Published in The Spinoff, 24 February 2017
Adrian Orr’s 23% salary increase has been decried by everyone from the PM down. But Orr is no ordinary public service boss: he’s a savvy corporate investor, responsible for truly remarkable returns. His salary should match that reality, argues Peter Davis.
Through the early 2000s both Australia and New Zealand enjoyed good times, thanks to iron ore and dairy – black and white gold – respectively. While the former rewarded its populace with tax cuts and now faces a $40 billion annual deficit, the latter conserved its surpluses, allowing the government of the day to hand a tidy set of books to its successor. After buying back the national airline and railway, creating an indigenous bank, splitting Telecom and establishing Fonterra, it invested those surpluses in, among other things, comprehensive early childhood education, a family support package – and a sovereign wealth fund (otherwise known as the Cullen or Super Fund), an entity already present in other small economies like Norway and Singapore.
The Super Fund is an embarrassment to the present government. It is everything that the current government is not: imaginative and far-sighted. It involves investing surpluses rather than handing them back as tax cuts, it represents asset building rather than debt accumulation, it does not require cuts to public services, and it tackles a big future policy question (how to fund Superannuation). More than that, it represents successful public enterprise of a kind we rarely see in New Zealand. And it has received no assistance from the current government, such as investment of surpluses. Read more
Chair of The Helen Clark Foundation, an independent public policy think tank.