The Case for a Non-Commercial Public Broadcaster

The Government recently established a working group to look at the possibility of establishing a new public broadcasting entity. At present Radio New Zealand (RNZ) is almost the only agency that adheres to a public broadcasting mandate largely free of commercial imperatives. Television New Zealand (TVNZ) is in public ownership, but in all but name it runs like a standard private television station, with slightly less of the brashness of its commercial counterparts.

So, why go to all the trouble of even considering a public broadcaster when the proposed melding of the disparate cultures of RNZ and TVNZ is running into opposition, the last attempt to graft public broadcasting values on TVNZ in the 2000s failed, other experiments such as TVNZ 6 and 7 were closed down with a change of government, and there is likely to be little new money for a venture of this kind?

There is a strong case for a free-to-air, non-commercial public broadcaster and online media outlet. This case needs to be renewed in the light of the dramatic technological developments of our era, the strengthening of cultural and commercial globalization, and the hints of a deepening political polarization anchored by social and mainstream media, all of which have occurred since “state broadcasting” was first initiated a century ago. This case rests on three arguments.

First, we need to re-establish and protect a free-to-air-and-online “commons” that is non-commercial and inclusive and that can nurture searching and even-handed journalism alongside opinion, controversy, and cultural exploration. What we are seeing in social (and increasingly in mainstream) media is an algorithm-driven business model where companies establish and feed increasingly distinct and separable market segments with content that builds the loyalty and activity of those targeted audiences.

The social media companies have gone the furthest with algorithms that develop and deliver market segments of opinion and related buyer and audience habits. This is a commercial imperative in a competitive environment, and no amount of handwringing about its unfortunate consequences – antagonistic opinion bubbles, the purveying of “fake news”, the fanning of conspiracy theories – can alter this direction of travel. The best that can be hoped for is to mitigate the worst consequences. The Helen Clark Foundation has contributed to public discussion about how this can be achieved both domestically and internationally. Public interest media was flagged as a key measure through which governments can counteract polarisation.

Mainstream media is not immune to this in New Zealand and elsewhere as loudly-expressed opinion increasingly comes to crowd out even-handed journalism, and journalism itself is tending to be dominated by hyperbole, stridency, and emotive impact.

Second, we need to protect New Zealand’s “cultural sovereignty” against an onslaught of brilliantly-crafted films and shows produced by the overseas streaming giants such as Netflix, YouTube and Discovery. Increasingly the sheer technical and cultural virtuosity of these behemoths threatens to overwhelm our puny resources. Aside from a continuing and brave series of documentaries on RNZ, the likes of Country Calendar on TV1, and Māori TV’s coverage of ANZAC day, it is a long time since I have seen a broadcaster help New Zealand to tells its own stories in a compelling way that could compete with the overseas tech, film and media giants, despite the efforts of New Zealand On Air.

Finally, there is the consideration of “soft power”. This might seem pretentious for a small country in the South Pacific, but “Brand New Zealand” and our distinct cultural and political mix are points of difference and interest internationally that play to our advantage. New Zealand should not be apologetic about telling its story and projecting its image in its immediate neighbourhood.

How, then, could we structure and fund a multi-platform but unified non-commercial public broadcaster and online media outlet from our current ingredients? TVNZ 2 should remain a commercial SOE and generate an income stream for the public broadcasting and online entity. New Zealand On Air needs a boost in funding from a digital advertising tax on the tech giants that have sucked much of the advertising base out of the New Zealand media. With that, it could take the ABC across the Tasman as a possible model of a combined radio and TV entity and expand its public broadcasting brief from RNZ to progressively incorporate the main components of TVNZ 1.

We might find that a TV-enhanced and suitably modified multi-platform mix RNZ has developed works well across the entire merged organization as it helps New Zealand to establish an inclusive commons where we can tell our own stories, conduct a national conversation, and hold a mirror up to our increasingly diverse and vibrant society, leaving plenty of room for the domestic private sector as well as the overseas streaming, broadcast and social media giants that otherwise threaten to overwhelm us.

Peter Davis

Chair, The Helen Clark Foundation

Social Democracy and the Healthcare System in New Zealand

The New Zealand Labour Party (NZLP) was formed in 1916 by a coming together of various socialist parties and trade unions. It did not achieve power until 1935, and held office for its longest term at that time through to the late 1940s. It has always been strongest in the urban areas and its early leaders were of migrant stock (Australian, Scottish, English).

