May 22, 2015
. . . An enormous gulf has opened up between what used to be the core Labour voter, particularly in provincial regions, and the metropolitan elites, with their state-funded salaries and public sector pensions. The consequence is the current generation of Labour politicians are stumped when it comes to enunciating policies for the delivery of a better life for working people.
There is now a fundamental unease in the NZ population the collectivism inherent in the original concept of the welfare state doesn’t necessarily deliver the results originally envisaged. It is based on evidence the safety net the welfare state was intended to provide has been turned almost into a lifestyle for many who spend years on benefits. Now when the Govt says testing for spending effectiveness (in welfare programmes) will be core to the new processes it is introducing, and funding will be re-prioritised to providers to get results, Labour doesn’t seem to have an answer, or an alternative. . . Trans Tasman
May 1, 2015
. . . Even among some voters friendly to National there is querulous criticism the Govt does not have a “plan.” The demand is for more “visionary” policy. This is to overlook the essence of conservative philosophy: what it is not necessary to change should not be changed, a conservative attitude is always the baseline for true progress.
This Govt’s success stems from the policies it has implemented in putting NZ back on the road to sustainable growth. NZ has now experienced solid economic growth for five years and it has been achieved without any inflationary pressures building up. Even though the dairy industry has been hit hard by plunging global prices, the rest of the economy is showing no sign of slowing up. But the Govt now has to battle a media which views the current state of the Govt, and its leadership, through a different lens. . . Trans Tasman
January 30, 2015
Trans Tasman notes Finance Minister Bill English is driving a quiet revolution in the Budgeting process:
Cabinet Ministers are getting to grips with the new spending processes Finance Minister Bill English is introducing in this year’s budget. Where departments previously put in bids for the amount they thought would be needed to finance particular programmes, they will now be expected to match the bid with an assessment of the return on the investment. This follows the changes initiated in delivering better public services, when departments were instructed to publish results their programmes were achieving. In effect the Govt is seeking to revolutionise the way ministries operate.
It requires different departments to work together, rather than in isolation, particularly in the field of health and community services. The Govt accepts the new processes will have to resolve complex problems such as privacy issues but the objective is to push Ministries towards targeting the money available to achieve tangible results. The Govt argues it has a duty to ensure funds raised from taxpayers are applied to maximise outcomes, rather than just for “nice-to-haves” Ministers or bureaucrats advanced in competition with each other.
The duty becomes more onerous as the Govt strives to bring the Crown accounts back into long-term surplus, without any nasty spending blow-outs from programmes initiated in earlier years. An example where unintended consequences can spring out of the woodwork to damage spending projections lies in Employment Court decisions related to the care of aged people and the definition of work, as well as in pay equity. One decision concerned the definition of work as including driving to and from the places where aged-care providers are working, and another involves the principle of equal pay, with the concept aged care workers should be entitled to the same hourly rates as those in the Corrections Department. How the Govt deals with these complex issues will have long-term budgetary impacts.
National is often criticised for having no plan by people who don’t understand that a lot of what it is doing is being done quietly, like this requirement for a return on taxpayer investment.
December 12, 2014
Quote of the day from Trans Tasman:
. . . The trust voters have in the Govt has been built up over six years of patient delivery of what National promised. And the trust will only be eroded when the Govt stops delivering on what voters expect of it.
This is why many commentators are missing the stand-out element in the political equation. The policy the Govt is following of “radical incrementalism” is what NZers want, and is delivering the rising prosperity most NZers seek. The new normal is low inflation, low interest rates and stable growth which is sustainable. It’s an economic environment unfamiliar to many NZers, but so attractive it is drawing many expatriates back to their homeland. NZ’s performance has been in sharp contrast with Aust’s, and the big challenge for the country will be to keep winning against its neighbour (and we’re talking not just about the Rugby World Cup in 2015). . .
Sustainable growth is something New Zealand hasn’t seen for decades.
It doesn’t mean there are not still problems to address and there are too many people who have yet to benefit from the growth.
But it does mean that radical incrementalism is working for New Zealand.
November 14, 2014
Transfer Tasman asks is economic transformation finally being delivered?
