Eric Crampton says Treasury has been haemorrhaging talented economists for years and the budget leaks were just the tip of the iceberg for a department in crisis

Eric Crampton says Treasury has been haemorrhaging talented economists for years and the budget leaks were just the tip of the iceberg for a department in crisis
Gabriel Makhlouf by Jacky Carpenter.

By Eric Crampton*

If the Canterbury earthquakes taught us anything, it’s that the immediate response to a disaster is a very different thing from the rebuilding that has to follow.

Disaster response is about triage, the good-enough, and avoiding substantial further harm. The rebuild is different. It takes a fair bit of thought about what the place should look like, and a long-term strategy to get there. In the best case, the long-term vision has always been in place and all that needs to be done is working out how to get there from the current mess. But it can be a lot harder if there were a lot of longer-standing issues prior to the disaster that also need to be resolved.

The state services commission’s investigation of Treasury secretary Gabriel Makhlouf’s conduct and statements during last week’s unauthorised access to budget documents is disaster response. But this disaster was not the Christchurch earthquake, and the IT department is the least of Treasury’s issues. Last week’s mess is the culmination of years of mismanagement that saw the substantial erosion of Treasury’s competence, to the point where Treasury’s fundamental reason for being has been put at risk.

Treasury needs a recovery, and a rebuild. The job facing any incoming chief executive will be exceptionally challenging.

But let’s walk it through.

Treasury core function is to be the government’s lead economic advisor. It exercises a broad range of responsibilities, but it isn’t unreasonable to view the most important one as advising the government about trade-offs. Policies have a wide range of costs and benefits; providing accurate advice to the government about the likely consequences of policies, both intended and unintended, within a framework allowing a weighing up of different policy options, is incredibly important.

As a central control agency, Treasury is in a particularly important position relative to other ministries. Every ministry will view its own spending proposals as particularly meritorious. There are near-infinite numbers of programmes that could be developed and deployed, many of which would do at least some good. Regardless of your views on the appropriate level of tax, budget constraints must ultimately bind – even if the government massively expanded the amount of money it collects, it would still have to decide among competing ways of spending the last dollar collected. The minister of finance must help cabinet assess priorities.

And that’s where Treasury comes in. As a state sector ‘control’ agency, it runs a level ruler across the competing policy proposals. If all is working well, a rigorous analysis helps ensure that every dollar spent by the crown provides the greatest possible public benefit. That does not always happen, as cabinet may have an eye to net political benefits. But Treasury can at least assist its minister in assessing the trade-offs from a public interest perspective: some politically-inspired policies are more costly than others.

FINANCE MINISTER GRANT ROBERTSON WITH THE 2019 BUDGET (HAGEN HOPKINS, GETTY IMAGES

That discipline, when supported by rigorous Treasury analysis and backed by cabinet decisions to focus spending in the areas that do the most good, can provide a self-reinforcing virtuous circle. Ministries then know that the best way to secure funding for their priority areas is by putting up rigorous, credible proposals demonstrating the benefits of their policy. Treasury vets the proposals, holding them to a high standard. Cabinet approves the proposals that survive the process. And the loop is then closed with post-implementation reviews checking whether spending and regulatory programmes have panned out as expected, or whether resources should be redirected to more promising areas.

Treasury’s core job, then, isn’t to be besties with all of the other ministries. Good relationships are important, and make the job a lot easier, but delivering credible and rigorous advice to the government is priority. Sometimes government will not want to listen, and that is the government’s prerogative. But even in that case sound assessments, if published, help Parliament and voters to hold the government to account.

Treasury is failing in that role and nobody else can do it.

I don’t know when that all really started going wrong on Treasury’s end, but I know when I noticed it going wrong. It started with something trivial, as these things often do.

On 22 November 2015, Treasury Secretary Makhlouf penned an op-ed for the National Business Review lauding the merits of diversity. All well-meaning and nice-sounding stuff, who could possibly be against it? But the Secretary wrote “international research shows companies that have a balanced representation of women and men on their boards perform better.” As I was rather familiar with the academic literature in the area, I was curious on what research the secretary had drawn. When I asked, Treasury cited a couple of consultancy reports that made no serious attempt to deal with some of the trickier statistical issues at play. These suggest that while women are great directors – they show up more, and are more likely to join committees – diversity alone has either no impact or a negative impact on firm performance. What the research does show is that firms which value diversity tend to be broadly well-managed and governed, and thus out-perform the average, and that firms with weak governance benefit from diversity on their boards.

