The budget fiasco

From the Inquiry's findings into the Treasury budget leak:

33. The Inquiry considers the senior leadership did not actively consider or promote a view of the Treasury’s appropriate obligations in relation to the production of Budget information. The organisation has faced ever increasing demands for greater volume and more complex Budget products. This resulted in:
a. Managers and teams feeling they had no option but to deliver whatever was requested of them, irrespective of the impact on resourcing and potential organisational risk; and
b. Critical decisions being made for expediency’s sake, in the absence of consideration of the wider organisation and security risk.

34. The Inquiry considers some of the above findings may be indicative of wider issues within the Treasury and invites the current Secretary of the Treasury to consider these matters further. 

The potential for snippets to be indexed from the clone site was known in 2018, but not addressed for 2019.

72. When the cloned Treasury website was subsequently created, approximately 2 weeks before Budget Day 2018, the clone was configured to use the shared index with the live website, thus breaking the “vault” as per the stipulated configuration. W&P team members responsible for producing Budget documents worked to develop those documents on the cloned website, and once finalised documents were set to “published” state on the cloned website. Because the cloned website and live website used a shared index, document headline and snippet information on the clone website where documents were set to “published” were able to be accessed by search users.

73. From interviews with relevant Treasury staff it is apparent that the ability to view Budget Sensitive document headline and snippet information in response to specifically worded search activity followed by an Error 404 script was known by individuals involved in determining to deploy the clone as the BDS solution for the Treasury website in 2018. There is no evidence to indicate the risk associated with visibility of document headlines and snippet information was formally escalated outside of this group. While it was contemplated not linking the index and cloning the index as well as the site, the testing method employed by CASS staff indicated it would take approximately three days to re-index the clone site prior to Budget Day which did not meet business requirements and consequently this option was disregarded. On the day of the incident the platform vendor was able to deploy an alternative method that re-indexed the clone site within one hour. The CASS IT team had not previously sought any advice from the vendor regarding methodology for re-index.

I think I've heard similar grumbles elsewhere in the public sector: business requirements that don't quite get why something that's just-released won't be immediately indexed. 

86. Upon observing the configuration which drove both site searches to the shared index, the vendor recommended changing the configuration to remove the link to the shared index. The CASS IT team raised concerns regarding the time to rebuild the index. The vendor was able to show the IT team a standard command line which took just one hour to re-index the site (not three days as experienced by the CASS team in testing their own method). 

And the whole thing goes then to governance:

91. In the view of the Inquirer, this flawed technical solution coupled with a lack of good practice was able to occur as a consequence of failures in the application and appropriateness of Treasury wider security, risk, control and governance settings. In the Inquirer’s view, those issues created an environment in which similar incidents are possible until such time as the Treasury improves the application of its systems, processes and governance of similar activities. The adequacy of action taken by the Treasury post the incident was outside the scope of the Inquiry and has not been assessed.

The report suggests that the problem would have been fixed if someone had escalated the clone design up to the IT Security Manager.  

113. The Inquiry did not find evidence of effective oversight in relation to the teams involved in the  incident and many of the people spoken to in relation to the incident raised concerns regarding the inability of managers to successfully escalate to senior managers matters such as the non-engagement by the wider organisation in the Treasury Website project or the descoping of the BDS from the same.

114. The Inquiry considers the organisational structure contributed to the incident particularly in relation to the operation of the Treasury/CASS IT team. As the senior manager of the Treasury and CASS IT function, the CIO was not a member of Kaiurungi at the time of the incident. The CIO reported to Kaiurungi on operational matters via monthly reporting on IT and Information Management however the Inquiry was told that corporate services was not a priority area of focus for Kaiurungi.

Kaiurungi is chaired by the Chief Operating Officer - Fiona Ross at the time. The CIO also reports to the COO. 

115. The Inquiry heard from a number of interviewees of the challenge within the organisation of gaining senior level engagement or commitment on matters associated with organisational functioning or performance, particularly where it related to corporate services. Furthermore the Inquiry observed an apparent organisational divide between “the business” and corporate services. In the Inquiry’s view, a disregard for the role of corporate services coupled with a lack of prioritisation of delivering organisational objectives contributed to the incident in a number of ways as evidenced by:
a. The inability of the Treasury Website Project to gain engagement from “the business” in the design, content and management of the new Treasury Website;
b. The lack of consideration of the impact on the W&P team of the continual increase in demand for the production of Budget documents in the final 6 weeks of the Budget preparation and subsequent impact on organisational risk profile;
c. The non-involvement of W&P in the BOG;
d. The failure to develop end-to-end process or governance oversight of the Budget process;
e. The failure to undertake effective close-out or other review procedures to inform organisational performance
f. The non-inclusion of the CIO on Kaiurungi.

116. The vulnerability in this area was further exacerbated by a reported organisational belief that work on core business operations is less valued or important than policy work or other core economic or fiscal functions of the Treasury and therefore not prioritised.

The CIO reports to the COO and the COO is on Kaiurungi.

Things start looking bleak as we read on.

121. Interviewees reported struggling to gain regular, consistent engagement with the Steering Group of the Treasury Website Project (subsequently renamed the Treasury Website Migration Project). Documentary evidence supports the assertion that meetings were held infrequently, not well attended and ultimately reduced to the COO and Project Manager in composition.

122. The Inquiry considers that the Treasury Website Project Steering Group (subsequently renamed Treasury Website Migration Project Steering Group) did not provide effective governance oversight of the project and failed to alert the wider organisation to the significant risks associated with the project.

