decided that the Defence Force couldn't afford the $600 it would cost for the crew to fly in daylight the day before and stay overnight in a Wellington hotel. Defence Minister Jonathan Coleman confirmed that hotel costs were a factor in forcing the helicopter to fly in darkness.

A terrible mistake, yet I find I have sympathy for the Defence Force apparatchiks. The armed forces have been subjected to comprehensive reviews and savage cuts for many years. Little wonder they tried to save some money on accommodation, with no idea that their penny-pinching would have such tragic consequences.

A similar tragedy of thrift occurred at a Motueka school earlier this year. A school cut down five unsafe trees and needed to stack them on school grounds before selling them for firewood to raise school funds. They allowed the groundsman to stack them instead of paying a contractor. The board would have been aware of how education ministers vigorously wag their fingers and replace boards with commissioners when board spending gets out of control.

Tragically, the groundsman, with no training in stacking logs, stacked them unsafely and they rolled when some children played on them, killing a 5-year-old boy. The board of trustees was convicted and fined. The members were not part of some evil capitalist conspiracy intent on making massive profits, but simply a bunch of parents concerned enough to give up their free time to help their school.

What underlies both these tragedies is the relentless pressure on publicly-funded organisations to save money. So can we take any lessons from these tragedies? Government departments should do their best to cut wasteful spending, but they should also stand firm on fiscal bullying.

Spend the requisite money to get the job done properly but, if you can't afford to do it safely, then don't do the job at all. And if you're made to put people's safety at risk, then blow the whistle. Better to turn up to a whistle- blowing inquiry than one into deaths of people under your care.

And though we are in a recession, let's hope Dr Coleman and other ministers see the difference between genuine thrift and cutting spending so much that health and safety is endangered.

Though I don't share Finance Minister Bill English's view on abortion and euthanasia, I respect him for having a genuine concern for the sanctity of human life.

Let's hope that sufficient funding will be forthcoming so that government organisations are not forced to take undue risks. That way Mr English will ensure that human life remains sacred and will not become, to use his term, a "nice to have".

The Dominion Post