Written By:
lprent - Date published:
8:48 am, November 25th, 2023 - 48 comments
Categories: act, Christopher Luxon, national, nicola willis, nz first, political parties, Politics, winston peters -
Tags: New Zealand Initiative, rbnz, tova o'brien
On Friday, three parties respectively and finally signed agreements to gain a slim majority in parliament. What this means is that some time on Monday Governor General Dame Cindy Kiro will be able to swear in the new ministers of the Executive Council. The current ministers from Labour and the Greens will be able to shed their role as a caretaker government and to reprise their experienced role as members of the parliamentary opposition.
Parliament will be open for non-ceremonial business on December 5th as there are only three sitting days left in this month. At that time we will have a government, parliament majority, and the loyal opposition mostly in place and its constitutional muzzle removed. At that point the political phoney war will be over.
So we’re still going to be waiting a bit less than 2 weeks to see how Luxon (or possibly Peter’s) chaotic coalition will gel. After reading Tova O’Brien in her description of the formal announcement of the three frenemies making up the coalition in “The weird and wonderful first moments of our new government” who are already starting to jostle for their standing in the election in 2026 (or possibly earlier), it doesn’t look like that gelling process will be particularly neat.
There are only nine sitting days in December. Even if urgency is invoked and very long parliamentary ‘days’ are forced, this leaves little time for any substantive legislation that to pass this year. It won’t have time to get parliamentary legal support to change it from vaguely written wishes, get checked for conformance against the bill of rights and other existing acts. These would also have to compete for sitting days with any Nicola Willis face saving pre-xmas mini-budget.
But to be completely fair to our incoming Minister of Finance, the coalition agreements with NZ First luckily has gotten rid of her fantasy revenue from taxes on property sales to overseas buyers. Figuring how to plug that fiscal hole in National’s promised tax cuts with the limited economic growth already anticipated for next year will be tricky.
Plus National has also committed itself to refocusing the Reserve Bank remit target to inflation, probably dropping the current remit on Maximum Sustainable Employment (MSE). This can be done with a simple change of remit by the Minister of Finance to the Reserve Bank governor. When that promised change of focus eventually takes effect, it is likely drive growth and tax revenues even lower.
I’d expect more debt borrowing and more fantasy economics from Nicola Willis as she ineptly balances the impossible political promises with the attainable economics. Expect more of the fantastical sleight of hand that is such a feature of the New Zealand Initiative ideas rather than anything that deals with a economy that exists in in the real world.
So what we are likely to get between now and Christmas is a random selection of dick-waving political acts that are easiest to push through. In effect a flag waving exercise for a new government to their donors to show that they have a semblance of control. Repealing of legislation that hasn’t already taken effect or reversion to previous legislation that has been discarded by parliament are favourites.
Plus incoming ministers, after they have gotten into their offices and jumped through parliamentary services hoops to get the staff that they want, will also be able to see what they can do to generate some personal headlines with the easier regulation changes. The problem with that is that the news cycle tends to drift into somnolence in December. So I’d expect that will mainly come from excitable ministers who are newbies. Looking at the coalition, there are quite a few of them.
Substantive changes will be signalled when we get the sitting schedule for next year, and when Nicola Willis has had time to figure out how to plug her leaking fiscal policies..
In the meantime, I have to say that I think that it is refreshing for authors in a political blog to be back supporting the politics and the opposition. While politicians like being in government, it tends to be pretty boring for political bloggers.
It is way more fun pointing out the blindingly obvious flaws in a government when they put conservative and socially regressive dipshits into office, especially when it is usually clear that they usually don’t seem to have done much deep learning after they were weaned from their parents. There is so much to dislike with the incoherent and conflicting crony capitalism policies that are a feature of all three of the parties in the three-way governing coalition.
It is even more interesting when the National-led coalition has a majority of just 5 seats after they provide the speaker, and can’t afford to offend any of their coalition partners or even too many of National’s own MPs. It must be galling for current National MPs many of whom have spent decades blagging off Winston Peters and even Shane Jones to be dependent on their goodwill.
But they have to realise that when they lost the election in 2017, their 44.4% of party vote was quite significantly more than the 38.06% that they got this year winning the government benches. These failures of a slowly declining political party carry consequences. In this case the rise of a previously subservient Act party to a higher status, and dealing with Winston Peters on the government benches.
