All power and control to the Chief Executive
You might have thought that the Prime Minister was the most powerful and influential person in New Zealand.
This surely applies to most decision-making processes in politics and on policies in this country, as we have seen in last minute U-turns on important questions which upset Maori and the Maori Party in particular.
Then there is the Governor-General. In general he has no influence on politics but signs Government policies and laws and represents New Zealand’s Head of State, Queen Elizabeth II.
New Zealanders get continuous insight into Government politics through the media which daily televise and publish statements and denials on nearly everything. Imagine a week just like this:
As Government ministers are allowed to think for themselves they are also allowed to voice their opinions to the media. But if the Prime Minister has a different opinion he tells them to change their opinions and say that they were too fast to speak out in public and now share the Prime Minister's opinion because this is the real Government policy... You get the idea.
The more astonishing it is that all New Zealand governments have vested all power with regard to the treatment of overseas pensions in the hands of the Chief Executive of the Ministry of Social Development (MSD). This almighty power includes the essential question which overseas pensions can be deducted from NZ Super.
Unlike private secretaries and assistants who change with every change of Government because such posts are given to party faithfuls, the Chief Executive of MSD has been Peter Hughes under the Labour and the National Governments.
Eleven times mentioned in Section 70
The Chief Executive is the mind behind the 2005 and 2007 Reviews of New Zealand Superannuation and Overseas Pensions. He is the one who at some point decided that the decisive factor is not the nature of overseas pensions but their purpose (i.e. that an age pension is paid at retirement). But the real purpose is that overseas pensions are a welcome opportunity for revenue gathering in order to finance New Zealand pensions.
Of course, the Chief Executive would not judge the nature of overseas pension without legal advice from a group of law experts. But it does not change the fact that he is the first and last authority to give out instructions to WINZ to deduct most overseas pensions from NZ Super. If he accepts the ill-informed or mean-spirited (or both...) recommendations of so-called experts, he must also take the blame for it.
The Chief Executive is also the mind behind the Wellington Mandarins, the ghostwriters who answer the letters angry and desperate pensioners write to Government ministers and the Prime Minister on the issue.
If you scan Section 70 you will find the expression "Chief Executive" highlighted eleven times. This is the evidence that the Government has given all the power to a loyal civil servant whose word is law. He surely has calculated how much it would cost the state not to deduct overseas pensions.
The numbers he presented to the respective Cabinets have probably spoken clearly enough to keep the Government(s) from taking the power and control back. They might even have led the Prime Minister(s) and Ministers of Social Development to instruct the Chief Executive to find reasons for leaving Section 70 unchanged. This could have been the trigger for his spectacular mind twist on the nature and purpose of pensions.
No-one knows Section 70 better than the Chief Executive. No-one knows better how unfair it is. He must be a well-loved civil servant, saving the Government such a lot of money. The more wrongful decisions he makes on the treatment of overseas pensions, the more he is loved by his superiors.
Update April 2011
No April Fools' Day joke: The Ministry of Social Development (MSD) has announced on 1 April 2011 that Peter Hughes, the ministry's Chief Executive, will leave his post in September 2011. This is good news for superannuitants with overseas pensions, as Hughes is the mind behind the hardship many retirees are subject to due to the Direct Deduction Policy. With a new CEO things can only get better - as they cannot get any worse. Write to the new CEO as soon as he/she takes office. Read more about Peter Hughes' decision to step down after the expiry of his contract in September here.
New Zealand fur seals
Not a poor man
Not that you think the Chief Executive would have reason to be jealous of any pensioner who is entitled to an overseas pension. In the story "All things being equal" the NZ Listener (May 1-7 2010, Vol 223, No 3651) reported that Peter Hughes is one of the many civil servants who earn more than the Prime Minister:
"Today, not only have jobs for the low-skilled become scarcer and more poorly paid, but the rewards at the top have exploded.
In the state sector, 16 chiefs earn more than the Prime Minister’s
NZ$ 393,000, including Ministry of Foreign Affairs and Trade chief executive John Allen on NZ$ 610,000, Ministry of Social Development chief executive Peter Hughes on NZ$ 560,000, and Treasury secretary John Whitehead, also on NZ$ 560,000."
Now at NZ$ 593,000
According to the latest figures, Peter Hughes' is the highest-paid public servant in New Zealand. His annual salary is NZ$ 593,000. He did not get a payrise in 2010, so has to cope with NZ$ 11,346 a week before tax. This salary does not include a possible bonus. Here is the TV3 report from 21 October 2010.
Isn't it ironic that the man who is in charge of beneficiaries is the highest-paid civil servant?
Update 1 October 2011
The new CEO of the Ministry of Social Development, successor of all overseas pensioners' arch-enemy Peter Hughes, is
Brendan Boyle. Start addressing your complaints about the Direct Deduction Policy to him - not that he gets the impression we will retire from protesting...