The gulf between the wonderful picture the government likes to paint on the world stage of New Zealand as a paragon of international environmental virtue and reality continues to widen.

According to the Prime Minister at this week’s United Nations Climate change meeting, New Zealand is leading the world in sustainable food production, and has done “so much in just two years” to transition the country towards a carbon-neutral economy, with the implicit promise of more to come.

It is a catchy theme on the international stage – the small, isolated country at the edge of the world, long critically dependent on agricultural production for its prosperity – that is nonetheless prepared to take the challenge of climate change head-on, and reorder its economy and society accordingly, not just in its own country, but in the wider Pacific region of which it is part as well. As a response to the bitter chiding by young Swedish environmental activist, Greta Thurnberg, of international leaders’ perceived collective inaction, it could not have been better pitched.

There was just one small problem with it, though, as indeed there is with much of this government’s narrative, here and abroad, about what it is doing. The bold and optimistic rhetoric is just not matched by the domestic reality. Whether it be housing and the development of Kiwibuild, or mental health, or making our communities safer, the chasm between what was promised and what has been delivered in this so-called “Year of Delivery” continues to yawn ever greater.

This is especially so in the area of environmental policy, climate change in particular. Indeed, the very day the Prime Minister was proclaiming so very boldly on the world stage, it became clear that her government’s overall climate change policy is running into difficulties, with the inclusion of agriculture in the Emissions Trading Scheme proving to be just as much of a stumbling block as it was for both the last two National-led and Labour-led governments. And as they both came to realise, an Emissions Trading Scheme without agriculture is only a partial scheme. Somehow, this government thought it possessed a superior skill that would enable it to solve all that, but now it finds itself in exactly the same position as its two predecessors who have wrestled with this same issue over the last twenty years.

The Prime Minister waxed lyrical in New York about the government’s freshwater policy, but again, the reality of achieving better quality standards is falling far short of the international impression being created. Nor is it even clear that the government will be able to make the progress it is seeking in this area, because of entrenched interests, and despite the relevant Minister’s cocky assertion “trust me, I know what I’m doing.”

And all the while, more reports come to hand of various species of native flora and fauna being threatened to extinction, coastal communities facing destruction because of rising sea levels, and our carbon emission levels continuing to rise. While these are all long-term trends that transcend the life of this government, there is, tellingly, no evidence to suggest that any of the steps it has taken “in just two years” have had any significant impact. It is one thing to parade virtue on the international stage, but something else to have to match it to domestic reality.

How much longer the government can get away with this game of two stories remains to be seen. In the absence of effective and decisive action, and any evidence of progress, it is going to become increasingly difficult to maintain the pretence. And if the National Party switches to full reverse mode on any hint of bipartisanship on climate change policy, as seems increasingly likely in the wake of its decision to embrace Australian Prime Minister Scott Morrison’s successful climate change agnosticism in the recent election campaign, the rosy picture is going to look pretty tattered indeed.

Taking the moral ground on important international issues, the way the Prime Minister does, is a defensible position in its own right. It is something successive New Zealand governments have done on various issues over the years and been respected for. But to maintain any credibility for even the briefest period of time, there has to be more to it than just endless talk and promise. There must be accompanying discernible, effective action. That is, after all, what we elect governments for, something the current one is seeming increasingly incapable of grasping. For it, the endless earnest talking about something seems just as important as doing anything about it.

Eloquent, fine words are all very well, but their effectiveness rests ultimately on the credibility of the actions they give rise to.  This government may learn the hard way that talk, endless talk, remains cheap. It is still the actions that count.  

  

 

It took a testy Morning Report interview this week to remind me that Simon Bridges was still the Leader of the Opposition. Until then, he had been largely invisible as the events of recent weeks unfolded.

Of course, this could have been a deliberate strategy on his part. He may well have decided that as the Prime Minister squirmed on the hook of her credibility over the ongoing Labour sex scandals issue, and the wider #metoo ramifications, it was best that his Deputy, Paula Bennett, was left to front that issue, especially since the disgruntled and dissatisfied Labour complainants had approached her directly some while ago. Perhaps he may have felt that his becoming involved would raise afresh the spectre of the Jamie-Lee Ross affair, and put National on the back foot over its internal handling of that matter, so best that he stay right out of things.  Or, that the Prime Minister would doing such a good job all by herself of skewering her credibility through her vague and inconsistent answers, that there was no need for him to get involved. Whatever the reason, the upshot was that he was left looking very much missing in action.

