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  • rmacculloch

Finance Minister Willis' 2024 Budget Breached National's Coalition Agreement with ACT and NZ First, but no-one seems to care.

The Coalition Agreement sworn to by National commits that Party to an Ongoing Decision-Making Principle, namely that, "The Coalition Government will make decisions that are: Principled-making decisions based on sound public policy principles, including problem definition, rigorous cost benefit analysis (CBA) & economic efficiency". It tied that principle to Budgets, stating such decisions must be "Fiscally responsible - with spending decisions based on rigorous cost-benefit analysis to ensure taxpayer money is treated with respect .."

So how many spending decisions in Willis' 20024 Budget were subject to Cost-Benefit Analysis? From everything I know about it, not one. That's why Willis' answers to Jack Tame on the topic of failing to fund cancer drugs that she promised for hundreds of Kiwis were shambolic. Who is she to play God and say that there was, in her judgment, not enough money for that purpose? (But there is enough to pay the world's richest man, American Jeff Bezos, to make more Lord of The Rings Movies, in Wellington?) Who is Willis to say she is now going to "prioritize" funding those drugs, telling Tame she should be able to do so by the end of the year, all because she has got some bad headlines out of it? Where is the "principle", or has she none?

All these answers should instead have been framed by Willis in the context the benefits & costs of such decisions. Will ten more people die before the year end because they cannot get these drugs, while she is looking into prioritizing them? Is she just prioritizing them now because the "optics" are not looking good for her? If a human life is valued at $5 million in a CBA, then that's a terrible cost of $50 million. Pharmac do apply these techniques - so why didn't Willis use their benefit-cost ratios & compare them to the ratios of her preferred use for those funds, providing evidence that her choices had higher societal benefits? I'm not begging her to do so - I'm saying she swore to do so in her own Coalition agreement. It did not give her discretion to just say she would slash and spend how she felt like.

When no objectivity is applied to spending decisions, it opens politicians up to accusations they're spending money to help their own re-election chances. Willis lives in Wellington, as does Chris Bishop. He won his seat - she narrowly lost hers. Does she want to keep movie subsidies to help her win a Wellington seat next election? It is legitimate to ask that question, since she swore by the use of "rigorous cost-benefit analysis" and made it a central principle of her new-style of government, yet reneged on that promise in favor of playing politics. Even worse - she is now reacting to media pressure, saying she will reverse herself because she's got bad headlines. Seems she's doing a Cost-of-Looking-Bad-in-a- Jack Tame Interview, versus the Benefit of Not Looking Bad in a Jack Tame interview analysis.


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