The Dim-Post

December 6, 2011

ACT’s deal

Filed under: Politics — danylmc @ 6:26 am

This is meaningless:

National and Act both said the country’s current financial problems were caused by irresponsible Government spending between 2005 and 2008, and that they would amend the Public Finance Act to prevent the situation arising again.

They agreed to legislate in the next two years to make spending on core Crown operations, the unemployment benefit, asset impairments, and natural disasters subject to a limit.

It doesn’t come into effect until next term. If National are the government then English and Joyce will ignore it. Labour will repeal it in their first hundred days.

This is poor policy:

National also agreed to introduce charter schools in areas where there is continuing educational underachievement.

The schools are state-funded but run by private groups. They will set their own teaching practices and pay teachers according to performance, in exchange for setting specific achievement targets in their charters.

But everything this government does around education is poor policy. What’s significant here is the political precedent. In future, the Greens and Labour will also collaborate on controversial but mutually desired policies before the election, and then pull the same stunt – introduce them with no warning and no mandate as part of a ‘coalition arrangement’. Pretty shabby.


  1. But everything this government does around education is poor policy.

    Right. At least they’re consistent.

    Comment by Neil — December 6, 2011 @ 7:16 am

  2. This is meaningless:

    But, surely future govts will respect the authority of the current govt to command them?

    Comment by Psycho Milt — December 6, 2011 @ 7:34 am

  3. “introduce them with no warning and no mandate”

    Policy is never a priority in NZ election campaigns anyway. Most people who vote Labour simply do so because they mistakenly perceive it as the party of the working man. (when it’s really the party of the socialist nomenklatura)

    The mainstream media, whose job it is to report on policy, is always fixated on more important stuff like the Key/ Banks Cup of Tea tape, or Brash’s meet with the Brethren to example a couple of recent elections.

    That’s how democracy works in countries where socialism is the ascendant political force. IOW, it doesn’t work.

    Comment by Redbaiter — December 6, 2011 @ 7:37 am

  4. “That’s how democracy works in countries where socialism is the ascendant political force.”

    But in countries like th USA where socialism is not the ascendant political force the media have a laser like focus on policy and the issues that really matter….

    Comment by Richard29 — December 6, 2011 @ 8:20 am

  5. They’ve also decided to entirely privatise the work account of ACC, despite a large body of evidence that it offers lower costs and greater benefits than competition-based systems, and absolutely no evidence base presented to either the public or the sector against.

    Of course, you had to be 12, an average New Zealander, or (seemingly, because they weren’t interested in printing it) a member of the media not to know that this was entirely predictable policy. It was even printed in their manifesto The Hollow Men.

    Comment by George D — December 6, 2011 @ 8:28 am

  6. Danyl, not meaningless. If they legislate a cap on the unemployment benefit, say $180 * 52 * 70,000, then either benefits will be cut, or (more likely) benefits will be denied.

    And as a result, a large number of hard working New Zealanders who pay taxes or would like to pay taxes will find themselves denied even the most basic provision. People who have worked for years and paid in on the assumption that there is a basic social insurance in this decent country called New Zealand. All those denied will suffer hardship. All will be subject to the scrutiny and scorn of plum National ministers like Bennett and Key, though they themselves are products of the welfare system. All will be rounded on by section of the media.

    Redbaiter, go back to the sewer.

    Comment by George D — December 6, 2011 @ 8:36 am

  7. (Not that I’m endorsing the welfare system on the basis of giving back to ‘tax-payers’ (ugh, what a term). The welfare system, social insurance, is a basic right to avoid severe hardship accorded by membership of society. I use the tax-payer argument because it’s a weak claim based on principles that should be intelligible the centre-right. Even these weak claims have been circumvented and ignored in the discourse National is engaging in).

    Comment by George D — December 6, 2011 @ 8:44 am

  8. They’re putting a spending limit on NATURAL DISASTERS?!
    Dear Jeebus, stop with the earthquakes please because we used up this years petty change already.

    Comment by garethw — December 6, 2011 @ 9:09 am

  9. They agreed to legislate in the next two years to make spending on core Crown operations, the unemployment benefit, asset impairments, and natural disasters subject to a limit.

    The APNZ botched this; it should be “excluding the unemployment benefit…” The idea is cruel and stupid, but not so totally fucking evil and idiotic that’d they cap spending on earthquake recovery.

    Comment by bradluen — December 6, 2011 @ 9:18 am

  10. “But in countries like the USA where socialism is not the ascendant political force.”

    That’s the problem with reading/commenting on socialist blogs, the participants usually have such a fucked up view of reality. The level of government spending and welfare in the US hardly excludes it from the socialist category. Leaving aside the fact that they elected “spread the wealth around” Obama.

    I repeat, it is unhelpful to the election prospects of socialist governments for policy to be focus of election campaigns. That’s why the media do their best to talk about other things.

    Comment by Redbaiter — December 6, 2011 @ 9:22 am

  11. I had a look again. From the Agreement:
    To this end they agree to legislate within the next two years to provide that core Crown
    operating spending, excluding finance charges, spending on the unemployment benefit,
    asset impairments and spending on natural disasters, will be subject to a spending limit.

