Written By: - Date published: 3:52 pm, November 16th, 2008 - 103 comments
Categories: national/act government -
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As we predicted, National has used a confidence and supply agreement with ACT as a vehicle for its true right-wing agenda.
National has given a wide range of concessions to ACT, far more than is necessary to gain ACT’s already pledged support. Together, they amount to a far more rightwing policy program than National promised.
Here’s a summary (full version here):
Hide to be Minister of Local Government and Regulatory Control (= fewer controls on business, less public input). Roy to be Minister of Consumer Affairs (like appointing Paris Hilton to teach at a finishing school).
Life sentences for people with three serious convictions (what ‘serious’ is we don’t know). In California, this law has seen the prison population explode while crime rate reduction has been in line with falling rates in states without such laws.
The Emissions Trading Scheme will be suspended until ACT gets to have a review under its terms of reference, which are designed to have the ETS scrapped and preferably not replaced or replaced with a carbon tax. National and ACT opposed a carbon tax in 2004, it is just a delaying tactic.
“Task Forces that include private sector representatives and private sector chairs to undertake fundamental reviews of all base government spending. A focus of this work should be on elimination programmes* that do not deliver value for money”. Value for money being decided by the rich ‘advisors’ National/ACT appoints to carry out the review. I wonder how much value for money they will see in poverty relief.
Cap expenditure on government services by law. Which would prevent the Government responding to new policy challenges without cutting existing programmes. That will be a problem for National, it has already promised programs requiring thousands more public servants. It will mean the new prisons National/ACT will build will need to take money from other areas, like health.
Flatter tax. That means any future tax cuts will go exclusively to the wealthy. Most people will get nothing.
Further weakening of the RMA.
More money for private education = less for public education because expenditure is capped.
Your work rights will be attacked too. National/ACT releases this is sensitive so they’ve disguised their plan with coded language.
National/Act agree to close the ‘income gap’ between Australia and NZ by 2025, requiring ’3% productivity growth per year’. Which is just economic techno-babble. What ‘income gap’ are they talking about? GDP per capita or wages or what? And how would a faster rate of productivity growth close this gap? Anyone who knows what productivity is (the amount of wealth produced in a unit of work) knows that merely increasing productivity doesn’t necessarily boost GDP or wages. GDP = productivity x work done. So, GDP not only depends on productivity it also depends on how many people are in work. And boosting productivity doesn’t lead automatically to higher wages – wages are determined by supply and demand in the labour market, nothing to do with productivity. In fact, productivity grows faster when employment drops because it’s the low quality workers that lose their jobs first and lower quality capital that sits idle first, but wages don’t go up because there is more slack in the labour market.
So, why this rubbish statement? The following paragraph gives the answer. National/ACT will establish “a high quality advisory group to investigate the reasons for the recent decline in New Zealand’s productivity performance”. New Zealand has grown faster than Australia and other countries in recent years. Overall, our productivity growth has been slower in recent years at about 1.5% than in past years (2.5%) but for a very good reason. Our economy has grown so fast that it has sucked in lower quality labour and capital, which brings down the average (if you look at just workers who have been in the labour force continuously for the past seven years their productivity has continued to increase at about 2.5%). Any first year economics student should understand this. So, what do National/ACT expect their ‘high quality’ (ie private sector) advisors to recommend? They’ll say work rights are the problem – that weakening workers’ rights is the way to boost productivity and, thereby, wages. It’s all rubbish of course. Just like ‘trickle down’ in the 1990s, the effect will be lower wages and lower GDP growth.
Is this the change that you felt it was time for?
*(yeah, that’s right, National and ACT’s grammar problems have continued from their campaign ads to their official agreements. There are more grammar mistakes in the education section)
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Scoopit!
How much of this hard right subtext will be lost as the media rush to crown Key the champion of democracy? Answer: most of it.
Oh well New Zealand, don’t say that some of us didn’t tell you so…
“Flatter tax. That means any future tax cuts will go exclusively to the wealthy. Most people will get nothing.”