It’s trivial in the grand scheme of things, but it was a worry: the secretary of the Treasury was weighing in on a politically contentious issue, and rather than provide the kind of dispassionate weighing up of complex evidence his position demanded, he reached for politically convenient but statistically glib consultancy reports for use in an op-ed format.

2016 brought far greater worries. But I’m afraid I need to provide a bit of back-story. During the time I was on faculty in economics at the University of Canterbury, from 2003 through 2014, Treasury and the Reserve Bank fought over our best and brightest honours graduates. Every year, prior to starting honours, the best of the cohort would spend the summer on an internship with either the Bank, or Treasury. And every year the two most prestigious public sector employers of economists would make earlier and earlier employment offers to make sure they had their pick. Other Ministries knew it was pointless to extend an offer to a promising Honours student too early, as top students would be waiting to find out whether they had an offer from the Reserve Bank or Treasury before entertaining others.

And so, in August of 2016, when a friend emailed on behalf of his son, then completing a masters at Canterbury, to ask about the employment environment at Treasury, I naturally suggested he ask any of his classmates who had completed the Treasury internship. But things had changed since I left. Canterbury’s best students had stopped seeing Treasury as a place that was interested in economics or in hiring economists. Graduating students questioned whether Treasury wanted to hire any economists at all.

More senior Treasury officials I advised about the problem appeared to take those concerns seriously, with changes to who undertook the graduate recruitment efforts at the universities. But in November 2017, Treasury celebrated having been awarded Deloitte’s IPANZ Public Sector Excellence Award for a blinded graduate recruitment process that resulted in no hires with qualifications only in economics. It would of course be silly for Treasury to hire only economists, but recruiting no graduates with a sole focus in economics, when Treasury was losing senior economists, created the opportunity for a substantial erosion in core skills.

So I went to work under the OIA to try to figure out what had been happening. I also started checking other measures of Treasury’s performance. And things looked increasingly grim.

While 10 of 15 graduates recruited in the 2019 graduate recruitment round had some background in economics, only four had at least honours-level training in economics or finance. The recruitment process did little to distinguish candidates with a minor in economics from those with a masters or honours degree. And Treasury’s in-house training programme is simply not up to the task of making up for those deficiencies.

Very recent reports suggest stronger efforts to hire in economists, but the deficit is now large.

Among those staff with known qualifications, relatively few have appropriate training in Treasury’s core business. An OIA response I received last year suggested economists are outnumbered among the analysts – at least among those whose qualifications were known.

(IN 2019, 10/15 HAD SOME ECONOMICS IN THEIR DEGREES, BUT ONLY 4/15 HAVE HONOURS OR BETTER IN ECONOMICS OR FINANCE. HONOURS IS THE MINIMUM TRAINING FOR A PROFESSIONAL ECONOMIST. SOURCE: OFFSETTING BEHAVIOUR).

Over the past six years, from 2013 through 2018, Treasury has seen a net loss of 18 economists with honours or masters-level training, and a net loss of five with PhD-level training.

It’s consequently little surprise that Treasury’s annual reports reveal declining measures of the quality of Treasury’s policy advice since 2012/2013. Performance for 2017/18 was so bad that it included a footnoted apology in the 2018 Annual Report, noting a continued need “…to ensure economic perspectives are fully covered.” Treasury analyses should not fail for want of economic content, and yet here we are.

And the decline has not gone without notice.

Where Treasury had released its 2015 External Stakeholder Survey within a couple of months of its receipt, Treasury sat on its 2017 External Stakeholder Survey for almost a year and released it only under substantial pressure from me. The survey showed declining stakeholder satisfaction on every single key result.