While the party had its roots in the labour movement and even to this day has affiliated blue-collar unions, it forged an alliance with the indigenous, Maori, people of New Zealand in 1936 (an alliance that has mostly lasted the test of time), and it has increasingly become a social democratic rather than a specifically “labour” or “democratic socialist” party as it came to rely on women, the young, liberal urban professionals, and public sector workers for electoral success.

This trend was reinforced by the introduction of proportional representation in 1996 modelled on the German system of Mixed-Member Proportional (the biggest electoral change since universal suffrage was provided to women in 1893 and seats set aside for Maori in 1867). This electoral innovation completed the movement of the NZLP from a broad-spectrum left-of-centre party to one closer to the centre with the Greens to its left and the conservative National party mirroring it to the right-of-centre.

The First Labour Government entered office in 1935 headed by Michael Joseph Savage, a miner, labourer and trade unionist of Australian stock. He and his colleagues are seen as architects of the foundations of the modern welfare state, including the healthcare system. The party campaigned on the introduction of the Social Security Act in 1938 which provided, for the first time in New Zealand and possibly the world, comprehensive social security support, including unemployment, pensions, child benefits – along with university health care which provided free hospital care, doctors’ visits, medications, and other health benefits. This was paid for by an increase in income tax.

The key features of the New Zealand healthcare system are free care in public hospitals, subsidized care for access to family doctors who deal with 90% of medical encounters and control referral to hospital, and subsidized care for access to specialists. There is also a universal school dental service staffed by non-graduate dental therapists founded in the 1920s, and a comprehensive injury care, rehabilitation and compensation system that grew out of workers’ compensation in the 1970s and is funded by a levy on workers and employers. Finally, New Zealand established a drug subsidy agency in 1993 that negotiates with pharmaceutical companies and has managed to reduce prices to half their normal market level. Most New Zealanders pay a nominal sum for medications dispensed by the pharmacist.

It should be noted that many of these innovations were introduced “across party lines”. Thus, the school dental service was introduced in the 1920s by conservative parties, but has stood the test of time under different partisan governments. The injury system – called Accident Compensation – was founded following a commission of inquiry under a conservative government, but founded in 1974 under the Third Labour Government, led by Norman Kirk (the first New Zealand-born NZLP leader). Finally, the drug subsidy agency (PHARMAC) was introduced under a conservative government, but maintains support from “both sides” of politics, in part because of the enormous savings it makes.

There are two areas where a social democratic government makes a real difference – maintaining the funding base for the healthcare system so that it remains universal in coverage rather than being privatised by degrees, and instituting preventive, public health initiatives that are opposed by the relevant industries that produce harmful outcomes and products (tobacco, alcohol, food, beverage, and also environmental effects, for example from farming and other activities).

For example, in 1999 the National government opened up the injury system to private insurers, a move that was reversed when the Fifth Labour government came to power that year. While superficially an attractive prospect, private insurance was going to cost much more and the criteria they applied to avoid payments was going to lead to a steady decline in benefits. Similarly, the National government of 2008-2017 steadily, but subtly, ran down the health system such that the incoming Labour/New Zealand First coalition government in 2017 had to inject large amounts of funds into the system to prevent its erosion. The NZLP has also opposed tax write-offs for private insurance cover. Again, a superficially attractive initiative; however, it benefits the more affluent and requires subsidization from the taxpayer to maintain its viability (this has been the Australian experience).

The picture on preventive, public health policy is more mixed. In 1990, the last year of the Fourth Labour government, the Minister of Health, Helen Clark, introduced the Smoke-free Environment Act which protected employees and public spaces from smoking. This was not repealed or weakened by the incoming conservative government. All tobacco sponsorship was also bought out and banned. The Fifth Labour government led by Helen Clark from 1999 to 2008 introduced nutrition and other initiatives in schools, but not much has been done to tackle the issue of obesity, against industry opposition and possibly a lack of public support. Similarly, with environmental hazards and climate change, the current NZLP government led by Jacinda Ardern, has moved slowly as it tries to bring public opinion with it against opposition from industrial interests and the National party.

What are the lessons? Some factors are specific to the New Zealand experience. For example, the Great Depression of the 1930s provided the radical fuel for a major initiative such as the Social Security Act of 1938. That said, many of these features of the welfare state are now advocated by technocratic organisations such as the World Bank. No developed country can now do without a version of unemployment insurance and pension schemes, and the concept of universal health coverage is accepted around the world. Thus, initiatives that were seen as radical in the 1930s have become basic building blocks of modern, well-governed societies, although they can still meet major opposition.

