The Customs Computer $30 Million Blowout

Guest post by Daniel Silva from the Importer’s Institute

Yet another big government IT project has gone off the rails. This time it is something called the Joint Border Management System (JBMS), a system designed to upgrade and link systems currently operated by Customs and the Ministry of Primary Industries (MPI). It was supposed to be finished by the end of 2012 at a cost of $75.9 million. Three years later, the development is still not complete and the budget has ballooned to $104.1 million.

This is merely the latest in a series of similar debacles. They are practically unavoidable, given the model used by government for IT procurement. It has been described as the “waterfall” model. Mike Bracken of the UK’s Government Digital Services described it as “writing most when you know least.” A group of public servants write massive tender documents attempting to guess the needs of end-users years in advance. The scope of the projects is such that only a few large consultancies can qualify to tender. The selected consultancy then gets on with over-running budgets and missing delivery deadlines.

When it all becomes public, everyone runs for cover and the hapless Minister nominally in charge is left to take the flak. In the JBMS project, Customs, MPI, the Department of the Prime Minister and Cabinet and the State Services Commission were all called to put out the fire. Official Information requests were declined (on the usual grounds of ‘commercial confidentiality’) and an embarrassing law suit with IBM was avoided, but not before a few more millions were spent getting legal advice from Crown Law and Chapman Tripp. Those suits don’t come cheap.

Does it have to be this way? After all, banks do on-line banking, Amazon sells books, clothing retailers of all sizes sell clothing, Trademe manages an auction site and airlines sell tickets on-line. None of these well-functioning systems were developed using the waterfall model. They were not the product of any grand design and all started as relatively small projects, run by in-house teams or small-scale contractors. Unlike public servants, the owners of those businesses did not have access to lavish amounts of other people’s money. Many of the early versions of these successful applications failed miserably, but were soon replaced by others that did not.

Matt Ridley, a member of the British House of Lords, said in an article published in The Times,

[The systems that] succeed allow for plenty of low-cost trial and error and incremental change. It’s the mechanism Charles Darwin discovered that Mother Nature uses. Rather than a grand ‘creationist’ plan or a big leap, natural selection incrementally discovers success through trial and failure. From the English language to an airliner, everything successful has emerged by small steps.

The current Customs system, Cusmod, was developed around the same time as trackstock, the Warehouse Management System that we use at DSL Logistics. We like to say that trackstock is very good indeed, because it incorporates fifteen years of mistakes. Every time something goes wrong, our small in-house team of developers comes up with solutions which improve the functionality of the product. Cusmod, on the other hand, looks substantially the same that it did fifteen years ago. Of course it is out-dated and no longer fit for purpose. Instead of breaking the system up into smaller units and developing the capability to maintain them in-house or by using local developers, the departments went for another big bang approach and propose to replace the whole thing by spending over $100 million of taxpayers money.

The idea that a group of public servants can specify the myriad requirements of users, years in advance, is nothing short of arrogance. Yet, New Zealand is awash with very smart developers that deliver solutions to businesses of all sizes, day in and day out. Unlike massive projects like Novopay or JBMS, those systems actually work, in a way that no public sector IT system has ever done.

The rationale for JBMS was never very clear. At one stage, it was trumpeted as making it easier for businesses to register with the bureaucracies, a step that every business must undertake exactly once in its lifetime. The need for a ‘single window’ arose from the decision to keep two separate agencies working on border control, contrary to what every commission of inquiry convened on that topic over the years recommended. A single border control agency is the norm in comparable countries. It soon became apparent that the real purpose of the exercise was to upgrade the control systems of both agencies, while keeping two chief executives and their coteries of deputies.

Customs already records details of every transaction in a modern relational database. That provides the mechanism for the collection of statistics and the management of the revenue collection functions. The same data can also be used for intelligence purposes. There is no discernible need to create a new mega system to improve intelligence gathering. If the data being collected is not sufficient, new fields need to be mandated. Customs officers need to receive better training on how to query their databases and produce better analytics. If the tools that they have at their disposal are not good enough, then any of the many local software developers can provide them with query/reporting tools by lunch-time, at a fraction of the IBM costs.

Does such an approach work? It does. According to Matt Ridley, British minister for the Cabinet Office Francis Maude

began by centralising controls so that he had to sign off any IT contracts of more than one million pounds (now raised to five million), then built up an in-house capability to offer cheaper and better design, and opened procurement to smaller companies. Government contracts with outside IT suppliers are now shorter and smaller. Some of the savings on offer were so vast that civil servants refused to believe them. In one case, 98.5 per cent of the cost of an existing contract was saved by letting a contract to a small British business rather than an incumbent multinational IT firm, and it worked better.

Internal Affairs Minister Peter Dunne represented New Zealand at the inaugural meeting of the D5 Digital Leaders’ Summit in London in December 2014. The D5 is a grouping of five nations – United Kingdom, New Zealand, South Korea, Estonia and Israel – considered amongst the most advanced in the provision of on-line government services. Its establishment was a British government initiative. We hope that Mr Dunne learned something at that meeting.