Lack of Post-Implementation/Close-out Review

123. Based on the information reviewed by the Inquiry, had the Treasury undertaken a robust post implementation review of the TWMP and a review of the BDS solution in 2018 it may have highlighted the risk created by the visibility of document headline and snippet information. This may have led the Treasury to consider how it could improve the BDS solution for 2019 and thus averted the incident.

124. The lack of post project review in relation to the TWMP and BDS solution for 2018 is consistent with findings from a number of independent reports commissioned by the Treasury and reviewed by the Inquiry in relation to the Budget Process and other risk matters. Furthermore the Inquiry observes that the Treasury has not implemented recommendations contained in a number of independent reviews commissioned by the Treasury. This is consistent with the Treasury’s lack of prioritisation of working on core business operations and in implementing systems and governance to pursue the same.

Increasing Pressure on Treasury Staff working on the Budget

125. Following discussions with relevant Treasury staff, the Inquiry considers the Treasury’s senior leadership did not adequately consider the impact on staff of ever increasing production expectations, milestone slippage outside of the Treasury’s control or the impact on the risk profile for the Treasury itself of its unquestioning approach.

126. The Inquiry considers the lack of senior leadership consideration of the demands on the organisation contributed to an environment whereby:
a. managers and teams felt they had no option but to deliver whatever was requested of them, irrespective of the impact on resourcing and potential organisational risk; and
b. in which critical decisions were made for expediency’s sake, in the absence of consideration of the wider organisation and security risk.

The report goes on to note rather a few initiatives underway at Treasury to strengthen processes.

Overall it looks like a governance issue. The IT guys figured nobody up the chain wanted to hear about risks, and they didn't know that there was a solution to the up-the-chain problem of folks who wanted stuff kept strictly confidential but immediately (or almost immediately) indexed for search when released.

I wonder whether the IT team would have punted the thing up the chain had they known that they could de-risk it at the cost of only an hour's delay on indexing rather than a likely-to-be-shot-down 3-day wait. And I wonder whether, had they mentioned it earlier, someone might have told them to check if there were alternatives like that.

The Inquiry points to failure at senior leadership levels. They don't name names as such, but you'd think that would have to be the Chief Information Officer, and the Chief Operations Officer to whom he reported, and if you wanted to go up to the top, well, Makhlouf. They'd know more about what all happened than I do.

I just keep remembering that Treasury had Fiona Ross fronting a workshop and sun and moon feelings a few weeks before the budget fiasco. Danyl's reporting on that was withering.

Fiona Ross is a thought leader in the public service; an articulate and engaging public speaker. She stands at the front of the room: a seminar space on the third floor of Treasury. The 30 people in the audience fall silent. She begins. “We all know we live in a DEVUCA world.”

Everyone nods thoughtfully. Except me. I raise my hand. “We live in a what?”

Ross looks at me and blinks. “DEVUCA.”

I try to imitate the sound, unsuccessfully. Someone at my table explains the acronym in a low voice. “It stands for diverse, ambiguous, volatile, uncertain …”

“I think complexity is in there,” another person suggests. There is some disagreement. No one is quite sure exactly what kind of diverse complex ambiguous world we occupy.

“Google it,” Ross advises.

“I will. How do you spell …?”

“And in a DEVUCA world we all need to be more empathic and inclusive. That’s why Heartwork is so exciting.”

Maybe the whole card game thing really only took 15 minutes of her time. But you read this, and then you look at the IT mess that came under Ops at Treasury, and it's hard not to wonder if they maybe needed to be a bit more focused on core business than on DEVUCA worlds and card games.

Very glad that Treasury's now under new management. 

Ready-up

My column in the last Insights newsletter covered some of the coming Coronavirus mess.

The government this week extended the COVID-19 (coronavirus) travel ban barring foreign nationals from arriving in New Zealand from mainland China and suggesting self-quarantine for Kiwis returning.

The continued ban feels like the right decision for a highly contagious disease with mortality rates that appear to be around twenty times higher than the seasonal flu. But feels are a poor basis for policy.

The disease has some very worrying features.

Oral swab testing can miss cases detected by a blood test. And while the virus can be detected in most people within three to seven days, it takes up to 24 days for others. Quarantine for those who have been in contact with anyone who has been infected will be long.

Where about 5% of similar patients in Singapore wind up in intensive care, Wellington’s 29 ICU beds are starting to look just a bit inadequate. The health system will very likely quickly be overwhelmed if there is any serious outbreak.

So, preventing an outbreak seems important, if it is possible.

As more cases emerge internationally, any travel-ban strategy would have to expand rapidly but would become far less effective. And, as NZIER pointed out this week, delaying COVID-19’s arrival to coincide with the local flu season could make things worse rather than better.

We need to be thinking beyond the ban.

The government is contemplating support for exporters. But that seems only the start of the problem. How many businesses depend on timely deliveries of critical parts, tools and materials from China? Inventories will be running low and China’s shutdown will not end soon. Will everyone get a bailout?

There may be a case for compensating workers and firms affected by quarantine requirements for workers who have been exposed. Not providing that compensation makes it far too tempting for firms to tell workers to come into the office regardless of quarantine requirements, as a SkyCity manager reportedly did with an employee under quarantine after returning from Wuhan.

Singapore compensates firms for quarantined workers while applying sharp penalties to firms and workers who break quarantine. It is managing to keep something of a handle on its outbreak. The government should be considering that kind of model.

