23 November 2011

Principles of public service underpin the actions of government – or should do.

The New Zealand Cabinet Manual expects that employees in State sector will exhibit these principles by “being fair, impartial, responsible and trustworthy”. Public Service chief executives are required to imbue their employees with the spirit of service, and to give effect to the State Services Commissioner’s 18 standards of integrity and conduct. These standards are grouped around “being fair, impartial, responsible and trustworthy”. One of the aspirational standards is “to strive to make a difference to the well being of New Zealand and all its people”.

Should commercial enterprises have a similar public-spirited ethic?

If the intentions of some big businesses are anything to go by, any sense of contribution to national well-being is subordinated to shareholder interests. On a hard to conceive scale, 20 major American companies are reported to have spent more than $1 billion on federal lobbying and political contributions in a campaign to repeat a 2004 tax exemption on repatriated profits from overseas investments.  Lost revenue over the next decade could amount to $79 billion.

Allegedly the companies could anticipate a 14000% return on what has been spent on lobbying if they succeed in having the tax rate reduced, as happened in 2004, from 35% to 5.25%. A Kansas University study calculated that the 2004 enactment produced a 22000% return on the costs of lobbying for the change.

USAction and Public Campaign, the community groups that compiled the report from lobbyists’ disclosure forms, are alarmed at how much influence money has on lawmakers. Research shows that public spending in this way would be one of the least effective ways of creating jobs and boosting the economy.

In Britain, the High Pay Commission has found another detrimental impact on economic growth.  The Commission’s research uncovered that pay for some private sector top executives is 4,000% more than 30 years ago, with inevitable damage to trust in business.  By comparison, average wages in the UK have increased by less than 33% over the same period.