Now, being Leader of the Opposition is both the most difficult and the worst of jobs in New Zealand politics, even at the best of times. A Leader of the Opposition who is too sharp and critical is often dismissed as too negative and carping a critic, forever chasing every parked car they come across, no matter its size or significance. If, on the other hand, the Leader of the Opposition is more balanced and prone to constructive criticism and promoting positive alternatives, they are seen as not up to the job of holding the government to account. It is the ultimate “no-win” job, and Mr Bridges is by no means its first occupant to have struggled with this dichotomy.

However, there are times when the Leader of the Opposition can make a positive impact and present themselves as more than just the perennial critic, and become a Prime Minister in waiting. Usually, these are times of some national crisis or disquiet, where people are seeking reassurance and certainty, or just a return to common-sense.

At its heart, politics is about trust. When trust goes, governments soon go too. Labour’s woeful mishandling of recent events will have shaken many people’s trust in the party and its leadership. Consequently, there was probably a moment in time – now most likely to have passed – where the Leader of the Opposition could have stepped into the fray and seized the high ground. But he did not do so.

Mr Bridges and National could have grabbed the moment to position National as the party that would deal with the increasing incidence of sexual abuse in large organisations. He could have backed this up by demonstrating good faith, and releasing for public scrutiny, with all the personal details withheld, the full record of National’s recent inquiry into its own internal culture to show that his party is serious about dealing with this issue. And he could have committed National to pushing Speaker Trevor Mallard to implement fully the recommendations of the recent Francis report on bullying within the Parliamentary Service and the Parliamentary complex generally. But he stayed silent. In any case, that moment has passed now, so picking up these issues at this point would seem clumsy and contrived. Instead, National is left flat-footed once more.

In the meantime, the Prime Minister has jetted off overseas again to the comfort of the international stage, no doubt seeking more of the international fawning and adulation she has come to enjoy. While she is away, the country has been left in the hands of her grumpy, irascible do-nothing Deputy. And the Speaker continues to seem more interested in protecting the interests of the Labour Party than making the Parliamentary complex a safe place for people to work in.

Meanwhile, business and consumer confidence levels continue to fall and the prospect of recession increases; suicide rates are climbing to abnormally high levels; housing waiting lists and shortages are at all-time highs; the numbers of students achieving NCEA credits are declining; overall dependency levels are rising; and, the government’s self-proclaimed “Year of Delivery” looks more and like likely to join Kiwibuild on the policy scrapheap. With just on a year until the next election, all of these are presenting a further round of opportunities for the Leader of the Opposition to assert himself and for National to step into the increasing leadership vacuum.

Bare dare we hold our breath waiting for him to do so?

The resignation of the President of the Labour Party over the sex pest allegations was inevitable. It was inevitable because of his appalling handling of the situation so far; and, because in situations like this where there has to be a “fall guy” it was better the President take the fall to protect the Prime Minister.

But, in reality, it changes nothing. The Prime Minister’s claim that it was only earlier this week that she became aware that the senior staff member suspended some weeks ago from working in her office was facing allegations of sexual misconduct is raises serious questions of itself, regardless of the President’s resignation.

This whole saga has been handled appallingly by the Labour hierarchy since the Youth Camp stories emerged last year, only to be followed by the allegations surrounding the person working in the Prime Minister’s own office. The original instinct seems to have been to deal with the whole set of matters “in house”, ostensibly to prevent further embarrassment and upset for those involved, and clearly to minimise damage to the Labour Party. All of which is perfectly understandable, and arguably defensible so long as the complaints of the young people concerned were listened to, and acted upon in a robust, fair and balanced process.

But here is where the problems for the Labour Party and now the Prime Minister began. There is no need to rehearse the individual allegations here – they have been increasingly well-aired in the general media – but the consequence of the muddled, confused and ramshackle way of dealing with them has left the individual complainants feeling further insulted and angry, and the credibility of Labour’s leaders  shattered. And now, the Labour Party increasingly appears, for whatever reason, to have resorted to an almighty cover-up, which it is now trying to keep out of the public eye. But, as the Watergate example so dramatically shows, it was not the original offence, nor even the cover-up of that, but the cover-up of the cover-up that ultimately brought down the President. 

