I had fun last evening.

The Public Service Association and the Institute of Public Administration ran a debate on the topic ‘Are cuts to public services and asset sales in recessionary times the way forward for New Zealand?’ 

The main speaker was David Hall, Director of the Public Services International Research Unit, University of Greenwich, London.  On the panel were Bernard Hickey, MP Grant Robertson and me.  Not a very balanced line-up you might think.  Apparently the PSA had asked several ministers to front but they declined.  And most of the large audience seemed to be rusted-on PSA supporters.  They loved Grant Robertson for slapping down John Key for his remarks about our bloated and inefficient bureaucracy and Bill English for talking about ‘waffly’ social policy advice.  Anyway, none of that was a problem for me.

David Hall seems a decent fellow but his views are littered with economic fallacies and they fly in the face of economic research.  For a summary of them, see here.  Essentially, he argues that big government is good but bigger government is even better.  I felt dissecting his positions was like shooting fish in a barrel.  I even managed to feel sorry for the PSA – bringing him to New Zealand would have done their credibility with ministers and the heavyweight policy community no good at all.

Two bits of the evening were particularly enjoyable

I had been itching to ask a front-bench Labour spokesperson why is it that, of all the parties of the Left around the world, New Zealand Labour was in the shrunken universe of the resistant  – which might now be down to just North Korea – in opposing privatisation?  Communist China has long been into it, and now even Cuba.  Helen Clark’s Social Democrat friends have been into it everywhere – Germany with its Post Office, Sweden even with a hospital and a university.  You only have to look across the Tasman to see all Labor federal and state governments getting out of running commercial enterprises in the past 20 years – most recently the Queensland Labor government with the sale of Queensland Rail and the New South Wales Labor government with the sale of electricity assets.  Why was New Zealand Labour in such a weirdly different place?, I asked.  Can you believe what I got in reply?  “That’s not a question.”

The second bit of fun was to offer a bet to the PSA.  Earlier this week they had reacted to the government’s announcement about state sector cuts by saying they would drive the economy back to recession.  That’s a very testable proposition, I thought.  Any organisation that wants to be taken seriously should be willing to put its money where its mouth is.  So the personal bet I made is that there will be no recession (defined as two negative quarters of GDP) in the next two years if the government proceeds with its spending cuts ($200-300 million off new spending etc).  I said I wanted a serious bet – four figures, but they could name the first one.  (I could do with the money to help with my mortgage.)  Brenda Pillott and Richard Wagner Wagstaff looked sheepish but said they would come back to me later.  And indeed they did, but for only $100.  You can decide what to make of that, but I’m happy.

Anyway congratulations to the PSA for organising the debate – I loved it.