More important is establishing the long-term sustainability of these systems, with funding that has wide public support and that is seen to be efficient, fair, and sufficient. The fundamental fairness of the universal principle in health care can be accepted by almost all social groups, regardless of cultural background. However, maintaining these systems against tax-cutting conservative governments is harder. For example, the incoming NZLP/New Zealand First government of 2017 had to commit to reversing the tax cuts promised by the previous National government in order to protect basic public services, particularly health.

In New Zealand healthcare has proved to be part of the menu of policies that the public expects of a social democratic government, along with education, jobs, and other public services. Conservative governments also pay lip service to these features of a modern, civilized society, but actually work to erode and undermine them in subtle ways. Harder to advance has been the public health agenda, since here one can come up against public opinion as well as major industrial vested interests.

It has been estimated that 80% of health status advance comes, not form healthcare, but from the broader policy mix one expects of a social democratic government; namely, good education, a higher standard of living, urban sanitation, housing access, and public health. So, yes, progressives should advance the cause of universal healthcare, but they should also see it as part of a broader social democratic agenda that one comes to expect of a modern, civilized, and caring society.

Peter Davis

Chair, The Helen Clark Foundation

and Emeritus Professor, University of Auckland, New Zealand

This article was published in May 2021 in the Social Democracy Asia Journal. You can access the entire May issue of the journal.

Will the proposed health changes make a difference in Auckland?

Will the proposed health changes make a difference in Auckland? The short answer is – no; unless, the proposed commissioning (contracting and funding) powers get to be located at the level of the region rather than the centre, and unless those same powers stretch right across the funding spectrum to include not just hospital services but all those services delivered in the community by health providers and NGOs, many of which – such as Plunket and midwives – operate autonomously.

 Auckland is host to competently-run public hospital services that, partly as a result of COVID, are increasingly working, with Northland, as a regional network – as envisaged in the proposed health changes. Auckland is also host to two of the most significant networks of providers of general practice services, with ProCare run on professional lines with 200 practices and Tamaki Healthcare a corporate with nearly 50 clinics. Again, these are consistent with the proposed health changes.

With the abolition of the District Health Boards (DHBs), the centre of gravity in Auckland and Northland inevitably moves to the regional level. Furthermore, as the management of COVID in Auckland shows, organizing a regional system from Wellington can produce unforced errors and shortcomings that, with media amplification, very easily become an embarrassment to central government.

The argument for a regional presence in Auckland, advised by local stakeholders including Maori and Pacifika, is therefore a strong one. But it would be a missed opportunity if it were left to the current regional actors in hospital and primary care services, competent and well-tested as they might be.

If we had a properly-resourced regional commissioning agency, it could make quite a difference to the shape of hospital services. We might use hospital facilities more efficiently (including at weekends), such as expensive theatre time, equipment and beds, instead of building and buying new capacity. The trend towards fewer in-person outpatient and other visits in favour of contacts conducted virtually would hasten. There could be a greater blurring of some technical roles and a determined attempt to work with the educational sector on more flexible personnel. Much more “hospital work” could be done at home and with family doctors. These is the potential.

But by far the greatest possibility comes with non-hospital services. Under the existing model, rather than the “health” in the DHB moniker leading to a liberation and empowerment of non-hospital services, it instead disguised the fact that these services were overshadowed by the almost exclusive focus of management on effectively running their resource-intensive hospital services. By putting hospital services exclusively back under management control as they were in the 1990s, the non-hospital sector has “got out from under” and has a better chance of flourishing.

There are three challenges that primary and community care need to meet: integration of care between the current multiplicity of providers and funders; “levelling up”, so that we can bring up levels of service provided to lower socio-economic and other disadvantaged groups to match those currently enjoyed by more affluent suburbs; and keeping people out of hospital with sound after-hours cover, prevention of treatable hospital admissions, and early intervention for a range of conditions like diabetes that threaten to get out of hand. A regional commissioning agency prepared to add payment-for-performance criteria to standard methods could, over a period of years and with central government support, make a difference in these areas.

There will still be an important role for the new central health agency, Health New Zealand. For example, we might finally get a seamless IT and digital infrastructure that can replace our current patchwork with a national system that serves in real time anybody, anywhere, regardless of condition and provider. We will also, with Health New Zealand, have a coordinated national programme of capital investment, workforce development, specialist networks, and screening services across the spectrum.

There is a good chance these regional and national initiatives could draw bipartisan support.