The Labour Party likes to describe itself as one big family. Allegiances and friendships within the Party, and the connections that arise from them certainly run far deeper in the Labour Party than in most other political parties. Indeed, that common bond and sense of “we’re all in this together” have undoubtedly sustained the Party in some of its darker moments in the past. That, and the internal Party gossip it breeds, are generally positive features. Indeed, the informal camaraderie so engendered where everybody seems to know everybody else’s business is one of the things I look back on nostalgically as I reflect on my own previous more than twenty years’ membership of the Party. It truly is one big family.

All of which creates a real problem. The chronology shows that allegations of misbehaviour by the now suspended staff member were made to senior Labour Party officials in late 2018.  Following further allegations of sexual misconduct, a subcommittee of Labour’s New Zealand Council, the Party’s ruling body, convened in March this year to consider those. Its findings were considered by the full Council in June. Some time after that, the staff member was suspended from the Prime Minister’s office, and required to work from home.

Now, the Prime Minister is an ex-officio member of the New Zealand Council, and while she would not be expected (or indeed able) to attend all of its meetings, she could reasonably expect to be briefed by the President (and the Caucus representative, usually the Caucus Secretary) and other members on what took place at meetings she was not present at.  It would surely have been impossible to discuss these matters at the New Zealand Council without any reference to the sexual misconduct allegations, nor would it have made it any sense to do so. After all, that was what the subcommittee had been established to consider.

With a matter of this magnitude on their plates, it is simply inconceivable that the Prime Minister was not briefed about this time as to what was going on. Further, it is hard to believe that the Party President, the more than twenty individual members of the Council, and the Caucus representative were all unaware of the allegations against the Prime Minister’s staff member or resolved to keep her in the dark on what they actually knew. And then, having received the subcommittee’s report, and given Labour’s notorious propensity for gossip, that none of them sought even informally to tip off the Prime Minister. What did her close friend and confidante Grant Robertson know, and did he pass any message, however oblique, to the Prime Minister? Also, consider Speaker Trevor Mallard, who was only too keen to get involved in the Jamie-Lee Ross scandal to embarrass the National Party, and is a well-known sponge for political gossip. He seems so keen to protect the Prime Minister in the House, it is hard to believe he was in the dark on this issue involving a member of the Parliamentary staff, and did not pass on what he knew.

It is possible, but unlikely, that the Prime Minister was quite unaware what was going on. But interestingly, she  now says she attended the August New Zealand Council meeting to express her complete dissatisfaction at the handling of events. Moreover, she made comment to the media about that time hoping the Party had learnt from the Summer Camp scandal, implying by linking the two that she was well aware of the sexual connotations. 

And even if the New Zealand Council Members all maintained a remarkable silence throughout, it is hard to see how the matter was not discussed at the subsequent weekly meetings before Caucus between the Prime Minister and her President, especially once the person had been suspended from duty. Is it credible, given the Prime Minister’s earlier comments, and the mounting media interest to accept that the matter was not discussed by anyone, anywhere in the Labour Party at all? Was the Party President, a respected academic in his own right, that removed from reality not to have raised the specific information we now know he possessed with the Prime Minister? And how is it that the Prime Minister can say that it was only five weeks after the senior staff member’s suspension that she became aware there were sexual misconduct allegations involved? Presumably there were other serious reasons that led her to agree in the first place to the suspension of a valued senior staff member?

In short, none of this rings true. Either the Prime Minister has known the full picture for some time but, out of a weird sense of misguided loyalty to her staff member, has attempted to keep the matter within the Party rather than have it referred to the Police, where the whole story might come out. Or, everyone around her has deliberately conspired to keep her out of the loop so that the less she knows the better, which betrays a shocking lack of trust and confidence in her by those closest to her that all of us should be concerned about.

Whatever explanation holds water, this is the end of her Golden Weather as Prime Minister.   

    

About 80% of the legislation Parliament passes is non-controversial, and could just as easily be introduced by any government. Another 10% is controversial and more likely to arise from one particular government than the other, but is not so out of line that it will not be retained by the next government when it comes to office. Only the remaining 10% is so hard-line that it will not survive a change of government. Industrial relations, taxes, and some aspects of education and welfare policy are most likely to come into this latter category.

