Political Compass

September 1, 2014

Political Compass places New Zealand political parties:

 

compass

Whoever is behind it says:

This time around there can be no more important and over-arching issue than the secretive Trans-Pacific Partnership Agreement (TPPA) which New Zealand is poised to sign, yet receives scant attention in the campaign and is ignored in any of the “surveys” that we’ve seen. From the authenticated leaked information that’s available, it’s clear that this agreement is much more than the free trade deal that its National Party adherents describe. It is in fact an unprecedented move towards international corporate involvement in governance, including vital areas like education, health and pharmaceuticals, environment, agriculture, investor rights and much more. Under the TPPA, government legislation in the interests of the public — but against the interests of foreign business — may be challenged by a corporation in a closed tribunal on the grounds of impeding free trade. This precise thing has already happened in Australia, where the country’s plain packaging laws on tobacco were legally challenged by a tobacco company. The truth is that many of the electoral policies of some NZ parties could not be implemented under the TPPA! This, and not the flag, is the real sovereignty issue, and it\`s barely being raised. By comparison, every other electoral issue is window dressing.

I don’t think most voters share this view of the importance of the TPPA, nor what appears to be a hard-left, anti-trade view of it.

However they are right about this:

We remain perplexed about the electoral alliance between Mana and the Internet Party, given that Mana’s leader is an avowed socialist, while the Internet Party’s founder is an economic libertarian in the mould of the anti-state Pirate parties of other countries. . .

I took the test:

 

compass1

 

That isolates me from any of the parties but I think that’s the fault of the placing of the parties, the questions – some of which are on issues and ideas which aren’t relevant here – and assumptions made about how answers relate to the parties.

TVNZ’s Vote Compass shouldn’t be taken as fool-proof, but it has the parties better placed and is based on questions more relevant in New Zealand.

It put me in a similar place but has the National Party there as more centrists and liberal than the Political Compass does:

tvvc1


Bribe-O-Meter update

September 1, 2014

The Taxpayers’ Union has updated its Bribe-O-Meter to include four of the wee parties:

The Taxpayers’ Union have added the Green, ACT, United Future and Conservative Parties to the ‘Bribe-O-Meter’ hosted at taxpayers.org.nz.  Excluding ACT and New Zealand First, the total election ‘bribes’ – that is new spending not already in the budget covering the next parliamentary term, equals $12.7 billion, or $7,486 per household.

Jordan Williams, Executive Director of the Taxpayers’ Union, says, “The Bribe-O-Meter is enabling Kiwis to judge for themselves the various bribes this election. With the addition of the minor parties voters can assess which political parties are offering taxpayers value for money.”

“As of the end of last week, National’s election promises add up to $329 per household. The equivalent figure for Labour is $2,776, the Greens $2,893, United Future $1,253, and the Conservatives $236. ACT is in the negative, committing to cut spending by $6,876 per household.”

A lack of detail in New Zealand First’s policy documents has made it impossible for the Union’s independent expert, Dr Michael Dunn, to calculate credible figures for the Party’s inclusion in the Bribe-O-Meter.  Public and private requests to New Zealand First have, to date, not resulted in amelioration. 

If someone who used to do social policy costing for IRD can’t figure out NZ First’s costs, the problem is with the party and its policies.

Mr Williams says, “While National, Labour, the Greens, Conservatives, ACT, and United Future have provided the Union with sufficient policy and financial material to estimate the cost of their election manifestos, New Zealand First apparently just doesn’t have the information for our expert. It appears that Mr Peters makes promises to all and sundry, but no one at his office is adding up the cost.”

“We are delighted that in the last week, parties have come to us to test our expert’s assumptions and the Bribe-O-Meter’s methodology. On the basis of new information that parties have provided we’ve updated our figures and are able to provide more transparency to the voting public on precisely what parties are promising.” . .

The Bribe-O-Meter is here.

bribeometer

 

This puts the lie to claims by Labour and the Green Party that they will be fiscally responsible.

National’s promises amount to a total of $558 billion which is  $328.81 a household.

Labour’s total is $4,707 billion – $2,775.68 per household.

Green Party’s total is the highest – at $4.707 $4.906 billion, a cost of $2,893.03 a household.

The Act Party would reduce costs by $11,660 billion – a reduction of $6,875.60 per household.

United Future’s total is $2.124 billion –  $1,252.51 per household.

The Conservative Party’s total costs amount to $$0.400 billion – $235.88 a household.

NZ Firsts costs are a like its leaders utterings – whatever he thinks it is.

Labour and Green Party policies are already at 7482.68 billion.

That doesn’t take account of the cost NZ First and Internet Mana would require for their support.