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Daniel Silva is the head of the Importers Institute, an informal national association of New Zealand importing companies keeping members informed on topical issues of interest, and representing importers’ interests before policy makers and the public.

Pretending to Solve Housing Affordability

Guest post by Daniel Silva of the Importers Institute.

Import News from the Importers Institute: Pretending to Solve Housing Affordability

The government is finding it difficult to have a real impact on the affordability of houses. It has now come up with some pretend solutions.

The issue is actually quite simple. Some City Councils are run by people who believe that we should all be living in high rises near train lines, so we can ride a bicycle to the closest lentil-and-soy-latte shop. To achieve this vision of life in East Berlin circa 1975, they prohibit people from building houses where they want. Then, the cost of the remaining land goes up, astronomically. As it would.

The government does not seem to have the stomach to stem the ideological onslaught from the central planners, so something else is needed to try to convince people that they are doing something. Minister Nick Smith put out a consultation paper that suggested exempting building products from anti-dumping laws. Apparently, plaster-board from Thailand and nails from China were found to have been sold too cheaply in New Zealand, so the local manufacturers persuaded an earlier government to protect their profits by slapping a large protective tariff against competition from imports, using the arcane anti-dumping laws.

The Minister is right when he says “I worry that high duties on some imported building products, combined with limited competition in New Zealand is allowing excessive margins by building product manufacturers”. That is just as true when the same tariffs are applied to canned peaches, diaries and hog bristle paint brushes which are all subject to anti-dumping duties.

The Ministry said, “there is no intention to reform the fundamentals of [the anti-dumping] regime, such as by introducing a full public benefit test which would measure the impact of anti-dumping duties on New Zealand consumers”. So, they propose to change it just for building products, presumably because housing affordability is always in the news.

The Minister also proposed to corrupt the duty concession system, which exempts duty on goods without locally manufactured equivalents, again just for building components, again just to be seen to be doing something (other than the obvious). This principles-free approach to public policy reminds me of Muldoon who, when confronted with the problems caused to our exporters by the high costs of protecting local manufacturers, offered to eliminate duties on agricultural tractors.

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Daniel Silva is the head of the Importers Institute, an informal national association of New Zealand importing companies keeping members informed on topical issues of interest, and representing importers’ interests before policy makers and the public.
This article was first published in The Exporter magazine, and appears here by permission.

GUEST POST: Importers ask government to break strike

Guest post by Daniel Silva of the Importers Institute

The Importers Institute has today asked the government to pass urgent legislation empowering the Port of Auckland to dismiss striking port workers and contract out the work to private operators.

The Union today threatened to extend a two-week strike into three weeks. During that period, importers and exporters will have to spend many millions of dollars diverting cargo to other ports and airfreight, to keep shops and industry supplied. The exodus of shipping services from Auckland to other ports will accelerate.

This is not a genuine labour dispute for better pay and conditions. What the Union is demanding is quite simply a monopoly on wharf work, usurping the right of management to manage the Port. In effect, they are striking for the right to run the Port for the benefit of the Union. Their members will get nothing from this action, except for one month's lost wages and most probably redundancy.

The Importers Institute asked the Port management what the cost would be of moving the work over to private contractors without delay. We were told that is not possible. Under current legislation, a Court would probably force the Port to take back the striking workers. This is apparently something to do with the 'good faith' nonsense legislated by Margaret Wilson a few years ago.

We call it nonsense because the Union has been guilty of the utmost bad faith. They have lied through their teeth concerning the average remuneration of their members (over $90,000) as well as pretty much about everything else concerning this dispute.

The current government has had plenty of time to reverse the legislative excesses of the last government, but chose instead to smile and wave. The time has now come for the government to assume its responsibilities and prevent a bunch of industrial thugs from holding New Zealand to ransom.

We already have legislation that prohibits some forms of industrial action, for example sympathy strikes. That has not stopped the managers of the Union from going off to Sydney to ask their comrades in other countries to boycott New Zealand. The government's obligation is clear and urgent.

Daniel Silva is the head of the Importers Institute, an informal national association of New Zealand importing companies keeping members informed on topical issues of interest, and representing importers’ interests before policy makers and the public.

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GUEST POST: Climate Change and Eugenics [updated]

By Daniel Silva from the Importers Institute.

Eugenics is the study and practice of selective breeding applied to humans, with the aim of improving the species (Wikipedia). At its pre-war height, the movement often pursued pseudoscientific notions of racial supremacy and purity. It was practiced around the world and was promoted by governments, and influential individuals and institutions.

The second largest known eugenics program was created by social democrats in Sweden and continued until 1975. The pseudo-science was considered as 'settled' by progressive bien pensants in Europe and the US in the early decades of the 20th century. Then, the second World War came along. Several million dead bodies somewhat discredited the 'science'. Suddenly, no one believed in it any longer but, even more remarkably, no one had ever believed in it, apparently.

