Moving targets

November 10, 2017

National used yesterday’s question time to attempt to get clarification on the government’s targets for housing and spending.

The answers weren’t helpful:

1. Rt Hon BILL ENGLISH (Leader of the Opposition) to the Prime Minister: What will the specific measurable targets be, if any, that she will use to hold her Government to account?
Hon KELVIN DAVIS (Acting Prime Minister): As Prime Minister, I will hold my Ministers to account for improving the well-being and living standards of New Zealanders.
Rt Hon Bill English: What is the appropriate measure—[Interruption] 
Mr SPEAKER: Order! Sorry, I’m just going to start right now. Who is the member who interjected then? Right, there’s an additional question to the Opposition.
Rt Hon Bill English: What is the appropriate measure we should follow to monitor progress on KiwiBuild where the Government has committed to build 100,000 houses over the next 10 years?
Hon KELVIN DAVIS: We will make decisions on appropriate targets in due course.
Rt Hon Bill English: So does that mean that the current expression of the Government’s commitment, which is “to build 100,000 houses over the next 10 years” does not necessarily mean what most people would take it to mean?
Hon KELVIN DAVIS: We will make and confirm decisions on appropriate targets in due course.
Rt Hon Bill English: Does the Government stand by—[Interruption] 
Mr SPEAKER: Order! The chief Government whip, I think, interjected, or someone around her did. There is a further supplementary to the Opposition.
Rt Hon Bill English: Does the Prime Minister stand by her Government’s commitment to “build 100,000 houses over the next 10 years”?
Hon KELVIN DAVIS: We will make and confirm decisions on appropriate targets in due course.
Rt Hon Bill English: Why did the Government commit to “build 100,000 houses over the next 10 years” if it is now not willing to re-express that commitment in this House?
Hon KELVIN DAVIS: Because the previous Government didn’t build houses.
Rt Hon Bill English: Is it possible that the Government is revising this commitment because of public statements made by the Minister of Housing and Urban Development, that the commitment may involve not building houses but buying existing houses?
Hon KELVIN DAVIS: No. 
Rt Hon Bill English: What other reason could there possibly be for not being willing to restate a commitment made by all its members right though the election campaign to “build 100,000 houses”? What other reason could there be not to make that commitment here today? 
Hon KELVIN DAVIS: We are not revising targets. We will make and confirm decisions on appropriate targets in due course.
Rt Hon Bill English: So is the commitment to build 100,000 houses an appropriate target, or one that is subject to revision or further decisions, or is it one that we should take at its word? 
Hon KELVIN DAVIS: The member will find out in due course. . . 

That sounds like the answer is if there’s a target it’s a movable one.

Hon Michael Woodhouse: Who is correct: the Minister of Housing and Urban Development, who says that there is a fixed commitment to build 100,000 extra houses, or the Prime Minister, who says such a target has not yet been set?
Hon PHIL TWYFORD: Both the Prime Minister and the Minister of Housing and Urban Development have reiterated our policy, which is to build 100,000 affordable homes to restore affordable homeownership to this country. . . 

That’s the policy but what’s the target?

The Reserve Bank also questions the number of houses that will be built:

The Government has announced an intention to build 100,000 houses
in the next decade. Our working assumption is that the programme
gradually scales up over time to a pace of 10,000 houses per year by
the end of the projection horizon. Given existing pressure on resources
in the construction sector, the aggregate boost to construction activity
from this policy will depend on how resources are allocated across public
and private sector activities. The Government intends to introduce a
‘KiwiBuild visa’ to support the supply of labour to high-need construction related
trades. While accompanying policy initiatives may alleviate
capacity constraints to some extent, our working assumption is that
around half of the proposed increase will be offset by a reduction in
private sector activity.