What will we not get with the proposed health changes? We are unlikely to get marked improvements in life and health expectancy, particularly for the most disadvantaged. That requires vigorous public policy on housing, income maintenance, education, job safety and security, and public hygiene and environmental standards. It also requires a public health response that goes well beyond the proposed public health agency to tackling the drivers of disease from the food and beverage industries in the consumption of tobacco, alcohol, sugar, saturated fats, salt, fast foods and so on.

Also, with the proposed health changes, we will not get an end to shortage of service and unmet need. The demand for health care is hard to satisfy, and we will never have the supply to meet it fully. That is something that will not change, no matter who is in charge.

Peter Davis

Emeritus Professor in Population Health and Social Science, University of Auckland.

Maori leadership needed on health equity for all

John Tamihere reminds us of the ways in which Maori are disadvantaged in our current health care system. Each one of his examples in his Herald article strikes home as a real failure. They resonate with me, both as an academic who has studied health services and health policy for a long time, and as a current elected member of the Auckland District Health Board (ADHB).

The argument John makes is a powerful and persuasive one, but, from my experience of the ADHB, one could largely have substituted Pasifika for Maori and come up with a similar story of failure and disadvantage in the health care system. That is why the senior management and planning staff at the ADHB, with the support of the Board, have developed an equity agenda that encompasses both Maori and Pasifika, on the reasoning that these two groups share not dissimilar circumstances of disadvantage.

Then, to draw a fuller picture, one should also include those in the bottom two quintiles of our socio-economic structure, regardless of ethnicity. Those in that demographic are severely disadvantaged in similar ways, regardless of ethnicity. That is why DHBs have a special loading in their allocation from the Population-based Funding Formula that takes account of the proportion of their population that is in that demographic, alongside Maori and Pasifika. Overall, then, this is a story about people with limited voice and power trying to get a system to respond to their needs, and with the system trying through a number of mechanisms to respond.

Our welfare state system, inclusive of health and social policy, designed in the 1930s, operates on the principle that people in need, regardless of ethnicity and socio-economic status, should be served according to their requirements, whether that need be housing, income, education, or, in this case, health care.

The problem is that the system continues to fail in many of these respects, and Maori, among others, have borne the brunt of that. Let us remember that we are just emerging from the aftermath of a decade in which more state houses were sold than were built, benefit levels remained mostly unadjusted, low-decile schools didn’t get the support they needed, and the funding of the health care system was steadily eroded.

In other words, while the concerns of Maori are long-standing, they have also been exacerbated in the period since the Global Financial Crisis by a failure to maintain key features of the pre-existing social contract between the State and citizens.,

The Treaty of Waitangi governs the relationship between Maori and other New Zealanders. In the design and delivery of and access to health services, it must be taken into account. The Government’s proposed health changes are a chance to rectify the failures in health care, for Maori and or others who are disadvantaged.  Maori will be the vanguard of the change through the Maori Health Authority, but let the kaupapa be one of “leave no one behind”, “levelling up”, and “lifting all boats”.

The coalition of those who support the public health system can at times be fragile. Removing Maori from that coalition weakens it. For example, Ngati Whatua appear to have given up on the failings of the current system by signing up for comprehensive private insurance cover. That is understandable in the circumstances, but Maori leadership on the wider equity agenda across our health and social services is vital. That way we support not ‘separatism’, but solidarity and unity. We are all in this together.

Peter Davis,

Elected Member, Auckland District Health Board 

and Emeritus Professor of Population Health and Social Science,

University of Auckland 

Everything to play for in health reform announcement

There is everything to play for in the announcement of the long-waited health reform package by the Minister of Health, Andrew Little.

The announced structural outline is best seen as an enabling framework that, with good will, political and operational acumen, and sufficient funding, will in time flesh out a reconstructed health system that, while it builds on existing elements, is also a bold, new departure.

There are elements here that echo past reform initiatives.

