Archive for March 2008

Light blogging

March 26, 2008

I Hope all readers enjoyed their Easter breaks. Unfortunately, I got a bit of uni work ahead of me, so there will be no new blog posts until after 1 April, and possibly few for a while after that.


Stephen Franks is back

March 21, 2008

First we have Roger Douglas return to politics (and ACTs polling has increased to give it enough for a second seat, whether it will be Heather Roy or Roger Douglas at number 2 will be interesting) and now, to my delight, Stephen Franks. He has just been selected as National Party candidate for Wellington Central. Although he is unlikely to win the seat, I would be very surprised if he did not get a winnable list ranking (especially with National polling around 50%). He has had a solid socially conservative voting record in Parliament, which I hope to see continued in National, and as a lawyer knows a lot about the Electoral Finance Act, which he opposes, and I hope he can as a National MP help repeal it. I wish Stephen all the best with his campaign, and look forward to seeing him back in Parliament.

In Rotorua Todd McClay, son of former National MP Roger McClay, and former Cook Islands Ambassador to the EU, has been selected for National. Unlike Franks, his list ranking won’t matter much. Rotorua is now a National seat on paper (with its new boundaries) and with the tide going out on Labour, should be easily winable.

I hope both Stephen Franks and Todd McClay have excellent long Parliamentary careers ahead of them.

New petrol tax for Auckland

March 19, 2008

The Auckland regional council has just imposed a 5 cent per litre petrol tax to help pay for upgrading of its transport network. I support them in doing so. They have been given the powers to do so under the 2007 budget, and legislation being rushed through Parliament.

When will the new Bill Labour is passing take effect? 1 January. Just after the election. Coincidence?

Freedom of association under threat in Australia

March 19, 2008

Those who like me have followed the VSM (voluntary student membership) issue closely, may know that Australian students, unlike students here (except in Auckland University) have a real choice about whether or not to join a students association.

This however was not always the case. Although VSU (voluntary student unionism, the Australian name for VSM) was implemented in Western Australia from 1994 to 2002, and Victoria from 1994 to 2000, it was only in 2006 that membership of student unions became voluntary, thanks to legislation passed by the Howard Government the previous year.

Overall, Australian Labor has been more conservative than NZ Labour here, as shown by its support for strong defence forces, big tax cuts, and previously VSU (despite initial opposition). Aussie Labor also hasn’t shown the same nanny state streak Helen has.

However, there is no doubt Labor is a left wing party, and there are signs that it might U-turn again on VSU. The new Labor Government has released a disscussion paper on the issue, and Youth Minister Kate Ellis, who has called the policy a “disaster” is visiting universities to see what the effects are. And the student unions want their free money supply back. The National Union of Students (their NZUSA) has made the main issue for a meeting with Government ministers not student debt, high fees or low living standard, but surprise, surprise … repealing VSU.

We don’t need to worry too much. The latest position on VSU is the possibility of a form of compulsory membership, but capping the fee at $100 and banning from being spent on political representation (an interesting compromise, which means no misrepresentation, but still forces students to fund services they do not use). And half the Senate is controlled by the Coalition and family First who supported the VSU legislation, meaning it could be blocked there.

With the prospect of a National government sympathetic to VSM here, this will be an issue to watch.

The deficit

March 18, 2008

It turns out the $400 000 000 deficit is actually a $600 000 000 surplus. So there is (some) money for tax cuts after all. Actually, I didn’t look that much into the deficit anyway, regarding it, like the low surplus now, as a temporary thing due to the recent US economic problems. None the less, the fact the surplus is now only $200 000 000 instead of the billions means any tax cuts will be very small.

It also raises the question of where the surplus has gone. No doubt much of it has gone into Labours irresponsible working for families and interest free student loan bribes, along with runaway spending elsewhere. One interesting thing to note from the 2007 budget was its inclusion of $10.3 billion in contingencies for new expenditure. No doubt we will find out more detail of where this unallocated sending will go now that it is election year (hint: election bribes).

For those interested in tax cuts, don’t get despondant about the surplus at only $200 000 000. The real surplus (OBEGAL), not the cash surplus (OBEGAL doesn’t count investment in assets as expenditure, which would be counted as expenditure in the cash surplus) was 3.1 billion, but with this error corrected is now 3.8 billion. Actually slightly ahead of forcast. So there is still money avaliable. And that $10.3 billion in contingencies can be forgotten about. If your brave enough to cut spending you might be able to afford something decent.