Businesses should be preparing to deal with short-notice work-from-home arrangements in addition to supply chain disruption.

The travel ban has bought us a bit of time, nothing more. Use it wisely.

Italy went from 3 cases to 130 in 48 hours, including 26 in intensive care and three deaths. And Bocconi University is now closed, along with schools in Milan. There's also a ban on public events.

It looks to be not under control in South Korea, and not even close to being under control in Iran.

The government today announced another extension of the travel ban with China. It seems almost pointless. There are still far more cases in China than elsewhere, but folks could fly in from Milan, or Iran, or bring it back from a trip to Bali where nobody seems to believe the official stats that there aren't any cases.

I would be surprised if the virus were not already here.

It has a long incubation period and exhibits similarly to a cold for a lot of people after that. I am surprised that we have not yet had a confirmed case.

It doesn't seem implausible that the first case that presents here will quickly open up a pile of additional diagnoses among close contacts, and their close contacts. Numbers rising quickly consequent to knowing where to be testing will require the government to move quickly. It would be best if they had already mapped out what they plan on doing in that event.

The government does have a pandemic plan.

It isn't communicating anything from it.

Under what conditions will schools be closed?

What provisions will be in place to support those placed under quarantine, and their employers?

What penalties will apply to workers and employers who allow breaching of quarantine?

What facilities is the government putting in place for quarantine for those who are ill?

How much isolation-ward capacity do the hospitals have, and what happens if that becomes overwhelmed? Do we know whether the spread to almost all patients in the psychiatric ward in one South Korean hospital was a function of the perhaps greater difficulty of hygiene control in a psychiatric ward, or something more endemic to hospitals in places that are not Singapore?

Has the government sought assurances from providers of critical infrastructure that they are prepared for potential loss of critical workers and for breaks in supply chains?

A lot of GPs require people to show up in person for a re-up on a regular scrip, probably because that's how they get the fees. Might the government consider requiring that regular scrips be issued on request in the lead up to and during a pandemic so as to reduce the number of people showing up at the GP? Like, maybe there's some sense in having the GP check that my daughter still has asthma and that the meds are appropriate, but making people show up at the doctor's right now seems silly to dangerous.

There seems to be a lot of stuff that could be being sorted out during this brief respite in which it feels like we're just waiting for the Mask of the Red Death to make his appearance. If the government is onto it, I haven't heard about it.

Giving SkyCity the convention centre was a very big mistake - Peter Singer edition

Another for the Eric was wrong file.

I had thought that the SkyCity deal was the least bad way of getting a convention centre conditional on the government wishing to be involved in paying to have a convention centre.

I don't think that governments should be involved in paying for convention centres.

And we should view the regulatory concessions granted to SkyCity in that deal as having an opportunity cost to the state equivalent to what those regulatory concessions would have been valued at had they been put up for auction. So while the SkyCity deal was meant to mean that the government didn't have to "pay" as cash payment, it did provide very valuable regulatory concessions. It wasn't free. People would pay a lot for the regulatory concessions that SkyCity bought? How much? Well, think about how much governments have to pay in other places to get convention centres built. It would be surprising if it were a lot less than that.

There are complementarities between casino operation and convention centre operation which could mean it would be less expensive to have the convention centre there. When I'd looked at that lit at the time, convention centres tied to or near casinos seemed to fare less badly than ones that were not. It can be part of the draw in getting some of the bigger conventions.

So I'd figured that the whole thing was the least bad outcome.

I hadn't reckoned on cancel culture coming to New Zealand, and the implications of that where a very important venue would be managed by an operator with incredible sensitivity to its perceptions of the social preferences of its various regulators.

SkyCity did secure some incredible regulatory abatement in its deal to provide the casino. But there are always a hundred margins on which the regulators could cause them to cease to be. Just how the money laundering regulations would be applied to them, for example, and at what kind of cost and stringency. How liquor licences will be handled in a venue where there is gambling going on and the effects of alcohol on continued gambling may be a concern. How the sinking lid policy on video lottery terminals would apply to their competitors, where they have some security on their own numbers - the worse for others, the better for them. Just what penalties and sanction might apply when they are not seen to have done enough about problem gambling. There will always be margins.

One hears incredible-sounding, but utterly utterly credible, stories about just what sorts of things companies operating under the shadow of the regulators here will get up to in attempts to buy the goodwill of the regulators. I'm not talking about payoffs or corruption or stuff like that. I'm talking rather about expensive measures taken expressly because they think it will leave the regulators with a warm feeling about them when next their particular regulatory issues come up for discussion.

I guarantee you it is happening in general.

And I suspect that that is what is driving Sky City's very very public campaign around inclusion and diversity. Everyone sees an incongruity between 'social justice' pushes and the company's core gambling business. It isn't incongruity, it's self-defence.

And so we get SkyCity's hair-trigger response to a minor amount of complaint about their hosting Peter Singer.

Disabled rights activists protested that Singer would be talking at SkyCity's venue. This sort of thing is rather common. But SkyCity cancelled him.

Danyl Mclauchlan covers it well at The Spinoff. I disagree with some of what he says but, unlike Singer's other critics, Danyl has read and understood Singer's project. I disagree with Danyl on two points - one minor to the case at hand, and one substantive.

On the minor point, I think it is important that Singer presents his arguments in the way he does because it forces the moral reckonings and thinking - the benefits of that outweigh the discomfort among those who choose to read him badly.

But the major point is a bit different.

Danyl argues that SkyCity is a private venue and should be able to choose who it hosts.