  • A national health system. This was the centre piece of the Third Labour Government’s proposals in 1975 but never implemented. We will have it now, but in a less bureaucratic form. Its peak body in the current structure will be Health New Zealand.
  • Hospitals separated out to operate efficiently as large-scale health enterprises. This was implemented by the National government in the 1990s. We will have them again now, but working as cooperating networks of providers rather than as competitors in a health market.
  • Commissioning powers. We had this in the 1990s and before with the “purchase-provider” split. This function returns, and the key will be whether these commissioning powers can be used not just to extract efficiencies, but also to improve the distribution of services and enhance equity.
  • A public health agency. This was implemented and disestablished by National in the 1990s as it got too activist and upset industry interests. We will have something similar again, but within the Ministry, and quite possibly a more technocratic, less activist beast. There is a gap here.  
  • Localism. The DHBs established in the 2000s were a tribute to local community interests, as reflected in the continuation of the elective principle and the 20 (previously 21) different health boards. It looks as though the suggested reforms, while dispensing with the elective principle and removing the overarching board function, will retain an element of local responsiveness.
  • Primary and community health care. There is a renewed attempt to put the “health” of the District Health Board concept back on the agenda. It was a brave concept, but the non-hospital agenda of the DHBs has been overwhelmed by a hospital focus, and largely absent. This will be one of the hardest features of the proposed reforms to implement effectively. A lot will depend on leadership in the relevant professions and a willingness to work In the proposed networks at the locality level.
  • Digital infrastructure. This is a perennial. The Minister summed up the goal of these reforms as making our health system “fairer and smarter”. A key element in making our system smarter has to be a wholesale shift towards a comprehensive, interoperable and self-managing digital infrastructure. The necessity to establish an entirely new IT system for our COVID vaccination programme is indicative of how far a key feature of our health infrastructure has fallen behind.

What is entirely new and can find no precedent in previous health reform initiatives is the establishment of a Maori Health Authority (MHA) that will have commissioning, oversight, planning and joint-decision making powers. How this works out may make or break these reforms and is the sort of area that may well draw partisan interest in future. There is a constituency that relies on and supports the public health system. At its base are those for whom a private market can never work – lower socio-economic groups, the low-income elderly, and those with catastrophic or long-term and/or disabling health conditions. Gaining increasing recognition as distinct groups within this constituency of those who rely on the public health system are been Maori and Pacifika.

The MHA builds on this insight and adds an equity lens to the system, in part informed by a Treaty of Waitangi imperative, a focus that has not had organizational expression to date. Thus, the MHA has to be a major enhancement to the equity features of the system. It will be interesting to see whether it can work to the advantage not just of Maori, but other elements of the coalition of those who are almost totally reliant on the public health system and whose electoral and social support maintains it.

And then there is the broad middle class; they may take out private insurance, but they know that in the end the public system is there in time of need and, anyway, is part of the ethos of New Zealand as an inclusive and caring society. How the MHA rubs along with these and other groups may be one of the key elements that will be crucial to the long-term political future of these health reforms.

Peter Davis

Elected member, Auckland District Health Board and

Emeritus Professor in Population Health and Social Science, University of Auckland.

Dealing with the health effects of our harmful consumption patterns

New Zealand, like other affluent societies, is suffering the health consequences of our harmful consumption patterns. Thus, a recent report from Diabetes New Zealand shows that nearly 5% of the population suffers from diabetes and close to 20% are at a pre-diabetic stage. These numbers are likely to double over the next 20 years, with associated heath costs rising to nearly 10% of GDP and a quarter of Pacifika people suffering from the condition. The rising level of obesity, and our consumption patterns particularly sugar, lie behind these trends.

On the face of it, our system is not well geared to dealing effectively with this emerging health scenario; not only are we failing to make a sufficiently determined attempt to arrest or slow down this apparently inexorable rise in illness and disability associated with our harmful consumption patterns, but also, as the request for funding from the Diabetes New Zealand report shows, we are up for some major costs, and these will have to compete with many other demands on the taxpayer’s dollar. We see this every day at the Auckland District Health Board.

However, there is one feature of our system that is ripe for development and adaptation in dealing with these issues, and that is the Accident Compensation Corporation (ACC).

ACC is coming up to its 50th. anniversary. It is a social insurance scheme built on the insight that injury sustained at work – later extended to other areas of life – was a cost of employment inflicted on workers in industries such as forestry, farming, manufacturing, and construction, the burden of which they had to bear, rather than the industries that employed them. This was seen as unjust. It also provided no incentive for industries to improve their injury track record. Out of these key insights was born our current ACC levy and compensation system which attempts to cover the costs associated with injury, whether suffered at work or elsewhere.

Since the time of ACC’s founding the great change in the health profile of developed (and even developing) countries has been the shift from infectious diseases to conditions largely associated with our way of life, such as cancer, heart disease and stroke, and diabetes. These are in major part associated with our lifestyle, which includes the consumption of a range of potentially harmful products such as alcohol and tobacco and items containing sugar, salt, and saturated fat.

