OnPoint by Keith Ng

I am writing to heartily endorse Joshua Drummond for the position of Press Relations and Regulatory Affairs Manager at British American Tobacco.

I have known Mr Drummond for many years through our mutual association with the Freedom Importers Association of Hamilton. We celebrate enterprise and freedom by importing cigarettes into New Zealand though our underground tunnels with China and Belarus. Our non-fictional organisation, in fact, represents over 80% of the NZ tobacco black market as estimated by Ernst & Young. Mr Drummond's intimate knowledge of this sector will no doubt prove invaluable to your organisation as you continue to praise its contribution to the economy.

During his time with our organisation, he has proved himself both resourceful and committed to the cause of freedom from the nanny state. On one occasion - the celebration of Dr Don Brash's election as Prime Minister - Mr Drummond personally walked from our Belarus depot with 19 cartons of cigarettes internally concealed within his person. Why did he internally conceal the cigarettes when we had underground tunnels? Because that was how much he loved freedom.

Mr Drummond's commitment to the cause of liberty is only matched by his resourcefulness and skill in modern public relations techniques. His ability to astroturf is unequalled in New Zealand. In the 2011 election, two-thirds of ACT candidates (and all of ACT On Campus) were, in fact, Joshua Drummond with rubber masks. I am not at liberty to name those candidates, but needless to say, Mr Drummond had much more success than the non-Drummond candidates.

During my last visit, Carrick Graham confided to me that he wished Mr Drummond was his son. This is a sentiment that we all share, and I am sure you will too, once you have witness the magnificent beacon of freedom and the dirty bomb of individuality that is Joshua Drummond.

Yours faithfully,

Keith Ng
Manager (Government and Cartel Relations)
Freedom Importers Association of Hamilton

To state the obvious: Student loans are loans. When you pay off a loan, you stop paying. So if repayments go up from 10% to 12%, graduatues won't pay more - they just pay *earlier*.

This impacts on government finances:

1. The government collects future revenue earlier, allowing them to "get back to surplus" earlier. This part is purely political.
2. Collecting revenue earlier means they don't have to cover interest on it. This is a real saving, but this is only worth a fraction of the "revenue increase".
3. It will marginally worsen default rates, because:

• Graduates who don't default will pay the same amount (i.e. 100% of their loan), only sooner. (No effect on default rate.)
• Graduates who default because of bankruptcy or death will pay more before they go broke/die. (Very small positive effect.)
• Graduates who default by skipping the country will pay a tiny bit more before they leave. (It's for a short time while they're on a graduate wage - Very small positive effect.)
• The after-tax wage in NZ will decrease, making working overseas more attractive, causing more to leave and default on their loans. (Small negative effect.)

Increasing repayment rates DOES NOT improve default rates. It is a cynical policy, but not terribly significant either way.

Also: Stupid targeting is stupid

But this four-year limit thing. Seriously: RAGE.

This is not welfare. Welfare is welfare. We fund tertiary education because a well-educated workforce strengthens the economy and pays more taxes - it's an investment.

And it makes sense to target our investment for maximum return. Who are the people most worthy of funding? What kind of skills do we want in the economy? Where do we get the most bang for our buck?

On what planet is the answer "people who study for less than four years"?

We bemoan degree inflation, the fact that everyone is supposed to spend three years of their life at a degree factory getting a worthless undergrad that imparts neither wisdom or practical skills, and now, the government ONLY wants to give allowances to undergrads? Don't we need specialists anymore? Scientists? Doctors? Researchers? Cross-discipline study?

In terms of targeted allocation of allowances, this is arbitrary, perverse and just goddamn stupid.

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Keith Ng is a self-loathing BA(Hons) graduate.

If a man hides behind some hands - possibly his own - and an identical man emerges from those hands a few seconds later shouting "peek-a-boo!", how do you know if it's the same man? I mean, how do you REALLY know? Like truly, really, *KNOW* know?

