Proposed severe cuts could accelerate department's decline
Analysis: It sounds reasonable enough.
The National Party’s “back pocket boost” policy document says it will, if elected, reduce “back-office bureaucracies” to make immediate savings from a bloated public service, while protecting frontline services. This to enable tax cuts for the so-called squeezed middle.
The average “efficiency dividend” – savings made by government departments, ministries and agencies – would be 6.5 percent, National says, with agencies experiencing “very high rates of expenditure growth in recent years” expected to save more.
READ MORE: * DoC will get back on track when perverse rules are ditched * Crisis-hit Conservation Dept considers closures, offloads * Accident shows DoC risking another Cave Creek
Examples of cuts include reducing advertising and PR spending, not filling job vacancies and stopping some new hires, and stopping office refurbishments or property upgrades.
“The savings drive will start immediately on National taking office,” the back pocket boost document says.
An appendix listing “agencies identified for savings” notes the Department of Conservation’s output expenditure increased 85 percent between the 2018 financial year and 2024, to $710 million.
There are problems with just citing totals, however.
It doesn’t account for ring-fenced, time-limited money – such as funds earmarked for the $1.1 billion Jobs for Nature programme.
Also, not all revenue comes from taxpayers. The department makes money from business sponsorships, and collects concession fees from tourism businesses, for example.
Increases in revenue don’t adequately describe a department in decline, either – especially its struggle to maintain huts, structures and trails.
That’s not to say more money is always the answer.
In May, former Federated Mountain Clubs president Peter Wilson called for a “perverse” set of accounting rules to be changed, and for a league of volunteers to step in to help reduce a backlog of hut maintenance.
But given the department is charged with managing a third of the country, and protecting our taonga species of flora and fauna, saving money in one place can have unintended consequences elsewhere.
Last week, a trio of environmental groups said a $46m (6.5 percent) cut to DoC’s budget would be catastrophic.
In a statement released on Friday, WWF-New Zealand chief executive Dr Kayla Kingdon-Bebb said: “Defunding DoC would not only be disastrous for nature but also for the communities that rely on tourism for their livelihoods.”
Meanwhile, Nicola Toki, chief executive of Forest & Bird, said it was irresponsible to make cuts in the middle of biodiversity and climate crises.
The press statement suggested a reduction in predator and pest control could lead to the extinction of native species.
Environmental Defence Society chief executive Gary Taylor said DoC’s mission of managing a third of Aotearoa meant it was already severely stretched. The cuts proposed would be catastrophic for our natural world, he said – “and we simply won’t stand for it”.
National has been careful to say its cuts are aimed at the back office.
However, back-office workers support the frontline. Also, if you’re not an ecologist or hut maintenance worker, that doesn’t mean you’re an unnecessary paper shuffler.
Many DoC staffers lament the mess left by two big restructures over a decade ago, when 250 jobs were axed under former director-general Al Morrison.
Behind the frontline, DoC does plenty of important work. It’s a regulator that monitors consents, and makes submissions on development proposals, including mines, and advocates for conservation on behalf of the public.
Diminished department in funding crisis
Figures released to Newsroom show how the stretched department is struggling – a problem made worse by the pandemic and recent cost increases.
Between July 2019 and May 2023, the shortfall from expected international visitor levy revenue was $125m, concessions revenue was $55.7m lower than expected, and money from business partnerships was $11.4m shy of forecasts.
The Government has covered some of those shortfalls, but not all. DoC finds itself in a funding crisis.
The department’s latest annual report notes its operating expenses were $23.3m lower than expected because major work had been deferred and some field operations cancelled.
Since the emergence of Covid-19, DoC’s public face has diminished.
Visitor centres in Tāmaki Makaurau/Auckland and Otautahi/Christchurch have closed.
Centres in Pōneke/Wellington, Paparoa National Park, Tititea/Mt Aspiring National Park, Whakatipu-wai-Māori/Queenstown, and te Rua-o-te-moko/Fiordland have operated on reduced hours, and those in Tongariro National Park and Rotoiti/Nelson Lakes have been staffed irregularly.
