Nats step to the right with ACT

As we predicted, National has used a confidence and supply agreement with ACT as a vehicle for its true right-wing agenda.

National has given a wide range of concessions to ACT, far more than is necessary to gain ACT’s already pledged support. Together, they amount to a far more rightwing policy program than National promised.

Here’s a summary (full version here):

Hide to be Minister of Local Government and Regulatory Control (= fewer controls on business, less public input). Roy to be Minister of Consumer Affairs (like appointing Paris Hilton to teach at a finishing school).

Life sentences for people with three serious convictions (what ’serious’ is we don’t know). In California, this law has seen the prison population explode while crime rate reduction has been in line with falling rates in states without such laws.
The Emissions Trading Scheme will be suspended until ACT gets to have a review under its terms of reference, which are designed to have the ETS scrapped and preferably not replaced or replaced with a carbon tax. National and ACT opposed a carbon tax in 2004, it is just a delaying tactic.
“Task Forces that include private sector representatives and private sector chairs to undertake fundamental reviews of all base government spending. A focus of this work should be on elimination programmes* that do not deliver value for money”. Value for money being decided by the rich ‘advisors’ National/ACT appoints to carry out the review. I wonder how much value for money they will see in poverty relief.
Cap expenditure on government services by law. Which would prevent the Government responding to new policy challenges without cutting existing programmes. That will be a problem for National, it has already promised programs requiring thousands more public servants. It will mean the new prisons National/ACT will build will need to take money from other areas, like health.
Flatter tax. That means any future tax cuts will go exclusively to the wealthy. Most people will get nothing.
Further weakening of the RMA.
More money for private education = less for public education because expenditure is capped.

Your work rights will be attacked too. National/ACT releases this is sensitive so they’ve disguised their plan with coded language.

National/Act agree to close the ‘income gap’ between Australia and NZ by 2025, requiring ‘3% productivity growth per year’. Which is just economic techno-babble. What ‘income gap’ are they talking about? GDP per capita or wages or what? And how would a faster rate of productivity growth close this gap? Anyone who knows what productivity is (the amount of wealth produced in a unit of work) knows that merely increasing productivity doesn’t necessarily boost GDP or wages. GDP = productivity x work done. So, GDP not only depends on productivity it also depends on how many people are in work. And boosting productivity doesn’t lead automatically to higher wages – wages are determined by supply and demand in the labour market, nothing to do with productivity. In fact, productivity grows faster when employment drops because it’s the low quality workers that lose their jobs first and lower quality capital that sits idle first, but wages don’t go up because there is more slack in the labour market.

So, why this rubbish statement? The following paragraph gives the answer. National/ACT will establish “a high quality advisory group to investigate the reasons for the recent decline in New Zealand’s productivity performance”. New Zealand has grown faster than Australia and other countries in recent years. Overall, our productivity growth has been slower in recent years at about 1.5% than in past years (2.5%) but for a very good reason. Our economy has grown so fast that it has sucked in lower quality labour and capital, which brings down the average (if you look at just workers who have been in the labour force continuously for the past seven years their productivity has continued to increase at about 2.5%). Any first year economics student should understand this. So, what do National/ACT expect their ‘high quality’ (ie private sector) advisors to recommend? They’ll say work rights are the problem – that weakening workers’ rights is the way to boost productivity and, thereby, wages. It’s all rubbish of course. Just like ‘trickle down’ in the 1990s, the effect will be lower wages and lower GDP growth.

Is this the change that you felt it was time for? 

*(yeah, that’s right, National and ACT’s grammar problems have continued from their campaign ads to their official agreements. There are more grammar mistakes in the education section)