Perception of changes in the pattern of New Zealand government spending Simon Kemp University of Canterbury

More in some areas… In NZ as in the UK the (labour) government has changed its spending over the last few years. Between , the govt spent 27.8 % overall (after allowing for inflation). But there was more on culture (+79.8 %), health (+31.6 %) and education (+31.2 %). Less on Unemployment Benefits (-60.4 %) and solo parents (-13.8%)

So what? So what has this extra spending done for NZ people? I look at two main questions: 1.Has anyone noticed the changes? 2.Has anyone noticed changes in the quality of different services?

Method 1 Sample of 47 students and 50 non-students. Overall 37 men; median age of students in range 15-24; non-students Single questionnaire asked 4 questions about each of 8 government services, overall spending and overall tax take. Also asked for political party supported.

Method 2: Key questions 1.What change do you think there was to the amount of government spending on each area in the five years between 2002 and 2007? (after inflation; % requested). 2.What change in quality of the service in each area do you think took place in the five years between 2002 and 2007? (% requested). 3.What value do you think New Zealand gets from government spending in each area? (Scale 0 to 10). 4.Have you yourself made use of the service in the past twelve months? (Yes/No)

The key results RealMedian Est. Participants Median Est changeSpend less than realQualitySpend ( %)(%)(%) (%)($ mill) _____________________________________________________________________ Unemployment (0, 20)00 (0, 15) 615 DPB (0, 20)20 (0, 15) 1,467 Superannuation10.27 (0, 15)660 (0, 10) 6,807 Defence16.40 (10, 10)800 (-10, 5) 1,533 Education (0, 20)955 (-10, 10) 9,622 Law and order (0, 25)950 (-5, 10) 2,235 Health (10, 25)925 (-10, 15) 10,486 Culture79.85 (0, 15)1005 (0, 10) 884 All Expense (10, 30)695 (0, 15)53,283 All tax (5, 25)7852, 938 _____________________________________________________________________

First answers Has anyone noticed the changes? No Do people notice a quality change? Not much Overall, people saw significantly more increase in spending than they did in quality. Individual differences: Two effects of gender (unemployment spending; culture quality). Students saw a few more spending (unemployment; superannuation) and quality (health; unemployment; overall) changes. Not one difference between government & opposition supporters.

Correlations 1.Generally people who saw a an increase in spending saw an increase in quality. (E.g. Education  =.54; Health  = 0.40). 2.Some tendency for people who valued a service highly to see more spending and more quality increase in that area (e.g. Education spend  =.23; Ed quality  =.30).

Does it matter if you have used them recently? Difficulty in that some services were recently used by very few people (e.g. superannuation 6/97; defence 8/97; solo parent money 4/97; unemployment benefit 3/97). Three significant differences between users & non-users: Unemployment benefit. Those who used saw a median 10% decrease in quality; non-users saw no change. Health. Users (n = 56) saw a greater median increase in spending (22.5%) than non-users (n = 41; 10%). Users saw a greater increase in quality (10% than non-users. (Results with those close to you produced fewer differences than this.)

Conclusions Obvious first one is that this has been a colossal waste of money. Possibly because the money has gone into administration rather than service. “The Government has built a "Rolls-Royce" public sector, sinking more money into its departments than directly into New Zealanders, and needs to rethink its spending, according to an ANZ economist.” (Cameron Bagrie, The Press, 10 July, 2008.) Some evidence that education (though not health) spending has gone into bureaucracy rather than teaching.

But … 1.Overall quality perceived to be slightly better. 2.What % increase in quality (perceived or real) would you expect for (e.g.) a 25% increase in spending? 3.If you don’t use it, how would you know? The users of the health services did perceive more change. 4.Correlation between quality and spending change. People don’t perceive waste.

A question The government increases its spending on health by 31.6 %. Non-users notice nothing. Users notice a median increase in quality of health services of 10%. Is it worth it?