I think I will enjoy these next three years.
The current rise of populism challenges the way we think about people’s relationship to the economy.We seem to be entering an era of populism, in which leadership in a democracy is based on preferences of the population which do not seem entirely rational nor serving their longer interests. ...
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The amusing feature of this government is that Winston Peters is going to be probably their most experienced minister in this incoming government.
He has his structural flaws, many of them embedded in the excessively narrow training of lawyers (sorry mickey 🙂 but it is true). He is also at heart a conservative resistant to untried solution – but in a way that that appears to have escaped most of the current generations of conservative politicians in NZ. They have their focus on policies that can be summarised in slogans that Mike Hosking is capable of understanding.
Brian Easton has done a pretty good job at explaining Winston Peter's ministerial history over at Pundit. "Peters As Minister"
David Seymour was silly to let Winston have first go at Deputy Prime Minister. What's the bet there will be a new election before Seymour gets his shot.
They actually have a majority of, I think, 12 seats: The government has 67, including Port Waikato and NZ1st (48+11+8),while the opposition has 55 (34+15+6). This assumes, of course, no further changes due to recounts.
I was looking at how many MPs the chaos coalition would have to lose before they couldn't pass legislation.
Because of the overhangs and the need to seat a speaker, that probably winds up at 5.
That is where both the smaller coalition partners are required, to push the coalition (at present) over 62 votes. NZFirst has 8 MPs, Act has 11.
Both parties have a number of MPs who'd be easy to describe as single (or simple) issue politicians at this point. They're the ones most likely to decide that they can't support some kind of coalition policy being enacted.
The only electorate MPs are Seymour and Van Welden in Act, who both appear to have won their seats without National support this time. They wouldn't be subject to the waka-jumping clause (s55A of the Electoral Act 1993).
In all likelihood one or the other would be the persons to use it. But I believe that Seymour opposed the change in 2018. That makes it difficult in principle for him to use it if some of his first or second term MPs decided to jump ship.
National has a lot of new MPs after their bloodbath in the 2020 election, and have consistently opposed using waka jumping legislation. However I suspect that their principles are morally stretchy enough to use it if the coalition majority was threatened. However I'm not sure that Act would be quite as flexible about National using it.
Waka jumping legislation was in the coalition agreement in 2017, from memory as a requirement from Peters (and his memories of the 'tight five' jumping from NZF in 1998). So I'd guess he'd use it.
So you have to look at the risk level for the chaos coalition. It is 5 MPs jumping out that is they probably number that they could lose and still maintain a majority.
I'm quite sure that Peters would indeed use Waka jumping legislation if needed. And his MPs know that he would. I'm sure that will reign in their enthusiasm.
ACT maintained a very tight party discipline over the last parliament – and I would expect them to do the same, in government. IIRC, they were the only party in the last Parliament which didn't have some scandal/issue related to their MPs in the papers (possibly also Te Pati Maori – but there were only 2 of them)
National, would be the biggest risk here. However, all of their new MPs are electorate MPs – they have a very tiny list representation, and those are all senior MPs with too much invested in the party/government to go off the rails.
Their risk is that one of their electorate MPs will get delusions of grandeur (aka doing a Sharma). However, I'd not see it likely to happen in the first year or so – they'll all be working like little beavers to build their careers, hoping for select committee plums, and to catch the eye of the leadership.
To envisage 5 of them, going off the rails in such a spectacular way, is pretty unlikely. The tight-five from NZF – had a strong connection, in a policy sense, which would be lacking for 5 random National back-benchers [also the subsequent political careers of the 5, doesn't exactly inspire emulation]
What is more likely is losing seats at by-elections – and gradually having the majority nibbled away.
Why do you exclude the two ACT electorate MPs from the Waka jumping clause? The link you supply to the Act says "This section applies to every member of Parliament, except a member elected as an independent."
Thus it would apply to Seymour and van Velden. They were not elected as Independent MPs.
According to Wikipedia "No independent candidate has won or held a seat in a general election since 1943, although two independent candidates have been successful in by-elections". One was Winston in 1993. I have no idea who the other one was.
There are a number of sections that apply (you should be able to find them by looking at the whole of the legislation tab on the link that I provided).