“At various times over the last three years, the department’s Takaka, Renwick and Motueka offices closed due to staff shortages, and the Whangarei office closed due to staff shortages and flooding after Cyclone Gabrielle,” says Wilson, the director of heritage and visitors.
A maintenance backlog, and a surge in unplanned work (some of it related to extreme weather events), is taking its toll, just as international visitors are returning.
In May, the department closed three bridges in the Wānaka area – at Blue Pools, Rob Roy and Makarora – until summer, for safety reasons.
‘[A misalignment between operation and capital funding] has resulted in high levels of reactive maintenance, deferred maintenance, and deferred renewals. Consequently, the assets also become dangerous and unusable.’ – Treasury briefing, February 2022
The department’s network of recreation assets is the largest in the country.
It has 2170 buildings and huts, and 2115 amenity and toilet blocks at 329 campsites and 521 amenity areas. Beyond 168 “seaside assets”, such as wharves, jetties and boat ramps, DoC manages 13,385 “other structures”, and 14,623km of tracks.
All on a budget roughly equivalent to that of Christchurch City Council.
As Newsroom reported in May, DoC is struggling with a massive backlog of maintenance and upgrades of huts, tracks and structures, and unsustainable cost pressures has forced it to consider closures and divestments.
(DoC says it doesn’t have $300m of deferred maintenance but this figure relates to the total value of the assets, based on the initial acquisition cost, “that have been fully depreciated to a book value of $0”.)
The department spends about $35m a year on maintaining its recreation assets.
But by one count the department said it was falling short by about 133,000 hours a year. That’s the equivalent of work done by 80 full-time staff. In May, DoC revised that figure to 147,433 hours.
All the while, these assets age and fall into disrepair. DoC estimates half its huts, and 28 percent of other structures, are more than 30 years old. Most tracks are 11-20 years old, but a track’s “useful life” is thought to be eight years.
A tally in May said 170 huts had outstanding inspections, another 143 weren’t to “service standard”, and 18 had “extreme or high work outstanding”. Of the 1775 structures not to standard, there were 1078 yet to be inspected, and 562 failed a barrier assessment, 127 failed load capacity assessments, and 91 had extreme or high work outstanding.
Eight huts and 71 structures had been closed.
According to Treasury, between 2013 and 2019, DoC did more unplanned maintenance than planned maintenance – suggesting not just an under-investment, but inadequate planning.
How did we get here?
A February 2022 Treasury report into the “natural resources cluster” of DoC, Ministry for the Environment, and the Ministry for Primary Industries, said there was a 23 percent increase in DoC’s recreational assets between 2013/14 and 2014/15, because of a huge increase in tracks and signs, “without an effective strategy to sustainably fund the ongoing maintenance of the asset portfolio”.
Over that time, construction, material and labour costs increased, legal requirements had changed, as had “customer expectations of quality”. There had been a “misalignment” between operation and capital funding, the report said.
“This has resulted in high levels of reactive maintenance, deferred maintenance, and deferred renewals. Consequently, the assets also become dangerous and unusable.”
The scale of the work required to put DoC’s assets on a “more sustainable footing” is described as significant, “requiring a major increase in activity relative to historical delivery”.
The “true cost” of deferred maintenance is expected to become clearer over the next two years, the report said, “due to planned improvements to data systems”.
Money has been earmarked to tackle the maintenance backlog.
In 2022’s Budget, DoC received $60m to spend on visitor assets.
The “fit for purpose recreation assets” project is estimated to cost $21m over three years, including $5.9m in the current financial year. (Other spending has been earmarked for asbestos, Three Waters, and dam safety.)
A DoC “investment briefing” from April said the department needed more specialist staff to deliver work on visitor assets.
“The level of risk on the network has increased over time due to changing visitor outdoor skillset, increasing numbers of natural hazard events, and the ageing condition of the network in general which has made maintenance more costly.”
