Controlling the purse strings

Forest and Bird, Issue 280, 1 May 1996, Unnumbered Page

Controlling the purse strings

GERARD HUTCHING

The Cave Creek tragedy and its aftermath have focused public gaze on funding levels for the Department of Conservation. The Budget is only days away, and the government has been considering a "green package" for the financially strapped

department.

looks at

some of the manoeuvrings in the struggle to adequately fund conservation in New Zealand.

TIS NOT A GOOD TIME to be the Treasury manager overseeing Department of Conservation funding. Cave Creek and the attention given to the department’s lack of resources highlighted the fact that DoC today receives less money from the government in real terms than it did in 1987 when the department was established. Treasury's Michael Papesch does not appear to be the type to lose sleep over the issue, although he accepts that he and his colleagues will be viewed as among the villains in this particular drama. "Treasury becomes the convenient whipping boy but it’s ministers who make the decisions," says Papesch. Unsurprisingly, he is not willing to answer questions that might elicit any opinion about the state of DoC funding. Instead he prefers to talk about process — about budget cycles, Appropriation Bills, supplementary estimates and select committees. In his version of the democratic process, Treasury is a minor cog in a machine. It’s all about inputs and outputs, objectives and outcomes. "Treasury is there to provide second opinions. You have the general community which is indicating to the government what it thinks the priorities should be, and then you have the department which puts up its requests," says Papesch. Others are less sanguine about Treasury’s role. DoC staffers — amused at Papesch’s description of Treasury as providing only "second opinions" — point out that Treasury officials arrive at budget

meetings "all guns blazing" and with a consistent ideological agenda. Treasury, according to DoC officials, wants to reduce what it sees as the "drain" of conservation on the public revenue. Its suggestions for achieving this are a reduction in the size of the conservation estate, in other words privatisation (the less land to manage the smaller the management costs). This particular agenda has been recently revealed in a leaked letter from Treasury head Murray Horn to DoC director general Bill Mansfield urging DoC to sell land to generate additional income. "It is not clear to me," wrote Horn, "why conservation lands could not be managed under private ownership provided there were appropriate covenants to preserve the essential conservation values". Another consistent Treasury suggestion is that DoC could contract out key functions, in particular visitor services. tov He BUDGET now only a week away, officials and politicians have been crunching the numbers for many months. This time the process has had to take account of a "green package" promised by Prime Minister Jim Bolger. New information about the extent of forest collapse, Forest and Bird’s campaign to boost DoC’s funding, combined with the department’s lack of resources revealed by the Cave Creek inquiries and the fact it is election year have prompted the National government to put more of a green gloss on its policies.

One of the little noticed recommendations of the post Cave Creek inquiry by the State Services Commission into DoC’s performance, related to the department’s funding — the need to develop a "zero based" costing model, to draw up a list of DoC’s core functions, work out their cost and fund the department appropriately. "Resourcing is a major issue for the department," said the report. "The department’s core functions have never been costed on a zero base. The department is therefore not well placed to put forward an objective case for additional funds where its obligations increase," says the commission.

Michael Papesch is not convinced that zero-based budgeting is a good idea. "Tt would be difficult to do that, and if it were done it would be a massive exercise. And as yet the government hasn't taken a decision on the recommendation." While government ministers won't discuss issues relating to the Budget at this time, Labour’s spokesperson on conservation, John Blincoe, believes that if the zero-based funding exercise was done, it would demonstrate that DoC was grossly under-resourced. Both Labour and Forest and Bird have done their own costings and arrived at similar conclusions: DoC’s budget needs to be doubled to around $200 million. Blincoe envisages a phased programme of five years, with most extra funding apportioned during the first three years. He says that throwing large sums of money at the problem will not solve it, at least not immediately. For a start DoC would not have the trained staff to effectively use a budget that doubled

overnight — hence the phased programme. The Alliance is arguing for an immediate $50-million-a-year increase in DoC’s budget. "There are many other conservation activities DoC should be undertaking but can’t, because of extreme funding restraints,’ says leader Jim Anderton. A hint of what occurs in the bargaining sessions between DoC and Treasury is found in the "Financial Review of the Department of Conservation", prepared

by Parliament’s Planning and Development Select Committee chaired by National’s Christine Fletcher. Asked to describe the relationship between DoC and Treasury, the report quotes DoC officials as stating "that discussion between managers of the two departments has at times been quite robust, and [they] agreed that a healthy state of tension has sometimes existed". John Blincoe translates: "Treasury has been more hardnosed about DoC funding

DoC’s funding history

(1) net Crown Tunding excludes a capital charge introduced In 1991-92 on assets such as Dullaings. (2) other revenue includes hut fees, concession fees, sponsorship, cost recoveries and revenue from employment schemes such as Task Force Green.

After adjusting for inflation, funding for the Department of Conservation has dropped heavily since the department was formed. This has been partially offset by an increase in revenue mainly from visitor services and concessionaires — but the cost of obtaining this additional revenue is high both in dollar terms and the diversion of staff from core functions.

