by Don Nicolson
Former National Leader, Don Brash’s latest 2025 Taskforce report, comes with a sharper warning for the Government.
Rhetoric, the Taskforce warns, is divorced from policy reality.
But you also get the impression our politicians are ‘playing the man’ heading the Taskforce, than leading a much-needed public discussion about growing our economy.
Look at the insulation that has gone into the domestic economy since 2008 and before, every bit as much as what has gone into homes. The resulting ‘rough edges’ of the worst recession since the 1930’s, have been smoothed, or have they been brushed under the carpet?
Governments, of all hues, have embraced MMP’s dark praetorian truth – you have to bribe the electorate on a scale that would have made Richard Seddon blush.
Aside from some marquee differentiating policies, the only political metric in town is a crude ‘maximising’ of the party vote. Yet government should be about long term policy with some short term political considerations.
MMP corrupts all of this.
Under MMP, a government’s focus is all about short-term politics interspersed with some longer term objectives, as long as these don’t trip up the former. Yet polls are showing a growing disenchantment with MMP. ‘Middle New Zealand’ is waking up to the economic, social and political miasma it creates. Those Kiwis leaving for Australia warn us that something is rotten in our body politic. That rot is called MMP.
So please put your preconceptions of Dr Brash to one side and reflect on one core message - reducing Government’s size.
When the global meltdown hit the United Kingdom ‘insulation’ was tried and it failed miserably. Banks like Northern Rock failed and billions of pounds of Government recapitalisation didn’t stop its economy imploding. The British Labour Party suffered the predictable in May, but this is where any parallel with our last election ends.
The UK’s coalition Government, that odd couple of Conservatives and Liberal Democrats, was put together in some five days. As the first coalition since 1945, this feat was achieved, not only under an electoral system we’d cast off in pique, but in far less time than it took to form our current Government. Instead of waltzing into Downing Street dispensing placebos, there was brutal honesty about the UK economy.
Words like ‘cuts’ and ‘austerity’ are used openly and often.
While New Zealand continues to borrow to maintain spending, the UK initiated a root and branch review of all spending with two exceptions. Proving the short term political expediency point, its National Health Service is ring-fenced. Bizarrely, the same applies to Overseas Aid – then again – this is a coalition.
There were mostly no sacred cows either. The Harrier jumpjet, talisman of the 1982 Falkland’s War, is being scrapped along with the ships carrying them. Britain is getting replacement aircraft, but not for another decade. Before then, the Royal Navy will get two new non-aircraft carriers, one of which will be mothballed or sold.
And if you ignore Dr Brash’s message you ignore some home truths.
The British Government consumes around 42 percent of the UK’s Gross Domestic Product (GDP). Right now, our Government consumes 44 percent of our economy – eight percent more than what it did in 2000, or NZ$30 billion more in real terms. On sovereign debt, what a government owes as a percentage of GDP, New Zealand benefits from debt levels four times less than the UK’s current 65 percent. All good then.
But if you then look at the rate of debt growth in the government and non-government sectors since 2000, then our debt growth has outpaced the UK’s. Total New Zealand debt has grown by almost a third of GDP in just the first decade of this century. But that’s all okay because we owe ‘just’ 130.2 percent of GDP, or some NZ$246 billion. This is MMP’s encouragement of the ‘feel good’ coming home to roost. We all embraced debt leading to a major economic hangover. But under MMP, no politician wants to risk dispensing the medicinal cure.
Here’s another contrast.
In October, the UK’s Chancellor of the Exchequer, George Osborne, announced a ‘repair’ job on the UK’s massive deficit. Some 16 percent of all UK public spending will be cut by 2014, with overall UK public borrowing reducing to one percent of GDP by 2016. Thousands of public servants will go and programmes slashed. You get the impression a much stronger and resilient British economy will emerge.
Even now, our comparative June quarter growth rates tell a disturbing picture. The UK’s ‘uninsulated’ June quarter growth rate was four times higher than New Zealand’s ‘insulated’ and sickly 0.2 percent June result.
And here’s a major economic warning. In July, Treasury warned that the New Zealand Government debt trajectory would pass 100 percent of GDP by 2050. Think Greece, Italy and Iceland. Over the Tasman, our Australian cousins have, for 25 years under both Labor and the Coalition, continued economic reform. When you combine that with commodities it creates success. We’ve got the commodities but our Government’s $30 billion spending growth in real terms, has become an economic millstone.
If 2010 was the UK’s turning point, was 1996 seemingly ours?
MMP has put successive governments into political straight-jackets with mounting tough decisions put to one side.
We increasingly face economic and political entropy so if we desire a real future for our children and our grandchildren, MMP’s ‘gotta-go’.
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Don Nicolson is President of Federated Farmers
21 Comments
One cannot blame MMP for our “Patchwork economy”. MMP as many states in Europe demonstrate, such Austria, Denmark, Finland, Germany, the Netherlands, Norway, Sweden, and Switzerland have solid economies with good decision making mechanism. Not the system, but the people behind are the problem (policical & economic immaturity)
http://archive.fairvote.org/reports/1993/terrell.html
Q.....MMP corrupts all of this.
Under MMP, a government’s focus is all about short-term politics interspersed with some longer term objectives, as long as these don’t trip up the former. Yet polls are showing a growing disenchantment with MMP. ‘Middle New Zealand’ is waking up to the economic, social and political miasma it creates. Those Kiwis leaving for Australia warn us that something is rotten in our body politic. That rot is called MMP...Q
What a nonsense Mr. Nicholson - bring back Mal-doom !
by 2050?
Is this guy a nutter?.
more likely, a spinmeister.
What these folk don't seem to think (or want to know?) is that the austerity programmes have to bite his boyo's incomes in the bum, at some point. All things are linked.