During the election campaign John Key said he believes “NZ is on the cusp of something special” (as Trans-Tasman reported September 18). He was ridiculed by Labour (look what happened to them), by NZ First leader Winston Peters (who was predicting to his suck-it-up audiences the economy would crash in November) and by various “woe-is-me” pundits like Rod Oram. But now some hard data is emerging to suggest Key has a better sense of the way the economy is moving than his critics. Job statistics last week showed NZ’s unemployment rate is now lower than Aust’s, despite inwards migration reaching new highs. Canterbury is driving jobs growth, up 11% over the past year, and reporting the lowest unemployment across the regions at 3.2%.
This week the share market NZX top 50 index punched up to the 5500-mark, a new record high. Investors are chasing high dividend yields, and some of the big companies sitting on cash mountains are obliging them: witness Wellington-based Infratil this week paying a special dividend of 15c a share worth $84m on top of its interim dividend of 4.5c. Other evidence came from the ANZ Bank which headed up its latest Truckometer readings “High speed zone.” The two traffic indices, one concurrent with GDP, and the other providing a 6-month lead on GDP growth, both rose strongly in October, suggesting solid momentum over the second half of the year and into next.
ANZ economist Sharon Zollner in her commentary says “it is going to take more than a halving in global dairy prices to stop this juggernaut.” She sees the NZ economy continuing to vie for the lead in the OECD growth race. But the real kicker in all this is with annual CPI inflation running at just 1%, there is no sign of the engine overheating. This is why NZ might be on the cusp of something special – sustainable growth over the cycle above the long-term trend, without the Governor of the Reserve Bank having to slam on the brakes, and bring the economy to a shuddering halt. So this may be the economic transformation, long heralded, but at last being delivered.
The cycle of boom and bust is all too familiar in New Zealand.
The challenge of sustainable growth without inflation has proved too difficult in the past.
This time there are encouraging signs it could be achieved.
September 29, 2014
Prime Minister John Key has asked officials to come up with fresh ideas to tackle the issue of child poverty.
. . . Key’s genius is to sense developing problems, define what needs to be done and then act decisively to cauterise them. No better example is the call he has made this week for the DPMC, Treasury and other departments to delve into the issue of child poverty, and come up with fresh advice on how to wrap services into meeting the needs of those families who are struggling.
Left to its own, child poverty could lead to the evolution of a frustrated under-class and long-term a divided society. Key is going to make sure the issue is dealt to and doesn’t become a political headache. He doesn’t belong to the school which believes throwing more money at the problem is the solution. There’s a fundamental tension between ensuring sufficient welfare assistance is available and ensuring incentives to get into work are strong enough. Two out of five children said to be in poverty are in homes where one parent at least is in work.
Working for Families and other welfare measures are tactical measures: the overall strategy lies in more jobs, and, as Key sees it, in upskilling those who lack the skills for the opportunities opening up. Key argues the million NZers who voted for National on Saturday are caring people who will want to see the Govt understands the issue and is working its way through it. But he says those million people will also want to see those to whom assistance is targeted helping themselves. . .
Children shouldn’t be punished for poor decisions their parents make but nor should parents be paid, or compensated, for abrogating their responsibilities.
Only the hardest of hearts would begrudge assistance to the most vulnerable.
But most people work hard for their money and expect that those their taxes help, help themselves if and when they are able to.
Simply throwing money at the problem would entrench dependency and the social and economic issues that follow.
September 12, 2014
Polls midway through the campaign are continuing to point to a win for the incumbents on September 20, but Ministers reckon it will be a “tight finish.” On current polling, the Centre-Right parties appear to be about 15 points ahead of those on the Centre-Left. So is NZ becoming more conservative? Or is the Centre-Right domination of the political landscape due to John Key shifting National to the centre? The answers to those questions may only emerge in time, but after the hard slog through the global financial crisis and the Christchurch earthquakes, NZers have a clear and pressing priority. They overwhelmingly want a stable Govt to deliver steady, if not spectacular, progress.
They are averse to radical, dislocating change, or of “reformers” who want to re-shape their world. . . .
Only National can provide stable government.
The internal divisions in Labour have been overshadowed by other events and issues in the election campaign.
But they haven’t gone away and are one of the reasons the party is polling so poorly.
The unions and members lumbered caucus with a leader they didn’t want and who some still don’t support.
Throw in the Green Party wanting around half the cabinet positions plus Winston Peters, Hone Harawira, Laila Harre . . . and you get a recipe for instability and no progress.