It could be the new house target is a movable one because there’s more than a little doubt about the finances:

3. Hon STEVEN JOYCE (National) to the Minister of Finance: Can he confirm it is his intention as Minister of Finance to ensure core Crown expenses do not exceed $81.9 billion in 2017/18, $86.1 billion in 2018/19, $88.2 billion in 2019/20, $91.8 billion in 2020/21, and $96.1 billion in 2021/22, as specified in the Labour Party’s pre-election Fiscal Plan?
Hon GRANT ROBERTSON (Minister of Finance): I can confirm that it is my intention for core Crown expenditure as a percentage of GDP to be within the recent historical range. As to the exact figures in the member’s question, I cannot confirm those as, of course, they are subject to detailed Budget decisions and revenue forecasts that are yet to be finalised.
Hon Steven Joyce: Can he confirm that he stands by his statement from 4 September this year, and I quote, “Labour’s Fiscal Plan is robust, the numbers are correct and we stand by them”?
Hon GRANT ROBERTSON: I can confirm that the Budget that this Government is putting together will be robust and it will deliver on a commitment that this Government has made to ensure that all New Zealanders share in prosperity.
Michael Wood: What else, in addition to managing core Crown expenditure, will guide the Government’s approach to responsible fiscal management?
Hon GRANT ROBERTSON: The Government will observe the Budget responsibility rules as indicated in the Speech from the Throne: namely, delivering a sustainable operating balance before gains and losses; reducing net core Crown debt to 20 percent of GDP within 5 years; and ensuring a fair and balanced progressive taxation system. We will also never forget that the purpose of a strong economy is to give every New Zealander the chance to share in prosperity, and we will never be satisfied while children live in poverty or families sleep in cars.
Hon Steven Joyce: Does he stand by his statement also on 4 September, and I quote, that “Our operating expenses are above the line and are clearly stated.”?
Hon GRANT ROBERTSON: The Budget that this Government will prepare will be clear about what we are spending and where the revenue for that is coming from.
Hon Steven Joyce: So that’s a no. Can I also ask: does he stand by his statement, and I quote, “We have quite clearly put in the spending requirements to meet the promises we have made. Our fiscal plan adds up. We are absolutely clear that we have the money to meet the commitments that we’ve made.”, also on 4 September?
Hon GRANT ROBERTSON: The Government will prepare a Budget that shows how we will pay for the important commitments that we have made to ensure that every New Zealander benefits from economic prosperity.
Hon Steven Joyce: Can the Minister of Finance then confirm that it is not his intention to necessarily ensure core Crown expenditure does not exceed $81.9 billion this current financial year, $86.1 billion in the next financial year, $88.2 billion in 2019-20, $91.8 billion in 2020-21, and $96.1 billion in 2021-22? Can he confirm that’s not his intention, even though it was specified in the Labour Party’s pre-election fiscal plan?
Hon GRANT ROBERTSON: I can confirm that we will keep Government expenditure as a percentage of GDP in line with the historical range.
Hon Steven Joyce: Can the finance Minister then confirm that he doesn’t at all stand by the numbers he presented in the Labour Party’s fiscal plan prior to the election?
Hon GRANT ROBERTSON: The Government is currently going through the usual process of putting together a Budget. We are absolutely confident that we will deliver a Budget that is in line with the Budget responsibility rules that were outlined in the Speech from the Throne and that will deliver to New Zealanders a fair share in prosperity. As I said in my primary answer, the final numbers are the subject of the normal Budget process. . . 

Hon Steven Joyce: Is he saying that the actual numbers written on the Labour Party’s fiscal plan prior to this election, which he and his colleagues defended vigorously during the election campaign, are no longer relevant? The comments he has made suggest that he will put whatever numbers he likes in front of the public in due course in the next Budget.
Hon GRANT ROBERTSON: I have been absolutely clear that the commitment that we have made is that Government expenditure as a percentage of GDP will remain in line with the long-run historical trend. Members on the other side of the House well know that we will now be looking at new revenue forecasts and, indeed, new growth forecasts. They will determine the exact numbers that are presented. But we are very clear on this side of the House: our number add up. . . 

