Australia is often called “the lucky country,”1 but I think the name could also apply to New Zealand. In saying this, I am not talking about New Zealand’s natural beauty, climate, etc., though all of them are great. Rather, I am talking about its government and its politicians.
From 1999 to 2008, Helen Clark and Michael Cullen, her Finance Minister, ran an impressive center-left Labour government. Anticipating the problem of affording superannuation payments in the 2020s and later, when the baby boomers reach retirement age, the government set up what is commonly called the “Cullen Fund.” Payments were made into the fund and invested so the money would be there to help make superannuation payments in the future.
With John Key’s resignation earlier this month, Bill English, Finance Minister under John Key, has become New Zealand’s new prime minister. He may be the most impressive of the lot.
As Finance Minister, Bill English did a lot of work behind the scenes for the government’s social programs. Mr. English called the Key government’s approach “incremental radicalism”: incremental changes which cumulatively, over time, amount to radical change.
Let me explain what I find so appealing about Bill English. First, he has a philosophy and approach to government which is more than a bumper sticker (a comment on the U.S., not prior New Zealand leaders). Plus he realizes that governing is more than just setting goals and spending money.
Upon becoming Prime Minister, Mr. English explained his approach to social issues as follows:
“I'm a strong believer that markets work, because people face consequences of their decisions and it's a powerful positive force. At the same time you can still be concerned about what Government does for people. These things aren't mutually exclusive.”
As Finance Minister, Mr. English developed what he called the “social investment” approach.2 I wrote a lengthy post about this idea here; there is no read to repeat it. In short, the idea is to spend (“invest”) money now, so money doesn’t have to be spent in the future. It helps people, and it means the government doesn’t have to keep spending over and over on the same people.
As a corollary, Mr. English wants more focus on government paying for what is proven to work; not just spending and then assuming the problem has been solved. Mr. English really wants to make sure the money is well spent and the problem is truly addressed; that people are actually being helped (an important point). Too often in the United States, people look at how much government spends, not how much it accomplishes. Mr. English wants to focus on the latter. (I wrote a blog post on this idea a couple of years ago: “Making Government Work Better – Something Everybody Can Agree On, Right?”)
But Mr. English gets even deeper than this. This is from “Offsetting Behaviour,” a New Zealand blog, about a speech Mr. English gave a few weeks before he became Prime Minister:
“[Bill] English also highlighted the importance of institutions. He ..., and this is my paraphrase, said that policy graduates need to think beyond the shift from inputs and outputs to outcomes, although that's important too, but rather towards the incentives that lead to those outcomes, and the institutions that shape the incentives. He noted that he has a lot more time for ‘these are the institutional features leading to bad policy leading to bad outcomes’ thinking than for ‘here are bad outcomes, change this policy to get better outcomes’.”
This is an exciting an approach to governing – and helping people.
Bill English has also talked about the need to assess laws against what they are actually supposed to achieve. Is the law really accomplishing what its proponents said it would do? If not, how does the law need to be changed?
Finally, there is this comment Mr. English made in 2014:
“Governments need to create an environment of stability and good incentives for [businesses] to grow the economy. Businesses need confidence the rules will not shift and the Government is not one of the risks they have to manage.”
The last part really struck me: Government should not be one of the risks business (or anybody, for that matter) should have to manage. What a great thought. During our presidential campaign this year, I thought of Mr. English’s comment and wrote a letter to The Wall Street Journal comparing what Mr. English said with the candidates we had. (You can find a copy of the letter here.)
Compare this politics – and these politicians – to those in United States, or a lot of other countries, and you will see why I think New Zealand is a “lucky country.”
1 While the reference to Australia as “the lucky country” is usually meant favorably, its origin was just the opposite. It comes from a 1964 book about Australia by Donald Horne, the last chapter of which opens as follows: “Australia is a lucky country run mainly by second rate people who share its luck.”
2 Mr. English understands that the social investment approach is not suitable for all public spending, but that doesn’t mean it shouldn’t apply where it does.