Are the reasons behind the Cook Straight Ferry Debacle at the Root of NZ's Cost of Living Crisis?

Is State ownership, on top of the lawyers & accountants who've been running KiwiRail (being the just-resigned Chair & current CEO, who have law & accounting degrees, respectively) to blame for the Cook Strait ferry mess? Maybe not. Last week the privately owned Bluebridge ferry also broke down, drifting for hours. Could there be a more fundamental problem, at the heart of our productivity & cost-of-living problems? In Britain, many private operators cross the English Channel, like P&O and the Stena Line. They compete with the Channel Tunnel, which is majority-owned by the French Government's National Rail SNCF. On one side lies France with 70 million people, and on the other the UK, also with around 70 million. NZ's South Island, by comparison, has 1 million people. What would happen if our government didn't run the Inter-island ferry and privatized it? Then you'd create a private monopoly, or duopoly with Bluebridge, which may open all kinds of (lack of) competition problems. As a consequence, you'd probably have to introduce a regulatory regime, which may itself have problems. Isn't this issue at the center of a swathe of market failures across the entire country, from our supermarkets (which we can't criticize anymore without risking a defamation suit of the kind that Foodstuffs, via Chapman Tripp law firm, threatened against one of my economist colleagues) to our banks, to our airports, to our building industries?

So you're damned if you privatize in NZ, and damned if you don't. We currently face either a market failure, or a State failure. Take your choice. There are solutions to this problem, so why hasn't the army of bureaucrats in Wellington designed them? They've had 30 years since the reforms of the 1980s. What've they been doing since, apart from criticizing the 80's reformers? Here's one reason no solution has been provided: there are no longer top draw micro-economists working in Wellington with the required expertise, particularly, I believe, in the fields of "mechanism design", "procurement" & "regulation", which are hard. Instead Wellington is now dominated by a management class with little specialized knowledge who want to boss around the folks in the engine room, who they call "number crunchers" and "techs". Worse still, this class has arisen from a non-meritocratic system, where how you talk-the-talk matters more than anything. Elon Musk is a geek, number cruncher and tech. So is Jeff Bezos. They're the two richest people in the world. At least overseas, things changed long ago - now it's the geeks, crunchers and techs who are the owners & bosses & management. Lawyers & accountants are just their back-room advisers. But not in throwback 1970s Wellington. NZ needs a culture change as to which professions are highly valued.

The Fate of NZ's Entire Health System has been tied to Auckland University of Technology's Chancellor and now an Auckland University of Technology Professor

Health NZ is the new centralized public health-care monolith. Its Chair is charged with running our entire health system, which makes that job by far the "biggest" one in the country, after the Prime Minister and Finance Minister, in terms of size of the budget and number of staff. A few years ago the Chair was Rob Campbell, who is the Chancellor of the Auckland University of Technology (AUT). He's also a former Chair of SkyCity Entertainment Group. Campbell was sacked over a political attack he made about National's Three Waters policy, according to Radio NZ, which reported how he "took to LinkedIn to criticize policy as a thin disguise for dog-whistling on co-governance".

The new Chair of Health NZ is Lester Levy, a "Professor of Digital Health Leadership", who also works at the Auckland University of Technology. Levy was once an adjunct at Auckland University & former colleague of mine. He was also a Chair of the much loved (not) Auckland Transport. Yesterday The Post revealed Levy is dividing his time at Health NZ with another job - his professorship at AUT. To deflect criticism he wasn't giving full attention to "turning around" NZ's health system, Levy told a Member of Parliament that he was putting in "at least 10 to 12 hours a day, seven days a week". He said he did no undergraduate teaching at AUT & some on-line postgraduate courses. This is what I don't get - if he is spending those hours on Health NZ, how much time is AUT getting out of him? How much time is he spending with undergrads, which is the most important part of a professor's job? How much time is he spending on research for AUT if he's seven days a week on Health NZ?

Here's the rub. When I worked in the United States, one of my colleagues, Ben Bernanke, who had his office at the time in the Woodrow Wilson School for Public Policy, became Chairman of the US Federal Reserve. Princeton University gave him several years of full "leave", which to my understanding was with no pay. Similarly when another colleague there, Alan Krueger became Chair of the US President's Council of Economics Advisers, he was also granted "leave" from the University. After the leave expired, both were required to return to give their full, undivided attention back to teaching Princeton undergrads, as well as researching & publishing articles. In cases where staff wished to be away for longer, their employment was ended. I assumed that when Levy took the Health NZ job, he was put on full leave from AUT, though it appears that has not been the case.

At a deeper level, Health NZ should, of course, never have been created & the fortunes of the health of every NZ'er thrown into the hands of one person. One such oversized, central authority with one supreme boss is a non-starter. National, ACT & NZ First need to think about the future of our health system properly, and realize the incentives are wrong, and will not be fixed by buying new IT systems, bringing in a Digital Health Leadership "expert", blaming "back-office" managers for screwing up and arguing prevention can do the trick, as Levy has argued stated. Instead we are witnessing the end of the era of single public payer - single public supplier health-care. Whether it is Campbell, Levy or the next person, they wont save NZ's health system given its present structure, which has to redesigned. It requires both the knowledge and will of the PM, who must first persuade the public there is a better way. I suggest the greatest priority of Chris Luxon is to fly without delay to France, or Singapore, and learn about how things can be done better - how better health-care quality can be delivered for lower cost than Health NZ will ever be able to achieve.

Sources

https://www.1news.co.nz/2024/09/18/working-like-theres-no-tomorrow-health-commissioner-defends-other-role/