Hon Steven Joyce: Has he noted how often the Reserve Bank mentioned policy uncertainty in their Monetary Policy Statement this morning, and has he considered how his statements in the House this afternoon and his responses to questions will not help with that policy uncertainty when the Reserve Bank was obviously placing some credence on his previous statements about Government expenditure and now he is not even standing by those?
Hon GRANT ROBERTSON: The Reserve Bank Governor noted today that his thinking was preliminary, and, just like the member opposite, when the Half Yearly Economic and Fiscal Update and Budget Policy Statement are released before the end of the year, there will be significant certainty about our spending plans. If the member can’t wait, I’ll make up a special advent calendar for him so that he can count down to the half yearly update.

In opposition you might be able to get away with vagueness, but governments need to be much clearer on its spending plans so that public institutions like Treasury and the Reserve Bank have sufficient information to perform their roles effectively.

“This morning’s Monetary Policy Statement from the Reserve Bank makes numerous mentions of domestic policy uncertainty including ‘uncertainty around tax policy’, uncertainty around the ‘future impact of these policy changes’ and ‘heightened uncertainty regarding the domestic outlook,” Mr Joyce says.

“While the Bank is taking a steady as she goes approach at this point, it is clear that their economic forecasting is affected by a lack of clarity from the new Government as to their fiscal and economic plans.

“This is not a surprise as we are all still yet to see the figures underpinning the coalition agreement between Labour and New Zealand First, which was signed over two weeks ago, and we are all still yet to see the Government’s mythical final 100 Day Plan.

“Yesterday’s Speech from the Throne contained 51 new spending commitments, which will put significant pressure on the Government’s spending track and net debt.

“The first Bill In Parliament this week seeks to legislate for $325 million of extra spending, without any reference to how this fits in to the government’s wider spending plan.

“The public will rightly be concerned that the large number of spending promises they have heard about could sacrifice New Zealand’s hard work to get back into surplus and start paying down debt.

“The irony is that in recent years all the economic risks have been offshore. Now just as the world economic outlook is strengthening, all the risk and uncertainty is being generated domestically by the economic opaqueness of the new Government.

“It is time for the Government to be much more transparent and start releasing more details of their fiscal plans.”

It’s possible they haven’t got any fixed ones, like their housing target they’re movable.

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National’s 10 big achievements

November 9, 2017

Hutt South MP Chirs Bishop writes on 10 of National’s big achievements in government:

. . Let me say at the outset that no government is perfect. All are affected by global economic circumstances and – as encapsulated in Macmillan’s famous dictum – “events, dear boy, events”. Governments never deliver all the fervent desires of their most ardent supporters, and most aren’t anywhere near as hopeless as partisans from the other side would have you believe.

I believe New Zealanders can look back with pride on nine years of National government. The country is demonstrably a better place than it was in 2008. Since Muldoon (who infamously, and depressingly, promised to leave the country no worse than he found it) that has surely been the litmus test for good government in this country. New Zealand is prouder, wealthier, more confident and aspirational than it was nine years ago. . . 

Nine years ago the country was in recession and forecast to have a decade of deficits.

Thanks to the good work through three terms of National-led government the situation and outlook are much rosier.

1. Getting the country through the global financial crisis – and back into the black

Any account of the last National government has to start with the GFC. Sir John Key, Bill English and team took office in the teeth of the worst financial crisis since the Great Depression, and it’s worth recalling that New Zealand actually entered recession a year before the rest of the world. Treasury predicted never-ending deficits, unemployment to rise to over 10%, and debt to peak at 40% of GDP.

The government didn’t panic – and nor did it slash and burn. Social support was maintained, but poor quality programmes were rationalised, and new Budget operating allowances were pared back. In the years preceding 2008, Labour had increased spending unsustainably (50% in its last five years) for little to no effect. With Bill English in charge of the purse strings, departments were told to focus on results, not just to lobby for ever-escalating spending.

