Public-private ventures could fund protection schemes

Gareth MorganEconomics, Environment

- Seals on Sub Antarctic islands - Public-private ventures could fund protection schemesIn a post financial crisis world where expanding indebtedness is no longer a ticket to prosperity and where the tax drag on private incomes already annoys large tracts of the population, pursuit of greater well-being via expanding government is no longer an option.

How does important public service work get done then? Let’s consider an example – conservation.

The business of ecological islands is expanding in New Zealand. There are various approaches, however, some fraught with more risk than others. While the Department of Conservation started it all with pest eradication on offshore islands in the 1960s, inland “fenced” islands have since been established – the Karori Sanctuary in Wellington and Maungatautari near Cambridge being examples.

The advantage of inland islands is that they offer the public easier access, the disadvantage is their cost – they simply do not meet state sector rates of return. It is fascinating the private sector and local councils still want to try. Rodent-proof fences are expensive to erect and maintain, whereas a coastline is free. There are many inland nature reserves where native fauna is present that have no fences at all, they are protected by regular pest eradication programmes – for example Pukaha Mt Bruce.

The halo effect – wherein localities congruent to the ecological reserve enjoy the effect of concentrated birdlife – can be common to both fenced and non-fenced inland reserves.

So if we agree there are two purposes to these islands – to provide public access to the native fauna and flora that result, and to protect the native biodiversity – then each project needs to be evaluated on the right criteria. Is it there for the public’s direct enjoyment, is it there to protect the species, or is there a bit of both? That’s the evaluation that a project needs to stand or fall on.

Without doubt offshore islands present the most cost-effective environment by far for protection of species. The business of building publicly accessible reserves of native species is a competition between fenced and unfenced facilities. Dependent upon size, fenced reserves are more expensive and more likely to need commercial activities to make them sustainable. It is significant that central government has only played a minor, supportive role in fenced reserves – because of their high cost they quickly become controversial if a commercial model isn’t established. The experience at both Karori and Maungatautari confirms a lack of commercial success is fatal.

But by far the most important role of ecological sanctuaries has little to do with public viewership and visitation. It is about recreating an environment where endangered species can rebuild their numbers. That is why DOC has focused on the most cost-effective approach to that, eradicating pests from offshore islands.

Its work has a global reputation now and is lauded far and wide as best practice. Commendably, DOC does encourage people to visit these islands, although in numbers that don’t threaten the projects themselves. This reflects the reality that visitation is not the primary purpose. The cost of visiting these islands can be as high as flying across to the theme parks on the Gold Coast, so public enthusiasm is muted.

New Zealand’s subantarctic islands are a different proposition again. Here our adventures into whaling, sealing and farming left behind a legacy of introduced pests that have wreaked havoc among the vast wildlife of our Southern Ocean.

Slowly but surely DOC has been removing the pests from these islands. The numbers of various species on our subantarctic islands have been plunging for a combination of reasons – climate change, industrial fishing and pests being the majors. The extent of the plunge is alarming – rockhopper penguins down 90 per cent since the 1940s, sooty shearwaters down 40 per cent, elephant seals down 97 per cent since 1940, and so it goes on. Rodents that compete for the food on these islands and kill directly the chicks of the breeding birds are one factor we can address.

But this work, which is important from an ecological perspective along with the business of conservation generally is becoming more valued by the day to societies that are drowning in their own waste, faces its own challenges. But – as with an increasing amount of state-funded work – there is a problem.

The problem is the government has run out of money – it taxes heaps already, it looks down the barrel at mounting debt as recession bites and Christchurch awaits reconstruction. The threat of a credit downgrade is never far away. So of course taking a razor to government spending is a predictable reaction.

State sector deliverables are hard to value – there is no market price for law and order, a floor on poverty, an equitable society, influence on global affairs, public health, no fault accident insurance, education and a conservation estate. This doesn’t mean that inefficiency in the state sector doesn’t exist – not at all, its elimination has to be continually pursued with the upmost vigour. But the nature of our adversarial politics being what it is, it comes in cycles – crusades against the state sector followed by periods of healing.

Arguably a purge is under way now, with many ministries under the hammer from a populist rant about state service inefficiency. Such a pogrom threatens the long-term work that many ministries do – whether it be science, diplomacy, foreign aid or conservation – an arbitrary 10 per cent cutback threatens to wreak long-term damage for short-term political gratification. Distinguishing genuine eradication of featherbedding and goldplating from arbitrary cutbacks to desired public services seldom features in these purges.

But it’s times like this that are optimal for the private sector to step into the breach and mitigate the damage arbitrary political purges inflict. The Million Dollar Mouse project that I’ve instigated to eradicate mice from the Antipodes is a case in point. It is high on DOC’s priorities but as with most departments it has a list of projects that don’t correspond to this week’s priorities the politicians determine.

One way to get a project up the priority list is to offer to part fund it. Then its rate of return on the taxpayer dollar is hugely boosted. Public private partnerships are precisely the way to make stuff happen that otherwise wouldn’t.

In the post credit boom era where so many governments have overstretched and accordingly face substantially reduced choices, the direct role people can play to get public services done is greatly enhanced. Put simply, the politicians have exhausted much of their cache, they are and should be open to joint ventures with those championing specific causes directly. Having found the limits to their monopoly power to tax and borrow, governments are welcoming direct involvement by the public.

It’s a new era.

Donations to the Million Dollar Mouse project can be made at All public donations are matched dollar for dollar by Jo and Gareth Morgan.

Public-private ventures could fund protection schemes was last modified: December 15th, 2015 by Gareth Morgan
About the Author

Gareth Morgan

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Gareth Morgan is a New Zealand economist and commentator on public policy who in previous lives has been in business as an economic consultant, funds manager, and professional company director. He is also a motorcycle adventurer and philanthropist. Gareth and his wife Joanne have a charitable foundation, the Morgan Foundation, which has three main stands of philanthropic endeavour – public interest research, conservation and social investment.