A smoke-screen for the privatisation brigade

Written By: - Date published: 10:14 am, December 3rd, 2008 - 19 comments
Categories: ACC, national/act government, privatisation - Tags:

Now that didn’t take long. Well rehearsed from the 1990s, National has already started using the privileged position of government to conjure up bogeymen to get their unpopular privatisation agenda past the public. John Key called an urgent press conference yesterday to beat-up a $1b shortfall in ACC funding. ‘OMG, this ACC thing is out of control, Labour should have told me in the Prefu’, Key cried.

Auckland University economist and ACC expert Dr Susan St John couldn’t quite understand the rabid yelling “I’m totally surprised at the over the top extravagant language here, over what seems to be a reasonable minor matter”

But Key knows very well what he’s doing. He’s beating it up with a purpose. Of course Key knows only decisions approved by Cabinet can be included in the Prefu – and Cabinet couldn’t make a decision about a heated election issue like ACC in the election period. That’s Constitution 101. If Key didn’t know that himself, he had advisers to tell him.

The real reason behind the boy crying wolf is far more sinister. It was picked up by top ACC Lawyer, John Miller. “It seems too easy to suddenly come out with this, and I think it is a precursor for shaping it up for privatisation, saying look how appalling this is, we’ve got to get these insurance companies in”

Now, Key has ordered a Ministerial inquiry. It’s the same damn thing they did in the nineties. Using the power and privilege of government to smokescreen a secret agenda no one voted for.

19 comments on “A smoke-screen for the privatisation brigade”

  1. Mr Magoo 1

    To be fair, the privatisation issue WAS in their list of policies. So people sort of voted for this. (I doubt a majority of NZers agree with it though – but that is unfortunately trivial issue)

    I hear they are about to also double up beds in prisons also and I would suspect find some initiatives to cut along the way. Once you have crippled the public prison system enough, the private versions wont have as much to compete with.

    I mean Telecom was a “disaster” just before it was privatised. Why not make more things disasters?

  2. Gustavo Trellis 2

    Eddie, the Herald reports that this was known about in May. Six months is a long time to hide a $1b shortfall, and I’m sure if this had been a finance company, TheStandard would have been howling for their heads.

  3. Tim Ellis 3

    Eddie, I understand your points but it really is a nonsense to say that Cabinet could not have made a decision on this, and it is weasel words to say this is the reason it wasn’t included in the PREFU. The fact it was a $1 billion liability made it a non-controversial decision to include it in the PREFU. By the same token, if the FRA had been around during the BNZ fiasco, then the Cabinet couldn’t have made a decision on bailing it out because it would have been controversial, yet the BNZ fiasco was the very reason for the Fiscal Responsibility Act.

    The Government chose to announce retail bank deposit guarantees, constituting a $150 billion liability, without a Cabinet decision and within the election timeframe. We know it was the election timeframe because the Labour Party announced it at their campaign launch, just a few weeks before the election.

    Labour should have made a decision on this, and it should have been in the PREFU. Officials were told not to do so. Choosing not to do so was just simply dishonest. What was even more dishonest was that Labour went into the campaign promising to lower ACC levies, in the full knowledge that ACC was already projecting a blow-out. That is simply scandalous.

    If I were a Labour Party supporter I would be furious. Labour has given up the moral mandate on ACC. By being so dishonest over its funding, Labour have given National a free pass to open up the earners account to competition.

  4. IrishBill 4

    Interestingly Fran O’Sullivan has joined the right-wing howls for privatisation today. What perfect timing. I particularly like the oft-repeated claim that the NZX needs to be re-invigorated. There is never any concrete reason why we should expose our public assets to the vagaries of the exchange of course. I suspect it’s simply one of those essential truths believed unquestioningly by neo-liberal theologians such as Skilling and O’Sullivan.

  5. Jono 5

    “If I were a Labour Party supporter I would be furious. Labour has given up the moral mandate on ACC. By being so dishonest over its funding, Labour have given National a free pass to open up the earners account to competition.”

    But serisouly, what time did this talking point go out? Was it by fax, email, or tin can ona string? Its so succinct its scary!

  6. bill brown 6

    Oh ffs, did you listen to what St John said – here I’ll link to it for you

    CLICK HERE

    This is a short fall due to a range of reasons – explained here:

    CLICK HERE

    Now, go and listen to this:

    CLICK HERE

    And come back when you’ve been educated.

  7. Jono 7

    Irish, when would you say Fran actually wrote that article? Over tea last night as she digested the ACC-related news of the day perhaps. Surely it wasn’t ready to go prior to yesterday as part of some coordinated campaign of faux outrage?

  8. Duncan 8

    Labour has given up the moral mandate on ACC. By being so dishonest over its funding, Labour have given National a free pass to open up the earners account to competition.

    It’s quite a stretch to say Labour has been dishonest over ACC funding given the reasons provided in the documents released by John Key yesterday.

    In any case, I would have thought you’d base your decision on whether to privatise the ACC scheme on the basis of what will provide the best outcome for the public, not on whether your opponent is perceived to have given you a ‘free pass’. Good try though Tim.

  9. Strathen 9

    Dr St John didn’t give a straight answer to one question. She also contradicts herself.

    She does say that this is not a major amount as ACC pays out 3.6 billion a year. From my calculations, this must be a blow out of 13% from this one sector of the overall ACC account.

    What shocks me is that my knowledge of government funding is so poor, that I would expect a 270 million blow out to be considerable (especially if it’s to be 1 billion over 3 years), yet the commentary on here and from the Labour party seems to imply that it’s not that much money and didn’t warrant a speedy investigation when flagged back in May.