Essentially this means there is a large degree of continuity in New Zealand politics, which contributes mightily to our political stability. We are not prone to swings from one end of the spectrum to the other as different governments come to office.  All of which makes life difficult for the Opposition of the day, as it tries to define itself separately from the government, but without painting itself as too extreme to frighten off the potential voters it will need at the next election to gain office.

However, sometimes there are issues where the Opposition knows it is on the wrong side of public opinion or practice and that it has to change its position to have a chance of electoral success. So it was that the National Party adopted Labour’s Working for Families programme, and enhanced it in office, despite John Key once having derided it as “communism by stealth”. And why John Key, like Jim Bolger before him,  also moved quickly moved to shore up the nuclear-free New Zealand legislation, which an unsuccessful predecessor had pledged would be “gone by lunchtime”.

But there are limits to all this consensus building in Opposition. After all, it is pretty hard to argue that things would be different if the Opposition came to power, if they have spent too much time agreeing with the government on too many of the major issues. What would be the point of voting for them to get even more of the same than usual if they were to come to power? As always, the trick will be to know where the line should be drawn.

The National Party will be weighing up all these considerations as it finalises a position on the government’s zero-carbon legislation, currently before the House. Certainty, continuity of policy, and doing the right thing by the planet are strong and noble reasons to support the legislation, but National may calculate that such an essentially “me too” stance will not differentiate it sufficiently in voters’ minds (especially its farming core which still harbours strong doubts about the impact of too rapidly reducing methane emissions) to attract or retain their support, particularly if New Zealand First sniffs the same breeze and abandons the government on this issue.

National will also be looking closely across the Tasman at the strong sceptical stance the Morrison Government took on emissions and reducing fossil fuel reliance, and the electoral dividends that apparently paid in their recent election. Now that Judith Collins has put her stake in the ground opposing the zero-carbon legislation it is virtually certain that the consensus in its favour that was building up in Parliament during the last two to three years is about to be broken.

A similar situation seems to be occurring with regard to drug law reform. While there was never anything approaching a consensus between the two main parties on this issue, there had been signs earlier in the year that National might have been willing to look at the government’s ideas, vague and waffly as they have been, but National’s spokesperson’s increasingly critical comments suggest those signs have gone. Rather, National now looks likely to oppose cannabis law reform, and perhaps become part of the “no” campaign, which will make for interesting times if the referendum votes “yes”, but National comes to power after the election.

However, there are particular risks associated with National’s emerging position. It will have had to calculate very carefully its assessment of the potential political gains and losses, and it must therefore be assumed that in terms of its specific political advantage, it has concluded there is more to be gained than lost in adopting such an approach. Then, having rejected the current government’s plans, it will have to factor in what it will have to do about climate change and drug law reform, should it find itself leading the next government. It need only look across the political aisle at the rapidly increasing shambles that is the current government to see what happens when you come to power on the basis of a few slogans and no clearly thought out policy.

Time will tell the wisdom of National’s eschewing of consensus on issues that cut across traditional political boundaries, like climate change and drug law reform’ but it is certainly different from the approach most likely to have been seen from former Prime Ministers Jim Bolger and John Key. And they both went on to win three elections.

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Crank up the pipe organ! The superannuation merry-go-round is starting up again. In 2014 Labour proposed lifting the age of entitlement to 67 years, but National was opposed to it. But in 2017, it was National wanting to lift the age to 67 years, with Labour opposed. Now, National has revived that promise, and the merry-go-round is whirring into life all over again, promising everyone under the age of 48, at least a two-year longer wait until they can collect their New Zealand Superannuation.

Generations of New Zealanders have been adversely affected by superannuation changes since the infamous 25% surcharge imposed by Labour in 1984, and its even tougher replacement regime introduced by National after 1990. There was a brief period of truce following the uncomfortable Accord negotiated by the two big parties in 1993, more to get superannuation and their pitiable records off the election agenda than to provide stability and certainty for retiring New Zealanders. Finally, universal non-means tested superannuation from the age of 65 years was restored in the late 1990s, but almost immediately there began to be whispers about long term-affordability and sustainability, culminating in the two big parties returning to their old tricks in the last few years.

