Previous Posts


It has been reported that, "A retired appellate judge .. has put Royal NZ Yacht Squadron on notice that he will sue it if it allows the America's Cup defence to be taken offshore. Sir Edmund Thomas, who briefly served as a judge on the Supreme Court, also indicated he could use the discovery process to examine the relationship between the squadron, Team New Zealand and its chief executive, Grant Dalton".

The Herald reports that "While the next venue for the America's Cup is yet to be determined, both the squadron and Team NZ have made a series of claims that they are unlikely to be able to fund a credible defence in NZ. The retired eminent judge, however, says, 'I believe that the defence of the Cup should take place in NZ. The public interest is involved, and I would wish to promote the public interest'.

However, on economic grounds, I'd tend to disagree with Sir Edmund about where the public interest lies in this case. Why? Sports economics has long debated whether hosting events, like the Olympic Games, leads to net economic benefits for countries. One of many articles on this question (see below) concludes, "The Bottom Line" is "Hosting the Olympics tends to result in severe economic deficiencies for cities". The author says "Beijing generated $3.6 billion and spent more than $40 billion for the Summer Olympics in 2008". So why do nations like to host the Games? It seems more for political reasons than economic ones. The Kiwi taxpayer, likewise, heavily subsidized the recent Americas Cup races in Auckland. The Council states, "The combined government & council group funding commitment to the 36th America’s Cup [held in Auckland in 2021] totals $249.5m with the government contributing $136.5m for construction, the event fee, and commercial & base related costs". What? Quarter of a billion dollars!? And in the middle of a pandemic with closed borders and barely a SINGLE foreign tourist in attendance!?

So is there a better alternative? Yes, and I would tend to side with the Yacht Squadron and Grant Dalton in terms of what is that better alternative. The model follows more the one which Bernie Eccleston, the former Formula One "Supremo", used to help revitalize those car races. Glamorous new venues and host cities were established around the world, from the likes of Miami to Abu Dhabi. Huge public and media interest followed. The publicity which Mercedes, Red Bull, as well as the team founded by Kiwi Bruce McLaren, got out of the Formula One global "circus" exploded.

In terms of the Americas Cup, having races in exotic new venues would probably do wonders for the sport. Whilst NZ remains the Cup holder, we have great influence over the types of boats & rules, which are important factors in helping us to retain the Cup. To the extent the Cup becomes a far bigger world event, Kiwi sailors, boat building expertise and national prestige maybe hugely enhanced. People living everywhere could start attending the races, like in Formula 1, and far more so than the relatively tiny number who fly all the way out to NZ to see the races in Auckland. Besides, the foreigners who come out here tend to be more of the super-rich variety who don't even stay in hotels, but instead on their own superyachts with foreign crews.

So in terms of economic costs & benefits, I see our "public interest", at least in terms of putting NZ on the global map and promoting us as a place of extraordinary yachting expertise, to be incomparably enhanced by turning the Americas Cup into a world series, along the lines of Formula One. Imagine if those car races were held in Auckland, time after time. No-one would be interested. Same track. Same views. The Americas Cup, like F1, needs different courses, different views, different weather. Winning F1 greatly helps Mercedes sell its production cars. It showcases German engineering, and German drivers, on the world stage. It doesn't matter where the races are physically held for the country associated with the winners to benefit greatly. So I'd argue that legal attempts to bog the Cup down in Auckland on the pre-text of defending the Kiwi "public interest" are seriously counter-productive.


The NZ Herald ran an article over the weekend about the government's Jobs for Nature program, under the heading, "Jobs for Nature creates just one tenth of promised jobs to date". That is a kind headline. The program may well have not created a single new job. The article quotes us, starting out with the line, "An economist has roasted Jobs for Nature as "a total failure" of job creation".

An ecologist has since written to me, saying much of the money has been given to large organizations, including Department of Conservation "proxies" whereas small, more independent, "grass-roots" environmental groups have been overlooked, even though they are ones who were "already doing the job". Given ecologists who've been delivering the goods haven't, it seems, got a look in, one wonders whether this scheme is more about the government supporting itself than the environment? The Herald article is below:


NZ Herald

By Kate MacNamara

One of the Government's signature job creation programmes, funded as part of the Covid-19 response, has to date created just one tenth of the jobs it promised.

In May, 2020, in response to fears of significant job losses, the Government announced new spending of $1.1 billion for an amorphous scheme it dubbed "Jobs for Nature". Labour ministers including Minister for the Environment, David Parker, and Finance Minister, Grant Robertson, claimed the spending would create some 11,000 new jobs.

But just 1100 full-time equivalent jobs (FTEs) were created in the first 15 months of the programme, from its inception in July, 2020 through September 30, 2021, the date to which the Ministry for the Environment has tallied figures.

That very modest jobs figure contrasts markedly with ministers' touts of creating "thousands" of jobs through the funding, many of which were made repeatedly in the run-up to last year's election.