The 2018 rewrite hasn't been tested. It wouldn't surprise either me or the framers of that legislation that it was effectively unenforceable.
However I suspect that the courts would look at s55D and s55E pretty closely. The parliamentary leader is only that of the parliamentary party. But candidates are selected by the parties themselves.
The 'parliamentary leader' would have to have to demonstrate an issue of proportionality being disrupted. This would be an interesting argument in the case of a substantive split. Think of the splits after 1993 for things like United party from Labour. It may be that rump of the party is smaller then the rebels. You'd have to sort out who was the real parliamentary leader was.
It'd involve looking at if the the local party constitution and how the member was selected as a candidate to determine if a party leader can expel them. After all that is only the parliamentary party. The local party bodies are often a different legal entity.
In particular if the MP was unopposed at party selection, or the local party members support them when they split. The MP could argue that the local party supports them.
If you look at the constitutions of the older parties like Labour they tend to be pretty specific the the branches and even the LEC to some extent are independent voting bodies. The people who vote on selection are local, LEC, regional, and just a few votes from the NZLP head office. No party leaders nor sitting MPs are directly involved.
I don't know about the Nats, but Farrar has always proclaimed how independent the electorates are…. (yeah right he does it for mischief, but I wonder what the documents actually say).
I also suspect that the courts would be open to a plea that it wasn't that they moved away from the party, it was that the parliamentary party moved away from them. Think of Labour members when Rodger Douglas and cronies were making the parliamentary party into Act.
Mostly because in 2017, they were the parliamentary leaders and I beleive that both had considerable (possibly excessive) say in the candidates that got selected in 2020 and 2023.
Yeah, but if they say that they are the political party but the the nominal parliamentary leader of that party is not, then they are not independent members. It isn't too hard to imagine a case for the political party to move away from the nominal parliamentary leader recognised by the speaker. After all this is the favourite tactic of some of the more interesting parliamentary coups.
To tell the truth, reading those clauses, I get the impression that they are never meant to be used. They just open crates of legal worms.
It is all very well to enjoy the ability to criticise the government without feeling like you are betraying our side, but if they do half of what they have committed to we will be significantly worse off.
Economically we are guaranteed a recession by this time next year. Partly this is because of international headwinds (like slowdowns in Europe and China), but the measures announced are guaranteed to cost jobs, which reduces spending and tax take. They might reduce government spend on non-essential back office roles (perhaps the people who respond to OIA requests?), but there is no growth to cover their fiscal holes. Probably they will look at increasing GST, but that will cause more hardship and cut growth even more.
There is a lot of spiteful measures promised, repealing all the things that the previous (do nothing?) government managed to get in place. Smokefree law, fair pay, tenants rights, along with a return to the worst features of previous ACT/national coalition – 3 strikes, charter schools. It is amazing that the charter schools can do whatever they like while state schools will have to teach certain certain subjects on certain hours each day, in a control that Labour would have been accused of soviet style engineering if they had suggested it.
The only saving grace in these coalition agreements is that so much is couched in weasel words ("consider", "business case", etc). A lot of it will never happen.
Look to see the number of people sleeping in cars grow exponentially.
"The only saving grace in these coalition agreements is that so much is couched in weasel words ("consider", "business case", etc). A lot of it will never happen."
In 2017 the Nats' line of attack on Ardern was "working groups!". There was some truth to it (e.g. tax working group) but mostly it was the usual select committee process or policy development.
To placate 3 different parties the "get cracking" government is now proposing … more working groups.
Sadly all you say is very true.
The only thing I would add is the consignment of any action on addressing Climate Change to the cupboard under the back stairs.
Yes NActFist say they are "Committed to Climate Change" – they just don't say whether mitigation or promulgation. One suspects the latter.
Especially with the Agricultural sector having no real climate change policy will mean more farmers going bankrupt the input costs for farming will continue to rise beyond the means of smaller farmer's and indebted farmer's rural communities will depopulate. Meaning National will have fewer guaranteed seats.Meat and Dairy will struggle as Shipping, Fertilizer and Fuel then weather more droughts and floods China's economy Europes demands for Carbon neutral food.No longterm plans for the backbone of our economy The Tax take will be well down and National will use tough Austerity policies which will push the economy into a downward spiral like the late 70's early80's and the 90's where National followed outdated Chicago principals which were design to bankrupt small countries so the big Corps come in monopolize more at firesale prices.Farms will be the first going at firesale prices ! Just like1987 all over again. Unemployment will rise as it always does under National lead govts more money to find more benefits even less tax.