Neither seems to realise they have no credibility anymore when it comes to superannuation. So, every time one or other of them raises the prospect of changes to superannuation they raise also the spectre of their mutual historic duplicity, with the consequence that no-one believes what they have to say.

It is time to draw a clear line, and rule out once and for all any further tinkering with the age of eligibility. At the same time, to address affordability and sustainability issues, two other steps should be considered.

First, now that most New Zealanders of working age are in Kiwisaver, it is time to make that a compulsory national savings scheme, with minimal exemptions. Boosting people’s Kiwisaver accounts would reduce the long-term pressure on New Zealand Superannuation as the major source of retirement income. In turn, that would enable governments to consider whether, from about 2040 or 2045 onwards, the value of New Zealand Superannuation could be reduced for new retirees, while retaining universality from the age of 65. If, as a result of changing work patterns, the age 65 cut-off for Kiwisaver was moved upwards, moving the age of New Zealand Superannuation upwards in line with that could also be considered, but only at that point. 

At the same time, fresh consideration needs to be given to a scheme known as Flexi-Super to meet the particular needs of those who often do not enjoy long retirements – manual workers, Maori and Pasifika, for example. Flexi-Super is a voluntary scheme that allows people to take a reduced rate of New Zealand Superannuation from the age of 60, or an enhanced rate if they defer taking up their superannuation until the age of 70. In reality, that would mean those taking superannuation from the age of 60, would be paid about 66% of the full rate of superannuation for the remainder of their lives, and those waiting until 70 would receive about 130%. The scheme would not be compulsory, although once a choice had been made, there would be no option to review it.

The key point of Flexi-Super is individual choice. If one was unwell or utterly fatigued, the option of a lower rate of superannuation for what might only be a few years (and might not even be as far off as 65) would be very appealing, especially as there is virtually nothing for them at present.

Various polls have indicated Flexi-Super resonates with many New Zealanders, but three main arguments have been raised against
it, although none have a great deal of merit. The first is that it will have little impact on overall costs. By itself, that may be true to some extent, but if it was accompanied by compulsory Kiwisaver as proposed above, it would most likely see a steady voluntary increase in the uptake age of New Zealand Superannuation until around 67, thus reducing the long-term cost of New Zealand Superannuation.

Others say, that it would be politically unsustainable to tell someone who has opted for the lower rate of superannuation at age 60, they will remain fixed on that lower rate once they reach 65. That ignores the fact that they will have had an effective five-year advantage over those who wait till 65. Also, it has to be assumed that in reaching their original decision people would have been made fully aware of the long-term implications. People are used to having to make hard calls in life, and Flexi-Super would be no different. But it is only an option for people to choose, if it suits them, not a compulsory requirement. 

The third counter-argument is the most novel and comes from the Treasury. It opposes Flexi-Super because it sees it as an incentive for everyone to opt in on the lower rate at age 60, bank the money as essentially free money and then derive the benefit at 65 or whenever, of what they see as a tax-free government retirement subsidy. They overlook two obvious points; first,  in the most unlikely event their scenario were so, there would be no additional superannuation payable to those people from 65, so there would be no additional cost to the government, beyond what was paid out from age 60. And second, because people would be taking the discounted, not the full rate, of superannuation, the long-term costs to the government would actually reduce by about one third.

Compulsory Kiwisaver and Flexi-Super are the real superannuation issues we ought to be discussing and debating now, rather than scrambling back on the faded old inter-generational betrayal merry-go-round of ensuring today’s income earners continue to pay for their parents’ New Zealand Superannuation, with no lasting guarantee there will be anything  there for them when they retire. That is the most short-sighted and unsustainable of all positions.

    

  

At first glance, Simon Bridges’ strident opposition to the government’s proposal to establish an independent office to cost political parties’ election spending plans looks childish and petty.

The proposal, advanced by the Greens, not Labour, that there be independent scrutiny and corroboration as appropriate of the various spending policies put forward at election time has much to commend it. There has been too much peripheral debate over recent elections about the cost of policies being promoted, rather than their content. Steven Joyce’s discovery of a $11.7 billion hole in Labour’s proposed Budget at the last election, or John Key’s “Show us the money, Phil” taunt to Phil Goff in 2011 were great attack weapons at the time, but in the absence of independent verification voters were left none the wiser as to their accuracy.