While these consumption patterns are obviously enjoyable and to an extent willingly engaged in, they are also encouraged and promoted by the industries that profit from them. In other words, as with ACC 50 years ago, the food and beverage industries are, through the promotion of consumption lifestyles, laying a major burden of harm on the community by way of illness, disability and premature death, a burden that is not internalized into the cost structure of these industries but is instead carried by the taxpayer through the health system.

It would be perfectly possible to extend the ACC levy system from industry-specific injury risk profiles to risk profiles for different illnesses like diabetes, both to fund the treatment arising from these consumption patterns, and to help modify them by incorporating the real costs of community harm in the prices of these products. As with the current ACC system, this would perform a double duty: it would cover treatment costs for illness, and also help reduce the health impacts of these harmful features in our consumption patterns.

But there are possible downsides. For example, the most disadvantaged sections of the population, as represented in the bottom 20-40 percent of the socio-economic distributions, are likely to be consuming more harmful products, and those products are likely to be a higher proportion of their disposable income than for higher-income people. Thus, any levy on these products could be seen as regressive in its impact. However, there are alternative less harmful products, and lower-income people are more likely to switch because they would be more susceptible to the income effects of levies on these products; in other words, they would be less able to afford these products and would in time switch to cheaper equivalents that escaped the impost.

And levies on harmful products do not necessarily rebound to the disadvantage of manufacturers either. The British government imposed a sugar tax on beverages in the United Kingdom. A recent review of this initiative in the British Medical Journal shows that, while sugar consumption declined by ten per cent, volumes of sales did not, since manufacturers reduced the sugar content of their products rather than suffer a downturn in sales.

As with ACC in its current format, this extension could work for all stakeholders. Above all, we might at last deal with a feature of our lifestyle that, on its present trajectory, could in future generations roll back many of the great gains in health we have achieved over the last century.

Peter Davis

Elected member, Auckland District Health Board, and Emeritus Professor of Population Health and Social Science, University of Auckland

Another Review of PHARMAC

With each major change of government in recent years, PHARMAC has been required either to list a particular drug (Herceptin under National), or undergo a review (the current government), or both a new listing (Interferon) and a review (in the early 2000s).

This degree of scrutiny speaks to the sensitive and contested area the agency occupies. As an agent of government it makes inherently controversial decisions (with life-and-death consequences in some instances), but at arm’s length from the political process.

This time, however, the debate around PHARMAC seems to be different. In thirty years of observing this area, I have never seen such a concerted assault on PHARMAC, with barely a week going by without a petition or a media story about the alleged baleful influence of PHARMAC on access to medications. There could be several reasons for this. Is more expected from a government of “compassion and kindness” after a decade of “soft austerity”? Is there a hungrier media and a pharmaceutical industry that is more energetic and savvier? Is it that PHARMAC taking over the procurement of cancer drugs from the DHBs presents a single target? Are social media platforms fuelling more populist, anti-establishment groups across a range of issues?

Whatever the reason, we now have a review headed by Sue Chetwin, former CEO of Consumer New Zealand, with a panel including Heather Simpson, Chair of the Health and Disability System Review, and with terms of reference focused on performance, transparency and accessibility, timeliness of decision-making, equity, new and emerging drugs, criteria for prioritisation, and safety.

On performance, PHARMAC has done well, making savings each year equivalent to its entire budget and sufficient in size to fund a major DHB. It has also taken on an ever-expanding menu of tasks (most recently medical devices) with both quality gains and cost savings.

On transparency and accessibility, it is surprising to the layperson to find that, while financially sensitive information is not open to scrutiny, the records of the key decision-making committee (PTAC) are available on the website. It is also the case that PHARMAC is subject to the Freedom of Information Act, and has a whole section of its website devoted to responding to a large number of requests.

Timeliness of consideration of a drug can be an issue, but often full information is not available to PHARMAC on the entry of a drug to the New Zealand market. This also relates to the government’s interest in new and emerging drugs. Over half of recently listed drugs internationally have been “expedited”, often under circumstances where information on key indicators such as longevity and performance relative to existing drugs is not immediately available.

Equity and prioritization are hard to judge. New Zealand has a low patient co-payment for prescription drugs. Ninety per cent of pharmaceutical use is accounted for by just twenty per cent of medication users, suggesting that those most in need are being targetted, including for multiple conditions requiring complex treatments.

Finally, safety. This is probably prompted by the concerns over PHARMAC’s attempts to substitute cheaper but equivalent generic drugs for more expensive brands. In research with which I have been associated on those with epilepsy, we have found this not to be a problem, although there can be a perception of harm (the nocebo effect) that is not discouraged by the industry.  

