Opinion: 6 questions for the new National-ACT govt
10th Nov 08, 11:21am
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.