Nor does it take into count the added costs of higher taxes, higher interest rates, higher inflation, more welfare and a stalled economy.


What matters

August 31, 2014

Trans Tasman on what matters to voters:

The vital factor for NZers as they come to vote are issues which impact on their lives: the trajectory of the economy, jobs, living standards, inflation, house prices, education and health services. Voters’ assessments on the credibility, competency and leadership of the parties weigh equally heavily. And a primary concern is stability of the Govt to be elected under the MMP system. . .

Anyone who understands the issues, the policies, the parties has a clear choice.

A stable, National-led government will continue with the policies which are working in these important areas; a weak unstable Labour-led government propped up by the Green, New Zealand First and Internet Mana parties won’t.

There are major differences in policies too, not the least of which is tax:

Where Labour is talking of raising taxes, National is dropping broad hints it wants to lower taxes by revising tax thresholds to provide some relief for those on low and middle incomes.  . .

The PREFU supported the government’s claims that the books will be back in surplus.

There is no justification for increasing tax rates. If conditions allow, there could be a case for some reductions, if only to counter bracket creep.

The only justification for adding a new tax would be by taking away an existing one.

Labour and its left-wing cling-ons want to increase tax rates and introduce new ones as extras not replacements.

High tax and high spending under the last Labour-led government put New Zealand into recession long before the rest of the world. That they haven’t learned from that mistake shows they can’t be trusted with the public purse again.
In their last five years in government, Labour’s spending increased by 50%, pushing mortgage rates to 11%, causing inflation to exceed 5%, and putting the economy into recession well before the global financial crisis. Now they want to make the same mistakes all over again.

In stark contrast National has spent the last six years working for New Zealand with policies that are working for New Zealanders and this week announced more of its plan for the next three years:

We’re focused on the things that matter to New Zealanders. If you’ve missed any of our policy announcements this week, we’ve summed them up below. If you want more information on any of these announcements visit: www.national.org.nz/plan #Working4NZ


They haven’t learned a thing

August 30, 2014

Labour and the Green Party are trying to pretend they would be good economic managers.

The cost of their policies puts the lie to that:

David Cunliffe and Labour have actually increased their new spending promises for the next four years to $18.4 billion, despite putting some of their proposals such as New Zealand Power on the never-never, National Party Finance Spokesman Bill English says.

“David Cunliffe and David Parker have again been caught out under-costing their expensive promises,” Mr English says. “This is irresponsible and deceptive and confirms that under David Cunliffe, Labour is reverting to its failed spend and tax recipe of the past.

“We saw what happened the last time around – under Labour in 2008, floating mortgage rates reached almost 11 per cent, inflation exceeded 5 per cent and the economy went into recession well before the global financial crisis.”

Labour’s latest costings attempt, which it released on Monday, confirm its untried New Zealand Power proposal, which would give politicians control of the electricity industry and push up power prices, would be postponed until 1 January 2018.

And in another example of it attempting to dress up its numbers, Labour has also pushed back free GP visits for over 65s and other groups to 1 January 2017.

“So while David Cunliffe is going around New Zealand making expensive promises, he is quietly pushing some of them back beyond two elections because he knows they are unaffordable,” Mr English says.

“But he has again failed to hide Labour’s real spending agenda because he has not added in promises made over the last two weeks.

“Even using Labour’s own numbers, the cost of its promises over the next four years is now $17.3 billion – up from its claimed $16.4 billion when it first attempted to cost its policies.

“But when the real costs of its proposed R&D tax credit, compulsory KiwiSaver and New Zealand Power are included, the tally jumps to $18.4 billion – up from around $18 billion the last time around.

“As Labour’s numbers come under scrutiny, they keep changing them,” Mr English says. “David Cunliffe has tried to say he would spend less, but when you add it all up he is actually spending more.”

Labour Party Election 2014 Spending Announcements – as at 27 August 2014
Four year costings as per Labour documents unless noted

