While the government is in the mood for breaking up failing conglomerates like the supermarket duopoly, it should consider doing the same to one of its own largest agencies – the ubiquitous Ministry of Business, Innovation and Employment. MBIE was supposed to be the government’s go-to department, but nearly everything it gets involved in ends up turning to dust at some stage.
It
was MBIE that devised and managed the cumbersome, draconian MIQ scheme during
the Covid19 lockdowns. It was MBIE, rather than the expert drug buying agency
PHARMAC, that oversaw the Covid19 vaccine procurement process which left New
Zealand one of the last countries in the world to get the vaccines, despite
then Minister Megan Woods’ promise that New Zealand would be “at the head of
the queue”. Apparently, although the orders may have been placed early enough, MBIE
failed to ensure payment in advance to ensure stocks were supplied, a mistake
PHARMAC would never have made.
Now,
MBIE’s influence appears to have expanded to include judging the value of
international events. Its unwillingness to support Auckland Council’s proposal
for a bed tax to fund the next America’s Cup defence in Auckland in 2027 seems to
have been a major influence on the government deciding not to get involved, and
the Cup defence being forced offshore again.
But
this is not an isolated case. In recent years, New Zealand has lost the hosting
rights for other international sporting events, from the Netball World Cup to
the Wellington Rugby Sevens. It is now hard to imagine New Zealand ever hosting
a Commonwealth Games or Rugby World Cup series again.
In
March 2024, Deputy Prime Minister Winston Peters blamed what he called “overly
influential bureaucratic processes, power-drunk government departments, and
some decision makers who care more about their fiefdoms than our country’s
economic development and international reputation” for these decisions.
Auckland Mayor Wayne Brown has suggested the government’s failure to support a
visitor bed levy for Auckland to help fund an America’s Cup defence could cost
it the next election.
Meanwhile,
the government’s political defence of the decision not to provide the estimated
$75 million necessary to support a Cup defence in Auckland has been
predictable. “There is no magic money tree” says Finance Minister Nicola
Willis. “Our priority is New Zealanders’ needs”, she adds, citing schools,
hospitals and the cost-of-living. And, drawing on unspecified MBIE advice, she
“doubts” the projected $2 billion economic boost that a Cup defence in Auckland
was projected to provide. But the $75 million that was sought for the projected
America’s Cup defence is a small drop in the government’s bucket, around 0.5%
of its annual expenditure, before any economic gains are considered.
The
decision also likely sounds the death knell for the Eden Park upgrade. The
Prime Minister has already made it clear that the government is unlikely to
fund the estimated $110 million needed to upgrade Eden Park. That will further detrimentally impact our
capacity to host international sporting events. Yet taken together, the
economic benefits over time from the America’s Cup and upgrading Eden Park would
have far outweighed the one-off costs.
All
this comes barely a couple of weeks after the government’s vaunted infrastructure
summit where the Prime Minister and the Minister of
Finance boldly asserted that New Zealand was open for business again and was
actively seeking international investment partners for infrastructure
development and significant events.
Both
the failure to fund the America’s Cup defence and the upgrading of Eden Park send
unwelcome signals about how receptive the government is to be doing the types
of deals necessary to bring projects to fruition. Both are good examples where
the collaborative investment approach the Prime Minister was so earnestly
preaching at the summit could have been applied to overall national benefit. Moreover,
the apparent failure to embrace these opportunities does not bode well for
possible future infrastructure investment partnerships getting off the ground.
All
of which comes back to the “bureaucratic processes” and “power-drunk government
departments” Peters was complaining about a year ago. Implicit in those
comments was a criticism of the monolithic power of MBIE to stifle development
opportunities. There may have been logic at the time of MBIE’s formation in
bringing together a key range of government functions as a type of one-stop
shop to facilitate progress, but MBIE’s consistently cumbersome and myopic
approach, on a range of issues over time, has had the opposite effect. It is not up to the task and needs to be
broken up.
To
ensure New Zealand does not become a backwater for international sporting and
related events, the government ought to establish a stand-alone independent
specialist agency to work on both securing such events for New Zealand and the
public and private funding required for them to proceed. After all, our country
continues to produce the best sports performers in the world across a vast
range of sports and cultural activities. We ought to be able to see them compete
here, rather than watching their overseas performances in the middle of the
night.
But
so long as MBIE’s narrow-minded influence holds sway, that will remain the best
New Zealanders can look forward to.