Free Press

ACT’s regular bulletin

A Thought Experiment
Rest assured, general raconteuring will be back. But this week Free Press ponders a parallel world where MMP was introduced straight after the Muldoon Government and before the free market reforms of the '80s and early '90s.

Fed Up
MMP was introduced largely because the electorate got sick of change. Prime Minister Bolger’s broken promise not to introduce a surcharge on Super was just the final straw. But MMP might equally have been introduced in response to Muldoon’s dictatorial style.

We Got Lucky
Fortunately, the system was introduced after Roger Douglas, Richard Prebble, and Ruth Richardson had made New Zealand one of the best-governed countries in the world.

What We’d Have Missed
The reform period gave us an independent reserve bank, a commercial SOE model, accrual accounting in public finances, the Quota Management System in fisheries, a simple system of (somewhat) low and flat taxes, competition in healthcare, a competitive market in electricity, privatisation of inefficient government businesses, self-governing and (initially) bulk funded schools… all introduced under first-past-the-post but difficult to imagine being introduced now.

Malaise and Decline
Policy has slowly gone backward under MMP. Governments now target spending at swinging voters more accurately (think Working for Families, interest-free Student Loans). Employment law has gotten more complex, the RMA is probably a bit worse than a decade ago. Positively, National partially privatised a few power companies, mildly reduced tax rates and introduced Partnership Schools with ACT’s support.

Getting the Numbers
The most important skill in politics is the ability to count. Under the MMP period, Labour and National-led governments have been dependent on New Zealand First, the Alliance, United Future, New Zealand First again, then the Maori Party. These coalition partners have each extracted their own concessions, mostly of bad policy.

A Small Sampling
To keep this short we’ll list just a few policy choices that might have been better made.

Marine Reserves
All sizzle but no sausage. They ban taking fish from a certain area, while leaving the Total Allowable Catch the same. The same number of fish will be taken from a smaller area, inconveniencing fishers and damaging the fishery. A double own goal.

Employment Law
Employment lawyers now say National is worse than Labour, who made bad employment law for sincere reasons. Untangling Michael Woodhouse and Labour’s joint half-pie attempt at killing zero-hour contracts will be a lawyers’ bonanza.

The ACGT (Accidental Capital Gains Tax)
Having campaigned against a capital gains tax, the government is now implementing one by accident. The two-year bright line test puts in place all the machinery for taxing capital gains. All a future government needs to do is extend the period to, say, fifteen years, and we will effectively have a capital gains tax. In fact, the opposition are already promising to do so but National is not for turning.

Corporate Welfare
Steven Joyce loves taxing businesses profitable enough to pay company tax and giving it to companies like Gameloft, who take $2.9m, make a loss and skip the country. He has never explained why he thinks the government can invest other people’s money better than they could have done themselves.

Harmful Digital Communications
The Government has passed into law ten rules for being nice to each other on the internet. We are not making this up. Freedom of speech has suffered but people are still mean to each other on the internet.

Nationhood
The Maori Party shows how successful a minor party can be. The mandatory Iwi consultation clauses proposed for the RMA are just the latest example of a trend toward two standards of citizenship.

That’s Enough
We don’t want to depress Free Press readers. MMP is a recipe for gradual policy decline, luckily starting from a high base. Our goal is to build up ACT until we hold the balance of power so we can prevent bad policy and promote good.

ENDS

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