Monday, November 17, 2008

Devil in the details

The new National-led government will be sworn in on Wednesday, then, after he’s Prime Minister, John Key will head off to the APEC meeting and other foreign visits. We now know that due to the agreements with minor parties, National may have problems delivering on what it told the country it would—and wouldn’t—do.

The cost of support from the Maori Party has been pretty low for National: Instead of following long-held National Party policy to abolish the Maori seats in Parliament, National has agreed to do so only in consultation with Maori people, and apparently will proceed only if Maori agree to the abolition. Making the seats permanent like General Electorate seats are (called “Entrenchment”), which has been a Maori goal, is apparently not on the near-term agenda.

Apart from that, National promised to look at the Foreshore and Seabed Act, including the possibility of amendment or repeal (which Maori want). But the language in the agreement makes clear that National intends to keep the provisions of the legislation regardless, so repeal may be moot.

National—and the country—will have the biggest problems with ACT.

To gain ACT’s support, National agreed to various reviews and working groups on cutting government spending, eliminating “programmes that do not deliver value for money”, and involving the private sector in reviews of bureaucracy performance and public spending. Funny how ACT is so keen to cut government spending, but wants to spend a fortune on reviews and working groups and other processes. It looks to me as if ACT is seeking a justification for slashing government spending or eliminating entire programmes in areas that New Zealanders want left alone. “Value for money” is a loaded term that relies on the personal values of the reviewer as much or more than a review of balance sheets. This will require careful monitoring.

ACT also wants a flat-rate income tax; though National doesn’t, it nevertheless has pledged to work to flatten the rates, and their one-man-party partner wants a top tax rate of 30% across the board. All of which will reduce revenue that’ll have to be offset by spending cuts, increasing other taxes (GST, petrol, lower-earner income tax) and/or by borrowing.

The greatest publicity has been over the Emissions Trading Scheme (ETS), part of New Zealand’s commitment under the Kyoto Protocol. ACT wants it scrapped altogether, while National wants to amend it. So National agreed to a Parliamentary review in which climate change deniers will be given equal footing with real scientists with the pretty obvious goal of coming up with “rational” or “scientific” reasons for dumping the ETS altogether. At ACT’s insistence, National has agreed to push through an amendment to the ETS delaying its implementation, apparently indefinitely, and lifting the ban on new thermal generation plants while the review is being done. Worse, the “review” will be undertaken with results viewed “in the light of current economic circumstances”, a phrase that could be used to break any campaign pledge.

I didn’t vote for National precisely because I didn’t want ACT calling the shots on policy. John Key has pledged to lead a government for all New Zealanders. This is where he starts proving he’ll really do that—if he can.

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