Which is pretty much where we are now with Global Warming. I predict that, not before long, no one will believe in this proto fascist construct - and you will be hard-pressed to find anyone willing to admit that they ever did. But, like eugenics, not before untold damage has been inflicted on millions. The stupidity of converting crops to biofuels has consequences. Eco-entrepreneurs make millions, millions die.

The wheels are falling off the climate change bandwagon. The corruption of science evidenced by Climategate is simply too blatant to ignore. The IPCC turned out to be as corrupt as you would expect a United Nations body to be. Politicians everywhere who went along with this charade are finding out all about the Turnbull effect.

You read it here first. About three years ago, I commented on these matters in an address given to a group then celebrating the 50th anniversary of the Treaty of Rome. Some extracts from that address:

"The Importers Institute is pleased to be associated with the celebration
of the 50th anniversary of the Treaty of Rome. That is because we believe
that international trade is good. It is certainly preferable to war. That, we
must not forget, was the main reason why the founding fathers of the
European project sat down in Rome 50 years ago and decided to free up
trade among European countries.

"Let us celebrate the success of that project, but let us not forget
that it is under constant attack. Many Europeans seem to have forgotten
the lessons of history and are again flirting with a form of fascism.
This time, it is eco-fascism and is dressed up as a wish to "save the
planet".

"These people are opposed to free trade. They fret about "food miles"
(but, strangely, not about clothing miles or pharmaceuticals miles) and
say that the only way we can save the planet is by de-industrialising,
reducing food production and restraining the mobility of people.

"In fairness, this disease of the mind is not exclusive to Europe. You
will be familiar with Al Gore's alarmist documentary, the one that seems
to say that we must all panic now, before it is too late. Mr Gore relied
heavily on a graph showing a very close correlation between past
temperature changes and concentrations of CO2 in the atmosphere. What he
conveniently omitted to tell us was that the levels of CO2 changed 800
years after the temperature went up. There is a correlation all right,
it is just that it goes the other way. How inconvenient.

"All that happened about 10,000 years ago, long before humans invented
SUVs, hospitals or air-conditioning. The medieval warm period was
another inconvenient truth. So inconvenient, in fact, that the IPCC
relied heavily on a graph showing that it never existed. The now
infamous hockey stick graph showed a flat temperature line stretching
back one thousand years, rising steeply from the beginning of the
industrial revolution. Unfortunately for the alarmists, the graph was
proven to be not just scientifically wrong - it was an outright fraud.

"The more that people begin to realise the actual impact on their daily
lives of the eco-fascist agenda, the more they are likely to question
the pseudo-scientific hype used to justify it. The eco-fascists reply
against this inevitable backlash seems to be to shout that the "science
is settled" with increasing shrillness. Settled science: now there's an
oxymoron if ever there was one.

"But, is such talk really inconsequential? People bent on 'saving the
planet', with their talk of food miles and taxes on air travel, have the
potential to destroy the very basis of our economy. Instead of
countering their fallacious arguments with science, we seem to be saying
that yes, you are right, but please go easy on us because we are quite
green ourselves. What a strategy!

“We want to keep access to Northern hemisphere markets and would like
their tourists to continue to fly twenty four hours to spend their money
here, while agreeing that air travel is bad for the environment. Then,
we spend a few million dollars on a 'buy local' campaign. If madness is
defined as the ability to simultaneously hold contradictory beliefs, the
inescapable conclusion is that we are being governed by the insane.

"Let us celebrate the real success of the Treaty of Rome and that was
the opening of borders and the increase in prosperity that only trade
can deliver. Jean Monnet and Robert Schuman did not set out to create an
isolationist Europe, inimical to trade and wedded to romantic notions of
economic self-sufficiency. We should celebrate their legacy by refuting
those notions."

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To get a free subscription to Daniel Silva’s Importers Institute email news service, please subscribe
in www.importers.org.nz.

UPDATE:  The worldwide collapse of the house of warmist cards continues. Now, in New Zealand, we finally have the admission by the National Institute for Water & Atmosphere (NIWA) after two years of being asked that it no longer knows on what basis it once adjusted the raw temperature data that has been collected for over a century-and-a-half.

“NIWA’s website carries the raw data collected from representative temperature stations, which disclose no measurable change in average temperature over a period of 150 years. But elsewhere on the same website, NIWA displays a graph of the same 150-year period showing a sharp warming trend. The difference between these two official records is a series of undisclosed NIWA-created ‘adjustments’.”

But NIWA now candidly admits it no longer holds “the original worksheets and/or computer records” used for its in-house manipulation of official temperature readings, leading to the NZ Climate Science Coalition to say that “NIWA has forfeited confidence in the credibility of its temperature recording procedures,” and to call for NIWA “to abandon all of its in-house adjustments to temperature records,” and “revert to the raw data record, perhaps accompanied by a statement of any known issues.”

 

These tectonic changes will demand alterations to or even cancellation of our own ETS and other responses to “global warming”

The Climate Science Coalition press release on NIWAgate is here:
NIWA Unable To Justify Official Temperature Record [hat tip Owen McShane]