What a crock of scare-mongoring rubbish! The deal is looking at working towards lowering the top tax rates to 30%. That will benefit everyone who earns more than $40,000. It will effect MOST people directly and EVERYONE indirectly as it impacts the economy.
As if wealthy = $40k! What planet are you on where $40k makes you rich!?!? Try living in Auckland on that with a family.
The tax range will still span 12.5% through to 30%. It is not remotely flat tax. Besides, flat tax still means that those who earn more pay more because it is based on a percentage (heaven forbid people get treated equally!).
I realise that this might be difficult to grasp but I am sure Wikipedia could break it down for you.
[Mad. do the maths, who gets most ff the benefit if you cut the current tax system to one with a top rate of 30 cents? Clue, it's not the people on $40K. SP]
There’s good and bad in the agreement, Steve. I like the fact that it’s set down a goal of raising productivity by at least 3% a year, and to focus on reasons why our performance has recently declined, for instance.
But you’ve highlighted many of the negatives. What especially concerns me from a personal perspective is the whole “three strikes” nonsense. Even if we assume “serious” will not have the meaning ascribed to it by some of the SST’s supporters and will actually mean serious, if I commit three (admittedly scary) armed robberies with a water pistol and harm not a hair on anyone’s head I go to jail for life whereas if you stab your ex partner multiple times in a fit of jealous rage then, providing it’s your first or second offence, you’ll eventually get out.
Even DPF is worried about David Garrett at this early stage, and there seems no doubt that inclusion of the clause that says that gets referred to a Select Committee is payoff to him and the SST for their support of Act. It’s equally certain that they’ll be extremely vocal in garnering support for the Bill in its present form…and that that will resonate with a large proportion of New Zealanders who haven’t stopped to research the issue.
Now that Mr Hide is Minister of Local Govt, lets take a quick peek at ACT Party policy in this area:
Local governments need to change, and to do so quickly.
And this is what they have in mind:
Of course this list of bullet points could mean anything in practise, but there are two things that absolutely stick out like the proverbial dog’s whatsits:
1. The shedding of all activities they define as “commercial”
2. The defining of roading and water as “commercial”.
Bear in mind that 90% of all roads in the country are owned and serviced by local govt. ACT policy is to sell it all off to the private sector.
Bear in mind that all privatisation of all natural monopoly infrastructure services, such as water supply, has resulted poorer services, increased prices and asset stripping. Now you get to soak in it.
Now while National have promised not to sell any State owned assets in it’s first term, local govt roading and water supply assets are not technically speaking State assets. Which of course is the perfect weasel out.
And while a Key led National minority govt is not beholden to implement every clause of ACT policy, appointing Hide as Minister of Local Govt demands collective Cabinet Responsibility in this portfolio. So while ACT cannot attack the govt in areas where they share portfolio responsibility, equally National is not in a position to attack ACT in the same area.
In essence by appointing Hide as Minister of Local Govt, National has largely abdicated Government policy regarding Local Govt to the ACT Party.
ACT policy states: Local governments need to change, and to do so quickly.
A mass sell off of roading and water assets is a radical hard-right policy. Few New Zealanders would have voted last week for that. This incoming govt will attempt to ram this through as quickly as possible.
I find your rhetoric quite amazing. The pejorative terms used to describe parts of the agreement which clearly still need fleshing out before we can get a good handle on whether it is good or bad indicate to me that no matter what good outcomes derive from the agreement, you will be unable to see them. As for your limited understanding of productivity and the rational you provide for productivity increases (ie the supply and demand for labour) I respectfully suggest you go back and retake Economics 101. It seems to me you are locked into old and outdated paradigms that no longer have any relevance. Your response is driven by fear and ignorance not by any objective reality. The government for the last 9 years has absolutely failed to deliver any meaning full improvements in health, education, or employment. And please don’t quote lowered unemployment rates. We all know what a crock these are, with people being actively diverted onto sickness benefits. Just look at the explosion in this area.
Frankly, I would rather give this lot a go than continue with the same sanctimonious, authoritarian, patronising bunch. Reading this blog it is apparent to me that you just haven’t cottoned on yet to why this election was won and lost.
