Free Press. ACT’s regular bulletin
Free Press
ACT’s regular
bulletin
Why the
Delay?
The coalition talks are taking longer
than Winston Peters promised. The media have slavishly built
up Peters as Kingmaker for over a year. We thought he had
leverage, too. But something’s wrong. He is flustered. He
wanted to be more than kingmaker, he wanted to be king. But
what if he is actually a beggar that both parties are
ambivalent about dealing with?
Undercooked
Election Result
We know what it’s like to be a
minor party washed away by the Jacinda tidal wave. New
Zealand First thought they’d double their support during
the campaign, instead they lost three list seats and their
only electorate seat. They have far less of a mandate than
Peters expected when he set the October 12 deal
deadline.
Bad Signalling
The trick
of running an auction is making sure each bidder doesn’t
know how much the other is willing to pay. Winston Peters’
bizarre press conference where he abused journalists for
half an hour sent two messages to both Bill and Jacinda. 1)
You know I’m trouble. 2) The other side knows too, because
I did it in public.
What’s Really Going
On?
We may have all misread the situation. Both
Bill and Jacinda may be saying, “Listen mate, you’ve
lost your seat, your party’s finished in three years like
you are, and everyone agrees you’re a nightmare to work
with. We’ll give you a couple of million dollars budget to
be the Minister of Racing, otherwise we’ll sit this one
out, thank you very much.”
You Read It Here
First
Neither side wants to be kingmade or
queenmade by Winston Peters, both realise it is a poison
chalice. The Kingmaker is actually a beggar, and that’s
why he’s lost track of the timeframe.
But
How Would We Really Know?
Bill and Jacinda could
have unionised and given Winston clear terms. Put your
demands publicly so the public know what you’re asking
for. Then we could be having a policy debate instead of a
farce. The public would be a lot
happier.
We’ve Seen This Move
Before
Labour, the Greens, New Zealand First
indeed all of the left-wing parties, were apoplectic about
the TPP being negotiated in secret. Now they are happy to
negotiate a domestic issue in private. Foreign relations
require secrecy because it’s a nasty world out there. A
domestic deal should have been done with cards on the
table.
What about the Policy?
The
last three weeks have set a new low with zero policy
discussion anywhere. The media have been happy to report on
which biscuits are being eaten at coalition talks. They’ve
also described policy discussion as ‘going down a rabbit
hole,’ and ‘attention seeking’ when David Seymour
raised it. Don’t cry for me Aotearoa!
Preserving the Good
New Zealand
routinely ranks in the world’s top five for the important
policy settings. We are free traders with a competitive
agricultural sector that does not rely on subsidies. We have
a broad-base low-rate tax system that allows most people to
pay their taxes without hiring an accountant. We have an
independent central bank focused on inflation targeting. We
have had, for the past nine years, restrained Government
spending. We have flexible labour markets without crippling
compulsory unionism. These are all under threat this
week.
Free Trade
In an excellent
NBR column this last Friday, Matthew Hooton points out how a
multi-party consensus on trade is essential to our
prosperity. Every other prosperous population of five
million-odd people is integrated into a large bloc. Denmark,
for example, is a member of the EU. British Columbia is part
of Canada and, by extension, the North American Free Trade
Agreement. Superpowers can afford to change tack when a
demagogue is elected, but pulling out of negotiations New
Zealand’s diplomats have nurtured for a generation will
not just cost us those agreements, but our reputation as a
trustworthy negotiator.
Low Rate Broad Base
Taxes
Our taxes are low compared with most
places (try adding up three levels of taxes in California,
for instance). We don’t have a myriad of silly exemptions
that are only good for tax accountants. Look out for silly
concessions to New Zealand First or even the Greens such as
taking GST off some foods, or adding a capital gains tax so
that you pay twice, once on the income you invest, then
again on the capital you accumulate.
Inflation
Targeted Monetary Policy
At the end of the day,
central banks have one job, and that’s deciding how fast
to run the printing presses. They can run them fast for more
inflation, slow for less, or just right as is the target in
New Zealand. That’s. It. Trying to lower the dollar by
printing money is daft because each New Zealand dollar may
be worth less but domestic inflation means exports cost more
New Zealand dollars.