More worryingly, among those interacting with Treasury on core business of economics, macroeconomics, and fiscal projection, satisfaction dropped from 70% in 2015 to 47% in 2017. The proportion of stakeholders viewing Treasury staff as well-informed dropped significantly, as did overall confidence that staff do a good job. Lifting the quality of Treasury staff was near the top of the list of stakeholder priorities, with one highlighted response noting that “Treasury staff are personally a pleasure to work with, but they don’t have a strong background in economic analysis.”

It is very, very easy to find former Treasury staff, now employed in other Ministries or in the private sector, who will attest to the diminished value the organisation has placed on rigour and expertise. Once you start being the guy who notes and criticises Treasury’s decline, a lot of people who have been bottling up frustrations for rather some time start coming out of the woodwork for a sympathetic shoulder. And then you start having to be very careful lest a vengeful Treasury run system audits to figure out who has been talking to you this time.

I have no view into processes in IT at Treasury; it will be interesting to see whether Makhlouf received bad advice about the data breach, or whether he provided his own spin on things. But I do note that IT, until just a few weeks ago, came under the responsibility of Fiona Ross as Deputy Director of Operations. You will remember her as co-sponsor of the wellbeing card game about which Danyl McLaughlin recently reported. Rigour and competence have not seemed to be Treasury’s driving priorities; it could be that last week’s IT mishap is another symptom of the larger issue, or it could just be the kind of screw-up that can happen too easily in IT.

The problems are also evident in the much-promoted wellbeing framework. Done properly, the framework would provide an extended form of cost-benefit assessment incorporating a broader range of costs and benefits into the calculations. Programmes would be evaluated against that broader cost-benefit framework, both when policies are proposed and when evaluated in post-implementation review. But too much of Treasury has taken a qualitative approach to wellbeing that seems actively hostile to rigorous analysis. The framework did not prove ready to provide the kind of wellbeing budget for which we might have hoped.

And it isn’t as though Treasury only started working on this with the change in government: the wellbeing focus even predates Secretary Makhlouf, dating back at least to about 2010 under then-Secretary John Whitehead. At first it seemed mainly to be a marketing exercise to find a vocabulary more palatable to a future incoming Labour government; Treasury still stung from Finance Minister Cullen’s dismissal of Treasury advice as ‘ideological burps’. But the project metastasized from there, with volumes of working papers and a dashboard of indicators. Treasury has been working on its wellbeing framework for years and has achieved very little. The 2019 Budget increased spending by billions of dollars in prioritised areas, but without any framework either assessing the likely wellbeing benefits or evaluating whether those benefits eventuate. The primary effect of the wellbeing focus has been to diminish rigour in Treasury analysis.

And let me now scare you a little bit more.

All of the problems I’ve so far described are problems in the normal day-to-day drill at Treasury. When the next economic crisis comes, as it inevitably will, the government will likely have to make major decisions, some of them in the space of hours. At stake will be the jobs of thousands and billions of dollars of value across the economy.

As the lead economic advisor, Treasury will be on the front line for advice. The depth of its expertise in economics and finance will strongly influence the quality of the government’s response. There will not be time to learn the relevant literature or to study the relevant problems – as a less trained junior staffer might do during a normal policy cycle. Staff will either be able to quickly think through how best to respond based on a broad and deep knowledge of the field of economics, or they will not. And getting it right will matter.

All of that leaves an incoming chief executive with a monumental task.

Treasury needs to rebuild core competence in economics. To do that, it needs both to be and to be seen to be a place that values rigorous economic analysis as critical to its role as lead economic advisor. Strong economics graduates need to see Treasury as a place where their contributions would be valued. Many in Treasury will point to the difficulty in hiring good economists in a small market, but I remember when Treasury was the place where our best dreamed of being despite the poor salary relative to the private sector. Economists who wanted to make the country a better place chose Treasury when Treasury was a place that valued economics.

It can be that place again. But that rebuilding will require substantial changes in Treasury’s senior leadership, beyond the Chief Executive. A fish rots from the head, but the rot works its way down if the thing is left out in the sun too long.

How did HR at Treasury manage to run the kind of recruitment processes it has been running for so long? Did impetus from that come from staff within HR, or direction from above?