The government books got back into the black in 2014/15. Unemployment is now down to 4.6% and labour force participation is at record levels. Our debt to GDP topped at just 25%, and is coming down (Australia’s is 40, the UK’s is 90 and the USA’s is 108%!).

I’m proud that we did this while maintaining investment in core public services. For example, since 2009 health spending has increased by $3 billion per year, or around 25% (population growth has been 14%).

The incoming government inherits books that are the envy of the developed world.

2. Building a more productive, diverse and competitive economy

While dealing with the GFC, National started the process of consistent, moderate and sustained economic reform to build a more productive and competitive economy.

Through careful, measured tax reform, state asset sales and welfare reform, the results are plain to see. The economy is growing at 3% per year, one of the fastest growth rates in the world, and has generated 274,000 jobs in the last two years. The job numbers are remarkable: New Zealand has the third highest employment rate in the developed world (at a time of record migration – it seems that immigrants don’t “steal” New Zealand jobs, as some like to claim).

Economic strength has flowed through to people’s pay packets: average annual household income is up 42% since 2007, and average wages have increased by more than twice the rate of inflation. In fact after tax wages have increased twice as fast in New Zealand than in Australia since 2008.

The economy is more diverse. When the bottom fell out of dairy in 2014/15, New Zealand kept growing. The technology sector is expanding at a dizzying rate with revenue now over $10 billion. That famous “manufacturing crisis” that Labour used to talk about? The sector’s now been expanding for 57 consecutive months.

3. Dealing with the Canterbury earthquakes

Following the Canterbury earthquakes in 2011, the government was told that the local economy could expect a sustained downturn, a dramatic fall in population, and rising housing costs. National worked quickly to keep jobs in the region and support unemployed workers and businesses facing temporary shutdowns. The SCIRT programme to repair broken roads and pipes was an unequivocal success and the EQC home repair programme has repaired hundreds of thousands of homes – a building project the likes of which New Zealand has never seen. Yes, a small number of the repairs require remedial work, but this is typical in the private sector as well.

Many of the key anchor projects are now complete, including the Bus Interchange and brand new Justice Precinct. A solution has finally been achieved for the Cathedral and progress is being made again on the Convention Centre.The real news is in the results. The Canterbury economy is booming and the population higher than ever. The housing market is stable. The dire predictions following the earthquakes have not come to fruition – on the contrary, Canterbury is thriving and is well on the way to becoming one of the best cities in the world to work and live in.

4. Significant reductions in child poverty

Some will call it chutzpah for including this, but the facts are indisputable: child poverty measures fell on National’s watch, despite absurd hyperbole to the contrary. Using MSD’s Material Wellbeing Index, the number of children in material hardship in 2016 was 135,000. Too many, obviously, but well down on the 170,000 in hardship in 2008; and massively down on the 220,000 following the GFC (in 2011).

For a supposed “neoliberal” government regularly accused of showing no empathy for the disadvantaged, National’s record is impressive: the first real benefit increases in 43 years, massive insulation programmes for state homes (and the private market), breakfasts in schools programmes, free GP visits for all kids under 13, and more. National’s family incomes package (about to be legislated away under urgency by Labour) would have lifted around 50,000 further kids above the poverty line.

5. The Better Public Services programme and Social Investment

In 2012 the government did something quite profound. It set ten targets aimed at delivering results for our customers by reducing welfare dependency and crime, increasing immunisation and achievement at school, and more. This quiet revolution in the public service has led to improvements across the board: crime down 14% (youth crime is down a third), rheumatic fever has reduced 23%, 94% of 8 month olds are now fully immunised, to name a few.

Allied to this was “Social Investment” – targeted, evidence-based investment to secure better long-term results. The government spends $61 billion on social services every year. Far too often we don’t ask much about the efficacy of that spend – particularly for those with complex needs. Bill English often says: “we need to know what works, for whom, and at what cost.” Social Investment is about doing things differently: using sophisticated data to identify need and risk, and to invest up-front in what works. By breaking down silos between agencies, harnessing the power of community instead of big government this approach changes lives for the better, rather than just servicing misery.