Apart from a major funding boost (which is outside the terms of reference for the review), where could PHARMAC raise its game? The industry, and the advocacy groups it fosters, are winning the public relations battle hands down. PHARMAC is in danger of becoming so demonised that it will lose the current tenuous political traction and social license it currently enjoys – because media can always find a human-interest story, with an associated morality tale, on issues of medication access.

But there is another side to this story. Almost all the drugs in question are very expensive, and many of them add limited clinical advantage to existing treatments. Looking through the records of the meetings of PTAC, one can see the careful way in which committee members weigh different sources of information as they become available. Unfortunately, that does not make headlines.

PHARMAC is a remarkable and, to date, unique New Zealand innovation. t is equally remarkable that the agency has survived since 1993 under sustained attack from the pharmaceutical industry. It has had the good fortune to occupy an ideological and pragmatic common ground between governments of very different pollical persuasion for over 25 years, in part because of the billion dollars a year in drug purchasing costs it saves.

Maybe that will see it through this review, as it has through previous challenges to its existence.

Peter Davis

Emeritus Professor of Population Health and Social Science

University of Auckland

After COVID. Beyond GDP Growth

With the start of the largest immunisation campaign in our history, and the continuation of strong public health measures, New Zealand’s largely COVID-19 free status can be consolidated, although we have to wait a while longer before the wider world becomes more health secure.

Here, we can now look ahead to our post-COVID future. Will we grasp this opportunity to map out a bold future, or will it be largely a return to “business as usual”? If our response after the Global Financial Crisis (GFC) is any guide, the prospects for fresh thinking leading to transformational are not good.

After the GFC, and cheered on by the bank economists and the commentariat generally, New Zealand suffered a collective failure of imagination. In the pursuit of untrammelled GDP growth we went for volume rather than added value and innovation. Essentially the strategy was about more of everything: international tourists and students, migrant workers to fill the gaps we couldn’t or wouldn’t fill ourselves, more unprocessed primary commodities, and more roads and vehicles. This all contributed to economic activity, but added little value, diversification, or new directions, and put considerable pressure on our infrastructure and our ecosystem.

It also required the government to look the other way as greenhouse gas emissions soared and questionable emissions units were traded, fresh-water systems suffered, logging debris was left unsecured, fishing vessels could ignore catch requirements, safety standards in trucking were not properly enforced, low-value providers in international education and elsewhere flourished, and short-term visa migrant employees were exploited at work.

Is there another way, and is New Zealand well poised to take advantage of it? A recent report in the Global Competitiveness series from the World Economic Forum (WEF) suggests we are well placed. The report – – reviews the prospects for post-COVID transformative economic and institutional change in 37 countries (including New Zealand), assessing a range of indicator across the three Ps of productivity, people and planet.

The top performing countries are almost all small-to-medium social market countries with competitive economies and developed welfare states: namely, Demark, Finland, and Sweden in the first rank, with the Netherlands, Canada and New Zealand not far behind. The one exception is China, which also features in the second rank. Our usual comparators, such as Australia, the United Kingdom and the United States, are towards the middle of the pack, with Greece, Hungary, Mexico, and Turkey in the bottom decile.

Where does New Zealand do well above average in the 100-point scoring system? We are in the top rank when it comes to quality and trust in our public institutions, a thriving, long-term oriented and stable and financial sector (although data availability is very limited here), and indications of diversity, equity, and inclusion (again, with limited data availability). New Zealand is also above average in keeping education and skills training up-to-date, in the quality of its labour laws and social protection, and in expanding access to care services and improving health system resilience.

But where is New Zealand below average and needing to lift its game? Despite all the public rhetoric, WEF sees a need to upgrade infrastructure for the energy transition and ICT access. It also thinks New Zealand could do a lot better in shifting taxation in a progressive direction, creating a more competitive and vibrant economic environment, facilitating the higher-technology “markets of tomorrow”, and incentivising and encouraging the long-term investment in research, innovation, and invention needed to underpin those markets.

These insights into areas of strength and weakness in New Zealand’s economic and institutional structure are not necessarily new. What is new is the comparative framework that allows us to view ourselves in relation to 36 other economies on key parameters of performance, and to find that we are close to the top rank – and that those comparator countries are not dissimilar to ourselves in many societal and economic features. We are in that cluster of small-to-medium-sized countries that operate largely on a social market basis with a competitive, open economy underpinned by environmental protections and with a well-developed set of welfare state arrangements that provide the essentials of an enduring social compact fora cohesive and fair society. We have the potential to transform. The question is whether we have the will to do so.