A politically independent statutory office, able to verify or debunk such claims, to help resolve voters’ uncertainties about the veracity and accuracy of claims like these, would have been welcomed at the time. Ironically, and assuming such an agency genuinely understood the intricacies of government financing, it is more likely than not that its judgement would have erred on the side of the National Party in 2011 and 2017, making Mr Bridges’ current reaction that much more puzzling.

However, the government is not planning to set up such an independent body, with all the statutory protections it has spoken of, until 2021, meaning the first election it will workable for is in 2023. In the meantime, the government is proposing that the Treasury undertake the function for the 2020 election.

This is where it starts to get more difficult. Treasury’s recent conduct over this year’s Budget leaks has raised serious questions about its competence and judgement, as well as its ability to respond calmly under pressure. It was Treasury, after all, that erroneously stated the leak was the result of a deliberate hack by an external organisation – by its implications the National Party – when we now know the leak came about because of the Treasury’s own ineptitude in managing its website. The thought that this agency could presently be relied upon to provide accurate and impartial credible assessments of political parties’ spending policies is beyond belief.

But there is another reason why the use of Treasury in this way in 2020 should ring alarm bells. As a public service agency, Treasury’s primary role is to serve its Minister, the Minister of Finance, in the implementation of government economic policy, and to report and recommend appropriate actions to the Minister accordingly. Over the years, various Ministers of Finance, of all political hues, have sought advice from Treasury on the cost of proposed Opposition policies, which Treasury has provided as dispassionately as it can. But it has still reported to its Minister in the first instance, in the full knowledge that the information provided is likely to be used politically to advance, if possible, the interests of the government. Requiring Treasury to act in 2020 as an independent policy costing review agency, while still being required to serve the interests of the government of the day is neither possible nor tenable.

Nevertheless, the establishment of a genuinely independent review office would be an important step forward towards more credibility and transparency. Both Labour and National, as well as other parties, should have a genuine interest in and commitment to making this happen, sooner rather than later. They should be prepared to work together in a bipartisan way to make this a reality.

However, if it cannot be achieved in time for the 2020 election – and it is a little unclear why this seems to have been ruled out – the current apparent default position of relying on an interim, half-baked idea like using the Treasury in 2020 should be ruled out altogether. The suspicion is that were Labour to rule out the Treasury option, National would be much more willing to engage on developing a viable long-term solution. Far better to have a proper regime in place in 2023, even it means having to stay with the status quo next time around.

In that context, Grant Robertson’s hysterical reaction to Simon Bridges’ obstinacy looks equally childish and petty. But it does raise the question of why is Labour so hell-bent on using the Treasury this way in 2020, if the independent agency cannot be established before then? It is a chilly reminder of the government’s recent decision to transfer the power to decide government referenda questions from Parliament where it currently resides to the Cabinet, but for the 2020 election only. Are they coincidentally unrelated, or are they part of a wider, deliberate strategy to tighten control of the political environment to boost the government’s election prospects next year? Cabinet deciding referenda questions is one thing, but effectively empowering the Treasury to cost and report on other parties’ election policies is something else altogether.

If Labour and the Greens are genuine in their view that an independent budget review office is an important step forward, and not just a clever political stunt, then they should withdraw the Treasury idea, and focus on working across the Parliamentary aisle to bring the new agency together as quickly and robustly as possible.

Otherwise Simon Bridges’ hitherto apparently childish and petty comments will quickly be seen to be comments of substance and judicious warning. 

      

PHARMAC’s recent decision to fund two additional drugs from December this year has been widely welcomed by patients and the general public alike. The drugs, Kadcyla and Ibrance, are used in the treatment of advanced lung and breast cancers and will prolong and improve the quality of life of many affected patients who have been unable to afford them before now. Both drugs have been the subject of high profile campaigns from patients and their advocates who have long felt that the system has been too insensitive and slow to act upon their concerns. Against that backdrop, this recent PHARMAC decision was seen as something of a watershed.

The process by which PHARMAC decides which medicines to fund is rigorous and thorough, for obvious reasons, but consequently it is also very slow. Medicines recommended for funding by the Pharmacology and Therapeutics Advisory Committee (PTAC) can often wait months and in some cases years to be approved for funding by PHARMAC. PTAC is PHARMAC’s primary technical advisory committee and operates with an understandable sense of separation and independence.