I agree with that. Every private venue and platform has to decide on what works for them, and what doesn't. A church hall should not be compelled to rent out its facilities for an erotica event, and a gay bar should not be forced to host a homophobic comedian just because it rents its facilities to other comedians. Property rights matter. And if the loss in future profits from hosting one particular event outweighs the profit of that particular event, that gives a way of weighing things. It speaks to effective demand.

But SkyCity they had a contract with Singer, and abandoned it under pressure.

I think that they abandoned it because they live in the shadow of the regulator. It is not a normal commercial decision. Even if SkyCity thought there would be zero consequence in attendance at their venue, they would fear the ill-will of the regulator.

"Oh, SkyCity. Yeah. We have to look at their renewals. What was that thing a couple of years ago where disabled people were furious with them? Like, what's wrong with them if they managed to make those people angry? Maybe we should look a bit more closely."

Avoiding that is the simplest explanation.

And it is consistent with other things SkyCity has been up to.

And it is also a very good reason that they should never have gotten the concession to run the Convention Centre. I hope that anyone considering booking anything with them for any reason will take very seriously the risk that SkyCity will cancel their event at the slightest pressure, because the regulatory risk they face will not be going away.

Does it seem plausible that cancelling Singer, who was to be talking about effective altruism and charity and the importance of doing the most good possible in the world, was a normal commercial decision?

Is it a free venue choice thing when they fear the hammer of the state? I don't really think so.

And it is a kind of a testable hypothesis. Here's the Masters thesis project, for those who choose to accept it. I bet the result would publish reasonably.

There exist company Corporate Social Responsibility rankings. How do company CSR rankings vary by the regulatory threats facing those companies and the industries in which they operate? You could use surprise state-level election results to identify effects for companies subject to state-level regulation, or changes in the composition of the relevant congressional oversight committees. 

I talked about some of this with Mike Hosking this morning.* Not about the broader potential research question, but about this particular instance.

It looks like Peter Singer's found another venue. In the interim, those keen might want to listen to my own chat with him in 2015 at the Christchurch WORD Festival. The link takes you to my post at the time that excerpted the best bits, including some fun around whether vegans should consider eating Canterbury lamb.

And if you get the chance to attend in Auckland, you should.



* Hosking introduced me as a member of the Free Speech Coalition. I'm broadly supportive of the Free Speech Coalition, as I am very much a fan of free speech, but I don't think I ever signed up with them. I don't really join things. I don't know whether my own position on this stuff corresponds with theirs, but I'd hope it does. And I don't keep close enough tabs on every position they've taken to necessarily endorse every bit of it. That's one reason I don't join things - it requires too much attention.

Radio Games

It looks like RNZ's trick to fund both RNZ Concert and the new Youth station would also have worked on former Broadcasting Minister Steve Maharey, who writes:

For now, Concert FM is safe. When the news broke that Radio New Zealand (RNZ) was considering turning Concert FM into an automated station on an AM frequency so it could use the FM frequency to establish a ‘youth oriented’ station, discordant notes immediately emanated from classical music fans all over the nation.

For those new to the story, let me recap. Radio New Zealand has for some time, under the capable leadership of its CE Paul Thompson, been trying to make itself more interesting to 21st century audiences: particularly younger audiences who will, hopefully, turn into lifelong faithful listeners.

This is a reasonable objective but not easy to implement when you have no money (1).

As any good CE knows if you are looking for real money from a tight budget the place to go is people. Accordingly, RNZ made it known that Concert FM staff would be made redundant, a new automated classical music service would take its place and new staff would be employed to run youth programming.

That any of the folks at RNZ thought this would be an easy sell is difficult to understand. They might have realised their mistake if they had made it clear to their Minister and the wider Government. It is a fact of political life that to touch Concert FM is akin to peeing on an electric fence.

It appears that RNZ thought that they told their Minister, but they now say the communication might not have been clear enough.

(A note about communication at this point might be useful. Informing someone is not communication. At a minimum, communication requires feedback from the person being communicated with to be sure they both got the message and understood it).

Back to the story. As a former Broadcasting Minister (disclaimer!), I learnt about the need to tread carefully around Concert FM from the formidable Right Honourable Jonathan Hunt. Rt. Hon. Hunt was the Minister who oversaw the market based reforms to broadcasting during the heady days of the fourth Labour Government. Significantly, despite the preferences of the day for throwing everything open to the market, Concert FM survived unscathed. When I asked how this happened, I was informed that the audience for Concert FM made it political suicide to do anything other than leave it alone.

I really don't get how folks see this play and go "What was Radio NZ thinking, threatening to knife something that is politically untouchable in order to fund a daft youth thing? How could they think it would be easy to convince anyone they could do that?"

It looked, from the start, like an obvious play to extort funding for both programmes. No government would let them kill Concert FM. The government freaking out and funding both Concert FM and the new youth thing seems a daft response though. Or, at least, you'd think that the government could convey back to RNZ that its entire Board would be sacked for running this kind of game against the government if the Board allowed it to proceed. Operational independence is one thing. Creating hostage situations for the government is another.

But the play worked. It'll be interesting to watch to see what other government agencies learned from this episode.

I covered things in my column this week for Newsroom. You can get it here now, ungated; they're worth the subscription though. I conclude:

As Newsroom reported last week, RNZ’s chief executive Paul Thompson worried that going down normal channels to secure the use of the 102 FM band would “bog down our plans for five years and nothing would happen.” A game of chicken in an election year would be much quicker.