Just why were some of treasury’s most competent economists driven from the building, and by whom? There are pockets of excellence that remain at Treasury. What can we learn from where those pockets are? Any incoming chief executive would be very well advised to read carefully through treasury’s 2017 internal staff survey which very clearly testified to the diminished standing in which expertise is held within the organisation.

There is an additional overarching worry. Just how did state services commission processes lead to the appointment and the more-inexplicable reappointment of Makhlouf in the first place? Both may reflect SSC objectives, and are a concern when we consider the current appointment process.

Rebuilding Treasury’s capability and credibility must be the critical task for a new Chief Executive. Treasury needs much more than a pair of steady hands who might stay its current course. It requires an exceptional candidate.

It needs someone whose credibility as an economist can visibly demonstrate the organisation’s commitment to rebuilding capability in its core responsibility as the government’s lead economic advisor. It needs again to be the place where New Zealand’s best economists want to work, rather than one that is the object of derision. And it needs a Chief Executive with the public sector and managerial skills to make the staffing changes at senior levels necessary to start fixing the problem.

It will be difficult to find that unicorn candidate. An interim CE may get Treasury through the current disaster response phase. But the recovery and the rebuild from what Makhlouf has wrought over the course of his tenure as secretary is a much bigger, more difficult, and fundamentally more important project.


*Eric Crampton is chief economist at The New Zealand Initiative. This article first ran on The Spinoff and is used here with permission.

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35 Comments

Actually, the rot started years before that - when the 'unlimited growth' brigade told everyone they were all we had to listen to.

And now, everyone in 'economics' and just about every journalist, is a believer. The problem was that the format didn't fit within a bounded system, and we are forcing that system now in a way that threatens our further existence as a species. But we're not measuring or discounting correctly - and some are choosing to avoid/deny, using the 'growth forever' mantra to hide behind. Others have their life-stories and egos tied up in the mantra.

But it had to be changed. And the old-guard weren't going to go without a fight.

Crampton is of the old school - "When the next economic crisis comes, as it inevitably will, the government will likely have to make major decisions, some of them in the space of hours. At stake will be the jobs of thousands and billions of dollars of value across the economy".

Yes. a crisis will come, as I've long posited hereabouts. But it's not 'jobs' and 'billions of dollars of value' or even 'the economy' that are at stake - it's the long-term living chances of New Zealanders. Those are not measured by GDP and physical threats have thus-far been avoided by being treated as 'business externalities'.

That has to change because the old narrative was deficient. The new one will not be penned with such assertive arrogance, but it will have the advantage of being non-fiction. I say three cheers for those who are looking ahead.

Your new narrative is unlikely to be adopted by average brains that have studied marketing and business studies (or my expertise: IT). You have a chance with statisticians, mathematicians, historians but only the very best.

You write off all economists. What about Kate Raworth's 'Doughnut Economics'?

True - Kate Raworth, Steve Keen and (pretty much) Yanis Varoufakis - who got quashed-out by mainstream neolib pressure - are right there. And there are others, of course.

It doesn't need 'the very best' - it needs a way of thinking which academia calls 'Systems' and which I call 'Generalism'. It's currently largely an amateur space - although SA/Adelaide employed Herbert Girardet as 'Thinker in Residence' - that'll do it.

https://www.interest.co.nz/opinion/98119/murray-grimwood-looks-how-we-sh...

Great article. Scary. Has Eric applied for the job? I hope so because drastic change is needed.

BTW It is worth playing with the interactive chart.

I don't have the respect for economists that Eric Crampton has and a very bright person in any field is usually of more value than a bare undergraduate in an apparently relevent subject. However any student who chooses to study marketing or business admin has already admitted they are not of top caliber intellect. Treasury should be recruiting top mathematicians, statisiticians, physicists, historians - these are the subjects confident intellects tackle - OK maybe a few economists too. If the Treasury wants practical knowledge of business and finance then employ a few retired businessmen and bankers not inexperienced students.

Has the Treasury confused 'diversity' with 'mediocracy'?

No - to be fair, they're outside their comfort-zone, as are we all. The current narrative is obsolete, but nobody is clear about how to write the new one.

