Hooton on the government having to face the tough stuff now

Credit: Comrade Jacinda FB page

Matthew Hooton explains that play time is over for the government, they must now get down to tin tacks and start governing.

Labour’s poor performance in parliamentary question time and the shambles over the election of the Speaker is merely the public evidence of a Beehive not yet even properly staffed. Some ministers have not yet given any clear direction to their departments about priorities. Labour’s coalition partner, NZ First, which has completed its transition to government, is mildly frustrated its larger partner is not yet up to speed.

To a certain extent, this can be excused: Four months ago, Labour had absolutely no expectation of forming a government until 2020 at the earliest. Labour was then completely overwhelmed with holding the ship together through the election campaign and managing the inflow of new support and money that accompanied Ms Ardern’s rise, and then succeeding in its do-or-die negotiations with Mr Peters.

But this is a government that has promised a bold programme, including in its first 100 days that end on February 3.

Tick tock. No houses are yet built, and no trees planted. David Clark already has youth suicides marked down in his name and child poverty still exists.

To show progress by the next election on building the 100,000 new homes it has promised, the new KiwiBuild agency must be up and running this year. It will then need to ensure the new building capacity it acquires adds to rather than replaces existing private-sector activity.

The same pressures exist with the billion-tree programme, for which the first plantings are essential next winter. Aucklanders will expect the new light-rail line to the airport to be well under way by the time they vote in 2020 and Northlanders will want the same for heavy rail to Northport.

Students starting university summer school in January straight from high school will expect Education Minister Chris Hipkins to have delivered on Labour’s promise that it will be free. Police Minister Stuart Nash has to find 1800 new officers to meet his public commitments. There needs to be an urgent expansion of mental health services in urban and rural New Zealand after the previous regime’s disgraceful neglect.

Business and homeowners will want to see the personnel and terms of reference for the tax working group before Christmas, and the government must avoid further stuffups like Mr Nash’s premature comments on GST on low-value imports, which had to be clarified by Finance Minister Grant Robertson.

Genuine progress on these issues is essential for the government’s credibility but they are dwarfed by the need to show real reductions in inequality and child poverty given Ms Ardern has staked her prime ministership on those issues.

Jacinda Ardern and the rest of the Muppet Show she leads are finding out that virtue signalling and bumper sticker slogans are not policy.

Making that more difficult is the government’s promised fiscal rectitude outside health and education. It also claims to have been confronted with bad news this week about the cost of a growing prison population and fixing leaky schools. It faces considerable wage pressure from the public sector for which it has not fully budgeted.

This puts Mr Robertson in an exceptionally tight spot. For credibility reasons, the finance minister dare not deliver a looser fiscal policy than his pre-election promises. More importantly, as the Reserve Bank warned last week, further fiscal loosening would lead to higher interest rates and a higher dollar, which would conflict with the government’s promises to exporters and risk crashing the now gently falling property market. That would almost certainly condemn Ms Ardern to being a one-term prime minister.

Word from treasury sources suggest that the $11billion fiscal hole that Steve Joyce was widely lambasted for, is in fact more like $18billion. Borrowing might not be an option, and word is tax increases for the top end are being considered.

Strong political leadership is needed. The Wellington bureaucracy was allowed to reach record numbers under John Key, Bill English and Steven Joyce. The good news for Ms Ardern and her ministers is that if they clearly lead and direct the bureaucracy, officials will deliver on the government’s priorities, as they did in just four days over the foreign house-buyer ban.

On the other hand, if the bureaucracy sees early that it can get away with just passing bits of paper among agencies as Mr Key tolerated – remember his Auckland financial services hub proposal? – then it will deliberately procrastinate and the new government will soon seem as lacklustre as the last.

As she turns her full attention back to domestic policy this week, Ms Ardern is going to have to display the decisiveness and clear leadership she has demonstrated over the past week on her Asian tour.

The bureaucracy is already leaking like a sieve. Never before have they seen such fools put in charge of anything much less the country.

 

-NBR

 


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