6. A more competitive, affordable, secure and renewable electricity system

It’s a bit odd that Labour has promised a full-scale review of the electricity market (although it seems to be what new governments do – we’ve had one every time there’s been a change of government). I’m confident the review will show that New Zealand’s electricity policy settings are outstanding. That’s largely due to the work of Gerry Brownlee, who inherited a totally dysfunctional system. Under Labour consumers were told every second year to save power during winter, prices rose 72% in nine years, and security of supply was at serious risk. Moreover, despite rhetoric to the contrary, gas and coal use massively increased – Labour even underwrote the building of a new gas power plant!

Fast forward nine years and renewable electricity is at near record highs, electricity prices actually fell in 2017 in real terms thanks to more competition, and despite dry years we’ve had no forced conservation campaigns. Most astonishingly, we have decoupled economic growth from increased electricity demand: the economy is growing at around 3% while demand is flat and even falling.

7. Reforms to welfare to reward independence and work

National undertook the most significant reforms to the social welfare system in a generation. Benefit categories were simplified and new expectations introduced for beneficiaries, requiring them to be available for work or getting ready for work. Social obligations for beneficiaries with dependent children were introduced to ensure they were meeting health and education goals. National established the Youth Service, where case managers and providers help young people gain education, training and employment skills. Sixteen and 17 year olds on benefits were placed under money management.

Welfare reform demonstrably worked. The number of sole parents on a benefit is the lowest it has been since 1988. Sixty thousand fewer children are now growing up in a benefit-dependent household since 2011. The current lifetime liability of the benefit system has reduced by $13.7 billion over the last five years. This equates to clients spending 1.3 million fewer years on main benefits over their working lifetimes.

8. A big lift in the number of young Kiwis achieving educational success

When National came to office in 2008, one in two Māori and Pasifika kids left school without NCEA Level 2 – a passport for the future and the recognised minimum standard for other tertiary options.

In 2016, nearly 75% of Māori students, and nearly 80% of Pasifika students, achieved the NCEA Level 2 qualification – remarkable progress by any measure.

Under National, participation in Early Childhood Education hit record highs. The dysfunctional industry training system was overhauled. By 2016, there were 43,000 apprentices around the country, including 100,000 trainees. The Network for Learning was started and completed (on time and under budget) providing ultra-fast, uncapped, high-quality data, at no cost to schools. Pathways from school to study and work were overhauled through the Youth Guarantee and Trades Academies.

9. Treaty of Waitangi Settlements

Despite Māori overwhelmingly voting for them, and Labour liking to preen as the party of and for Māori, the Treaty Settlement process stalled between 1999 and 2006, only getting started once Michael Cullen took over the portfolio.

Using his skills developed in a former life as a negotiator for Ngāi Tahu, and his genuine good-hearted commitment to reconciliation, Chris Finlayson just got on with the job. The results speak for themselves: 59 Deeds of Settlement signed in nine years, meaning the majority of historical Treaty settlements across New Zealand have now been resolved. And consider this: it was Chris Finlayson that delivered the long overdue apology to the Parihaka community for the atrocious actions of the Crown committed almost 140 years ago. Not only that, National gave legal personhood to Te Urewera and the Whanganui River, allowing long-overdue settlements to proceed.

A final point. The Foreshore and Seabed confiscation was one of the most disgraceful acts of the Clark government. National restored the rule of law by restoring the right of Maori to go to court to prove customary rights through the Marine and Coastal Area (Takutai Moana) Act 2011.

10. A turnaround in net migration

One of National’s most effective ads in the 2008 election featured John Key standing in Westpac Stadium, pointing to the 30,000 plus yellow seats, and noting that about the same number of New Zealanders were leaving to move to Australia every year. National said that we’d turn it around – and we did.