It has some scary stuff too - which more seem to baulk at. Economics sees more people as more wealth. That was just plain incorrect. Wealth is access to parts of the planet, plus energy. Less people means more planet/energy per head - so population is one side of the new-narrative coin. We'll get there because we have no choice - the Limits to Growth have nobbled growth - but we need to go easy on those peering ahead through a glass, darkly.

A generalisation: business studies and marketing teach continuity and maybe so does economics but maths and physics teach the concept of phase changes (water becomes ice) and discontinuities.
Good economists may as you say fail to contemplete the end of the world but once the idea sticks then they are the people who can plot a specific date.
PDK - do you ever wake up happy to be alive? It is a lovely sunny winter's day, we have a great garden - why am I at a computer??

Always. But it's cold this morning and I write when it's cold :)

.... hmmmmmm , so " global warming " isn't kicking in where you live ?

Global warming is what is happening. Climate change is what we experience.

"Get woke, go broke" or in the case of Treasury "get woke, go mediocre".

Shouldnt the head of NZ Treasury have loyalty to the country called New Zealand?
Does the reduction in the economic discipline capability help NZ, or global interests/entities?

Gabriel may well be a really good chap, but I am very, very suspicious of any UK public serpent. They have turned a powerful economy into a basket case with their deluded ideas.

Why else do you have the Brexit revolt? Pure Hayek, putting experts in charge leads to stagnation and decline, followed by the call for a strongman who will sort things out.

Excellent staff officers often make poor commanders. Just as an expert navigator or bombadier is unlikely to make a good fighter pilot. The very qualities that make them excell in one role become a hindrance in the other.

Field Marshal Erich Von Manstein (1887-1973), arguably one the Wehrmacht's best World War II military strategists who was dismissed from service by the Fuhrer in March 1944 due to frequent clashes with him over military strategy, later articulated Field Marshal Moltke’s model in the following quote:

“There are only four types of officer. First, there are the lazy, stupid ones. Leave them alone, they do no harm…Second, there are the hard- working, intelligent ones. They make excellent staff officers, ensuring that every detail is properly considered. Third, there are the hard- working, stupid ones. These people are a menace and must be fired at once. They create irrelevant work for everybody. Finally, there are the intelligent, lazy ones. They are suited for the highest office.”
http://old-soldier-colonel.blogspot.com/2011/07/field-marshal-moltkes-fo...

Canterbury’s best students had stopped seeing Treasury as a place that was interested in economics or in hiring economists. Graduating students questioned whether Treasury wanted to hire any economists at all.

Maybe, Treasury noted the lack of appropriate real world knowledge of economics being taught at Canterbury's economics department?

Some glaring examples from the US highlight the shortcomings of current thinking.:

Quantitative easing has been the most experimentally-established monetary program in history – and I’m not even factoring Japan here. It has been conclusively, inarguably proved to have been an utter failure.

Because of this, earlier this week while Chairman Powell was in Chicago for what was an international disgrace talking about rate cuts, he otherwise had no choice but to say:

“…views differ on the effectiveness of these policies.”

They really don’t. Economists have tried to claim how as yields have declined more without QE than with it, that’s only because of these term premium components.

Link

Economists start with R*. In reality, R* or R-star is just their way of admitting the economy has never been fixed without accepting blame. Ben Bernanke didn’t announce ZIRP and QE1 by saying the recovery will be stunted because the natural interest rate is going to fall by decree of demographics.

Link

Even when what is being taught is flawed it's very helpful to understand existing thought and to communicate those failures. They need some economists, or Treasury will continue to be completely clueless.

Perhaps half as many Treasury employees would achieve twice as much?

