Did ANZ-National attack the public service?
Posted July 11, 2008
on:It appears that the Standard is unhappy (*) (*) (*) with the ANZ-National piece on government sector spending (*).
Now the criticisms of the ANZ-National line appear to be:
- Its only a 4 page insert in there weekly report,
- The definition of backroom and frontline is self-serving and wrong,
- The report relies on the belief that all spending on backline staff is waste.
I can understand the Standard’s irritation at some of the headlines that have been taken from the piece – but nonetheless I feel that their criticisms of the actual discussion that ANZ provides are off the mark, here’s why:
It’s too short
I get the feeling that the insert was merely a summary of work that ANZ-National has been doing for a long time – but currently are not willing to release (as they don’t want to alienate people). As a result, I don’t see this as a fair criticism of the quality of their work.
Conversely you could say that important elements are missing because they had to shrink their work down to 4 pages – however, reading through the piece I felt that there underlying point they are trying to prove is will illustrated, namely that:
more attention needs to be paid to where money is ending up.
The report is asking Treasury to increase the transparency associated with government spending – an issue I heartily agree with, but doubt any government would be willing to implement.
The definition of backroom and frontline staff is inappropriate and they believe that backroom staff are a waste!
In a standard economics sense the definition is perfect. Frontline staff are the ones that face the customers and “directly” create value. Backroom staff only increase value indirectly by increasing the marginal product of frontline staff – this is a standard way of viewing firm or government department structures.
I do think they should have been a bit more careful when discussing backroom staff – they did make it sound a little like that type of worker does nothing. However, there analysis does treat backroom staff appropriately.
On top of this they assume that the marginal product of backroom staff diminishes a lot more quickly than that of frontline staff – a relatively fair assumption when you think of other similar types of organisations (eg department stores). Fundamentally this implies that a firm, or government department, does not need to increase supervising/backroom staff as quickly as it does frontline staff when increasing services.
Now given these assumptions they discuss where new funds are relatively being directed. They have found there has been a bias towards backroom staff over the past few years. You can defend this by saying that the public service was previously understaffed – but it doesn’t make the measure inappropriate.
Conclusion
I feel that the main purpose of the ANZ-National statement was to say “hey, Treasury, give us some more transparency surrounding fiscal spending”. In this sense I agree.
If Treasury could do this, and provide measures of how the current and forecast fiscal stimulus might impact on the general economy (namely through inflation), the public would have a much easier time trying to figure out whether the government of the moment is really focusing on the economic goals that it is discussing.
9 Responses to "Did ANZ-National attack the public service?"
When you consider that non-productive ‘back-room’ spending in the report’s interpretation includes special needs teachers, call centre staff, and soldiers amongst others that one would clearly not consider ‘back-room’ (the silly definition includes anything that comes under ‘departmental funding’, in fact), I think we can begin to see that’s it’s a pretty dodgy piece of analysis.
And, of course, it’s only the service deliverers who are actually delivering the service but back-room staff increase their productivity, and there is no examination in the report as to whether or not increased spending on back-room staff has helped boost output and whether more output for the same resources coudl have been gained by a different mix of increased spending on frontline and back office staff. Look at the report – it just assumes all frontline spending is infinitely better than any backroom spending. It’s stupid.
Matt. The report includes all ‘departmental’ as opposed to ‘non-departmental’ spending as backroom, but Mallard pointed out a number of examples this morning on RNZ of departmental spending on frontline operations – including the ones I cited.
If that was the goal, then I say far enough too, but all the ‘analysis’ in the report, based as it is on these self-serving definitions of ‘good’ frontline spending and ‘bad’ backroom spending, has nothing to do with that goal, and it’s just fuel for people who do want to attack the public service – like our mate BS.
[…] A Treasury created measure for analysing the quality of government spending (as suggested by ANZ), […]
1 | Lynn Prentice
July 11, 2008 at 10:00 am
I think that the definition of what is ‘frontline’ staff is a bit limited.
For example if you look at the banks themselves, the number of frontline staff has been diminishing markedly over the years. The frontline has been steadily diminishing because more of the information has put on to the web. I seldom go into a bank except to put PIN numbers on cards. The frontline now effectively includes the people who deal with my BankMail on the website, the people who add functionality to their website to allow me to put direct payments without even talking to anyone, the people I talk to to organize cards and loans, etc.
Yet by Cameron’s analysis these would not be ‘frontline’ staff. Yet they provide direct service.