However, not everything is good. The economy is projected to grow at only 2% per year over the next three years, and with our population growing at 1.5% average per year between the 2001 census and the 2006 one, our per capita growth will probably be around 0.5%. This is bad, as when the economy grows, the government gets more tax revenue (e.g. more people spending more money, more GST, as well as more jobs (more income tax) and less people on benefits) creating room for tax cuts (which can lead to more growth causing an upward spiral) and better public services. And 2% growth could be good news. There is talk of a possible recession.

Translation: There may be money for tax cuts now, but may not be in future.


March 18, 2008

Sorry I haven’t been blogging much for a few days, but now that I’m back I’ll start with the biggest politics news item of the last few days: the return of Roger Douglas to ACT.

To give some background, ACT was co-founded in 1993 by Roger Douglas and former National MP Derek Quigley, but Douglas allowed Richard Prebble to take the leadership, while he took the party presidency. In the 1996, 99 and 2002 elections ACT had reasonable success, gaining 8-9 seats in each election, but never became part of a coalition Government. After leaving the presidency in 2001, Douglas left ACT altogether, after Rodney Hide was elected Party leader, despite Douglas’ opposition to Hide based on Hide’s perk busting history. They have only recently made up. Now Roger is not only back in ACT, he is going to run for Parliament as well in an unnamed electorate (there has been speculation about Hunua), and may even get into cabinet.

The news is good for almost everyone except National. Although bringing Douglas back has some risks for ACT, of confirming its tough right wing image, it does give it publicity, and may attract some right-wing voters who left for National to return. ACT’s vote plummeted last election when many former ACT voters jumped to National under Don Brash, who was seen as sympathetic to their strong right wing views. John Keys moving of National more to the center of the political spectrum has given ACT plenty of space to move into, but they have not improved their poll performance. This surprised me, and part of the reason may be the Party turning into a personality cult around Hide, more focused on publicity stunts than policy. This post summed it all up. Douglas’ return should help with this problem. ACT has plenty of potential, given it won 9 seats in previous elections, and John Ansell, the man behind National’s 2005 billboard campaign, has agreed to help them, which should help. However, traditionally ACT has been strong when National is weak, and vice-versa. This is partly because ACT supporters may like to push national in front to ensure a right wing Government, even if their favourite Party suffers.

But a bigger part of the reason is that there is only one Party ACT will get votes from: National. Any ACT gain will be to National’s expense. Not only does National have to worry about loosing votes to ACT, but it may have to start defending itself from the right, something Key hasn’t needed to do so far. And ACT could make coalition negotiations for National post election more difficult. Imagine National trying to deal with Winston, promising stronger restrictions on foreign investment as part of a coalition, but ACT strongly objecting, and National needing both NZ First and ACT to govern.

Which brings me to the other party that may be pleased by Douglas’ return. NZ First now has the possibility of telling voters: “National is going to need a coalition partner. It can be ACT, with Roger Douglas, or it can be us” to get Labour voters to switch to NZ First to keep ACT out, in a similar way to how National voters switched to United Future to keep the Greens out in 2002. Labour, although it has this risk, can say (based on possible polls showing National can’t govern alone but can with ACT) tell voters: “NZ First won’t be there as it is polling below 5% and/or will go with us, Greens and Maori party won’t go with National, therefore National’s only coalition partner is ACT. A vote for National is a vote to bring Roger Douglas back in charge of the country” message to woo some National leaning voters scared of ACT back.

It will be very interesting watching how the election unfolds.

The bureaucracy

March 13, 2008

David Farrar makes some good points about where my tax money has gone.

Since Labour has came into office, there have been:
12% more teachers, but 40% more education bureaucrats
28% more medical professionals, but 51% more health bureaucrats
28% more MSD service staff, but 109% more MSD bureaucrats
and a 142% increase in salary costs for policy departments. It is the fastest growing sector in the economy.

Now I know why despite investing all this extra money in health and education Labour hasn’t delivered much better services in these areas.

The problem with bureaucrats are that while some certainly are needed to monitor the performance and manage Government departments, they represent a burden on the economy. If we have an extra 10 000 bureaucrats (which we have been given by Labour since 2000) we have additional costs on the taxpayer to pay their wages, while delivering no goods and services to the economy. If we don’t have the 10 000 bureaucrats, the people can be employed in more productive sectors of the economy, paying tax (helping ease instead of adding to Government coffers)  and making our country richer. This is not to mention where bureaucracy makes things worse with unnecessary regulations and red tape.

It is therefore pleasing to see Key promising to do something about the problem. He is going to cap the number of bureacrats at 36 000 (where they are now) saving taxpayers $500 000 000 over three years (which can go into improving the quality of health and education). The downside to the policy is it is timid. I’m not an expert on bureaucracy, and don’t know precisely how many the country needs, but perhaps a review into this (with only 10 temporary bureaucrats) might not be a bad idea.