This article does not surprise me. The standard of almost everything governmental in this country is very mediocre these days. It is wasteful, time-consuming & way too expensive, everywhere you look, interact with & listen to. It is shambolic here in the provinces so no surprise that Wellington is the same. Perhaps the Well-Being budget is short for the Wellington Being Budget? This whole well-being thing has socialism written all over it.
Yes, I hear you Kate, but you should be writing to Mr Trump & Mr Xi & a hundred other world leaders as well. These are the people with real power. We don't have any of that in NZ. Our only crime is to have shat in some of our rivers, but we're working on that.
I also believe we (the world) needs to learn how to survive with less people, but is that happening? No.
Will that happen? Yes, but not in the way we want it to, unfortunately.
I'm also sorry to inform you that the story of humanity doesn't have a happy ending Kate. I know you want it to, but sadly, that's not the case in its past, present, nor will it be its future. And I love happy endings, believe me.
We have lived during a very fortunate age. My parents generation, & theirs before them, had to go & fight (war) to the death to protect what you & I have enjoyed. We are very lucky humans, when looked at in the context of human history & we should be thankful for that. Nothing this side of the grave lasts forever. Nor will you & I, thankfully, & already (at my age) I am already past my use by date & my children will now have their turn to run the cutter. Is this world a better place today than when I came into it in the 1950's? Hell yes. On choice alone it's 100 times better. My food is outstanding these days. It certainly wasn't that great on my mother's table I can assure you. Okay, we have some issues, but we in the west we are much closer to solving these issues than the 150 other countries that couldn't give a f...k. What we have today is as good as you'll get. Enjoy it. Life's too short.

Passport office is very good. Anything else?

This article seems rather full of assertions for a supposedly evidence -driven economist. Treasury has since at least the late '80s bled experienced staff to private consultants, banks etc. It's had just one major botch-up on its web settings and an evidently distracted CEO. But no big deal. Many govt websites have been decidedly lax on IT security. I wonder if the author's real concern is about the Treasury's overdue repositioning away from old-school narrowly focused, market driven economics, (championed at Canterbury for many years) and the neo-liberal platform that the author seems to like to uphold?

He claims a stake holders report indicated competency levels are much lower now than in 2015

Good article, Eric. And timely, too, given the divided state of the Gubmint (balanced only with a none-too-stable minor party), the populace (makers and takers, perps and evermore victims (because victimhood Pays...), urban and rural, cis-gender and the LBGT alphabet soup, tribalism and We-are-One...it's a long and sorry list - Identity Politics in action).

Everything is a trade-off, and Treasury's main purpose is to provide advice about the resources extracted compulsorily for us Makers, distributed to the Takers, and the perceived wisdom of various scenarios of that resource's usage.

That wisdom need not be exclusively expressed in dollar-based economics, but given that the Well-being Budget is couched in nothing else - no social-benefit solid objectives, no measures, no explanation of the cost-per-victim-uplifted, no exploration of the effects on those from whom the largess is derived - it's hard to take seriously the inevitable calls to invent completely new activity measures, apply them rigorously, and hold a Gubmint to account thereby.

This very thread shows all too clearly the reactions - from calls for more Sun and Moonbeam 'diversity, through a weary acceptance of the status quo (because it may be the least worst option), to the invention of flow or energy-based measures - the latter completely mute about - say Mental Health, about Maori and Pacifica tribulations, about Useless Mouths, about Cities in general, about Cancer drug funding for the hundreds of people who need millions per year each worth of - er - Drugs, and about the myriad of other real-life trade-offs that Gubmints have to face squarely or be voted outta the ring. No answers from either extreme, just endless hectoring and preaching from a High and Remote Pulpit.

The one lesson from history is that Utopians, of any stripe, tend to cause Dystopia. Dollars and Feelz may indeed not be the whole story. But they are all we have at this point in our evolution (or, devolution - YMMV....)

Warners are not causes - despite the convenience of using them as blame-shift targets.

And a clear understanding of causal/caused has to be kept in mind - Maori and drug issues can all be related back to overpopulation, via lack of access to resources/energy, for instance - our ancestors took their chances from under them and it's our rules they are the wrong side of.

Plus which, some have indeed though out some 'best moves', but those tend to get quashed from publication. Trace back the 'why' of that, and you get 'we don't want to know'. I can tell you that there will be a mass exodus from cities, food being an imperative and more labour being required per acre. But to avoid accepting the reason the exodus will happen, some choose to bury the discussion. It's interesting to observe how folk react.

Voting from here on - unless much better informed - will be a series of 'rejections'. A mass wanting better than the status quo, and nobody capable of delivering. Whether we mature past that, is an interesting question

Reading many of your posts, I cannot help but think that you are blinded by a narrative you are just obsessed with being correct. It makes for some remarkably crazy comments.