Quite remarkably, net migration between New Zealand and Australia for the year to June 2017 was 560 – in our favour. Usually people move from smaller countries to much larger countries. But over the last nine years, New Zealanders literally voted with their feet: staying home and coming home in record numbers. Around 10,000 more Kiwis are coming home than under Labour, and far fewer are leaving.

There’s so much more that could be added: the most significant action on improving freshwater quality in New Zealand’s history, the National Sciences Challenges and a big lift in research and development, huge investments in infrastructure (such as the Waterview tunnel and the Kapiti Expressway), the ambitious goal of Predator Free NZ, and so much more.

National leaves behind a better New Zealand than it inherited from Labour in 2008. And we are hungry to hold the government to account so it doesn’t squander the hard-won gains of the last nine years.

National has left the incoming government with a very solid foundation of success on which to build.

It owes it to all New Zealanders not to fritter it away, to keep the policies that were working well and improve on those which need to be done better.

 

 


First confidence test fail

October 24, 2017

Winston Peters used his speech announcing who he would anoint as Prime Minister to give a lament about how dismal the outlook is.

We in New Zealand First believe that an economic correction, or a slowdown, is looming, and that the first signs are already here:

– In the housing market slowdown
– In Reserve Bank and trading banks nervousness
– In the cessation of hot money into our economy
– In property ownership concerns
– In receding consumer optimism, and
– In ebbing retailer confidence

There were great risks in whatever decision we made and despite our having had no influence on these risks, some will attempt to heap the blame on us.

That those blame caricatures are both spurious and misplaced, won’t stop attempts to misdescribe the cause of events.

That’s why we are putting this scenario out front, right now, so that such attempts will fail.

No-one can blame Peters and his party for events beyond their control.  But now they’re in government we can hold them responsible for how they prepare for and react to them.

It won’t be ‘misdescribing’ at all to blame him and the government he’s part if they don’t take a prudent approach to preparing for a gathering storm.

National inherited a projected decade of deficits when it came to power in 2008.

New Zealand was already in recession and then the global financial crisis hit.

It then faced other natural and financial challenges including earthquakes, droughts and a dairy downturn.

No matter what was thrown at them, Prime Minister John Key and his deputy and Finance Minister Bill English projected calmness and confidence. They promised to protect the most vulnerable and were open about making tough decisions.

Thanks to their efforts, and of course all those of the individuals and businesses who contributed to economic growth,  the incoming government has inherited a far sounder financial base and outlook.

Peters by sorry contrast has failed his first confidence test with his gloom and doom but don’t-blame-us speech.

This is reflected in a reader survey by the NBR.

Asked if they expected their businesses to thrive, survive or nosedive, 50% opted for survival with 35% picking nosedive and only 15% picking thrive.

That’s not a scientific survey but businesses need confidence to take the risks to invest and Peters has given them none.


Still backing Bill

October 20, 2017

No sooner had Winston Peters finished anointing Labour last night than commentators were beginning to talk about a successor to National leader Bill English.

That might make good copy but leadership speculation is not in National’s best interests.

Bill led the party to a historic level of 44.4% support – that’s nearly 8% higher than Labour got in this election and higher than Helen Clark ever got.

The ODT nails it:

National’s share of the vote was lower than in 2014, but English secured about 20,000 more votes than Key did in 2014. He held National up against a stronger onslaught from Labour than Key ever faced, and ensured that fourth term was at least well within its reach.

His fate was delivered by the whim of Peters – not the voters.

He’s earned the leadership and it will be better for the party if he keeps it, at least until the new government’s honeymoon is over. After that the choice of staying on as leader or not should be his, for his sake and the party’s.

Someone whose grasp of history is better than mine might contradict me, but I don’t think New Zealand has ever had an opposition this strong in numbers. The MPs also have a formidable breadth and depth of experience and skills.

National was strong, united and loyal to the leader in government, the caucus and wider party need to remain strong,  united and loyal to the leader in opposition.

That’s an important part of the way back to government in the shortest possible time.

 


Bugger

October 19, 2017

Winston Peters has opted for a Labour-NZ First coalition.