You can't. It is unknowable.

--

I think that if Banks can successfully deny the "thank you" call, then he can argue that he only solicited the donation, requested that the donation be split into anonymous $25k chunks, and received some anonymous donations in $25k chunks - but he had no way of knowing that the donation he got was the same donation that he solicited and was told he was going to get.

And therefore, they are anonymous donations and this is all technically not illegal.

And maybe it is.

But you know what? "Technically not illegal" is fine as a threshold for "not being thrown in jail", but it is not fine as a threshold for "fit to hold public office making and executing laws". This isn't even about holding politicians to higher ethical standards - it's about fundamental respect for their domain: the public and the law.

If a member of Parliament and a Honourable Minister of the Crown conspired to mislead the electoral monitoring body and circumvent electoral law, in order to hide the source of a donation from the public, legality is not the issue. John Key isn't deciding whether to throw him in jail, but whether he wants this guy as a minister. Is the bar really set so low that deliberately misleading election officials and the public, and explicitly disregarding the spirit of the law is fine, as long as it's not technically illegal?

And is the bar for accountability so low, and we're so desensitised to Winstonness, that Banks can meaninglessly chant "I can't recall" - as in "I can't recall" that time I got helicoptered out to the Crisco mansion where I met an obese Bond villain who offered me $50,000 - and we have to accept them as actual words with meaning coming out of his mouth, as if he actually answered a question? He might as well be saying "I know you fudged electoral law, but what am I?".

Only in Punditville could we describe this as political discourse, or actual communication between human beings. Out in the real world, "FUCKING RIDICULOUS" would be considered an accurate and comprehensive description.

Clark faced the same choice with Peters in 2008. Her position then was every bit as BS as Key's is today. I'm pretty sure she knew she was doing something shitty - but she was desperate to stay in power and Peters had 7 seats - so she held her nose and did it anyway. What's Key's excuse? The only thing at stake here is the illiberal conservative leader of a libertarian party that has gnawed itself down to the bone, and the leader himself is only there because he was tube-fed an entire electorate by National, who got covered in Teapot vomit for their troubles.

The cost of ending this farce is pretty cheap. And Key doesn't even have to pay.

One of the prevailing criticisms of the Government's Capping regime is that it forces departments to lay off staff, only to rehire them as consultants (and after paying out their redundency). 

But is it true?

The most comprehensive source of information we have on the state sector comes from the State Services Commission's Human Resource Capability survey. It's a wealth of information – except it doesn't cover casual contractors or consultants. 

A Cabinet paper in April 2010 offered a tantilising glimpse. Somewhere in the bowels of Treasury, somebody managed to compile this:

It showed that, one year after the cap was put in place, personnel expenditure slowed and “the capping policy [did] not led to any increase in consultant expenditure”. 

That was the only time this data has appeared. Subsequent Cabinet papers never used this data again. So I OIAed it and made a spreadsheet. 

This here is the money shot (or lack thereof). Changes to staff numbers (EFTS from the HRC) are plotted horizontally and changes to consulting expenditure are plotted vertically. If departments are replacing staff with contractors, then the results should clustered around the top left quadrant. They are not.

(You can explore the data yourself here. The second-to-last sheet has the Motion Chart shown above. I can't be bothered figuring out how to make the embeded links work in this CMS.)

Based on this data, there is no obvious replacement going on. Except there are gaps in the data, missing departments like Education, MED, DoC, TPK and NZTA. A few months back, Max Rashbrooke OIAed individual departments to try to get the same numbers and arrived at a sum of $375m a year spent on consultants (compared with $189m in these Treasury numbers).

The missing departments probably account for most of this gap, and there's probably some definitional issues... hey, wait a goddamn minute! That's massive! These are not obscure, tiny departments: They make up 30% of “Core Government Adminisration” expenditure.

So, let me get this straight.