Maori and drug issues can all be related back to overpopulation, via lack of access to resources/energy, for instance
That is just a gross generalisation and misappropriation of an issue. On the one hand it would be near impossible to argue that Maori "access to resources/energy" has declined over the previous 200 years. Perhaps some (cultivated) land was stolen, and that is unforgivable however this pales in comparison to the immense boost in the ability to extract resource from their lands. In addition I reiterate what I said previously - you are blinded by a narrative that presumes you have one parsimonious explanation for everything. Tell us, Dr Grimwood, exactly how reducing 'overpopulation' (whatever that is supposed to refer to) would positively impact the rates a of drug use in the indigenous community? Arbitrarily saying such a thing is about as naive as saying canoes are equally responsible for drug abuse issues.

Plus which, some have indeed though out some 'best moves', but those tend to get quashed from publication.
Can you give an example?

Perhaps the Soylent Green division of a prominent Retirement Village chain - a perfect circular economy - was one of the 'strangled at birth' examples of 'best moves'?

Perhaps, waymad. Perhaps.
Oh how less fortunate we all are as a result.

The narrative won't go away.

Europeans were drawing Europe down in an unsustainable manner, circled the world subduing those who were using it in a more sustainable manner. They won because they brought more energy to the clash. Then they tapped into the one-off, millions-of the years in the making, source of fossilised solar energy (coal, oil, gas). That, they used to rip into every other resource - and I include 'sink' capability in the list of 'resources', atmospheric CO2 being but one example of an over-used sink - and into the diverse biosphere. Sans fossil energy we are grossly overshot as a species.

As a dominant race, the Europeans imposed their rules, even their religion, on the subdued races. They're still extracting resources from under some, via World Bank and IMF 'loans' and corrupt puppet leaderships. Ken Sarowiwa is a classic example of what happens when a fight-back is attempted. But we see Maori prison and poverty stats as a 'Maori problem', whereas it a result of us writing the rules and dictating what the culture will be. Unfortunately, the winning culture was the most energetic - not surprising - but this level of energy is unsustainabe. Interesting when you work it al through.

A percentage of most European-trashed cultures - First Nations, Inuit, Aboriginal, Maori, has buried it's hopelessness/downtroddenness in alcohol or drugs. That's just how it is.

If you want to learn (if you're not just into shooting a messenger, in other words) read 'Short History of Progress (Wright), Overshoot (Catton), Limits to Growth and updates (Meadows et al), Doughnut Economics (Raworth) and I can send you a list nearing 100 of publications, papers, books.

Resource-use is 'per head' - less heads means more resources per head. Simple - but remember the supply is shrinking all the time, exponentially..... :) If you're serious about learning, trace, say, phosphate. Trace who ripped it off whom, where we currently get it from, and how much is left. Then consider our linear agriculture system in light of what you've just learned. How long does that last? And that's without considering the fossil fuel input. You got a plan to keep people alive without feeding them?

Your last comment is an oxymoron. Purposely? But the list of media outfits which have avoided putting up stuff they've had offered, includes most of them in NZ (pers com). Truth is not a requirement; 'balance' is as near as they get (that's a fudge which gives 50% exposure to a falsehood by default) and the Editor's decision is final. And circulation/clicks beat truth, almost every time. Even public radio fails that test, much of the time. The problem is that our cultural narrative is based on some fatally flawed assumptions. Growth forever within a bounded system was just one of those. And there are a lot of bets laid ahead on that, eh?

It all comes back to energy. Solar in, low-grade heat out, everything else in-between. Try not eating and not filling your tank, if you don't get that. To get how useful fossil energy was, push your car home. This is an orders-of-magnitude dilemma. Go well.

Another Ministry with major problems with not having the right expertise is MBIE. They seem to have lost all the staff with expertise, and are unable to retain the new staff. They have filled up on lawyers and policy analysts who are running MBIE into the ground with exceedingly poor decisions. This has been going on since about 2008, so it's no wonder they are not interested in reducing compliance costs for construction. They instead do everything to increase costs without providing any benefit to the nation.