    What is considered a considerable amount in government spending?

  10. IrishBill 10

    “Irish, when would you say Fran actually wrote that article?”… etc

    Jono, I don’t think that for a second. What I know is that the calls from the neo-liberal right have got a lot stronger over the last week and that they are obviously feeling they are in a position to flex some muscle now.

    John Key held an “urgent” media conference. Don’t think he did so because he’d only just found out about the ACC issue (which I do think was badly handled by Labour). They would have had the information for a day or two and have been quietly circulating it around friendlies while deciding on the best strategy to officially release it for maximum political impact. In this case the political impact they wanted was a general sense of unease about the integrity of ACC. That is, a climate in which their privatisation scheme is less controversial.

    This is an anchor story. What you’ll see over the next few weeks, or months, will be a series of stories about ACC “failure” all of which hark back to this one but all of which would be too minor to get real coverage without this anchor. In short they’ve found an issue they can big up the spin on (as I understand it, it is not that big a deal) and decided to use it.

  11. Graeme 11

    Of course Key knows only decisions approved by Cabinet can be included in the Prefu – and Cabinet couldn’t make a decision about a heated election issue like ACC in the election period. That’s Constitution 101.

    I’m not sure that the requirements of the PrEFU are as basic as Constitution 101, but the point remains that it could have been publicly announced, irrespective of the PrEFU. Along with all the reasons and the rationale behind it etc.

    That it wasn’t announced somewhere (in the PrEFU, or a press-release or somewhere) does make it seem as though something was being deliberately hidden.

  12. tsmithfield 12

    It is clear that Labour was telling absolute porkies before the election:

    Exhibit one: There knowledge of a $1 billion dollar shortfall in the ACC acount before the election. No dispute about this.

    Exhibit two: Their promise to REDUCE ACC charges after the election.

    So, they were clearly writing cheques they couldn’t cash. It was all about TRUST, remember.

  13. lprent 13

    TE: That is a curious jump

    “Labour have given National a free pass to open up the earners account to competition.”

    So a cost increase in the non-earners account of the ACC gives NACT a free pass to play with the earners account. Ah yes I see that you have the Key logic impediment syndrome down (or are possibly infected).

    I see that dog-whistle politics by the NACT isn’t going to stop merely because they’re in government. This looks to me to be exactly the tactics followed by the Nats in 1990. Take normal operational decisions and make them too hard. Solving them requires a sacrifice by people who aren’t them or their mates.

    And you wonder why we don’t trust these dipshits ?

  14. Tim Ellis,

    there you go again… beating up the beat-up.. whattis this – you in put training or something!

    “non-earners” was how I heard the aspect under consideration. Small bikkis..

    Who’d wannabe a small bikkis beanbagger.. unless of course the government platform made it pay..

  15. toad 15

    lprent said: So a cost increase in the non-earners account of the ACC gives NACT a free pass to play with the earners account. Ah yes I see that you have the Key logic impediment syndrome down

    I’ve blogged about that over at g.blog Lynn.

    Of course there is no logical connection (unless the privatisation plans go further than the earners account that is in announced National policy), but creating the perception of ACC as a dysfunctional organisation will help neutralise public opposition to privatisation.

  16. phill 16

    I must admit when I heard this on the news, the first thing I thought was ahh the privatising beat up begins.

    Not quite sure why we need an enquiry, surely Its not surprising that any organisation that relies on investments is having a major shortfall in income at the moment….

  17. PK 17

    Read the conspiracy theory about privatisation of ACC which surprised me as I read key’s statements as very clearly a dig at labour and putting labour forward as untrustworthy, dishonest etc – so I did a completely scientific straw poll with carefully chosen review questions elucidating various colleagues’ and friends’ impression of the matter ….

    anyway, quickly asking about 15 people got 4 versions of “I haven’t seen the news”, 12 versions of “they are having a dig at labour” and 1 “was that to pay for the plane to Thailand?” – OK so I made the last one up but I didn’t get one response attributing any sort of ‘blame’ and therefore representation of ACC as dysfunctional and thus enouraging privatisation.

    I did a follow up question asking whether they think this should encourage ACC to be privatised and quelle surprise? They all couldn’t see any such link.

    So guys, the trouble about looking for conspiracies whatever one’s political affiliation is that they are really easy to find especially when they don’t exist. Both sides of the centre divide do it and tend not to be believed by the middle of the road people.

    I don’t believe – I reckon key is taking the opportunity to twist the knife – more likely to be a distraction from taking the time over sending the wright brothers’ spare plane over to Thailand … oops or is that a conspiracy theory? More believable than the ACC one to me though.

  18. George Darroch 18

    “I don’t believe – I reckon key is taking the opportunity to twist the knife… more believable than the ACC one to me though.”

    How about both? No-one says that National can’t be cynical and opportunistic at the same time. They’ve probably been searching for things to attack the previous Government with (that don’t require them to step in and do the hard work of fixing), and this was the first target. We might see a string of such criticisms in the next couple of months – I’d be surprised if we didn’t.

  19. rave 19

    Oh Christ boring boring rush on xmas.
    With the election looming, Rodney Winstondone, a crisis confronting, bankers bailing, John cringing, Helen grading, who would say; “look we are over budget on ACC for ‘non-earners’ by x amount”?
    It seems John Boy would have because he should have, just like he kept telling the guvnor what to do, how much to back up banks, being bipartisan man, cause he’s our moral hazard northstar for broke banksters. The indebtability, the hypocracy, the xmassacre of it all.

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