Critics say that is a major part of the problem, and that a better model to follow would be that of Britain’s National Institute for Health and Care Excellence (NICE). They point out that once a drug has been recommended by NICE for funding it has to be funded immediately. As there is no equivalent to PHARMAC in Britain, it is the National Health Service (the NHS) that has to pick up the tab alongside all the other health expenditures for which it is responsible. As part of its decision-making process NICE does attempt to undertake some cost-benefit analysis and assessment of the cost–effectiveness of new treatments, but funding remains the responsibility of the NHS.

In New Zealand, where there has never been a very strong pharmaceutical industry, even in the best of times, mainly because of our small population size and distance from world markets, controlling the overall level of expenditure on pharmaceuticals has always been a major issue for governments. Until the late 1980s, there was no control; the prices demanded by manufacturers were paid unquestioningly, and the overall pharmaceutical bill was soaring. PHARMAC and its predecessor were established at that time to get some control of the level of pharmaceutical expenditure and the prices multinationals were charging New Zealand suppliers. It is fair to say that in the early years at least it went about its work with a vengeance and independence that successive Ministers of Health came to welcome, because PHARMAC, not the government, made all the difficult decisions, and took all the public opprobrium accordingly. PHARMAC was (and is still) effectively NICE and the NHS rolled into one. Ironically, one of the things other countries and their pharmaceutical agencies look admiringly at is PHARMAC and its independence.

Over the years, starting with the national medicines strategy, Medicines New Zealand introduced in 2007, there have been modifications to PHARMAC and its processes to make it more accountable to both patients and the pharmaceutical sector, although its autonomy remains its cornerstone. However, PHARMAC is still under no obligation to fund any medicine recommended by PTAC within a specific time frame, if at all. And governments generally choose not to intervene in the process.

While the Kadcyla and Ibrance decisions have been welcomed, they are by no means the only medicines in this situation. For example, Adalimumab was recommended for patients with ulcerative colitis in 2018, but is still awaiting a funding priority from PHARMAC. So too with Ustekinumab, another Crohns and Colitis drug, recommended by PTAC in early 2019 but still awaiting ranking by PHARMAC. And, as even a cursory glance at PHARMAC’s on-line application tracker shows, there are many other drugs in a similar limbo, affecting many other patients and conditions.

To deal with this, a government could decide to completely overturn the current system and revert to the previous system of just paying unquestioningly the prices multinational manufacturers demand for medicines clinically approved by PTAC. That would be as foolish as it would be short-sighted. So too would be the establishment of dedicated funds for new, innovative and expensive medicines, which the current government mooted but has now sensibly turned away from. Nor is it altogether desirable to be tacitly encouraging various high-profile and well-organised campaigns, however heart-rending and legitimate their cause, to be lobbying to be treated differently from everyone else. That just entrenches the unevenness and unfairness of existing policy.

What is needed is a much more fundamental consideration based upon sound epidemiological and clinical advice about the spread of medical conditions prevalent in New Zealand, both by age, gender and cultural groupings, and the range of medicines most likely to be needed in this country to deal with them. Then, armed with that information, which would almost certainly include all cancer and bowel related conditions, PHARMAC should be charged with developing a funding strategy to meet those requirements. In turn, the government would need to ensure that level of funding was made available and sustained into the future. The trade-off for any increase in spending on medicines would be the reduction in the need for more palliative services elsewhere.

Such a sharper and more strategic approach would ensure the focus was far more on providing people with the medicines they need, when they need them. It would be an incredible contrast to the current situation where pharmaceutical funding levels are incredibly ad hoc. The baseline has not been reviewed in years, and the increases that have taken place have been quite arbitrary, usually based on no more than what there is to spare in that year’s Health budget. There has been little evaluation of the efficacy of funding decisions to ensure the right people are getting access to the medicines they need and that those medicines have been effective. PHARMAC has been left to try to work incredible miracles, and then criticised when it sometimes fails to do so.

Without such a change of approach, the only resort available to desperate patients is more of the type of lobbying that preceded the Kadcyla and Ibrance decisions. It is demeaning, debilitating and unfair for people who are often extremely ill. And whatever else, it is no way to make sound clinical decisions about ensuring people get the medicines they need, when they need them.