Back in 2010, looking at consultant expenditure was considered important to measuring the success of the Capping regime. Despite not having 30% of the data, they considered it proof that the Capping regime wasn't affecting consulting expenditure. Having declared that it was okay for that one year, they stopped measuring the the regime against this data, even though it was still being compiled by Treasury.

Unless someone's hiding some data from my OIA, I think it's fair to say that the government (this Government and the ones before it) actually has no idea how much money is being spent on consultants. If it did, why would Cabinet be justifying their decisions with such shitty data?

I don't really understand how it can be this hard to collect this information, or how it can *not* be a priority to collect this information, especially for a Government that's trying to rein in public spending.

Disclaimer: Some of my best friends are consultants. Actually, I guess I'm a consultant as well. Oops.

–

Dear Journalists,

Feel free to use this spreadsheet. A few things that you might find interesting:

• MAF spending on consultants tripled from $4.2m in 2008 to $12.6m in 2011. *coughmergercough* *coughchangemangementconsultantsspewcough*
• Housing NZ consultants expenditure doubled from $10.8m in 2008 to $20.6 in 2011.
• Biggest spender on consultants in the last 3 years was Environment, totalling $58.7m.

Scans of the OIAed documents are here: Page 1, Page 2, Page 3.

So, I'm not sure about this story. If this group was really on an "international hunt for military secrets", why on earth would they tell everyone about it? More to the point, why would they send out prank emails from McCully's account in the first place?

Wouldn't it have made more sense to sit on this account which they have already compromised and continue to grab information from it? It's unlikely anyone would audit access to an Xtra account - they could have sat on it indefinitely. Hell, they could have set up a mail auto forward and I doubt McCully would've noticed.

Imagine that scene in Mission Impossible, where Tom Cruise sneaks into the CIA mainframe. Imagine if he then takes a dump on the desk. This is kinda like that. Contextually hilarious, but clearly not the behaviour of anyone who's actually trying to steal secrets.

So, here are the emails, put up by @TheComradez (not a Twitter account):

http://pastebin.com/qa4ikbpu

Obviously, I did not put them there. I simply found them after 15 minutes of Googling. Anyone who is paid to look for this stuff would have found it already, so I don't see any point in not linking to them. Also, none of it is classified anyway.

Sorry about the phone numbers, but hey - public interest.

My favourite part of the exchange would have to be when "J" tells McCully:

When you talk next to JA [MFAT Chief Executive John Allen] you could ask:

1. why do NZDF, NZTE and MFAT run completely different ICT systems offshore?"
2. Why does MFAT own its entire ICT platform?.is it an IT company?
3. What % of MFAT's communications are rated confidential or above?  ???.all messages shared with me were over classified.

1. When GCSB sets the security rules how does it take into account the operational/transactional costs for the affected organisations?
2. I saw evidence of mindless wasteful  admin crap from wellington and am in no doubt insufficient financial delegation is given to HOM's???JA does not have the system humming as I expect he would have had.

I assume JA will have a pretty good answer for those first four questions now.

J's full name and email were redacted from the email. Which begs the question: Why would a Russian hacker redact the identity of someone who's on pretty chummy terms with McCully? "J" seems like a Kiwi, is obviously very close to the action, but surely, no career diplomat writes that badly, right? The remaining list of names must be pretty short.

[UPDATE: Popular theory (2 out of 2) so far is that "J" is John Hayes. I really can't see any reason to redact his name. Maybe they're just fucking with us?]

I'm sure MFAT staff will find it very interesting who McCully gets his advice from. Would be nice if you could let me know. Safest way would be to email me through the PA website (the "Email" button below), but don't do it at work, and use Tor or a VPN first. If you don't know how to do this, just go to an internet cafe.

--

Another interesting breadcrumb is this.

3 days prior this story, someone - presumably the same person - posted parts of the emails online. Was it a show of "I've got the goods"? Were the emails posted elsewhere, and "Comradez" simply got them second-hand?

Wild conspiracy theories welcomed.

Also, this is relevant (from SMBC):