Promise less, prepare for worst

15/07/2008

 SOMETIMES the best way to make voters forget their ills – real and imagined – is to promise them less and prepare them for the worst case.

If politicians followed the rule of the possible when talking to the public, they would be better able to sell reforms. Perhaps they could even keep the electorate on side in the event of recession.

This advice come from George Megalogenis, senior writer for The Australian and is applicable this side of the Tasman too.

Remember the shock of Paul Keating’s “recession we had to have” press conference in November 1990 came not from the news itself, but from the denial of reality that preceded it. The then treasurer had repeatedly said that there would be no recession.

Imagine, for a moment, that Australia’s luck finally runs out, and a recession that may be engulfing the US and Britain reaches our shores by the end of the year, or early in2009…

Obviously, Kevin Rudd won’t want to talk the local economy down when the chances of recession seem low. But how would he go about changing the national conversation if things suddenly went pear-shaped? The Prime Minister would, of course, blame the previous Coalition government, and the rest of the world, in that political order.

Yet the lesson of recessions past is that governments lose credibility long beforehand, by overselling their ability to run the economy. They claim credit for the positive numbers, then look for scapegoats when the national accounts throw up a couple of quarters of negative growth.

It is a little difficult to remain credible when you claim the credit for economic growth which largely happens in spite of your government then deny responsibility for a downturn which is happening, at least in part, because of your policies.

The truth, if any leader were prepared to admit it, is the role of government is limited when the economy is humming. Stay out of the way of the market, take the opportunity to secure reform because change is easier to implement in good times, and keep a lid on expectations. The last bit is always the hardest, because in good times leaders err on the side of the bribe.

That brings to mind interest free student loans and a variety of other baubles we tax payers are funding.

It is only in recession that governments are really called on to manage the economy. They provide the safety net for those who lose their jobs and the public investments to prop up demand.

Sadly, we are cursed with politicians who spruik their expertise when it is not required, and who dodge their responsibilities when systems and markets fail.

Who does that remind me of?

 

p.s. I had to look up Spruik so in case you don’t know what it means either here’s a couple of definitions:

From Encarta  – to promote goods services or a cause by addressing people in a public place;

And from Wordsmith – to make an elaborate speech, especially to attract customers.


Hager’s Hollow Horror

05/07/2008

John Roghan  says Nicky Hager is carving out a new career in disingenuous political naivete.

Not content with a book based on Don Brash’s emails, since brought to the stage and soon to be a movie too, Hager is running a sequel on the discovery that some of the same “hollow men” are consultants to John Key.

The fact that someone in the National Party must be passing this material to Hager is far more interesting than the use he is making of it, and I have no objection to his using it.

I agree that where the material comes from is the more interesting, and for National, more serious point.

…email, I think, is fair game. A fair reporter, though, could reveal what he learns without feigned horror at the fact that people running for public office hire consultants who try to conceal some of their intentions during an election campaign.

Parties of all stripes are coy on some subjects before an election for good reasons.

The public interest can be greater than the sum of personal interests, sometimes even in conflict with direct personal gains. It is easy to sell benefits to a section of the electorate, harder to explain how the benefits hurt a country in the long run.

Some are minority interests that should be advanced in the national interest. Hager should ponder how much progress Maori would have made in recent decades if every step in their recognition had been an election issue.

Quite.

Public debate usually favours the status quo. Not much could ever be done if every decision was put to the electorate for a prior mandate.

Take the present Government’s biggest economic moves, KiwiSaver and, this week, KiwiRail, which I don’t remember being canvassed, with all their costly implications, at elections beforehand.

Had Labour given an inkling at the last election of the premium they have had to pay to re-nationalise the railway, and the fortune it is going to cost to cover its likely losses, National’s last campaign would have feasted on the information.

If only.

But now that the deed is done, the politics have changed. The purchase is the status quo and National will not dare put re-privatisation before the electorate this year, though that may be what it ultimately does with the trains if not the tracks.

Yep – once something is underway it is difficult to change it, even if it’s because sometimes bad policy is good politics.

Likewise KiwiSaver, a year old this week. At the last election the savings scheme was an essentially voluntary proposal. The following year it was to become compulsory for employers and acquire some costly enticements of dubious economic value.