I hope the anti-trade, anti-business rhetoric that characterised their campaigns is put aside and they govern for the good of the country.

I am very sorry Bill English won’t have the opportunity to carry on his good work – yet.

National with 56 MPs, and most of them holding electorates, will be a formidable opposition.


Which way will he go, what will it cost?

October 19, 2017

Winston Peters announced he’ll make an announcement on which party he’ll support to form a government sometime this afternoon.

Negotiations have been remarkable for the lack of leaks so nobody outside the parties knows what he and NZ First are asking for and nobody outside the parties knows what National and Labour have been prepared to offer.

It’s ironic that people who voted for MMP because they didn’t like politicians landed us not only with a system that gives us more of them but gave them more power too.

But that’s what we’ve got and sometime today we’ll know the government that the man who lost his seat and gained only 7% of party votes has chosen.

Which way should he go, which way will he go and what will it cost?

Bill English has the experience and skills that will make it more likely a government he leads will succeed and do better for New Zealand than one led by the much less experienced Labour team.

But only if the cost isn’t too high in terms of policy concessions and cabinet roles.


Winners losers, losers winners?

October 12, 2017

Karl du Fresne is right – this is all arse-about-face:

. . . In any half-rational political system, it would be the parties which between them won more than 81 percent of the vote, not Peters with his measly share, that determined the course of negotiations. A minor player such as New Zealand First, if it had genuine respect for democracy, would accept that its negotiating strength should be proportionate with its level of popular support. But again, this is Peters we’re talking about. And sadly he’s encouraged in his delusions by both the media, which can’t resist stroking his ego (for example, by calling him the kingmaker), and by the major parties, whose attempts to appease Peters come perilously close to grovelling.

Pardon the expression, but this is all arse-about-face. It’s demeaning to democracy. We’ve heard a lot over the years about the tail-wagging-the-dog scenario under MMP. Well, here it is writ large, and unfolding before our very eyes.

It’s a situation rich in irony. We voted for the introduction of MMP primarily to punish our politicians and bring them to heal. We were fed up with their broken promises. We wanted to make them more accountable.

Only now are New Zealanders realising that we achieved the exact reverse. Voters have no control whatsoever over whatever’s going on right now behind closed doors at Parliament. In effect, we have placed still more power in the hands of the political elites. This is the antithesis of what the promoters of MMP promised (and perhaps naively believed themselves). . . 

The situation is made even worse because whatever decision Peters and his negotiating team make has to be approved by serious consensus from the party board – the members of which have not been made public.

Frustrating as the protracted negotiations  and the secrecy over the board membership are, my fear is that the government that eventuates might be even worse.

It is possible Winston Peters and New Zealand First have learned from previous failures and will be determined to ensure strong and stable government in the best long term interests of  New Zealand.

But it is at least as likely that they haven’t and that both they and any coalition partners will be damaged by whatever permutation of government is foisted on us.

I dearly want Bill English to continue as Prime Minister but not at any price.

The Employers and Manufacturers Association warns that the country will come to a grinding halt if there are drastic changes to immigration; NZ First’s anti-trade and foreign investment rhetoric contradicts its assertion it wants what’s best for the regions and mining the misery of the Pike River families is simply despicable.

Like David Farrar, I think it will be better for the country to have National leading the government, but it might be better for the party to be a formidable opposition – what Emma Espiner calls the opposition from hell – instead.

I have a lot of confidence in the ability of Bill English and his team. Nine years leading the country through financial and natural disasters has proved they are more than capable. But they will need all their skill and experience, and more than a little luck to govern in coalition with, or the support of, Peters and his party.

Even then, there is a risk that whoever wins in the short  term might become the losers and the losers might turn out to be the winners in the medium to longer term.

P.S. Apropos of foreign investment – Eric Crampton gives some context:

 New Zealand is the most restrictive country in the entire OECD. It is the seventh most restrictive country of the 62 countries they surveyed.


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