Light In The Darkness

By David

Since writing last week’s Swimwatch article on the decision of Swimming New Zealand to increase our meet entry fees I have had time to ponder the history of Swimming New Zealand prices and costs. I have also received several interesting emails suggesting fresh avenues of enquiry. In no particular order then, here are some thoughts that may interest those involved in Miskimmin’s new Swimming New Zealand.

Did you know, for example, that Swimming New Zealand’s own rules – “SNZ Regulation 2.3 to be exact” – says “entry fees shall be set by SNZ and shall be published no later than 31 July of each year”? What that means is that to comply with their own rules any entry fee increase for this year’s championships in 2014 was required to be published by 31 July 2013. Swimming New Zealand’s actual publication date was January 2014; five months late.

But of course, the rules are of little concern to those employed by Miskimmin to run the new Swimming New Zealand. Rules are for other people. In the new Swimming New Zealand the politburo of Miskkimin, Layton, Renford, McKee, Power, Hunt, Cotterill and Brown can do whatever they like. Or at least that’s the way it seems. What else can explain their disregard of Regulation 2.3. For the sake of a $500 filing fee I think the SNZ decision is well worth an appeal to the Sports Tribunal.

Spin is all about the use of words. Take this sentence from the Swimming New Zealand announcement – “We have for a number of years now refrained from increasing our entry fees”. The implication of this sentence is that the fine people at Swimming New Zealand have patiently absorbed cost increases for say, ten years, in the service of their members. Finally and in desperation, they must now, reluctantly, pass on some of these costs in the form of a price increase. As their announcement says, “increases in costs have left us with little option.” That is the impression Swimming New Zealand want to convey. And it is a lie.

At what I think was the SNZ Annual Meeting in August 2010, SNZ proposed that the entry fee for national meets be increased.  The increase was large. As I recall it was 20% bringing it to the level of $15. I think the previous fee was $12.50.  So 20% would be about right. And now Swimming New Zealand has imposed a further 16.6% increase. In 3.25 years Swimming New Zealand has increased entry fees by 36.6%. The New Zealand Reserve Bank tells me that the inflation rate in New Zealand for the same 3.25 years was 6.9%. It seems that, in order to pay for their Mazda SUVs and opulent lifestyle, Swimming New Zealand has increased our entry fees by 36.6% and want us to believe that it’s all to pay for a 6.9% increase in inflation. That is what is meant by the word spin.

When Swimming New Zealand imposed their last increase in entries the income effect was disastrous. It will be interesting to see whether the same thing happens this time.

In 2010/11 an analysis of the entries in Swimming New Zealand Championship events showed that entries for the subsequent year decreased to national events (Opens, NAGs, Division 2 and Juniors) by a percentage greater than the percentage increase in fees. The clever move of increasing the entry fee caused a net loss to Swimming New Zealand. One might be happy to think that, the greedy bastards got their just deserts. Sadly though it actually meant that the membership of the sport took another hit. Just perhaps, if you want to find the reason the participation in swimming is falling, look no further than the SNZ company car park.

One would have thought though that this most basic Economics 101 lesson in the relationship between price and demand would have been known to someone involved in the control of the new Swimming New Zealand. But I guess a background in state monopolies (the Post Office), economic interest groups (the Electricity Authority) and an expensive Wellington private girl’s school (Samuel Marsden) affords a disconnected elastic view of that relationship. It will be interesting to see how much damage the current price hike causes the sport.

However, when it comes to spin, nothing beats this line in Swimming New Zealand’s announcement; “Swimming New Zealand are being faced with increasing costs to stage events with many aquatic facilities increasing pool hirage for competitions”. On very good inside-the-organization authority I have been told that SNZ get full recovery of pool hire costs for National championships from community trust grants. It does not matter if the price of pool hire goes up – Swimming New Zealand get 100% recovery no matter what.

So, if pool hire is cost neutral, what costs are being covered by Swimming New Zealand’s 36% price increase in three years? Well you have probably guessed the answer. It is the direct cost of staff – including the Mazda’s, the fake national uniforms, foreign travel and a seemingly insatiable greed.

I had to smile when I read an announcement by the Chairman of the new Swimming New Zealand, Brent Layton, in his role as Chairman of the Electricity Authority. He was commenting on a finding by the Authority that the costs incurred by power retailers over the past three years rose 21.5%. Retail prices over the same period rose by only 12.5%. Brent Layton said the results showed competition was forcing electricity retailers to absorb cost increases. Layton said, “This is a very encouraging sign and indicates the changes in the structure and rules of the electricity industry following the 2009 ministerial review are now having a real impact on retail market performance.”

One can only wonder how Layton explains his new charge, where prices have gone up by 36% in three years while costs have only risen by 6.9%. Perhaps, “This is a very depressing sign and indicates that the changes in the structure and rules of swimming following the 2012 Moller Review have utterly failed the organization.”

Don’t hold your breath for that sort of honesty. The real story here is that the new Swimming New Zealand is unaccountable at any level.