    There really should be a semi-colon in there, after excluding. NZ Herald might have messed it up, but it’s hard to blame them.

    Glad to see that they’re only privatising education, destroying ACC, and privatising social welfare and implementing the recommendations of the Welfare Working Group.

    Comment by George D — December 6, 2011 @ 9:31 am

  12. I think the spending limit has been misreported. In this it says “excluding” before finance charges, unemployment benefit, natural disasters,asset impairment etc.

    Comment by bka — December 6, 2011 @ 9:35 am

  13. Good lord.

    Bile free postings from RB. Still misguidingly partisan, but yet almost politely argued.

    Well done that online pseudonym!

    Comment by Scullion — December 6, 2011 @ 9:36 am

  14. Oh snap sorry.

    Comment by bka — December 6, 2011 @ 9:36 am

  15. Ha, that is an epic fuckup from the AP…

    Comment by garethw — December 6, 2011 @ 9:48 am

  16. What’s significant here is the political precedent.

    Yep, we’ve got the lot now. Day one of a Labour/Green/Hone government … eat the rich, under urgency, retrospective, no mandate and no scrutiny.

    Thanks for showing us how, John!

    Comment by sammy — December 6, 2011 @ 9:53 am

  17. “everything this government does around education is poor policy” Oh Dear, got one’s little knickers in a twist have we ?

    Comment by Ed Snack — December 6, 2011 @ 9:56 am

  18. Thought experiment: Suppose we had applied such a cap to education spending 100 years ago, when it was about a pound per person. Then education spending in 2011, after roughly adjusting for inflation and population growth, would be capped at around $340 million. Current education spending is $18 billion.

    So of course let’s enact a cap! 98% savings!

    Comment by bradluen — December 6, 2011 @ 9:59 am

  19. bradluen – you forgot to account for the massively higher economic growth we’d have had if such a policy had been enacted 🙂

    Comment by Graeme Edgeler — December 6, 2011 @ 10:52 am

  20. +1 Scullion

    What an odd position where I find myself agreeing with Redbaiter’s rejoinder re socialism and the US.

    Shame that his original proposition is at best, a straw-man and at worst, total bollocks.

    Comment by Gregor W — December 6, 2011 @ 11:05 am

  21. Graeme, even putting aside the likely economic disaster we’d have had through a lack of educational investment, the National/ACT approach doesn’t take growth into account – spending is limited based on current amounts plus population growth plus inflation. We could grow into a super wealthy country through… something… and absolute spending via Government wouldn’t budge. As pointed out by your site compatriot:

    Comment by garethw — December 6, 2011 @ 11:10 am

  22. I know its been said before but these policies are friggin GENIUS!!

    1. On the spending cap: If the 2014 election is lost then Labour repeals the law and National will crow to the heavens about how Labour is financially irresponsible, etc… If the 2014 election is won National will either use it to justify effective spending cuts… or… Use ‘exceptional circumstances’ as a reason to breach it (such as GFC2) and save the crowing for the NZF election win in 2017. Worst case can blame MMP for it and use it to justify another election to fix the broken system.

    2. On the charter schools: Its a way to stick it to the teachers union while blaming the teachers union (as they supported MMP and by some bizzaro-logic MMP caused this to happen).

    Anyone with half a potato for a brain knows any concessions to ACT are done to distance centre-national from more right-wing policies (ACT is the fall guy). The truth is what would Banks have done if Key had said, we’re giving you squat little man! Would have refused to support a National led government?? GMAB

    Comment by Hakawai Online (@hakawaionline) — December 6, 2011 @ 1:19 pm

  23. The spending cap (atrocious economics as it is) could be in law much sooner than 2 years. A bill on this is before the Select Committee with submissions on it closed. The Government could roll the bill over and have it in law within 6 months.

    Comment by Andrew R — December 6, 2011 @ 6:45 pm

  24. How the hell can a current government dictate to a future government how much it can spend?

    JK is being advised by bored ex Monty Python scriptwriters. He is clearly stupid enough to believe them

    Charter Schools? Which party was promoting this prior to the election? Transparency? What is that now that the election is over.
    According to JK Charter Schools are the result of MMP?

    John Key is John Cleese reincarnated.

    New Zealand is Fawlty Towers rebuilt.

    Comment by peterlepaysan — December 6, 2011 @ 9:46 pm

  25. Andrew R,

    Yes, the law could be passed quicker than 2 years … but then it would apply to National. So, they’ll delay until 2013, then use the 2014 budget as the baseline from which future Governments are not meant to deviate.

    Also, the bill before select committee would require referendums to be held before government spending could exceed the cap. The Act-National agreement doesn’t go this far – it just says the Public Finance Act principles of responsible fiscal policy will be amended. Seeing as these are toothless “nice to haves”, the overall legal consequence of this will be zero … it’s a purely political stunt.

    Comment by Andrew Geddis — December 6, 2011 @ 10:10 pm

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