Restrained Government
Spending|
New Zealand has run a trade deficit
twice since 1988, in 1999 and from 2004-2008. Both times New
Zealand First held the balance of power and fiscal restraint
went out the window. The public sector sucked up resources
and Wellington landlords drank extra champagne, but mortgage
interest rates hit 11 per cent for everyone else. The
fastest way for either party to stop the economy is to
abandon fiscal restraint by buying into New Zealand
First’s madcap spending promises.
Flexible
Labour Markets
New Zealand led the world with
the Employment Contracts Act introducing contract-based
labour law. Wage growth accelerated through the 1990s until
the Clark Government started to retreat from our country’s
world-leading economic reforms. Labour’s Fair Pay
Agreement Policy was barely scrutinsed during the campaign.
ACT couldn’t get its full destructiveness into a
soundbite. It would reintroduce union negotiated pay rates
for every sector (contractors included) and make strikes
part of daily life again. It is the most destructive policy
on offer in these negotiations.
Partnership
Schools
ACT’s charter schools are changing
kids’ lives for the better. Kids who had failed for years
at state schools are now at University thanks to these
innovative schools. There are currently six schools
contracted to open in 2018 and 2019. It would be shameful
for an incoming Government to sacrifice these kids’
futures at the altar of union bullying. Partnership Schools
must be maintained and invited to expand.
True
Loopiness
National hasn’t been shy about
handing out corporate welfare and picking winners,
especially when regional votes have been up for grabs (ten
bridges anyone?). National’s corporate welfare machine
could be wound up to a whole new level by a New Zealand
First deal, though. Look out for boondoggles to move ports
and subsidise industries with taxpayer
money.
Making New Zealand a Better
Place
If those are all the things that
government shouldn’t do, here are a few things that the
next Government should do (and ACT will not be letting it
forget).
Replace the RMA
It’s a
dog. It’s the biggest handbrake on development and housing
affordability in New Zealand today. After being amended 19
times in 26 years, nobody believes that another amendment
will make any difference. If anything, recent amendments
have made it worse with things such as 20 day time limits
for consents (councils just stop the clock) and Iwi
Participation Agreements (coming to a council near you). The
next Government should set a three year time limit for a
total replacement, introducing land use planning laws based
on property rights. National belatedly campaigned on ACT’s
policy of replacing the RMA in cities. Let’s hope that if
they have another term in Government they find some
mettle.
Fund Infrastructure
Properly
Councils waste a lot of money but they
simply don’t have the cash available to keep up with
infrastructure. The next Government should share half the
GST on new construction with the council that issues the
consent. This has the added advantage that it will give
councils the incentive to issue consents with a bit more
enthusiasm than we’re used to. The alternative is
continued sclerotic home building and more taxpayer money
going into housing subsidies in its various
forms.
Pay Good Teachers More (but not on
union contracts)
The last Government opened a
Pandora’s box of wage inflation with its care worker
settlements. Partly due to housing costs, teacher unions
(who have let teachers take a 30 per cent pay cut in the
last 30 years) are now demanding a 14.5 per cent raise and
threatening to strike. If pay increases are inevitable,
there’s never been a better time to strike a bargain. Good
teachers should be paid more on individual contracts, while
others should be shown the door.
Reward Self
Improvement in Prisons
We have major problems
with crime, recidivism, and illiteracy in prisons. They are
all connected. National belatedly campaigned on ACT’s
policy of reducing sentences for prisoners who learn to read
in prison. Labour are open to the idea. Let’s hope that
whoever forms a Government takes on this ACT
policy.
Raise the Age of
Superannuation
Universal Superannuation at age
65 is not sustainable. In the lifetime of current university
students, we will go from four workers supporting each
retiree to only two. The age will have to be raised before
then but National’s policy of waiting until every single
Baby Boomer retires first is a slap in the face for younger
taxpayers. Free Press predicts that an economic downturn and
fiscal crisis will force the issue anyway.
Let’s Wait and See
If we do see a
Government formed this week, ACT will be holding it to
account on the policy issues. Bring it on.
ends