Too much too far?

• advantage
• 3 years ago
• Categories: capital gains, climate change, covid-19, economy, health, housing, labour, local government, public transport, science, tax

As we lead up to Budget 2021, there’s much more shape to the whole direction of this government. It’s now the most wide-ranging since the fourth Labour government’s 1984-87 term.

• It’s merged and effectively nationalised all the polytechs.
• It’s just announced the formation of the New Zealand Health Service, again through massive amalgamation.
• It’s undertaking de facto local government reform by pushing 3 waters amalgamations and introducing new funding mechanisms.
• It is undertaking the largest public housing and urban regeneration projects we’ve seen in 50 years.
• It has effectively taken over Air New Zealand.
• It’s rolling out a series of public health measures against COVID-19 that will affect every single person in the country.
• It’s just embedded what is effectively a capital gains tax by extending the Bright Line test to 10 years. And the world did not fall in.
• It has enabled international flights and hence the tourism economy to start up again.

And of course,

• It intervened in the New Zealand economy with direct company and worker wage subsidies in the March-March calendar year on a greater scale than most others in the OECD.

Drumroll … coming up:

• In June we have the utterly massive Climate Change Commission policies that will get rolled out following public input. Electricity will be but one massive consumer and market-shaking issue.
• A comprehensive re-making of the Resource Management Act which has over 20 years of major precedent built up behind it.

So step back and look at this shape and ambition. Government, just through COVID, has taken a greater place in the direction of the society and the economy of New Zealand than we have seen since 1939. Everything else is an even further expansion (No, I don’t detect any single institutional theory. Or even a specific political theory to it all).

So it certainly is still the case that with each crisis, this state is expanding its role and ambition and power – and of course this power almost never gets given back: crisis and leviathan.

There will continue to be massive stumbles, such as light rail, that they will be rightly chastised for. It’s also possible to see the proposed RNZ-TVNZ merger fall apart as fast as the youth station launch did.

And it’s quite likely once the new set of measures come out that our wellbeing and our poverty levels have gotten worse since Prime Minister Ardern started in 2017.

So looking at the above list it’s hard to quibble with their scale or ambition within government. The left complain that they aren’t doing enough about poverty and housing, the right complain that government is sucking the oxygen out of the capitalist room and we can’t all live off printing money forever. But the great majority just love them.

This brings up a couple of not unreasonable questions when you see the scale of this government’s agenda:

1. Does the Government and the current New Zealand public sector have the capability to devise good policymaking in so many areas of fundamental significance to the New Zealand economy and society at once?
2. Does the Government have the political skills to execute these policies well? So far there’s been near-zero disagreements, and Cabient refresh has been mostly through natural attrition.

Perhaps we can sustain this feverish policy pitch from the crisis-gearing we find ourselves cycling within.

Perhaps we have just enough competent Ministers to carry enough of the load, and let the weak ones play with the plastic spoons.

Perhaps.