MBIE's dept of immigration is attempting to do what Russia's finest state planners couldn't do: decide which business skills are 'skills' - so we get bakers and tourist guides as 'skilled' immigrants. Old fashioned economists would define the skill as the salary earned. NZ bebefits from even a baker who make lots of dough (salary wise). My own skill was "IT" when I arrived but MBIE had a definition of IT skill that was embarassing - all they needed to know was that I had persuaded employers to pay me big salaries and then big pay rises. I assume they do much the same for construction: try and be experts instead of leaving it to the investors and the property insurance companies.

This entire article is about politics within government organisations, not just the failures of Treasury. A week or so ago i heard an interview about how we select people for top jobs. the interview was lamenting the lack of women, and held the basis that men are not selected on ability but personality and charisma. My experience is that while there does seem to be a modicum of gender bias, both men and women are selected on those traits (personality and charisma) as well as the ability to conform to a political system.

With this focus, is it any wonder that the organisation is eventually dumbed down? For those talented people within the organisation, conformity seems to be prized more than ability. Being right when you go against the political flows or conventional wisdom can be career destroying, because you are blamed for embarrassing your bosses - a serious faux pas, despite the fact that they were too dumb to see the truth when it was placed in front of them. Treasury is not the only Government department riddled with this malady.

I'm always amused at the "diversity"agenda - like a wealthy white NZ female is going to bring a completely different view to a wealthy white NZ male. True diversity is neurological and cultural and not gender. The most diverse thinkers I worked with were often on the spectrum, they approached problems in a totally different way to traditional thinkers. With regard to Treasury, this is a mess for their Board to deal with and they should be held equally accountable.

The diversity agenda argues 'women are different' that is why they must be 'treated the same'.

Any two things can either be absolutely different, or absolutely equal, but not both.

If men and women are different, then those differences are bound to show up as different aptitudes and preferences at a population level.

If on the other hand men and women are identical (as is held by progressive theorists that state that gender is a social construct), then there's no benefit to diversity and quotas etc.

Actually, there is plenty of research supporting diversity contributing to high performing teams - but this is neurological diversity, not gender. Gender diversity is a societal/political issue. However you don't need research to know this because, if you believe in efficient markets as I do then why aren't companies hiring all these cheaper talented females? If there is a pool of talent that is underpaid, surely they would be snapped up by profit maximising firms? This isn't to say that women are any less talented than men in aggregate.

I'm not sure I'd trust the advice of anyone associated with the business roundtable, its hadly going to be non partisan. My impression is that Treasury, like virtually every aspect of our society is simply sufferring the ravages of decades of disinvestment...or for lack of a better description, years of degradation resulting from the policy settings of neoliberalism. Money talks, who cares about society, who cares about caring, who cares about anything but money? I'm taking my PHD and going to work where I can make as much money to buy as many things as possible and sod everyone else. Thats whats happened to treasury.

With one or two honourable exceptions among their personnel, NZ Treasury has been the same institutional failure regarding the complexities of urban land economics and their interaction with the macroeconomy, as have virtually all "economics advisory" institutions around the world. Certain fundamentals of understanding, eg about what makes urban land supply "elastic" and eliminates "monopoly" economic rent in land, were common mid 20th century.

We have "experts" telling us that the reason that every single city in country A has real urban land prices 100 times higher on average than those in comparable US cities, must be "amenity". Economic rent is to economics what "gravity" is to rocket science, and these institutions and their expert memberships don't understand it anymore! Presumably in a nation where the population pays 50% of their incomes for bread to live on, bread has "higher amenity value" in that nation and we need not look at the situation with the supply of bread-making resources.

I suggest the brightest minds in the world are the members of the global 0.1% (or their advisors) who somehow manage to increase their portfolios value faster than anyone else, including during the "busts" that "no-one saw coming". Except that the 0.1% were quietly shorting everything in sight at exactly the right time.

Everyone else; politicians, central bankers, Treasury Departments, economists, transnational expert bodies, academics, activists etc are being played for idiots, by these people.

Makhlouf is quoted as writing “international research shows companies that have a balanced representation of women and men on their boards perform better.”
Perhaps the problem was that he practised what he preached, and wasn't even trying to hire the best people.