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Bernard Hickey says the 7th MMP election due this year is already shaping up as another battle of the middle class bribes. He'd prefer a Big Kahuna instead

Bernard Hickey says the 7th MMP election due this year is already shaping up as another battle of the middle class bribes. He'd prefer a Big Kahuna instead

By Bernard Hickey

Twas ever thus.

Just like the last six elections under MMP, the seventh later this year is shaping up as a contest between parties promising to award Government money back to the particular voting block they think they need to win.

It is the revenge of universal suffrage and proportional representation writ large.

Less than a month into this election year, three of the main political parties have promised to spend a collective NZ$1 billion on payments to appeal to one particular block of voters or another.

Labour's 'Best Start' plan for a baby bonus, extended parental leave and early childhood education would cost NZ$566 million a year by 2020/21.

Leader David Cunliffe even trumpeted that 56,000 families would receive NZ$60 a week per child in the first year, even for those earning up to NZ$150,000 a year.

Green's plan for community hubs at low decile schools would cost NZ$115.1 million a year, arguing that tens of thousands of poorer kids and their families would be better off.

National's plan was more targeted, offering to spend up to NZ$359 million over four years on big new pay packets for more than 6,000 teachers, who are not typical National voters.

Usually sceptical teachers were chuffed and Key was lauded for taking a swing to the centre left.

Voters from all the different demographics will be offered all sorts of packages and deals to win their support.

The words 'bribe' and 'middle class welfare' have already been bandied around.

So what are voters to do with this smorgasbord of tempting treats, most of which is their own money being directed back to them with a dash of salt and pepper.

It will pay to read the fine print and get out a calculator for some heavy number crunching. The devil is always in the detail.

The detail published with Labour's plan showed those on the parental leave that Labour hopes to extend won't be eligible for the baby bonus.

The bonus also ramps down in the second or third years as incomes rise over NZ$50,000.

Then there's the unintended consequences of these policies that could hit the same or other voters in the pocket. One of the complaints about Working For Families and interest free student loans was they simply enabled canny home owners on higher incomes to gear up into even bigger mortgages, helping to further inflate Auckland's housing bubble.

The other complaint was that a loosening of fiscal policy by the then Labour Government between 2005 and 2008 forced the Reserve Bank to put up interest rates by more than it otherwise would have.

The National Government is already waving the stick of higher interest rates over Labour's head, although Cunliffe has yet to plug the 'Best Start' package into his overall fiscal policy and say whether the overall package would be tighter or looser than National's.

Mr Key this week also indicated his government could loosen the purse strings a bit to extend parental leave.

So the juicy starter of a baby bonus or a higher 'Expert Teacher' salary or a tax cut or extended parental leave could be followed up by higher interest rates and house prices that wipe out the benefit.

It also depends on whether a voter owns a house and has a mortgage.

Some may benefit at the expense of others.

The danger with these policies that they layer giveaway and tax credit upon tax credit and giveaway, creating an almighty mess of policies for some poor bureaucrat to administer.

The complexity and caveats even seemed to flummox Mr Cunliffe this week.

It's a pity that MMP has driven politicians into these corners where they feel all they need is to buy off a crucial 1.5% of the vote to break the coalition logjam and return or cling to power. Even a change of Government seems unable to unravel the gimmes put in place by their opponents.

Mr Key once called Working For Families 'Communism by stealth', but has stuck with it through 7 years of Government and no one expects him to take the electoral risk of dropping it.

It all makes a more holistic plan such as Gareth Morgan's 'Big Kahuna' seem attractive.

A simple Unconditional Basic Income and a single income tax rate of 30% that also taxes income from capital, including land and buildings, would untangle this multi-layered mess of a benefit and tax system that has developed under MMP.

Such a big idea or reform is anathema to MMP politicians and voters.

So the only alternative is to get a big honking calculator and use it heaps between now and the election.

Perhaps the Electoral Commission should be offering training in how to use a spreadsheet as well as encouraging people to enroll.

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A version of this article first appeared in the Herald on Sunday. It is used here with permission.

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7 Comments

Well, looking at the new EMTR's caused by the layering, would be an Interesting exercise.
 
As for the Big Kahuna - the old Political Paradox applies.
 
Pollies (at least the upper quintile, not the Winstone Ganders of the world) know exactly what policies and settings should be in place to better things.
 
They just don't know how to get elected ever again if they do so.

National should make WFF payments a fixed dollar amount and let inflation kill it.
Create a guaranteed employment program, those that want a job can have a job. I dont care if it cost more than the current welfare system, it fixes idol hands issues in society and gives the private sector plenty of work ready labour to poach when they need it.

How would you stop this scheme from competing against the prviate sector.  This allready happens with some govt schemes such as prison nurseries.  A good theory.

Your right, you dont want to compete with the private sector. But I think it is better to give a person a job than it is to give a machine a job. Other parts of the world use alot more labour than we in NZ do.
The point is social wellbeing, and a workfit labour supply for the private sector.

The complexity and caveats even seemed to flummox Mr Cunliffe last week !
 
... and he got his " facts " horribly wrong , the real figure for people able to get his baby bonus is far less than the 51 000 he claimed .... some already get other government welfare programmes ....
 
... and he blamed his script writer for getting it wrong .... didn't check the " facts " the writer penned , just spouted them ....blaming those under you istaking  cheap shots ( they get no chance of rebuttal ) .... however , there's no risk of the scribe being admonished  , it's Cunliffe's cousin !
 
... you're being sloppy , Cunny ... lazy , ill prepared , playing the blame game .... Not leadership material !!!

Why don't you have a poll on the Big Kahuna option? I for one would vote for it