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Consultants’ Fees

  • May 28th, 2009

It was good to hear John Key’s unapologetic defence this morning of the $2k per day cost of Graham Scott.  Radio Pravda of course  did Labour’s bidding in repeatedly tagginig him as "former ACT candidate", without explaining that he is one of the world’s top treasury advisers. He gained international respect for NZ’s public sector restructuring (while he was Secretary of the Treasury) during the 1980s.

National of course did its share of smearing "consultants" generically during Labour’s term. Labour had hundreds of its propagandists on various consultancies, as well as experts who delivered vital value. I enjoyed Labour’s squirming under those attacks, though I urged my colleagues (and some National MPs) against them. Labour were defenceless because they could not explain the real reasons for even the sensible consultancies. They were idealogically snookered.

Employment law rgidities make consultancies prevalent in both the public and the private sector. Often the jobs they do would be better done by short term employees. But it is not easy to ensure that temporary employees do not renege and extract ‘compensation" when their contracts are not rolled over.

Employment law also favours consultancies for jobs where it is very hard to know, without sucking to see, whether the person can deliver the hoped-for value. Consultants can be offloaded immediately if they prove to be duds – not so with employees.

And consultants are often used where their expertise is specialist and valuable precisely because they hop from crisis or engagement to engagement. They’ve seen so many of the relevant circumstances  in many different organisations, whereas for the organisations those circumstances or problems are hopefully infrequent.

As to Graham Scott’s daily rate, after normal independent business overheads, it is probably less than the pay of many of Phil’s most useless current and former colleagues.

I should disclose an interest – I wish the government would use experienced lawyer consultants more frequently when law is being created. Governments of all stripes gaily engage QCs to defend the State (and force citizens into such waste)  in the litigation that follws inevitably from badly drafted law. QCs cost from $3-10k per day.

I saw plenty of law going through my Select Committee that cried out for some experienced lawyering. It was produced in good faith by teams of hardworking public service lawyers and advisors. It is no discredit to them to say that the output could have been a lot better if the spending on half the junior internal people had been replaced or supplemented with spending on a couple of very experienced specialist temporary outsiders. 

Any extra cost would be saved by avoiding just one muddled law court case once passed. Poorly framed law typically generates mutliple cases before the courts work out glosses to make an ambiguous provision more predictable, if indeed they ever manage to clarify it. Think about the lawyer costs of both sides in court cases. They’re just the tip of the iceberg, at between $30k to $300k for each side. Under that is the time of lawyers puzzling and writing fierce letters to each other in cases that do not get to court, and the citizen costs of negotiating under uncertainty.

A cost to the community of at least $1m would be a minimum for a typical muddled provision, and many times that for the more significant ones.


  • peterquixote
  • June 1st, 2009
  • 11:32 pm

we can get good advise from ordinary people, we don’t need to pay Graham Scott 2000 dollars a day for being precious,
he is sacked now,
goodbye Graham,
wake up NAT

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