It has been a bit strange to see this episode reported as a “debacle” on RNZ’s part, and the reversal of the planned cuts at Concert FM as “embarrassing.” It would have been daft to vandalise Concert FM in favour of a new youth service. That now looks unlikely. But was it ever really the intended outcome?

Rochester University political scientist William Riker studied what he called ‘heresthetics’ – the manipulation of the context or structure of a political decision-making process to get the outcome one wants. Political entrepreneurs are attuned to seeing heresthetical moves, reshaping the political environment to make possible that which was previously impossible.

Rather than castigate RNZ’s boss for the “debacle,” we might instead recognise and even, perhaps, applaud his spectacular feat of political entrepreneurship. If getting everything one wants is a debacle, we might ponder just how wonderful a catastrophe might have been. Sir Humphrey would be proud.

The Government may now have a bit of a problem if other Crown agencies take the appropriate lesson from this little episode. Successful entrepreneurs often attract imitators.

Should the Government not wish this play to be repeated, it might need to find ways of demonstrating these kinds of moves do not pay off for those who choose to play them.

Public health and vaccination

There could well be a case for having a public agency focused comprehensively on vaccination and communicable disease. 

But the proposal that the folks over at Public Health Expert isn't that. In a post framed around the recent measles outbreak and noting the risks around antimicrobial resistance and pandemics, we get this conclusion:

Business as usual is not a rational or viable option for NZ. There are almost daily reminders about the large current and impending public health challenges faced by this country. These challenges include the health consequence of persistent inequalities, the increasing burden from rising obesity and non-communicable diseases such as diabetes, and persisting problems of poor mental health and suicide. Possibly even more alarming are the rising environmental consequences of climate change and ecological collapse that take us beyond ‘planetary boundaries’, and emerging infectious diseases including rising levels of antimicrobial resistance and the emerging coronavirus pandemic. The current national measles epidemic is just another reminder that our national public health capacity and systems are no longer fit for purpose.

The good news is that the present Health and Disability System Review could map out the design for a new kind of public health agency to lead the transformative change that NZ needs to achieve its goals of improved public health and equity, and support its shift to a sustainable future.  Public Health Aotearoa could well provide the high quality sustained public health leadership needed to eliminate measles, improve our health security, and manage other long-term public health challenges.

It would be ...surprising... if this kind of agency maintained any kind of focus on pandemic prevention and vaccination promotion. It would quickly instead become an agency pushing for greater controls around lifestyle issues related to noncommunicable disease and, from the description above, social justice issues. And when that shift resulted in another great forgetting of the importance of vaccination and core public health, it would complain come the next measles outbreak that it simply hadn't had enough funding.

I could rather strongly favour there being an agency solely responsible for reducing the risk of communicable disease. That's core public health work. It would encourage research into vaccination uptake - finding ways to get folks vaccinated who are averse to vaccination. It would have targets around vaccination rates. It would make sure that public health nurses get into the schools to make vaccination routine. If it ever came to it, it could help coordinate quarantine regimes.

I really like the kinds of things that Nick Wilson writes about pandemics and preparedness. But I have no confidence that a new public health agency would pay any attention to pandemics or vaccination rates outside of a crisis.

Like, why would it be any different than the general focus of the current regime, in which it is dead simple to find millions of dollars in grants to Otago Uni to run focus groups about smoking (while Marewa does the real work out on her own) but hard to find much evidence of support for research into encouraging vaccination?

I'd put in an OIA request last year asking the Ministry of Health to list any research it's commissioned around vaccination. This is what I got back. It isn't much, despite waning vaccination rates.

Vaccination just seems to be low priority until there's a crisis. I wonder whether one tobacco researcher, by herself, has gotten more funding than the whole vaccination research agenda noted below.

Conversations with Atwood

Not everyone seems to have enjoyed Margaret Atwood's book forum in Auckland with Chloe Swarbrick.

I wasn't there.

But I did catch Tyler Cowen's superb talk with her. The podcast and transcript are all up here. A few highlights below. Cowen's breadth always amazes. You look across the range of folks he's interviewed, and the depth he'll cover...