$m
27-Jan-14 Best Start Policy 614
27-Jan-14 Extended Paid Parental Leave 245
27-Jan-14 Maternity Policies 50
27-Jan-14 Early Childhood Education Announcements 352
19-Mar-14 Forestry Policy 28
14-Apr-14 Bowel Screening Programme 56
23-Apr-14 Veterans Pension Extension 37
23-Jun-14 Canterbury Policies 116
25-Jun-14 R & D Tax Credit* 1,079
25-Jun-14 Accelerated Depreciation 210
25-Jun-14 Universal KiwiSaver** 845
25-Jun-14 NZ Power*** 566
25-Jun-14 KiwiBuild 1,527
25-Jun-14 KiwiBuild Finance Costs 176
2-Jul-14 School Donation Policy 175
3-Jul-14 Family & Sexual Violence Policies 60
5-Jul-14 Digital Devices in Schools 120
5-Jul-14 Reading Recovery 140
5-Jul-14 Food in Schools 70
11-Jul-14 ICT policies 17
22-Jul-14 Regional Investment Fund 200
24-Jul-14 Digital and Connectivity Policy 21
30-Jul-14 Living wage for Public Sector 94
31-Jul-14 Centres of Vocational Excellence 40
4-Aug-14 Youth Employment Package 182
6-Aug-14 Primary Healthcare 150
8-Aug-14 ACC 40
10-Aug-14 Free Doctors’ Visits 540
18-Aug-14 Tertiary Education (incl ACE) 130
20-Aug-14 Aged Care 222
22-Aug-14 Welfare Policy 78
24-Aug-14 Immediate Funding of City Rail Link**** 800
25-Aug-14 Other Education Initiatives 45
25-Aug-14 Other Smaller Initiatives 80
25-Aug-14 Maintain Real Value of Spending in Public Services 9,000
25-Aug-14 Policy Soon to be Announced 289
Total Announced Spending Pledges 18,394

*Adjusted to reflect Treasury’s forecast costs of the previous R & D Tax credit
**Adjusted to include the average Kiwisaver tax credit paid to new Kiwisaver members
***Adjusted to remove the claimed fiscal offset for wider benefits in one part of the economy that ignores wider costs elsewhere
****Labour says it would reprioritise existing transport spend but most of first 4 yrs committed/contracted

Note: some costs differ from the original Labour releases as a result of fiscal tables released 25 August.

This is only the cost of its spending.

It doesn’t take into account the cost of poor economic management, higher and extra taxes, higher interest rates, a greater burden of government and all the other hand brakes a Labour/Green?New Zealand First.Internet Mana government would impose on the country.

Higher spending and higher taxes didn’t work for New Zealand under the last Labour-led government and it won’t work if voters are conned into trusting another one.

Hopefully voters have learned what works for New Zealand and New Zealanders because Labour and its mismatched mates haven’t.

 

In their last five years in government, Labour’s spending increased by 50%, pushing mortgage rates to 11%, causing inflation to exceed 5%, and putting the economy into recession well before the global financial crisis. Now they want to make the same mistakes all over again.


Poll of polls

August 30, 2014

Colin James’s poll of polls:

. . .  National’s slip leaves it still strong but also underlines the fact that it does not have the election in the bag.

But its problems are slight compared with Labour’s. Its latest average is below its 2011 election score of 27.5% and far below the 33.0% average at the end of 2013. To make matters worse, a Reid Research poll for Native Affairs on Maori TV showed the Maori party’s Chris McKenzie ahead in Te Tai Hauauru.

The Greens continued to be steady. Their latest four-poll average was 12.6%, which would net it 16 seats.

 

cjpoll

 

cjpolls

While party support is volatile, the most encouraging result is the continuing belief the country is going in the right direction.

polls

 


Grow garden not pie

August 28, 2014

Slicing or growing the pie is a popular metaphor in discussions on the economy.

Keith Hennessey has a better one. He likens the economy to a garden:

The most common metaphor for debates about growth and income distribution is that of the economy as a pie. Some focus their policy efforts on economic growth and efficiency: making the pie bigger. Others emphasize policies that increase equity and redistribute income: how shall we cut up the pie and distribute its slices, whatever its total size?

We learn early in introductory economics that there is a big tradeoff between these two goals of equality and efficiency. Higher marginal tax rates allow for more income redistribution but create disincentives to work, save and invest and thereby reduce economic growth. Policymakers try to optimize, but at the end of the day someone has to decide whether faster economic growth or increased equity is the higher priority. . .

A flower garden is a better metaphor for looking at economic growth and income distribution. A flower’s growth depends on the individual characteristics of that type of flower and that particular seed. It also depends on common factors shared with other flowers in the same garden (e.g., the local climate, pests, the skill and diligence of the gardener) as well as its particular advantages relative to other flowers (better sunlight, soil, and water in this part of the garden than that part over there).  Although there is some interdependence, the rapid growth of a sunflower at one end of the garden largely does not come at the expense of a struggling tulip at the other end. The sunflower may have advantages the tulip does not, even unfair ones, but the fast-growing sunflower is not “taking growth” from the slow-growing tulip.

Flowers will grow at different rates for a variety of different reasons. Policymakers should focus their energies on absolute growth rates rather than relative ones. It’s not a problem that some flowers are growing faster than normal, unless (a) that growth is indeed coming at the expense of other flowers, or (b) that more rapid growth is because the gardeners are neglecting the tulips to help the sunflowers grow faster.