The briefing – written before May’s Budget – said the maintenance backlog was “not far beyond the department’s existing business as usual effort to reduce this risk”.
The paper called for a significant increase in investment over three years to reduce the backlog of “deferred, safety critical maintenance”, lifting the network to a fit for purpose standard.
Not only has deferred work meant some DoC assets were substandard and neglected, the implication is they’re less resilient to natural hazards and extreme weather events – conditions expected to happen more frequently because of climate change.
Just think of the damage inflicted by Cyclone Gabrielle. These events add considerable pressure to an already stretched maintenance budget.
Site closures and avoidable injuries might increase, the briefing warned, and safety-critical renewal projects were likely to increase in “volume, cost and seriousness”.
DoC figures show operation and capital spending on recreational assets over the past three years has been reasonably consistent – $69m in 2019/20, $79m in 2020/21, and $76m in 2021/22.
Wilson, DoC’s director of heritage and visitors, says operational costs include paying staff, buying field equipment and paying for services, and asset maintenance.
Capital spending is prioritised by “health and safety factors, strategic alignment to conservation goals, and value for taxpayers and stakeholders”, she says.
However, the department doesn’t – or can’t – tell Newsroom how much of its maintenance and renewal work was routine, and how much was deemed safety-critical.
With the 1995 Cave Creek disaster in mind, Newsroom asks if there is a danger to the public of deferring maintenance on high-risk structures.
DoC labelling structures “high-risk” doesn’t equate to a high risk to users, Wilson says. It’s a management category meaning the structures are inspected more frequently.
Critical maintenance work, when identified, is scheduled immediately. “If for whatever reason the work cannot be done at this point, the asset is closed for visitors.”
A May monitoring report to the deputy director general of operations identified three structures assessed as high-risk to the public:
- Lake Waikareiti bridge in Te Urewera (repair planned for November/December, “closure sign keeps being removed”);
- A bluff-safe barrier at Tongariro (“rock slip hazard, some but not all track closure signage in place, there is constant vandalism”);
- And Tarn Ridge Hut in Wairarapa (“Black mold in a rotten hut, rebuilding planned next summer”).
In January this year, deferred work included 11 overdue high-priority work orders on high-risk structures, and 99 overdue high-priority work orders on other assets.
By May, DoC had 59 overdue high-priority corrective work orders related to 50 high-risk visitor structures, and 119 overdue high-priority work orders on other assets.
“None of these cases result in an increased risk to visitors as the assets affected have been closed as per the department’s visitor safety approach,” says Wilson.
A separate briefing, written the same month, said 12 percent of high or medium-priority work orders for high-risk buildings and structures were overdue by two years or more. Some inspections are also overdue, although they are on track to be completed this year “with some exceptions such as sub-Antarctic Islands and closed structures”.
DoC’s new model for its visitor network – which might include closures or asset disposals – is “a phased programme of work over several years”, Wilson says.
Asked what changes are likely to service levels, and if assets will be closed or disposed of, she says no decisions have been made about “prioritisation work”.
“The department is currently examining what part and/or proportion of its recreation assets can be managed to the required standard, meet visitor, heritage, and biodiversity needs, and remain within budgetary constraints.
“The network will continue to cater for a range of needs for ‘back country’ and ‘front country’ users but may look different to how it does today.
“This programme includes improvements to meet climate, legislation, and population change. This complex work will involve partners, stakeholders, and public engagement. The department estimates this work to be completed within the next 24 months.”
Before that work’s finished, there’s a general election.
On the campaign, politicians are hammering their talking points. National accuses Labour of financial mismanagement and overspending, and Labour uses the policies of a National-led government as a bogeyman.
Whichever side wins, there’s evidence to suggest cutting DoC’s budget too quickly, and without reasonable consideration, could make a bad problem worse.
What most people want is an efficient public service, including a well-run and adequately resourced conservation estate to be enjoyed by everyone.