IrishBill: It seems you don’t understand basic economics, pete. Productivity is a measure of inputs to outputs. It is quite possible to increase productivity while decreasing outputs, if fact that’s what happened in the 1990′s where wages and investment in capital fell. The result was not good for our economy or our society. You also need to check your stats on the sickness benefit instead of regurgitating right-wing fibs. I suggest you start here.
Any illusions that National was somehow going to be a centrist government should now be gone. A lot of the so-called centrist’s round here like Higherstandard (right wing troll masquerading as a centrist) will do some mental gymnastics to defend all this.
I don’t see it being much towards the right at all nor will the general public. Hence why any points you made were simplistic, inherently wrong and out of touch. This won’t worry anyone that voted National nor do I think it will scare Labour supporters.
Gingercrunch,
If as Min of Local Govt, Hide implements his Party’s policy to:
Roads and piped water will be supplied on a fully commercial basis.
which can only mean the privatisation of both of these services.
This means that some corporate, probably owned offshore, will own, operate and charge you for the use of almost all roads and footpaths.
Every drop of water you use will be charged for by it’s private providers.
If you think this is centrist policy, then how about letting us in on some real hard core right wing policies? I’d love to know.
You don’t understand legislation do you..
“This means that some corporate, probably owned offshore, will own, operate and charge you for the use of almost all roads and footpaths.
Every drop of water you use will be charged for by it’s private providers.”
red – Yup and if this policy were to be implemented we’d get roads and water cheaper too. You seem to be under the illusion that if they’re state funded we don’t have to pay for them. Any privitisation means lower taxes. Given the superior efficiency of the private sector this means more money in everyones pockets. Win win?
A National Act coalition with a right wing agenda? O my God! I am shocked!
Selling off the roads ? Give me a break. Someone needs to check their medication.
That nice man Mr Key has not even been properly crowned and people are already picking on him.
Privatisation means for profit.
That means if it isn’t profitable to supply water to your tap, there won’t be any.
Just like the privatised electricity industry running the lakes dry so they could make huge profits during the Nat’s latest faux electricity shortage.
JohnBT…
Not necessarily a surprise, but not what Key campaigned on.
But God forbid that anyone question a hidden agenda in advance.
Greg sorry but that analogy doesn’t work. Most low income workers barely pay tax now. So full user pay which is what Red suggests will happen (I completely disagree), means low income workers could pay zero tax and yet to pay full costs for roading and water will become essentially unaffordable.
Hence, why this document Act and National released never points to that, nor will it happen and any suggestions that it will is only scaremongering by the extreme left. The agreement between National and Act and ministerial responsibilities does not point to Act’s policy in this regard. The left here believe it does. Why they come to such a conclusion is petty and ignorant, but the left have shown no willingness to be open to anything National will do. So while they scream National is going to the right, the world is doomed etc etc. Most people will be perfectly relaxed with such an agreement. You’ll see that the extreme left’s next step in their thinking process is to attack the mass-media. This is due to them believing that the mass-media are completely bias towards the right and are not independent. Such thought is pathetic. But that is how these people think.
What else did one expect when dolts were elected in this new government!!!
Only the worst kind of delusional ape would think Keys and his mob would give a shit about everyday New Zealanders…
George W all over again……Keys a George W wannabe….they obviously have the same speech writer…..dah bah ah bah dahhhhhhh
[lprent: probable troll? No points]
Yup and if this policy were to be implemented we’d get roads and water cheaper too.
Yeah, like the commercialisation of Transrail, Telecom, the Electricity industry, and endless similar examples from all over the world… all led to cheaper prices?
It never has. What it has resulted in is poorer services, asset stripping, run down maintenance and higher prices. And when the business fails, as they do from time to time (the notion of a free market necessarily implies business failure)… then because we cannot do without the service, the taxpayer is ripped off a second and third time by having to buy back a rundown asset that requires huge cash injections to restore it to functioning again.
