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Opinion: 6 questions for the new National-ACT govt
Now that the shape of the new National-ACT government is becoming clearer, it's worth looking at the sort of questions it will have to answer reasonably soon.
Should the government come up with a stimulus package?
Labour talked about a mini-budget before Christmas.These packages are all the rage at the moment overseas, but the last times National faced a recession its first instinct was to tighten the government's belt. Firstly in 1990 with Bolger/Richardson and then in 1997/98 with Shipley/English. ACT is also no fan of Keynesian style stimulus packages. But I think Key will want to be careful before cutting government spending and may even beef up his infrastructure programme.
Should National proceed with its NZ$1.5 bln broadband plan?
There's a few people in the industry who want to just get on with the existing regime and National may have had second thoughts about its idea of a separate state-owned network owner.
What should be in National's first policy targets agreement with Alan Bollard?
A new one will have to be written. Will it be quite as soft as the last couple of agreements (2002 and 2007), which raised the bottom of the 1-3% target to 1% from 0% and allowed Governor Bollard to target forecast inflation rather than actual inflation. Some National members are privately unhappy with the perceived softness of the current PTA and ACT would also agitate for a toughening of the agreement.
Who will run National's state spending razor gang?
Could it be ACT? It's one way to let down Sir Roger Douglas gently. Other options for ACT portfolios include State Services and Local Government, both of which could do with a dose of reform.
Will National announce some sort of Rudd style business, union, government strategy session to come up with new ideas?
The incoming Lange/Douglas government held an Economic Summit after its election in 1984. NZX chairman Mark Weldon likes the idea.
Will National agree to ACT's plan for a Taxpayers Rights Bill?
This would limit government spending growth to inflation and population growth (About 3.6% vs 6% on average in the last 10 years) and effectively do for fiscal policy what the Reserve Bank Act did for monetary policy -- take the political cycle and political whims out of total government spending.
4 Comments
Key could adopt some of
Key could adopt some of Act's more aggressive tax policies - one of acts points was that too much private productivity was targetted toward finding ways to avoid tax.
Broadband plan - great idea - how about making it free to all tax paying homes ? . Also all able bodied people unemployed could get paid to dig.
Bollard - if you have stronger targets, then you get higher interest rates (blunt instrument) which is going against the stimulation idea. get interest rates down and hopefully good working kiwis use this to reduce debt.
Put ACT in charge of the Razor gang - then Key does not need to worry about being unpopular (directly)
In terms of agreeing with ACT's ideas - how about holding a national phone poll one evening - all proceeds go to starship hospital ?
We will have to come
We will have to come up with a new name for a new coalition Govt which I presume it will be a coalition... The Nacts???( vs the Lags?? )
I have been involved with both ACT and National and in the early years the Nats would not come to terms with MMP. The best way to handle MMP is to have a good cop/ bad cop system of coalition partys rather than try to be a "broad church" party as with ist past the post. So we now have ACT/Nat and Labour/Green. Cerntre Right/Right and Center Left/left.
I actually think Rodger Douglas might prove to have some useful advice for the new Government. They are going to need all the help they can get in what is going to be a VERY difficult economic situation.
I wish them good luck...
Bernard Asked 1/ Should the
Bernard Asked
1/ Should the government come up with a stimulus package?
Depends on what you consider a stimulus package, Keynes correctly identified that since gov is so much of the economy it should go counter to the cycles rather than be reactive which exacerbate the swings. So since Cullen had a no borrow policy all they need to do is infrastructure work and amortise the cost. The 'problem' is that if they only do popularist projects, ie great motorways, carve up remote tracts of land for housing, then they could be building a bigger future burden
2/ Should National proceed with its NZ$1.5 bln broadband plan?
Yes..probably the 'greenest' policy they have, though I think in ground infrastructure cannot be controlled by a vertically integrated entity (ala Telecom) as it is an invitation to rape and pilliage.
3/ What should be in National's first policy targets agreement with Alan Bollard?
Inflatation 0.5% below the OECD Average.
4/ Who will run National's state spending razor gang?
Who cares?, I can't see any advantage of a slash and burn policy (see 1 aboove), The Gov sucked the labour out of the market it now has to be careful to ease it back in. I think the 'cap' will become a shrinking lid. There are a lot of areas (DHB's, Local Bodies) that could be rationalized for great productivity benefits
5/ Will National announce some sort of Rudd style business, union, government strategy session to come up with new ideas?
I hope not, this just indicates that Pastor Rudd has no idea
6/ Will National agree to ACT's plan for a Taxpayers Rights Bill?
I see no need for a "Taxpayers Rights Bill", I would however love to see a "Government Performance Web Site" which had up to date info (lots of graphs for Bernard) so that we didn't have to deal with the OIA and that data wasn't spun out to us by media liaison officers and parliamentary questions
Neven
It is difficult to understand
It is difficult to understand the woolly financial thinking or is it just plain spiteful thinking of the so-called financial analysts. Yes Bernard Hickey is one, along with Bruce Sheppard, both have been more wrong than right with their financial commentating and forecasting in the past.The others who must have vested interests, are probably the same ones that advised to invest money into Bridgecorp, MFS, Blue chip, and other transparently toxic investments. To put Hanover Finance into receivership may give secured debenture holders an 85% return of their capital but this will be over a 5 year period. To vote against receivership will give them 100% pay back over 5 years and also bond holders 50% return. Even two of NZ's most experienced liquidation managers consider that there are greater benefits to be had for investors if Hanover is allowed to trade its way out over a 5 year period. The question goes begging, does Sheppard and Hickey think they can be advantage by an influx of fire sales of valuable development property. Do they have a vested interest somewhere