COWEN: I’m a big fan of your novel, Hag-Seed, which I believe is your latest. A few questions about that and Shakespeare: How sympathetic is Shakespeare to Caliban in The Tempest?
ATWOOD: Shakespeare himself, when he was doing The Tempest, I think, saw Caliban as one of his comic figures. But as always with Shakespeare, nothing is two-dimensional. So The Tempest underwent a number of different metamorphoses in performance since Shakespeare. We have The Tempest. Then we have Oliver Cromwell. The theater gets shut down. The tradition is broken.
When the theaters come back, they can’t actually remember how these things were done. So in the 18th century, The Tempest was an opera, and they added some people. They added a person called Dorinda, who is Miranda’s sister, so that they could have an ensemble group of singers, obviously. Then they added another guy so that Dorinda would have somebody to marry. Then they learned how to fly Ariel, and Ariel flew around.
Then when they tried to bring back the original Tempest, nobody liked it because they wanted the opera. They wanted Dorinda and the flying Ariel. In the 19th century, when Ariel was always played by a woman who flew around, Caliban became a romantic sort of Byronic hero, oddly enough. Because by that time, people had caught up with slavery in the United States, and noble savages and other things like that that were of the 19th century.
COWEN: And he has real charisma.
ATWOOD: Well, it depends how he’s played. It really depends, and I’ve seen, by this time, a lot of performances of The Tempest, including film ones. One by Julie Taymor, in which Prospero is Prospera — she’s the duchess of Milan — has a pretty good Caliban.
But he has a lot of resonance. He’s given the most poetic lines in the play, actually. There’s a big question about him, which is, what happens to him at the end? We’re not told. It’s another of these open questions. We just don’t know.
COWEN: How sympathetic are you to Prospero? There’s a line in Hag-Seed: “He would seem to be the top jailer in this play.”
ATWOOD: Well, he is.
COWEN: Do you like him?
ATWOOD: Like or dislike, it kind of doesn’t matter. Whether I like or dislike him, I’m sympathetic to him in some ways. But he says himself that he got himself into this. He was the duke. He didn’t do his dukely duties. He didn’t behave in a duke-like way. He went off to study magic instead, and he let his brother usurp the kingdom. By doing so, of course, he threw his young child into danger and ended them up on this island.
If you want to know why he wants to get off of it, look at the menus, which I did. I did a little foodie piece for a food magazine on what they were actually eating. It’s not fun.
COWEN: As Leggs suggests in Hag-Seed, is there any chance that Prospero is Caliban’s dad?
ATWOOD: Think about it.
COWEN: Someone has to be, right?
ATWOOD: Think about it. Somebody has to be his dad. So, if we’re not accepting the devil as being the progenitor of Caliban, who is? I ask you. They’re both in the magic business. Why would they have not met up at a convention? Sort of a one-night stand producing Caliban.

COWEN: Handmaid’s Tale — is it an accident that you started it in West Berlin in, I think, 1984?
ATWOOD: Wasn’t that corny? It was very corny, but I couldn’t avoid it. If I had been able to do it in some other year, I would have because, inevitably, this question comes up. But I just happened to be in West Berlin. I didn’t go there on purpose to do that. But there I was, and how handy it was because it was the wall all around. And being Canadian, I could go into places like East Germany and Czechoslovakia and Poland easier than German nationals could. So I did.
COWEN: You had had a prior trip to Afghanistan. Did that influence the book at all?
ATWOOD: A bit, yeah. I was lucky enough to see Afghanistan six weeks before the present unpleasantness started. Six weeks before they assassinated Daoud. It was clear, and it always has been a crossroads, and it’s always been desirable. It’s always been desired by China, by Russia, and by anybody else in the vicinity because things went through it.
At the time we were there, there was a great big Chinese embassy. There was a great big USSR embassy. And there was a great big American embassy. Daoud was doing quite well by playing them off against each other and getting stuff out of them. They should have stuck with him. But it’s been chaos ever since. I saw it at the last minute before a lot of things just got blown up.
COWEN: Did reading the Book of Genesis serve as an actual influence on Handmaid’s Tale? Or it’s just a connection you noticed later?
ATWOOD: Oh, no, it’s right there in the epigraph. So the question to you is, if you’re going to take the Bible literally, how literally would you like to take it?
COWEN: Is it the Jacob version of this story or the Abraham-Sarah-Hagar version of the story that grabbed you? Usually you mention the Jacob version of the story.
ATWOOD: Yeah.
COWEN: There’s the second one. Why?
ATWOOD: Because it’s got more people in it.
COWEN: But the first version has a happy ending, right? You get Isaac, you get Ishmael. They each found tribes.
ATWOOD: Why would I write a book with a happy ending?
[laughter]
ATWOOD: Yeah, it’s not such a happy ending. It’s a very ambivalent ending, I would say. Abraham is a very dicey character in the Bible. But there’s a wonderful book called God: A Biography, which is by Jack —
COWEN: The Miles book, yeah.
ATWOOD: Yeah, it’s a wonderful book. I love it. It’s got the best exploration of the Book of Job that I’ve ever read. I think it’s brilliant.
But remember where my roots are. I’m Canadian. We took the Bible in school. There wasn’t any separation of church and state. Then I went to college and studied with Northrop Frye. Then I went to Harvard and studied with Perry Miller. And for all those people, you had to know the Bible.

Go read or listen to the whole thing. I had no clue about her entrepreneurial ventures and patents.

Jacinda says I'm wrong

TVNZ sought comment from the PM on critiques of the film subsidy regime. 

I'd had a chat with Breakfast TV on Monday morning on the back of Matt Nippert's absolutely excellent continued sleuthing into those subsidies.  

Currently, Mr Crampton says there is around $170 million spent in subsidies to international films. He says other industries are also affected by not getting a slice of that money, because they aren’t getting the people they need in the right jobs.

“The video game industry at the end of last year was complaining that they can’t get workers because they’re all being sucked in to video animation in the subsidised film industry,” he says.

“Where does it end? We shouldn’t be on this kind of rollercoaster. Every country in the world competes on these kinds of subsidies and it’s a mistake to be in that game.”

Jacinda Ardern disagrees. She says she believes the flow on affect of the film sector is worth it for New Zealand.

"You ask anyone who works in the industry whether or not it makes a difference... the flow on affect is huge," the Prime Minister said today.

"The film industry is completely unique."

The big problem that I had with the government's "wellbeing" budget is that it made absolutely no attempt to gauge whether anything in it was particularly useful in improving wellbeing. Funding went into areas where there were demonstrated problems, but with no particular way of telling whether those were also the areas where more spending could do the most good.

I guess I was hopelessly optimistic in expecting that a government that professed to care about wellbeing actually were serious about it.

If the Prime Minister's method for evaluating whether giant film subsidies are the best possible use of tax money is to go and ask the recipients of the subsidies whether they make a difference, well, I suppose we should all ratchet down our expectations for Budget 2020.