Oh, I agree entirely. Including about the weasel words in the coalition agreements.
You'll note that they are mostly in the agreement between National and Act. Exactly as you'd expect. Winston is after all a lawyer.
I can't see anything in the coalition agreements that is likely to increase profitable trade growth. That is what fuels our economy. Profit from external trade in NZ in profit terms fuels our tiny domestic economy by providing the money for the imported equipment and services that we need.
The trade part of MFAT would probably be the part of the back-office axing yet again. There is a reason why trade agreements that benefit our profit poor basic commodity exports in farming and forestry only happen after Labour has been in for while. Probably the same with intellectual property legislation.
Mostly what I see in the coalition agreements that will do minor reductions in the costs fro some low-profit commodity export industries. Nothing for the burgeoning tech exports (my sector) that make good profits apart from the dubious joy of having to host Judith Collins whenever they make profits despite her 'help'.
The rest are mostly policies that, as you say, are likely to cost the local economy and the tax take by supporting crony capitalism – the whole downstream immigration industry being the largest. Opening up for more low-wage workers and immigration being the only noticeable part of the coalition agreements. That only benefits the kinds of crony capitalists who donated to the National and Act campaigns so heavily. It certainly doesn't help anyone get better wages, productivity investment or increase our local economies skill levels.
Every punitive policy or repeated 'innovation' that National and Act will bring back have all been proven to be extremely ineffective and detrimental to the costs in our economy. Just good for people building or operating prisons or largely useless charter (and even most private) schools.
But I like to see the bright side in most things. The bright side for me is having a motivation to point out the inherent deficiencies of conservative thinking and its politicians by examining how they screw up.
For me sticking a sharpened spike in text up a conservative arse in pursuit of a very small cortex is almost as pleasurable are writing good code. Both are things that I was clearly put on this world to enjoy doing.
"I think I will enjoy these next three years"
Only from a position of privilege can one make such a statement. It's going to be hell for a lot of us
Yes, I know and I sympathise. Not only for you but also for my fellow skilled, unskilled, poor and affluent kiwis who increasingly are leaving NZ and heading to Aussie where they can get jobs that pay enough to build a life on. The poor and unskilled amongst them invariably acquired those disabilities under National governments – often when they were children.
However I feel as I have ever since I didn't use my green card in my 30s, that I'd be of more use exercising my talents here trying to reduce emigration as being the best way of getting rid of the continually increasing stupidity of National-led governments.
"In education, there will be a focus on the basics. In law and order there will be tougher sentences, more funding for Corrections and a harder line taken on crooks. In the public service, spending will be clamped down on. The emphasis on Māori names and language will take a back seat to core competencies." from Luke Malpass article.
It will certainly will be hell (or at least a lot harder) for gangs and criminals. But for the average working person contributing to society, but struggling to pay rent or mortgage and afford groceries, I think they will enjoy these next three years more than the last three.
I predict more people unemployed, more people in prison, more people living g in cars, a return to" what housing crisis" lower wages , the return of hideous things such as 0 hours contracts , and meth house eviction .
Yes I think unemployment will rise but inflation will come down. Very likely John Campbell will now do a program on people living in cars now the government has changed. And a definite yes to more people in prison (less on home detention that have violence charges) which will be a good thing. I don't think wages wil be lower but hopefully the tax brackets are adjusted.
So I actually agree with most of what you say.
David Seymour is playing the populist act by trying to look like he is on the side of renters with legislation allowing for a "pet bond", in addition to the regular rental bond.
Questions: Can many renters stump up another thousand bucks or so for this on top of their regular bond? and aren't pet bonds already allowed anyway as a special condition?
Hip hip horah.
Make English an official language.
Woop te do. Someone must have done a lot of work reading through past legislation to discover that someone left a sub-clause out that failed to give the English language official status. But Maori is OFFICIAL. Gosh! there is a big danger here that everything will have to be written (and spoken) in Maori unless we take urgent action!
And of course the pay back for the tobacco companies for their donated millions.