Peter Davis is Chair of The Helen Clark Foundation, an independent public policy think tank.

Observations on COVID in Aotearoa New Zealand

By dint of a dash of luck and a quantum of good management, the five-million strong island nation of Aoteaora New Zealand, wedged between the continents of Antarctica and Australia, has to date come through the COVID crisis largely unscathed. There have been 25 deaths – most in aged care residences – about 2,500 recorded cases of the disease, 75% in quarantine at the border, a national and a regional lockdown, and a few isolated outbreaks. But otherwise, at the time of writing, life is back to “normal” with a typical Antipodean summer break, in-person sporting and cultural events, and the economy close to pre-COVID levels. Borders, however, are closed to most non-nationals, and two major export industries – international tourism and overseas tertiary students – are for the time being on pause.

As a health sociologist, what observations can one make?

The infectious diseases are back! When I first arrived at the Medical School in the mid-1970s we were all certain that the infectious diseases were vanquished and now we had to grapple with “the diseases of affluence”, the NCDs. The arrival of HIV taught us different, and COVID reinforces that.

Non-pharmaceutical interventions are back! The most effective interventions prior to vaccination have been those involving changes in behaviour – distancing, hand washing, masking, isolation. All of a sudden the behavioural and social sciences have come into their own, for a time at least.

Leadership matters! New Zealand was ill-prepared for a pandemic, but a combination of outstanding bureaucratic and political leadership, combined with the institutional gift of a unitary state operating in a national health system, made the difference.

Health inequalities are not set in stone! New Zealand has an indigenous minority of 15%, it has the usual socio-economic disparities, 40% of its major city Auckland are foreign born, and yet COVID did not disproportionately strike the disadvantaged. The disease has come to the country courtesy of returning and travelling nationals predominantly white and relatively affluent, and these have been quarantined at the border. This, together with the first country-wide lockdown, prevented spread to other communities.

This is a disease of the digital not the analogue era! Communications moved to the virtual world. People worked from home. The health and educational systems ramped up their digital outreach. And social media played a major role in shaping patterns of behaviour, for both good and ill.

The health system underwent a once-in-a-century stress test! Death rates dropped over lockdown, hospital admissions and emergency department attendances dropped to half normal levels, family doctors closed because patient copayments disappeared, there was no winter flu season, all-cause mortality fell, and IT initiatives that had been hanging fire for years were suddenly implemented.

Experts and expertise are for a time in vogue! Yes, we had and still have conspiracy theories circulating, but the mass media have shown professionalism by and large, and talk of “post-truth” realities, “fake news” and the multiple realities of a post-modern world have been parked while we sit out and work our way through what in many respects is an existential crisis. The contrarians, opinion writers and commentators are already back, but “experts” are still listened to and expertise is valued.

One of the most remarkable outcomes is a nationwide rallying in the recent general election behind the ruling Labour Party, which achieved 50% popular support in our proportional representation system, comparable to levels reached in the 1930s. But it is unclear whether that rally will translate into a “New Deal”-style transformative move on a range of pressing issues such as climate change and energy, poverty and inequality, economic reset, and affordable housing. The roads are full again, house prices are soaring, the primary sector continues to earn our keep, and in many respects the prospects after effective vaccination are for a return to “business as usual”- not just in social life, not just in the economy, but in the health ecosystem too.

Think tanks are leading the way as political parties play it safe

Helen Clark talks about drug use

OPINION: We are living in unprecedented times with a pandemic of global proportions. For many commentators, this is seen as an opportunity to think “outside the box” about the future direction of our society and economy, and our general election seemed as good a place to start as any. Yet it threw up few new ideas, as both major parties played safe and protected their respective electoral territories. 

If the major parties cannot be relied on to bring big new ideas to the table, who can? The minor parties can make a substantive contribution. For example, under the previous government NZ First promoted the Billion Trees scheme and the Provincial Growth Fund, while the Greens advanced the Climate Change Commission and a series of related environmental and climate initiatives. 

What about the public service? It works within an environment that is constitutionally and politically constrained, responding to the programme of the government of the day and to the policy demands of major events, so there may be few sources of innovation here. 

Another option is think tanks, which are research-based policy and advocacy institutes that form a transmission belt between academia and politics. A recent newsletter of the Institute of Public Administration New Zealand (IPANZ) argues that think tanks can bring a range of perspectives and advice to governments, introducing new ideas and provoking public debate. 

Read the rest of my article in STUFF.