The original $1.1b in funding flows from the $50b Covid Response and Recovery Fund (CRRF) that was announced alongside Budget 2020. Earlier this year, Robertson announced a further $7b to "top up" the fund in light of the ongoing expenses of Covid.

Ultimately, the $1.1b was further padded with funds, largely from the Provincial Growth Fund. The Jobs for Nature envelope of funding reached $1.245b, almost all of it to be spent over four years, through 2023/24, though earlier this year that total was reduced by $26.6m, which was "reprioritised" to help pay to put cameras onboard fishing boats.

University of Auckland professor and economist Robert MacCulloch called the programme "a total failure as far as job creation is concerned".

"This is meant to be about helping create jobs during the pandemic. I think the bottom line is that it hasn't done that, even remotely. Who knows what's going to happen in the future but they've created a very small number of jobs to date at an immense cost."

MacCulloch said the programme's environmental aims might be lofty, but they don't justify funding from an emergency envelope of money set aside for responding to the Covid pandemic.

"If the Government wants to support the environment it should just have a programme that supports the environment … but, of course, that wouldn't warrant emergency Covid response money, such funding would need to compete in a budget process against all the other very pressing funding needs that we have, other spending priorities and I'm thinking, for example, of the life-saving drugs that Pharmac isn't able to buy at the moment…"

The Jobs for Nature spending is spread across five departments and agencies: the Ministry for the Environment (MfE), the Department of Conservation (DoC), the Ministry for Primary Industries (MPI), Land Information New Zealand (Linz), and the Ministry of Business, Innovation and Employment (MBIE). The MfE is the co-ordinating agency.

It's not clear what the government administration costs are, but the bulk of the money flows to third party organisations - including businesses, charities and non-profit organisations – which carry out project work.

This work includes; weed and pest control, tree planting and restoration of riparian areas, and efforts at improving fresh water quality.

Parker defended the programme. "Officials [sic] current advice is that as of September 30 projects approved to date are forecast to create 8873 FTEs over the life of the programme," he said. He also noted that some 5698 people "had started employment" through the programme. Employment starts, however, are not a useful measure; many of the Jobs for Nature funded projects are short term and employ people on both part-time and short-term contracts.

The FTE unit applied to the programme is predicated on 1560 hours of work, and corresponds to a 30 hour week across 52 weeks.

Parker's previous FTE projections have been poor. In October, 2020, just days before the election, Parker told Newsroom the programme was on track to "achieve an estimated 1740 FTE jobs in one year". In its first year, the programme actually created about half that figure: MfE data shows some 834 FTEs were created between July 1, 2020 and July 1, 2021, and officials warn that that figure includes some jobs created through other sources of funding.

Feeding the problem of underperformance to date is the extent to which funds for the programme, allocated for its first year, went unspent and have been carried forward to subsequent years.

Of the $150.38m allocated to DoC for delivery of the programme in 2020/21 the department spent just $63m; a spokesperson said the department has carried forward $87.28m to spend in later years. The MfE spent $33.3m of the $58.20m it was allocated in the first year; it carried forward $24.9m.

"In the first year efforts were focused on establishing the programme and project set-up," a department spokesperson said.

A considerable problem with delayed spending is that unemployment is now very low, and inflation in the New Zealand economy is running hot at nearly 5 per cent per annum. Job creation fuelled by government spending and ultimately debt, against a backdrop of rising interest rates, makes little sense.

MacCulloch said it's doubtful the spending is creating jobs in the sense of lifting people out of unemployment: "we're essentially at full employment. At this point they really aren't creating new jobs, they're funding jobs, and the effect, largely, will be to move people who already have employment or the opportunity of employment into that government-funded role."

Jacqui Dean, the National Party's spokesperson for conservation, said there is very scarce evidence that the spending is achieving its other goals either.

"The original intent was to provide nature-based jobs to people in the regions displaced from hospitality and tourism and other Covid-hit sectors. But the Government can't identify how many of these jobs are actually new, and they simply don't know who has taken up the work. They say that's not data they collect."

Officials at most departments said information on what jobs existed prior to the new funding was either not collected or not available.

For example, Jason Wilson, deputy director-general for the New Zealand Forest Service (part of MPI), said he isn't sure how many roles are new.

"[For wilding conifer control, funded to the tune of $100m by Jobs for Nature] the programme is delivered through regional councils, via 14 funding agreements around the country, and employment contracts are not with MPI, but through those councils and various small businesses who contract to them. Employee numbers were not collected prior to Jobs for Nature coming into existence. However, the number employed can be safely assumed to be significantly greater than in the previous financial year, in which total spending was $11.9m, compared to $40m in 2020-21…"

Measures for environmental outcomes are similarly muddy. MfE data measures the number of hectares tackled across different areas of work, for example, 839,162 hectares have been covered by wilding conifer control, animal pest control has covered 560,613 hectares, and plant pest control has been tackled over 301,919 hectares.

However, there is no measure for the effectiveness of the control in those areas, and the MfE warns that the same area can be reported in the totals multiple times because repeat control is needed.



Thanks for submitting!


Robert MacCulloch