Coastguard funding by Barry Young
Coastguard funding by Barry Young of Professional Skipper Magazine
COASTGUARD by Barry Young, Professional Skipper Magazine
Issue 28 June/July 2002
Some weeks ago, Coastguard resources were so stretched that if an engine on one of its rescue boats had packed a sad, that rescue unit would have been beached. There were no spare engines and there were no funds to purchase another.
How is it that an organisation like the Royal New Zealand Coastguard Federation and its operating units (more than 60 of them are spread around the country) can find itself in such a situation?
The answer is quite simple. Successive governments have neglected the service for a long time, and the majority of professional and amateur boat operators throughout the country have taken it for granted.
Over the years, governments have sidestepped what many would see as an obligation. They have done this by watching the Coastguard annually negotiate for funds with the Lottery Grants Board. At one stage LGB funding built up to $1.8 million a year, but in more recent times it has been reduced to about $1 million.
It is simply not enough money for the Coastguard to continue to provide the service expected of it, and with the Lotto take down some $80 million, it can be anticipated that even the present $1 million might well be reduced.
Currently the Coastguard struggles along raising $300,000 from its annual lottery, with operating units around the country raising further money at a local or regional level with variable success. The Coastguard needs $5.5 million to maintain its current services and develop such basic operational back-up as spare engines. Is it worth $5.5 million a year? The facts speak for themselves.
If the government had to replace the Coastguard it would need a minimum outlay of $20 million for capital assets. (This does not include buildings or land.) Maintaining and replacing these assets would cost in the region of $5 million a year. Heaven only knows what it would then cost to establish and train crews around the country on an ongoing basis.
Then there is the value of lives saved by the Coastguard. Some years ago the Bureau of Economic Research Ltd, or BERL, calculated that the economic cost to the country of a life lost (for motor vehicle accident purposes) was $2.4 million. The government uses this value to prepare business cases (cost/benefit analysis). The Maritime Safety Authority also uses this value in its business cases to justify capital works expenditure.
Each year the Coastguard assists approximately 5000 people to safety. Official statistics only record those who die. During 2001, according to Water Safety New Zealand, 19 people died as a result of recreational boating mishaps.
Police statistics for the 1999-2000 period record 550 lives saved, with the Coastguard being directly involved in 41 percent of these operations. In other words, the Coastguard saved 225 lives.
During 2000-2001, police recorded the number of incidents but not the lives saved. As the number of incidents increased by 25 percent over the previous year, it is reasonable to suggest this would represent 281 lives saved by the service.
Using the BERL figure of $2.4 million for each life, the Coastguard’s efforts over the last two years have saved $1.2 billion worth of lives, or $607 million worth of lives during each of the last two years.
Yet they receive nothing from the government, and only $1 million via the Lottery Grants Board. One million dollars a year is 1/607th of the value of the lives saved. Even if the government raised its contribution to $5.5 million a year, this is still less than one percent of the value of the lives saved.
This would have to be one of the great bargains of all time! Imagine what the Coastguard could do with a 10 percent return on lives saved, ie $60.7 million?
Now, let’s look at the value of vessels rescued. Not all of these would have been lost if they had not been rescued by the Coastguard, but in 2001 they had a value of $90 million.
Surely this is of more than passing interest to the insurance industry, another possible source of income. Then there are all those incidents during which Coastguard vessels stood by to prevent an incident from becoming a disaster. What value can you place on these?
Who runs the VHF network around the country? The Coastguard. And who runs so many of the marine education courses around the country - the Coastguard, although the Boating Education Service is pretty much a stand-alone profit centre, with its costs largely being offset by fees. Nevertheless, they are there, and to replace them would cost a fortune.
Whichever way you look at it, the Coastguard is worth many millions of dollars to this country. Yet the government, the institution responsible for the welfare of the people of New Zealand, pays virtually nothing towards its operation, although it has recently given some relief by way of fuel tax, which will amount to about $45,000 per year.
So what can the Coastguard do? Not all that much, if it continues with its policy of not rocking the boat. But it does have options, some of which might require significant policy changes, including its relationship with the police.