Nicola Willis Seeks New Sidekick To Help Fix NZ's Economy
Must be a "Change Agent" Who Can "Turn Around NZ's Economy"
Synopsis:
Nicola Willis is seeking a new Treasury Boss after Dr Caralee McLiesh’s tenure ends this month. She didn’t listen to McLiesh. Will she listen to the new one?
And why is Atlas Network’s Taxpayers Union chiming in?
About Caralee
At the beginning of July, Newsroom reported that a number of top civil servants wouldn’t have their contracts renewed under the Coalition government.
One of those is Australian and Treasury Secretary Dr Caralee McLiesh. McLiesh said the decision has been hers. And it turn out she and her family will be returning to Australia soon, where she’s landed the prestigious role of Australia’s 16th Auditor General.
It’s a 10 year term, and McLiesh came with strong commendations from within Australia.
Her credentials are impeccable - a PhD in Mathematics and First Class Honours in Economics, McLiesh has worked in government (Australia/NZ), not-for-profit (Red Cross Africa), international organisations (World Bank), management consulting (BCG).
Her impending departure was met with fulsome praise for her record from figures such as Barbara Edmonds, Craig Renney, Public Service Commission’s Heather Baggott etc. While Willis made kind remarks, Willis’s partners in NZ Initiative and Taxpayers Union have been tepid to scathing. More on that part later.
One of the defining characteristics of McLiesh’s 5 year NZ tenure is that McLiesh worked with the government on defining and monitoring measures above pure GDP.
The CTU’s Craig Renney in July:
[I hope the new Treasurer continues to look at] “things that weren’t just economic growth… child poverty…how to tackle climate change, we looked at a range of things, recognising that the role of government is not just to maximise GDP.”
McLiesh appeared to be a holistic, grounded and. credible thinker, quoted internationally, and recognised for public service innovation. That includes recognising a nation’s wealth1 is more than just monetary - for example, she supported the need to consider policy impacts on health, child poverty, the natural environment - on top of the traditional measures of wealth.2
McLiesh also saw merit and economic value in respecting the Treaty of Waitangi and Māori and Pacific Island cultures.
No wonder, I imagine, McLiesh saw the writing on the wall.
Such holistic thinking and addressing inter-complexity is often beyond those who seek simplistic rewards - punctuated by a certain symbol that some equate to true prosperity -
Others recognise the whole country matters - and supporting as many as possible, while caring for children, investing in people, the environment, and health outcomes, is a sustainable and ultimately intelligent way to generate more wealth.
It clearly wasn’t a compatible match.
Desperately Seeking A New One
So Australia gains a talent, and NZ seeks a new one.
The ad for a new Treasury Secretary was published on 31 July. NZME reported that Nicola Willis was heavily involved in crafting it.
It contains fascinating phrases, which perhaps reflect a lack of innate competence from the Finance Minister.
For example, the new Treasury boss must be a “change agent” who will advise the Minister on how to “drive greater economic growth and higher productivity” while maintaining “value for money from Government investments”.
“A thought leader who will lead and drive the Government’s economic agenda.”
They should also be “well connected” - particularly to the “business sector” and finally, “A challenge awaits the next Secretary to help turn around New Zealand’s economy”.
Wait, what?
It sounds like the Finance Minister role. Or perhaps, just an offer that’s too good to be true.
Right?
Wrong!
Anyone with the competency to do so would be, I imagine, jumping ship by now.
Who wants to work for a Minister & government that almost - without fail - and seemingly in the worst possible way, ignores official advice? [Eg. Kiwirail]
Who wants a boss that despite you telling them - exactly - what the issues are, pretends she never heard it and keeps repeating the same old tripe. [Eg. Increasing deficit for tax cuts when advised to reign it in - BTW Labour made me do it!)
Who needs a know-it-all who doesn’t appear to know how to do her job - and never did? [Eg. “My tax plan is credible and adds up” says Willis, before slashing services and borrowing big]
And finally, fixing what Willis and the government has broken is Willis’s job. By borrowing big on NZ’s future and slashing expenses to the bone, combined with ‘unexpected’ costs like the cancer drugs and austerity driven weakness, this is a situation of her own making.
Last month she also withdrew support for an independent unit to check her costings and forecasts.
Now while Treasury does provide advice when and if requested3 why would anyone of skill, calibre and integrity want to work for Willis - a woman who seems low on integrity, competency but big on scapegoat culture.
[Example: Claiming Health NZ Board was incompetent and financially illiterate after her government ignored information on health expenditures and deliberately underfunded Health]
Related Reading
Killing The Golden Goose of NZ's Economy
“Is that your modelling? Is that it?”
That brings me to one of my all time favourite shots.
Last year, Nicola Willis was on Q&A telling Kiwis that National’s tax plans were credible and added up.
As she points to bullet points on various one pagers, and reads out a simplistic maths equation, Tame can’t contain his laughter.
“Is that it?” Tame says, pointing to one of her modelling papers.
Willis also promised on that day that she will deliver a budget surplus by 2027 - better than Labour, she promised!
Well it turns out none of it was credible - just as multiple economists pointed out before the election.
Despite promising Kiwis that National’s tax plan added up, and she would be able to deliver tax cuts, Willis ended up borrowing $12bn more on Kiwis - an extraordinary sum for money that is just being eaten up left, right and centre. (National is overseeing higher GP costs, higher prescription fees, higher car registration etc)
And her forecast says National won’t return to surplus until 2028, but let’s be honest, that’s completely in doubt.
I’ve explained before why their moves are bad news for Kiwis -but essentially by pushed themselves - and by extension us - into a very tight corner budget wise, National will keep punishing our public services - including health, education, environment - to ensure they can look good while big donors are rewarded.
What has been some of Dr McLiesh’s Key Advice?
TLDR: The population is aging, and there are significant structural pressures, on top of the existant headwinds (climate change, geopolitical, economic weakness, debt servicing). Governments should start looking at options, including Treasury’s recommendation around Capital Gains Tax & super.
In February, McLiesh told the Government that they needed to reign in the deficit as debt servicing costs climbed.
Willis went ahead with borrowing $12,000,000,000 more anyway.
McLiesh also noted NZ’s aging population and demographics meant superannuation and health costs would continue to increase - while climate change and geopolitical tensions heightened fiscal risk. That needed urgent re-thinking, she suggested.
The government went ahead with their anti-climate policies anyway e.g. cancelling cycleways, methane reductions etc., readied for a concocted health crisis, and then spent big on tax cuts and roads.
McLiesh also spoke of the value and recommendation for capital gains tax.
Willis rejected that. (To be fair, Jacinda Adern succumbed to the pressure campaign of one Atlas Network Jordan Williams too, as Williams boasted about that to his Atlas buds)