Not long ago my employers wound up my company super fund. I couldn’t blame them; from April they had to contribute to KiwiSaver if staff favoured it. And who of us were going to turn down Cullen’s $1000 handout and tax credits?

The scheme celebrated its first birthday on Tuesday with 718,000 members – more than double the number predicted in the first year. The only people complaining about it are those annoying economists who see the difference between individual gains and the national welfare.

They fear the scheme will not add to total personal savings, merely displace previous savings schemes.

In the Herald last weekend Maria Slade reported an estimate that as little as 9 per cent of the money in KiwiSaver accounts so far is new saving, a percentage the researcher reckoned would not cover the administration and compliance costs of the scheme.

Is anyone surprised by this?

Westpac economist Dominick Stephens said KiwiSaver had cost the taxpayers $497 million in its first 11 months, an amount that could have added to national savings if it had been left in the Budget’s fund for future public pensions.

Even that fund is questioned by some savings professionals who point out that a superannuation scheme is only as good as the future economy that will have to pay out. From that point of view, the best retirement insurance is the investment made in the economy today.

And not just retirement – health, education and every other service will be more secure in the future if we strengthen the economy now.

Anyone who believes that the best investments are made by those who stand to lose if they get it wrong would argue the economy would be stronger in the long run if the KiwiSaver incentives were turned into personal tax cuts.

And yes again.

Nevertheless, National will have to keep the scheme now that it is replacing private savings on such a scale. The best the party can do is continue to avoid saying whether it will keep the incentives.

It will not be easy, and should not be easy; it is the job of political opponents and the press to pin all policies down. But adroit tacticians can keep the options open and enable a government to come to power with room to move in the national interest. Voters, I think, understand this. They don’t need horrified disclosures that it happens. It is the horror that sounds hollow.

Exactly. National has learnt from the damage done by stupid promises made by Jim Bolger before the 1990 election; and Helen Clark has too which is why she keeps trying to under promise and over deliver.

Parties should be upfront about their philosophy, principles, general  policy, and – sometime before an election – some detailed policy. But they can’t be specific about everything because, once a party is in Government it must have room to adapt to events and circumstances.


EFA Anti-Democratic – Clark

24/06/2008

It’s not Helen but Linda Clark who, with Chapman Tripp colleague Andy Nicholls, delivers a blistering attack on the Electoral Finance Act in this week’s Listener. The preview is here but the full story won’t be on-line for a couple of weeks.

The Listener does this to encourage us to buy a copy of the magazine and I’m not going to interfere with that so will resist the temptation to copy the whole piece. Instead here’s a taste of what they say:

An Act rushed through late last year is threatening our right to really know who we will be voting for – even our politicians are playing a waiting game, and it needs to be fixed now.

…The EFA’s dampening effect on the current election campaign is so serious, it is anti-democratic.

Though National has said, if elected, it will repeal the EFA, it needs to be fixed now if this campaign is to be a fair contest. Voters should be able to see for themselves what and who is up for election and not just in a flurry at the last minute.

… parties … are holding back their candidates from campaiging and robbing voters of the opportunity to be informed.

… election advertising … commits political parties to key promises… And in the contests for electorates, which these days are given scant media coverage, it helps voters identify one candidate over another.

People don’t even know which electorate they’re in after the boundary changes, let alone who the candidates are. The Waitaki Electorate has the highest number of registered voters in the country, but the returning officer said she got lots of forms back from people saying their details were correct but they’d been put in the wrong electorate.

The EFS is getting in the way of this campaign with the problems stemming from both the scope of the Act’s intention and the way it was drafted.

 …Parties have found calculating expenditure complicated by what is now a very broad definition of what constitutes election advertising…it’s possible a party logo alone will be deemed to be an advertisement – no one seems sure.

…What is prevailing is confusion and conservatism…The (Electoral) Commission…has opted not to provide any sign-off of expenditure before the election…

The trouble is none of this ofers any of the parties any certainty that what they are doing is not in breach of the EFA… some MPs may have already overspent…

Elections should never be decided by the courts and electioneering should not be such a guessing game.

…Constitutional laws require bipartisan suppport to be durable, They ought to be non-political.

There is more – buy a copy and read all it for yourself.


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