Resilience — not just an economic matter

As global economic events get bumpier, Bill English is getting fonder of economic “resilience”. But that requires more resilient strategic policymaking.

Top of mind in the economy is the dairy crash.

John Key airily said early this year that what went down last year would go up this year. Instead it has plunged more. Now some economists talk of “recession” — qualified by “possible”, true, but a word nowhere to be heard six months ago.

One bother for Key-English in the dairy debacle is the flow-on in regional economies and through them elsewhere in the economy, eventually to households.

At election time a year ago New Zealand was floating politically on an ocean of milk. Not now.

The other bother is debt. Banks — one in particular — have a lot sunk in dairy farms. How long and for how many farmers will the banks be able and willing to keep loan lines open?

Debt has been building in Auckland, too — on houses. Steeply.

Debt can be enabling, at a personal level and in companies wanting to expand output. But too much can be hobbling –- and can sink the debtors, as Solid Energy found and private punters in China’s government-pumped stockmarket bubble did, too.

In February the McKinsey Institute calculated that total world debt more than doubled in all four categories — household, corporate, government and financial — between 2000 and 2014 as a percentage of global gross domestic product.

How far this rise can go before there is a shock or a chain of shocks no one knows. But history suggests “when” is a more appropriate word than “if”. And then our economy and the society it serves will need plenty of English’s “resilience”.

That points up the relevance of a public service initiative started last year called the policy project.

This focuses on system leadership, people capability, policy products and services and policy leadership. It does not do strategic thinking but aims to build capacity in the public service to do that thinking.

A sinking lid on numbers has encouraged promotion of policy people instead of recruiting new talent. So there are disproportionate numbers of senior analysts, some (many?) not worth their pay, and too few juniors to do the groundwork.

Key policy project participants are “tier 2” people — deputy chief executives who run policy. Some have been doing some strategic forward thinking since ministers last year relented on their 2009 ban on strategies.

This fits into the need Key’s third-term cabinet has for something to lift people’s minds above the dairy crash, regional disparities, inequality and squeaking health system wheels.

With an election just two years away, ministers need to appear strategic so voters might get a sense they are not just a government of nine years past but one charting a future.

For that ministers need some visible action. And quick.

Urgency breeds frustration. English has been heard shouting at public servants who are not yet generating the sort of multi-agency, “customer-focused” data analysis and programmes he wants in order to transform the cabinet’s targeted and mostly still rudimentary “results” into real and lasting changes in individual and social conditions — “outcomes” in the jargon.

Some around the public service sympathise with his frustration.

These people see more process than ideas for palpable action. They see formulaic rigmarole and aversion to risk (of upsetting thick or opinionated ministers or the public). They see a habit of generating tortuous, multi-litigated and multi-iterated reports and papers.

They see some chief executives focused on their fiefdoms and leaving to the lead department the multi-agency, multi-level collaboration needed to effectively address complex issues.

All this suggests a need for new-generation thinking and energy to fit the government into today’s hyperglobalised and hyperdigitising world.

The policy project invited 64 “early career analysts” for a session which generated a lot of ideas for better career paths and policymaking. There are plans to build on that.

There is a stocktake of the 2011 “better public services” project to find where it has not yet delivered on its promises of higher quality management and policy.

And a change trialled in places last year will go ahead. Significant budget bids now need an evidential tick from Sir Peter Gluckman’s panel of departmental chief science advisers drawn from outside departments and the old policy tracks.

Some hard-bitten officials scoff. But grumpy third-term English means it. Some departments who don’t have chief science advisers are scrambling to find one.

Will the initiatives help make our economy and society more “resilient”? Will they encourage open-minded, open-ended (young?) thinking? Will they find a way round the Treasury’s habit of relitigating significant new policies from what it thinks are first principles?

We shall see. Or not, if rigmarole and timidity win. Then the message to citizens might be: resilience starts at home.