Only very young men, and aged ideologs still believe the propaganda lie that the private sector is ALWAYS more efficient than the public sector.
Well, the law’s been drafted here, so you should be able to figure it out. Murder, rape, serious assault, smacking your kids … that sort of thing.
[lprent: Fixed the link so that it works. Have a look at this to find out how to do them cleanly]
The agreement between National and Act and ministerial responsibilities does not point to Act’s policy in this regard.
That was my first reaction too. But do you imagine that after spending so many years in Opposition, and when Hide is going to finally get his butt into a Ministerial limo, that he his going to be content to footle about implementing National party policy?
Why accept the portfolio if you are not going to do anything? Key only committed to not selling state assets. Most roading and water assets are not state owned. There is nothing in the agreement limiting Hide’s potential agenda either.
Still I am interested to see you admit that by merely pointing out ACT Party policy direct from their website I am ‘scaremongering’.
“…smacking your kids ”
Even if it’s done in a loving way?
What’s with this sudden inrush of Act trolls?
Were the photon torpedoes primed in advance?
Your scaremongering because you IMPLY that is going to happen.
As for you bill brown. From what I have seen most of the people you could possibly be referring to are centre-right supporters but that doesn’t point to them being a supporter of Act. Also none of us are trolls and each are here I suspect independently. We just happen to have a different view than you lot. A difference of opinion is not trolling. Trolling is insulting people or deliberately getting a ride out of others by attacking them. I think you’ll find that is mostly done by a few here with left views.
“An Internet troll, or simply troll in Internet slang, is someone who posts controversial, inflammatory, irrelevant or off-topic messages in an online community, such as an online discussion forum or chat room, with the intention of provoking other users into an emotional response[1] or to generally disrupt normal on-topic discussion.” – Indiana University Knowledge Base.
I don’t see many people who are centre-right as doing such things.
Gee whiz, wasnt it Helen Clark who sold Telecom? I wonder if any comments she made affected its share price. The govt owned power companies returned over $450,000,000 to taxpayers last year but labour still did not renationalise them.
Anybody who thinks the public sector could ever,ever be as productive as the private is either insane or a public servant. Or both.
JBT, I think you may want to take your attempts at redirection somewhere else. Most people here have heard them all before, over and over and over again, yawn.
GCrush, you talk too much and say too little
“Life sentences for people with three serious convictions (what ‘serious’ is we don’t know). In California, this law has seen the prison population explode while crime rate reduction has been in line with falling rates in states without such laws.”
Yes we do, the crimes are specifically listed, and include only violent offences. The judge must warn criminals when convicted of their 2nd offence after conviction, and it is not retrospective.
I don’t see how ANYONE could argue against this.
Also – Labour supports the introduction of a productivity commission, well at least Hon Lianne Dalziel did the last time I spoke to her.
Anybody who thinks the public sector could ever,ever be as productive as the private is either insane or a public servant. Or both.
Are you not forgetting about all those highly productive private sector banks that are in the process of destroying uncountable trillions of dollars of wealth as we speak?
Your scaremongering because you IMPLY that is going to happen.
Well it is there right on ACT’s website. Roads and piped water will be supplied on a fully commercial basis.
Not partially commercialised, or part owned, or operationally contracted out. The phrase used is ‘fully commercialised’. That means selling it off 100% to a private owner. If you have any other interpretation I invite you to offer it for consideration.
Diversion JohnBT.
Simplistic half-truth statements, throwing of brickbats, avoidance of debate.
In fact typical of the slogan-based rhetoric without any fundamenal ideas and ability to engage in a discussion.
MikeE
Even if you don’t argue against it – which one might, but I shan’t – does it fix the supposed current crime wave?
How much crime (what proportion) is committed by the individuals the law will apply to?
A slogan-based bandaid is what it is. Whether it has merits (or not) in itself, standing alone the policy is a meaningless piece of granstanding. It does nothing to either address the causes of crime overall, or redress the symptoms.