When TSHTF, the asians will go back to rice.
But this wee diatribe is an attempt to shut out a voice in society, and it ain't voice championing future generations and their need for a biosphere.
Typical comments by sore losers who were the benefactors of the first-past-the-post system where voters could be ignored. This is what democracy is all about - listening to the voters wishes and not cowtowing to business intersts or free market idealogicalists such as Brash. Ireland is a prime example where these interests got their way over the best interests of the whole population but what do we hear - they didn't do it properly! Straight out of the Milton Friedman handbook.
It is not that MMP is a poor system...the problem is with the decision to allow 60 more snouts into the trough. The electorates could be reduced to 30 and then have 30 from the lists...beef up the electorate offices to be Parliamentary offices....The savings would run into the tens of millions.
To a large extent the advent of the web and the ability for the Intestinal Worm Party to voice its political viewpoint to the world, means MMP is no longer necessary for minor parties to be heard.
The argument that MMP is crucial for that reason is just silly, since any mob getting less than 5% and no electorate seat...ends up with how many seats in Parliament?
They are very good at saying isnt our democracy great because you can have a say on how to vote us into power but do not alow us any say in HOW we should be governed. To suggest that changing how we vote in a bunch of self serving wankers is somehow going to improve things is beyond me, how do you work that out? Remember that Rob Mulduln was under first past the post and we were not happy with that. Untill we overhaul our whole political system everything else is a waste of time.
What a load of complete rubbish, we had some utterly terrible governments under FPP.
FPP has been so successful in the US and Ireland etc hasn't it? their debt is so under control now isn't it?
If MMP is so bad how do you explain Germany? arguably the most successful economy in the world.
Why isn't Germany laden with debt if these half baked idiotic theories of Don Nicolson were true? and not as it is an incredibly successful economy, combined with a very high standard of living.
Kind of what every country aspires to be like
I dunno Wally...they come up in the wet and leave holes all over your lawn...? they wear maroon...? their poisonous bug eating cousins to a Frenchman....?
Nah Nah Nah ....something along the lines of interfering busy bodies....like a green Hilda Ogden....hmmmmmmmmmm lemme see now..........The High Chaperones .
You like ....Yes..?
So its perfectly OK to say 9% of NZers should be ignored? sorry I dont agree.
Amazing that some ppl somehow think someone else is not deserving of representation beacause their view point does not agree with their's that is not democracy.
The green party is a symptom....it attracts a decent % of the vote because a decent % of ppl want to see a green effect, not a green Govn....a green tinge.
regards
This guy is a loon....do Federated Farmers not realise the damage having a nutcase as their spokeperson means? He's simply amazing.....who needs a circus. yada yada.....libertarian loony......
MMP and bribery, hello JK bought the election off Labour in 2008, just as Labour managed to do the same in 2005, while Brash tried to do the same....I cant see MMP would have mattered significantly, its those middle voters who needed to be won (read bribed) over to get Key in and not the small parties % of the vote....those votes for ACT or Greens would have either been enough to get an MP, or the effect would have gone to the main parties....what would have been the difference under MMP? the small parties would have been a non-event....ACT could have been with 1 MP safely ignored. This guy and many of the way out there right wingers (applies to the loony left just as much of course) seem to forget that this govn was voted in on a mandate, a mandate very easily taken away next year...
regards
MMP makes it more expensive, dangerous and complicated for internal/external bastards to corrupt/buy our political system.
I like things the way they are. I have not voted for either the Labiour Party or the National Party since the mid eighties- and the disasterous David Lange years when our wonderful common assets were sold off cheap to a handful of unscrupulous insiders. bastards!
This guy is crazy like a fox. He kicks off another MMP debate, when actually this government is delivering everything farmers ask for.
Governmant deficits due to a lower tax take, rather than over spending? Joking. Farmers pay SFA tax now, and won't pay more.
CGT? Not a show.
A land tax? Even less.
Rates are about 1% of dairy farm gross. Still too high. Need a poll tax.
ECan? It can't deliver water for dairying. Scrap it and put something in place that will.
RMA? For water, will soon be Relaxed standards, Modified environments and Allocated by farmers.
Note that Fed Farmers never bothered to turn up to the recent McKenzie Country environmental talkfest. Why bother? Smith and Wilkinson will do the job for them.
The only fly in the ointment there is the Maori Party. They are claiming water from the rivers! OMG. Scuttle them with the new F&S and they will be history.
Admirable piece of distraction by Feds. Swallowed hook, line and sinker above.
What a clown.
1. Our economic performance under FPP was awful.
2. Looking globally there is no correlation between FPP and superior economic performance or proportional representation and poor performance.
Holding up the Coalition in the UK as best practice is self-defeating for your argument. That would also be the government had their election been held under MMP!
Furthermore the real point is that they are cleaning up the mess made by a textbook FPP 'elected dictatorship' government under Blair/Brown. Funnily enough the MMP governments across the North Sea don't have to deliver 'crisis budgets' because their more balanced governance did not deliver the same unsustainable policies as the UK.
If you're losing the economic policy battle, then perhaps you need to take a re-look at your policies and/or sell them better. Complaining that the electoral system is too democratic belongs in an earlier century.
What a mindless rant, with absolutely no structure or supporting evidence! Incredible! If I was a farmer, I would cringe with embarrassment that he was representing me with these burblings!
The depressing thing is, I'll bet that practically all farmers will be nodding sagely over their milk vats and saying he is a very switched on fellow and has hit the nail right on the head.
Cheers to all
What's behind Mr Nicolson President of Federated Farmers powerful organisation is obvious: http://en.wikipedia.org/wiki/Lobbying (with interesting culture differences)
No wonder he blames MMP, trying to wriggle out with stupid and untrue arguments.
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