ZB

Mike's Minute: Government wastage is totally out of control

Author
Mike Hosking,
Publish Date
Tue, 10 May 2022, 10:36am

Mike's Minute: Government wastage is totally out of control

Author
Mike Hosking,
Publish Date
Tue, 10 May 2022, 10:36am

A couple of good clues as to why we have such wastage of government spending and how the psychology behind it suggests it won't change under the current government.

We have had the revelations so far this week over the millions for consultants on Three Waters, it’s $20 million and counting.

The Zoom job fair that attracted next to no one yet cost a bit under a million to run with even the Minister acknowledging it didn’t take off the way they thought it would.

And now, a report into just how many jobs were supported by the wage subsidy scheme.

This, by the way, is a report from a ministry that along with every other ministry has more people working in it, given the Government has been on a hiring spree, with the broad belief, as outlined in the op-ed piece yesterday by Chris Hipkins, that more is always better.

Anyway, the report says 47 percent of jobs were supported by the wage subsidy. But more importantly than the statistic, is the inference. And the inference is that this a good thing and they get to say "look at all those jobs we helped save."

The reality is the number is false. It's false because 47 percent of jobs didn’t actually need the wage subsidy at all. They may have got it, but was the expenditure ever really required? In that part of the calculation, or lack of it, is the insight into the mentality.

What we know to be true, is that many companies employing many, many people didn’t need any sort of subsidy because they actually went gangbusters. Covid was good for business.

The key was the criteria. If you closed your door or were affected by lockdown you got the money. The fact you were online still doing business and the fact that in a lockdown you saw sales like you have never seen sales didn't seem to matter. The fact you went on to make record profits was never taken into account. The fact you went and paid dividends to your shareholders was never given any thought.

Why not? Because that’s not what this Government does. Their argument then, and as far as I know to this day, was the simple premise that they needed to get money out the door ASAP. In that quest they were successful. Billions upon billions flew out the door, but for what return? For what level of efficiency? No one knew because no one asked.

Here we are two years later clearly not having learned a single thing. Throwing money at stuff isn't hard; it's not a skill, especially when it's not your money.

But although 47 percent of jobs got it, 47 percent of jobs never needed it. But we will still need to pay it back.

Report doesn’t mention that part, funny that eh?