Golly gosh, I point out that labour sold assets and that is a diversion or redirection or simplistic. Thank goodness I did not mention that the train set Dr Sullen bought has already lost $250,000,000 this year or Air NZ has lost $900,000,000 over the last year. That would probably be right wing propaganda.
The way things currently are is …. its about the stupid economy stupid.
So who do you trust and who will most people vote for .
O thats right. Its that nice Mr Key
Madeleine:
“As if wealthy = $40k! What planet are you on where $40k makes you rich!?!? Try living in Auckland on that with a family.”
Well… as much as you might think the top tax rate people are in large number and have things tough…. Try asking the 70% of New Zealanders who earn LESS than $40000.
Got any sympathy for them?
Oh na, thats right, tories dont care about them.
Madeleine seems to suggest all of new zealand is in the top tax bracket
You’re flailing around John, without making any coherent point or strategy.
Are you, for example, suggesting that we should have let the national flag carrier fail? What would our current Minister of Tourism make of that? Should Bolger and Richardson then likewise have let the BNZ fail?
These are just a couple of questions, I could go on at length but there is little substance in what you say to respond to directly.
John BT,
Got any evidence showing an astonishing $900 million loss for airnz in the last year?
But thats besides the point… You conveniently neglect the fact that the government bought 80% in AirNZ in 2001 when after a decade of being a free market enterprise it bombed out!! Shares in it were worth 32 cents!!
Was it therefore a poor idea to rescue our national carrier?
Good point John!
Of particular interest to me is the success thus far of Keys crusade to slash red tape and put a clamp on ‘core public bureaucracy’
Already we have seen a new ministry created – Infrastructure
and we have created a minister who will no doubt have his own ‘bureaucrats’ tagging round with him: A minister of Regulatory reform!
But I thought tories dont like big government?
I have massive sympathy for anyone on a low income Chris G.
First of all I will point out that a $40k income does not put you in the top tax bracket. It puts you at 33% (well you have to add $1), the top tax bracket is 39%.
I lived 6 years as a solo mother on the DPB with an income that ranged from $13k to $18k and spent another 5 years living on $20k per year on student scholarships while my husband studied with 4 kids and through Dunedin winters at that. Living hand to mouth sucks.
However, I think you were so choking on rich envy hastily making assumptions that I have no idea and cannot empathise that you failed to note my point was that $40k is not “wealthy”; the claim that “tax cuts will go exclusively to the wealthy” is false.
Yes $40k is an improvement on $13k and on $20k and on the average wage but it is not wealthy. Especially if you have dependants to support and you live in a main centre.
You are kidding yourselves if you think “tories” are all rich pricks. I voted right wing when I was on the DPB.
They don’t typically but there are still a number of Muldoon type supporters in the National party. I think the creation of an Infrastructure ministry is worthwhile. Sure in implementing it, that creates more public bureaucracy. But its generally a principle to say that they won’t hire more than necessary. Though the agreement with Act may point to cutting of public servants. But we’ll see I guess.
One thing I do have to criticise the National party and their agreements with the Maori Party, Act and United Future is their sheer vagueness. I expected more detail with the election over but sometimes Key seems to still be in campaign mode. These agreements all seem to have much leeway for the National party. Seems to be many statements with, “we will review”, “we will have a look” etc etc etc. I just expected more detail and I think there is a possibly that how they are written could cause friction. To review something is fine, but surely if you’re the Maori party you will the Foreshore Bill to be removed. United Future surely in the future wants more than just a first reading for Income splitting and Act may want more hard-right agenda. And because of how all three are set out it means National can say, “Its in our agreement” and leave it at that.
The way policies were written and these agreements suggest that National is likely to be more adaptive to public sentiment than Helen Clark was. May be good for the left, but then it means less clarity in governance. That I can’t find a good thing.
“Even if we assume “serious’ will not have the meaning ascribed to it by some of the SST’s supporters and will actually mean serious.”
I’m not sure what you base this statement on. I think you’ll find that SST’s primary focus is on the sentencing of serious violent offenders. Its constituents tend to be the victims of recidivist violent offenders, many of whom are on bail or parole at the time.