The role of policy makers is to provide good law to ensure competition is fair and that businesses face their share of external costs, it isn’t to interfere in the market.

In the same way it makes more sense to think of economic growth as the sum of the unequal income growths of tens of millions of separate individuals, rather than as a single growing pie to be divided. Any particular individual’s income growth depends on his innate talent, education, and skills, his effort and diligence, and some degree of luck. It also depends on common factors such as the health of the local, regional, national, and world economies, as well as shared resources like transportation and communications infrastructures and a stable and predictable system of law, property rights, and government rules.

The principal economic challenges are to maximize the growth potential of the entire economy/garden and to maximize the opportunities for those individuals/flowers struggling to succeed/grow. And just as a gardener should spend more time tending to the parts of his garden that are struggling, policymakers should devote greater effort to maximizing opportunities for those at the bottom of the income distribution to improve their lot. In the long run this means things like improving elementary and secondary education, expanding free trade, and reducing the growth burden of regulations, government spending, and debt. In the short run it means getting the incentives right so that those on means-tested government assistance don’t face exorbitant marginal effective tax rates from poorly designed income phase-outs.

Benefits should be to support those who need it while they need it, not a disincentive to people who can help themselves to do so.

The flower garden metaphor has one final advantage over the pie metaphor. A pie does not exist without a baker, whereas flowers grow naturally. The growth comes from the flowers, facilitated but not created by a good gardener. In the same way policymakers and elected officials neither “create jobs,” nor “increase economic growth.” Smart policymakers create the conditions under which private firms create jobs and in which millions of individuals combine their separate efforts to create economic growth. The origins of economic growth are in the private sector, not the public.

In an area of economic policy as complex as this, a good metaphor matters and can influence policy. Policymakers should create the conditions under which the whole economy can grow as rapidly as possible, and should devote particular effort to maximizing the potential for those most struggling to succeed. Let’s not fight about dividing up the pie, but instead work to help the whole flower garden, and all the flowers in it, to blossom.

 The garden is a healthier, more attractive and natural  metaphor than the pie and provides a much better picture of good economic management.

The election gives us a choice between the National gardeners who respect the ability of businesses and individuals and understand the conditions which will help them flourish and the Labour/Green/NZ First/Internet Mana who don’t.

Hat tip: AE Ideas


Election outcome less certain

August 28, 2014

It was inevitable that polls would tighten as the election gets closer and last night’s 3 News Reid Research poll shows that’s happening:

August 19-25, 1000 people polled, margin of error 3.1 percent

National 45 percent, down 2.5 percent
Labour 26.4 percent, down 2.6 percent
Greens 13.5 percent, up 0.5 percent
NZ First 6.3 percent, up 1.7 percent
Conservative 4.6 percent, up 2.1 percent
Internet Mana 2.1 percent, up 0.1 percent
Maori Party 0.7 percent, down 0.1 percent
United Future 0.4 percent, up 0.2 percent
ACT 0.3 percent, no change

Seats in the house:

National 57
ACT 1
United Future 1
Maori Party 2
Right total: 61

Labour 33
Greens 17
Internet Mana 3
Left total: 53

NZ First 8

The Maori Party could go left or right.

But while it has voted against National more times than with it, the choice of being in a stable National-led government supported by Act, United Future and possibly New Zealand First would almost certainly be preferable to it than supporting an unstable Labour, Green, NZ First, Internet Mana coalition.

The Conservative Party is now in spitting distance of the 5% threshold.

Kiwiblog shows that if it makes it into parliament, Labour won’t be able to govern:

Conservatives 4.6%

Centre-Right 59 seats (Nat 57, ACT 1, UF1)

Centre-Left 53 seats (Lab 33, Greens 17, Internet Mana 3)

Centre 11 seats (NZ First 8, Maori 3)

This means National would need the Maori Party to govern, and Labour would need both NZ First and the Maori Party (plus Greens, Mana)

Conservatives 5.0%

Centre-Right 62 seats (Nat 54,  Conservatives 6, ACT 1, UF1)

Centre-Left 51 seats (Lab 32, Greens 16, Internet Mana 3)

Centre 11 seats (NZ First 8, Maori 3)

This means National would still need the Maori Party (or NZ First) to govern, but Labour would be unable to govern under any combination.

As another example of MMP’s perversity, National would have more seats if the Conservative Party didn’t make it into parliament but could be

more likely to govern if the Conservatives do cross the line because Labour wouldn’t be able to cobble together a coalition.


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