The oxymoron of 'smart active government'

"[L]ast month [MBIE and MFAT issued a draft report asking] ‘How can we accelerate the growth of high productivity activities in the New Zealand.’ …

"It was the ‘accelerate the growth of high productivity activities’ that prompted me to look a little further: the focus apparently was not economy-wide productivity and policy settings but the sort of ‘smart active government’ stuff MBIE has long championed, involving clever officials and politicians identifying specific sectors to focus on and specific interventions to help those sectors. …

"On a day when the dysfunctions of our public sector were on particularly gruesome display it seemed even less appealing and persuasive than usual. In a month when the government had been a) buying a rugby league game, b) increasing (again) film subsidies, and c) subsidising expensive New Zealand restaurants (via the Michelin corporate welfare), all in the name apparently of 'going for growth. …

"[T]he draft report is unlikely to be any use to anyone looking for illumination rather than support (the old two uses of a lamppost line). … [T]here is a list of types of interventions that have been or are being used in [other] countries but no effort at all to assess what role (positive or negative) these interventions have played in contributing to medium-term productivity growth. It certainly isn’t impossible that some might have been helpful, some will almost certainly have been harmful …, and perhaps many will have just been ornamental or redistributive …  

"N]ot once in the entire document is there any suggestion of the possibility of government failure, capture etc.

"Then the draft report moves on to four domestic case studies … None of it seems to display any scepticism, only a sense that we (governments) haven’t been sufficiently focused or willing to persist with particular sector supports. … And the whole document ends with a question that shouldn’t even be being asked by government departments: ‘How might we identify higher productivity and growth potential?’ …

"[T]heir mindset and fairly shallow analysis in documents like this helps provide cover for governments more ready to paper over symptoms, toss out some cash to favoured firms/sectors, and avoid insisting that the hard structural issues are identified and addressed).

"[Yet] this sort of stuff helps keep lots of officials busy and feeling useful."

~ Michael Reddell from his post 'Government departments championing…bigger roles for themselves'

"Why are taxpayers in the business of subsidising certain industries again?"

"Around 6pm on Saturday night one of the Sky Sport channels was showing a feature on the young Black Ferns star Jorja Miller. ...

"The show was made by NHNZ, formerly Natural History New Zealand and owned by Julie Christie. After the credits ... there came a line advising this show would get a rebate under the Screen Production Rebate scheme.

"This means that either 25 or 40 percent of the cost of making the programme on Jorja Miller will be refunded from the taxpayer’s purse. In other words, you and me have paid a sizeable chunk of the cost of making this rather inconsequential TV show.

"On Monday morning, the news bulletins were broadcasting information about a new $70 million dollar fund to subsidise 'events' like concerts featuring big time international stars. The narrative seemed to be that if Taylor Swift’s promoters had access to some of this money last summer when she was playing in Australia, they may have attracted the superstar to perform in New Zealand.

"All of which got me thinking about why are taxpayers still in the business of subsidising certain industries again? ...

"[T]here are increasing signs of what the political class often refer to as 'mission creep.' The two examples given above involve what might be termed glamour industries – screen production and entertainment. The government is happy to prop them up.

"But as taxpayers are we that well off that we can subsidise movies and TV shows to the tune of over a billion dollars for the next four years? It’s a scheme designed to attract big time film productions to this country but somehow modest little feature sports programmes on women rugby players qualify too – because they have a potential overseas audience through NZR+.

"The fact that international audience will be miniscule appears to be irrelevant. ...
"That’s the line that film producers and entertainment and sports promoters always use: 'Look at the economic impact this has had' they’ll say. Good for them. But if they’re so good couldn’t they have done it without taxpayers subsidising it?

"Governments putting money directly into certain industries are trying to pick winners. Are bureaucrats the best people to be the judge of what will fly and what won’t? I don’t think so. ...

"A subsidised economy was supposed to have ended forty years ago. The country can do better than its slow-creep return."

~ Peter Williams from his post 'The slow creep of subsidies: The Government looks after glamour industries'