The US experience

administration is in crisis. In the United States the National Parks Service is having to grapple with the fact that its budget is too small for the increasing demands made of it. Alarmed at the condition of national parks for both visitor services and resource management, Congress asked the General Accounting Office (equivalent to New Zealand’s Audit Office) to investigate. &) The GAO’s August 1995 report makes famil2D) (Gy EW ZEALAND is not the only country whose natural lands

iar, if depressing, reading. For example, between 1985 and 1993, visitor numbers at Yosemite National Park leaped from 2.8 to 3.8 million; as a result services have had to be cut and maintenance deferred. "The national park system is at a crossroads," says the report. "While the system continues to grow, conditions at the parks have been declining, and the dollar amount of the maintenance backlog has jumped from $1.9 billion to over $4 billion today." The GAO outlines three choices for dealing with the crisis: increasing the financial resources going to parks

than it has with other departments. It has a lack of sympathy for the concept of public service, and we have a government that doesn’t understand green issues". Conservation director of Forest and Bird, Kevin Smith, believes that "the extraordinary hostility" towards DoC emanates from attitudes in the Treasury and in Bill Birch’s office that conservation frustrates economic activity. "They see conservation as the green enemy, yet in their next breath they promote New Zealand’s clean green image to boost tourism and exports. Treasury is doing its utmost to derail Bolger’s green package at the moment," says Smith. Not that any green package will be especially bountiful, despite Conservation Minister Denis Marshall’s efforts to convince his colleagues of the need to boost DoC funding and despite a projected budget surplus of $2.9 billion in 1995-96, followed by $3.3 billion in 1996-97. A DoC head office staffer who knows the rough details of the package, described the increase as "useful" rather than generous. Most of the extra funds, if they eventuate, will go towards deferred maintenance. In the wake of Cave Creek the government is anxious to ensure the tragedy is not repeated. HE SIGNS of financial stringency were apparent from the time of DoC’s creation in 1987, when its budget was set at $30 million less than the agencies from which it was formed. Since then there have been two major staff reductions, with the loss of more than 700

staff. Today DoC has just 1,300 permanent staff, yet its responsibilities are more onerous — for example, coastal and marine conservation was in its infancy in 1987. Take Mt Cook National Park. Fulltime conservation and recreation staff have been halved from 24 to 12 since Lands and Survey days in 1986 although visitor numbers have climbed by 40,000 to 240,000 a year and the Tourism Board expects a further 140,000 a year by 2000. Successive governments have played upon the "loyalty factor" in curbing DoC salary increases. Over the five years till 1995, staff received on average only 0.35 percent increase in pay per annum. The area where this impacts most is in the loss of skilled staff who are then replaced by inexperienced staff — a point admitted by senior DoC managers to the Planning and Development Select Committee. PSA advocate Agnes McGee says a planner working for DoC can move to a similar job with a regional or local council and earn between $10,000 and $13,000 more. The Fire Service, itself supposedly under funding strictures, pays $10,000 more and throws in a car as well. A senior ranger with the Auckland Regional Council earns $62,000; the equivalent officer in DoC is on $47,000. McGee’s colleague Gary Waghorn says that his position provides him with a broad overview of government departments. DoC staff, he says, are being "ripped off". "They have been taken advantage of because they are loyal. But also in regard to terms and conditions — DoC takes on a lot of temporaries and casuals which is rare among other departments". Conservation officer and PSA delegate Bruce McKinlay says that the trend is that after three or four years with DoC, planners can move into much higher paid jobs. It is a situation that "can’t be controlled at Head Office". McKinlay says that while DoC staff

support more spending on conservation programmes, they would prefer to see across-the-board investment in all areas, including staff. An indication of how seriously some politicians view DoC’s funding woes appears in the final page of the Planning and Development Committee’s Financial Review: "We recommend that the House note with considerable concern that the Department of Conservation is unable to undertake adequately the range of functions which are entrusted to it. We reiterate our previous view that the department is under-resourced, and we therefore continue to express our serious concern over the level of funding for Vote Conservation." @

GERARD HUTCHING 1s a former editor of Forest & Bird. He ts now a Wellington freelance journalist.

(through more government funding, higher user-fees); limiting or reducing the park system; reducing the level of visitor services. Of the three choices, the latter two are considered as bandaid solutions. For example, substantial cost savings would occur only if a large park such as Yosemite were closed, and that is unlikely. But the GAO is pessimistic about the prospects of increased government funding: "While increased appropriations are one source of dollars, they are unlikely in today’s tight fiscal climate."

Year Net Crown Other Total Net Crown Total funding (1) revenue (2) revenue Funding revenue $m $m $m adjusted adjusted to 1987-88 $ to 1987-88 $ $m $m 1987-88 91 7 98 91 98 1989-90 93 16 109 85 100 1991-92 101 19 120 78 94 1993-94 97 29 126 74 98 1995-96 76

SOURCE: TREASURY