You might have thought that putting a couple hundred million dollars a year into Pharmac might do more good than film subsidies - it would be a 20% boost to that budget. Or any of a pile of different areas, including an education system that has trouble teaching graduates the difference between effect and affect. But no. Film subsidies.

It makes for fun syllogisms though. If tax is love and Avatar sequels are tax, are we required to love the Avatar sequels? I hope not.

Previously: Film subsidies are stupid

Congestion charging

In this week's column in the Fairfax papers, I look at the case for congestion charging.

The same kind of technology that lets commercial trucks handle road user charges painlessly could be installed on petrol vehicles. Petrol excise would go away, with road user charges taking their place to collect the same amount of money for the land transport fund.

Carbon charges on petrol would, of course, remain.

The purpose of a congestion charge would not be to fund new roads, or road expansions, or public transport, or anything else. The purpose of a congestion charge would be to get rid of the hassle and time and frustration cost that each of us bears when stuck in traffic, and to replace it with a monetary charge instead that would allow traffic to flow freely.

If you'd like an analogy, think about the old Soviet Union. Prices were officially very low in the government's stores, but everyone had to sit in queues for hours if they wanted to be able to buy toilet paper. That's how we run our roads: the government's set price for getting onto the road is zero, but you have to queue.

Ideally, congestion charging would be revenue-neutral. Road user charges would fund the roads, but congestion charges' only job is to alleviate congestion. The government could take every dollar collected in congestion charges, net of the cost of running the system, and give every person in the country an equal payment out of the collected funds.

Letting prices work can solve a lot of problems. It can also then make additional investments in roads rather less necessary. Traffic engineers like building roads to handle times of peak use. Charges that spread that traffic load more evenly over the day mean that you don't need to invest as much in increasing capacity in the first place.

Even better, the collected congestion charges can start to tell you when it does make sense to increase capacity – to twin Wellington's Mt Vic tunnel, for example, or to turn some of the chokepoint traffic circles on Johns Road in Christchurch into offramps and flyovers. If collected congestion charges around the chokepoint signal that people really put a lot of value on getting across town, that starts making the case for increasing capacity.

If instead we see that the congestion charge needed to for traffic to flow freely around the chokepoint at peak hours is rather low, then the economics of fixes like a second tunnel are likely rather poor.

It's hard to tell which is true until we start pricing congestion.

Like carbon prices, congestion prices are one of those things where the economic merits are obvious, but the politics in getting there are hard. Heck, Mark Blaug explained the case for them in a public lecture at Canterbury more than a decade ago.

Making the charge revenue neutral will be important in making the thing feasible. If people expect this to be a tax grab to fund all manner of new initiatives, they'll rightly balk. Using a congestion charge that way makes a hash of it. If you use the thing with revenue as an objective rather than a byproduct, you'll set the prices incorrectly. I like the idea of just giving everyone a cheque for their equal share of the collected net revenues.

At the same time, we do need better ways of funding roading infrastructure. And that's where Road User Charges could come in. If we have the transponders in place for congestion charging, we can use them to set different base prices for different roads. If it turns out that a second Mount Vic tunnel makes sense, which we'd quickly see if the congestion charge necessary to ease traffic around the tunnel were high, then you could fund the second tunnel with a dedicated charge on that route - that dedicated road-specific RUC could pay off the bond that funds the tunnel. And if it looks like there's no way that driver demand, as demonstrated by willingness to pay to use that route, would cover the cost - well, then digging would be a waste of money and shouldn't be done.

Tie-breaker

In this week's column in our Insights newsletter, I wonder a bit about whether T20 matches really need tie-breakers. 

I’m not convinced there’s anything wrong with a tie. Why are we always trying to break them?

We left Friday’s T20 match between the Black Caps and India after the 16th over. New Zealand needed only 26 runs from 24 balls with plenty of wickets in hand. The WASP had New Zealand almost certain to win. It was well past 11 pm, and our 9-year-old was dozing off.

I read CricInfo’s commentary aloud to my rather more awake son and his friend as we walked to the car. Back at the stadium, the roars we heard from a crowd heavy with India’s supporters during the final over probably meant wickets rather than boundaries, as CricInfo eventually confirmed.

So they were off to another Super Over that would take the game to a too-familiar outcome, well past midnight. And we were off to get the kids to bed.

The drive home had me wondering about tiebreakers.

If both teams end a match with an identical score, is there any fair way of determining which side deserved to win?

Deciding a match on the number of boundaries tends to reward the flashier team over a patient one grinding forward on ones and twos. Is the former really better than the latter?

Equally, handing a win to the team with more wickets in hand says that it’s worse to run out of wickets than to run out of overs in a limited-overs game. Both are surely valuable, so why set the one above the other?

But going to a Super Over is plainly a mistake – not simply because of any recent and repeated unpleasantness. You might think that, because an extra over in a twenty-over game gives us 5% more information about which team is really the better one, it is a fair way of resolving a tie. But this format privileges the team with top-heavy talent over the side with talent spread across its order.

Ties are more likely to happen when both teams have comparable skill, so it is no surprise that picking a winner between them involves some arbitrariness. Worse, every method of choosing can skew the pitch.

Yet nothing in cricket demands every match have a winner or loser. We could just accept that both teams were equally decent on the night.

At least that's better than being forced to consider New Zealand’s performance in the Super Overs. 