Many New Zealanders assumed they had elected a new government.
But they got the Mickey Mouse club instead.
What a f…n circus!
http://www.stuff.co.nz/national/politics/133349349/5-surprising-policies-buried-in-the-national-act-nzf-coalition-agreements
Nope – it's not currently permitted for landlords to charge additional bond for pets. Claiming damage caused by pets from tenants is also very difficult/impossible. This is why it is so hard for people with pets to get tenancies, because the risk to landlords is too great, they would rather have a house stay empty for longer than take tenants with pets. Unintended (but predictable) consequences of tougher tenancy protection laws. I'm totally in favour of laws protecting tenants from predatory landlords, but there needs to be ways for landlords to mitigate the risk of letting to 'non-ideal' tenants, otherwise those tenants are going to find it harder to take on a tenancy and will suffer. We used to have a unit behind our house that we rented out to several different groups of people while we owned it. We allowed pets until one person had a dog who destroyed the carpet. That was the end of allowing pets. We also let to a couple of very young parents – no problem as we had been young parents ourselves. They partied, disrupted the neighbourhood, etc until after one police callout they offered to leave and we jumped on their offer. Would we let 'high risk' tenants again with the current laws? Doubtful. A shame, as these people of course do need somewhere to live and we were happy to take a chance, but wouldn't under the current laws.
English is an official language of New Zealand, just by way of common law from England rather than NZ Parliamentary statute (I say England because English replacing Norman French as the official language of government predates the existence of the UK). If it wasn't official, it would not be recognised in Parliament, the courts or the various functions of the Executive branch.
"a majority of just 5 seats after they provide the speaker".
It is now 27 years since MMP started. However some people still don't seem to realise that and still stick to the old days of our FPP Parliament.
The Speaker's vote is cast by their party these days. It has been so for 27 years now.
What is it alwyn? To quick to score a gotcha rather than be totally honest?
The speaker, on matters of a conscious vote. Votes as they wish, like everyone else. Not as a proxy vote cast by their party.
I'm afraid that it is you who are jumping in to quickly.
It is of course quite true that in a conscience vote the Speaker does cast his own vote. However those are not the votes being talked about as the writer stated that "National-led coalition has a majority of just 5 seats after they provide the speaker". Conscience votes (and that is how you spell the word by the way) are not ones where the coalition needs to have a majority so are clearly not the ones we are talking about.
In votes on Government business the Speaker's vote is cast by his /her party. One hopes of course that the people casting the votes are conscious at the time.
Why repeat yourself, I said completely honest, I did not say you were wrong. Just frugal with the all the facts. Hope yours is not a representation of what we can expect for triumphant three thee next three years.
Yes.
https://en.wikipedia.org/wiki/Speaker_of_the_New_Zealand_House_of_Representatives
Section about neutrality (that page needs a TOC).
I wouldn't be at all surprised to see GST at 20% by Christmas. Ah well, at least it'll be easier to calculate ….
Na more smokers will fill willis' hole,
Probably why one of the agreements had something about terminating smokefree.
Yep.
https://www.healthcoalition.org.nz/repeal-of-smoke-free-laws-a-massive-set-back-for-health/
Wonder what other vices they will liberalise / legalise to tax the enjoyment out of…
Working on their method around tobacco, seymour being seriously libaterian, we should have a legal market for all drugs , so we can tax it. on the nation seymour alluded to an illegal tobacco market being untaxable. , funnily and confusingly (I'm on my 3rd cold one) I kinda agree, except for tobacco because as far as drugs go its pointless shit .
When you said fantasy revenue in relation to Nicola Willis, I had to fight back that ugly sinking feeling one gets when you know it's all about to turn to shit.
It would appear we have the first ever Minister of Finance who actively engages in magical thinking as the norm.
Coupled with a new PM who still thinks he’s a CEO – the interesting times curse has washed upon us
Luxon's popularity with his own supporters has peaked already … the real estate crowd are getting stuck in:
"inept negotiator"
Real estate agents criticise Luxon’s foreign buyer U-turn: ‘We’ve blown it’, All things property, under OneRoof
I too have this perverse, but somehow comforting feeling that I can go full nuclear on this mad coalition. And I will. Read the coalition agreements people. Anyone who has ever negotiated binding documents could drive a truck through a collection of dot points, more like a whiteboard brainstorming exercise, populated with forlorn hope and ridiculous statements including much given to outlawing the use of te reo. My question will be whether answering the phone in a public service with "Kia ora" will be a breach of this stupidity. Back to Naida Glavish days.