I tend to run cricket stuff past Scott Brooker to make sure I'm not beclowning myself too badly as a relatively recent convert to the game. 

Scott had an excellent suggestion for a way of avoiding ties, should one wish to avoid ties. 

At the start of the second innings, flip a coin. The coin flip determines whether the chasing team needs to meet the defending team's score to win, or exceed that score. Both teams then have the full inning to chase or defend a known target. No chance of a tie. And nothing that skews play. I rather like it. If you don't want to allow ties.

And this idea also has merit:

Maybe the side that wins the toss should always has to have one more run than the opponent to win. The side that loses must only be equal to the opposition to win, thereby balancing the winner’s advantage in being able to decide whether to bat first or not.

— Russell Hutchinson (@russellhutchins) February 6, 2020

Purity Spirals

This really isn't a bad explanation for why parts of Twitter seem utterly, utterly mad. 

Lately we’ve been witnessing more and more small worlds fall apart under the weight of their vast moral centre of gravity. In the past year, the middle-class, middle-aged, overwhelmingly female knitters of Instagram have descended into internecine conflict over racism allegations. Young adult fiction has exploded into an ethical gazumping war over who is allowed to write about what colour of character. In Canada, the music business has become so consumed by ethical etiquette that a juror who submitted the band Viet Cong for the nation’s top music prize was compelled to write a lengthy apology over how culturally insensitive his action was.

I’ve become fascinated by the link between what we see in examples like these, and a dynamic we’ve seen play out through history.

In 1967, Mao’s Red Guards took to the streets determined to root out the ‘four olds’ of traditional Chinese culture, killing hundreds of thousands in the process. By 1968, they had fallen apart as factions fought each other to represent the truest version of Maoism. In 1794, Robespierre found himself on the same tumbrel he had prescribed for so many other problematic persons. In both cases, a bidding war for morality turned into a proxy war for power.

In my new BBC Radio 4 documentary I wanted to join the psychological dots between history’s pinnacle nightmares and what happens at the end of your road. I decided to call both the phenomenon and the documentary, “The Purity Spiral”. A purity spiral occurs when a community becomes fixated on implementing a single value that has no upper limit, and no single agreed interpretation. The result is a moral feeding frenzy.

But while a purity spiral often concerns morality, it is not about morality. It’s about purity — a very different concept. Morality doesn’t need to exist with reference to anything other than itself. Purity, on the other hand, is an inherently relative value — the game is always one of purer-than-thou.

Read the whole thing. And catch the BBC podcast as well.

The entire dynamic may also have consequences for dating markets.

Ports and Portability

Alas, Bernard didn't keep the headline I'd picked for this week's Newsroom column. 

It's about whether it makes sense to move Auckland's Port. I don't know whether it makes sense to move it or not, but I do think that the first step is figuring out just how much value could be unlocked by turning 55 hectares of waterfront real estate over to other uses, whether residential, commercial, or anything else other than a stadium.

So: Ports and Portability.

Bernard went with "Hard numbers needed before 'blue sky' Port talk".

Ah well. I still like Ports and Portability. He's the expert though.

A snippet:

Moving Auckland’s port might make sense – someday.

But I do wonder about some of the talk of moving Auckland’s port to put in a waterfront stadium, or museum, or other large, iconic, and expensive facility.

Stadium maths are almost invariably bad. Rather than revitalising cities, stadiums more typically become white elephants needing ongoing financial support. Putting one on some of the city’s most valuable property would not only ensure it could never cover its own real costs, but would also forgo far better uses for prime commercial and residential land.

If you owned a quarter-acre section in Epsom, with a sprawling ramshackle workshop and shed in the back yard, rising property prices might eventually convince you to make some changes. Clearing the workshop out could be a bit expensive – and especially if you needed to find some other facilities for your projects. But subdividing could let you clear the mortgage and pay off a few other bills.

Unless you had money to burn, deciding to take on all the expense of clearing out the shed and finding another place to work might be a bit silly if you decided instead to put in a swimming pool. It could be nice on a warm evening, but it certainly would not help with the problem of covering the mortgage. And the bank might have something to say about it.

As downtown property values rise, eventually the Council-owned Port’s fifty-five hectares of land and wharves will be valuable enough in other uses to cover the cost of clearing the land and building new facilities elsewhere. Those costs will not be small, with consultancy reports battling over just how close to $10 billion the bill might wind up being. But the value of the underlying property will not be small either.

I worry that where the government wants to decide on whether to move the port before deciding on what to do with the waterfront land, we could too easily wind up with a waterfront stadium.

In the Hitchhiker’s Guide to the Galaxy, Douglas Adams wrote of how numbers written on restaurant bills within the confines of restaurants do not follow normal the laws of normal mathematics but instead follow Bistromathics. He imagined spaceships powered by this new math. Numbers used in economic impact assessments of stadiums are even stranger than bistromaths. To put the academic economic consensus simply, public investments in stadiums do not deliver the promised benefits.

A waterfront stadium the size of Eden Park would sit on about $600 million dollars’ worth of property, if that waterfront land winds up being worth about $10,000 per square metre; construction and running costs of a stadium would be additional. If the stadium had zero running cost and zero construction cost, it would still need to generate revenues of almost $50 million per year to cover the capital cost of the land alone.

And Eden Park’s total operating income last year was just short of $16 million. A stadium might not be the best possible use of waterfront land. It is just too easy to imagine combined governments spending billions of dollars to move the port based on business cases involving selling the port’s land, only to then spend easily over a billion dollars on a new stadium for the site instead.