I'm going to enjoy the coming 3 years too – as will the rest of the productive sector.
I don't think the troughers in Wellington will enjoy it though.
Landlords aren't productive,
You may find that the landlords you so dislike may assist with the housing shortage as we haven't built as many houses as promised over the last six years.
There were way way less during the 9 years of the Key government in numbers, against population, and even against natural increase.
What we had was Nick Smith or Brownlee or whomever was the sacrificial housing minister victim of the time waving their hands saying that the paddock they were on was the next big thing for at least once every election. Usually the same paddock.
At the same time they were selling off Housing NZ stock, and not replacing it while insisting on dividends to drain the capital value to pay for their tax cuts.
Wasn't John Key promising that the free market and landlords were going to fix Clark's teeny housing hole in 2008. Instead he inflated it exponentially.
Landlords don't build new housing. Mostly they buy run down housing.
Most landlords don't build new ,although labour tried to direct them in that direction, most pick up houses that should be left for first home buyers ,
If you build a house to rent , I applaud you. Seriously
Yes, I do happen to have a new build that is rented out in Tauranga.
Landlords have no effect on the the "shortage" (unless they build themselves the house that they are letting). By having to own extra house(s) the landlord increases the demand for houses, thereby increasing the "shortage".
Not sure I mentioned landlords…
I thought they were included in the troughers /shrug
Obviously you see yourself as one of the "productive sector", probably nobody else does, but you are entitled to your delusions of grandeur.
I see myself as one of the export tech sector.
The local tech industry has its own blowhard site
https://nztech.org.nz/info-hub/about-the-sector/
The companies I work for and have worked for sell high value hardware and software offshore. The R&D is done in NZ. Virtually all of the IP toolkit is opensource, and usually the exceptions come from Atlassian in aussie.
In 2022, the export tech sector is now our 2nd largest export sector consisting of about 11% of all exports, the largest export sector by employees, and the highest employee paid one.
Th tech sector employs about 120k people and has been rapidly expanding for the last 30 years – mostly targeting exports. They also have very high export profit margins which more than pays for the toys that they and I like. Unlike the farming sector or Microsoft they pay taxes here.
The tech sector is about 8% of GDP. It grows about 8% per year. Most are small businesses often with global reputations in vertical niches.
The biggest single problem with the sector is that as each company makes an impact offshore, they usually get taken over from offshore (there is a significant capital shortfall of capital in NZ). The R&D stays here and the sales and marketing moves to the target markets. On the other hand the amount of R&D investment is dwarfs that of any other economic sector.
Perhaps you'd define what you think are the productive sectors are in NZ? I can probably provide you some comparative stats.
We’re in the same sector then.
I disagree about there being a capital shortfall here though.
There’s plenty of capital in NZ, it’s just invested in the wrong things.
Very few tech companies in NZ that get sold off internationally, profitably for the founders, went through a govt incubator programme.
This is a young country, with still a lot of growing up to do.
Yeah it is in houses, because in a market with high immigration and insufficient appropriate housing being built and no capital gains tax, it represents the nearly risk-free high-return investment.
I starting to enjoy having higher interest rates right now – that is because I’m paid-off. Next year we will be looking around for a larger place to do more work at home. Problem is that it will be in bloody Auckland for my partners needs. Then the interest rates will get irritating. Makes me look at heading to Aussie or the US again.
We do get a lot more venture capital these days in the tech sector, but it is almost all from offshore or from tech owners here who have sold their startup or vested options and reinvest.
Better than the first startup I was in, they were funded using mortgages on family property, and then by a expat buying back into NZ.
Never been in a incubator myself. The technical startup side is the easy bit. It is getting a startup off-shore markets that is the hard bit. Especially the US.
The Trade part of MFAT isn’t that great. But it is way better than cold-calls when trying to find interested parties for marketing and support in different countries.
I think you have it wrong, I was not replying to your comment, but to Chess Player. But as they say, if the cap fits……..
Turn out we are in the same productive sector. So I guess so.