Kiwiblog tips Nats win

kiwiblog interpretation of the latest poll results - is that Labour are in deep trouble and have little chance of winning the 2011 election. However, the recession is not over yet and a lot can change in politics in a short space of time. On the horizon are looming challenges - for whoever forms the next government. The chronic balance of payments and current account deficits feature large in any external assessment of New Zealand's economic condition. Having said that - right now National have a handy lead in most polls.

Political parties will need to persuade the public that they have solutions for the thorny and intertwined issues of overseas indebtedness, overseas ownership and lack of NZ savings (in things other than housing).  Eventually these underlying constraints on sustainable prosperity will bubble to the surface of popular opinion and the party best prepared to resolve those concerns will be in a strong position. For now though credit card allowances, movie rentals and old sheds on Auckland's waterfront appear to be the focus of fourth estate scrutiny.

Chauvel opposes Income Splitting

Labour list MP, Charles Chauvel, has released a media statement apparently aimed at undermining United Future's income splitting policy. Income splitting is designed to enable parents to make their own choices about how they raise their children.

If one parent opts to stay at home to care for their own children then income splitting allows parents to be taxed as a couple instead of two individuals. In his media statement today Mr Chauvel says that in proposing this family-friendly policy Mr Dunne is out of touch with New Zealanders. 

Given that half the households in Ohariu are two parent families some observers might say it is not Mr Dunne who is out of tune with the electorate.

The Brash Report

The government invested into the 2025 Taskforce. As a centrist, who is sceptical about a purist market approach delivering good social policy outcomes, readers will not be surprised that I have reservations about certain aspects of the Taskforce prescription. However, when an effort has been made to address New Zealand’s deep-seated problems I am inclined to the view that it’s worth giving it proper consideration.

Certain aspects of the Taskforce prescription are worth exploring further:

• The relative decline in New Zealand’s GDP per capita is not well understood by the public – it needs to be;

• The substantial increase in government spending since 2005 is unsustainable and needs to be curbed is a useful observation but needs to be considered in the context of the global recession of 2009.

• The trebling of subsidies for early childhood education and day care is also worthy of evaluation to see whether such expenditure is getting the benefits expected of it.

• Reforming the welfare system to curb abuses is also going to be important over the next decade.

• Ensuring that our income and company tax rates are competitive with Australia, the UK and other competitors for kiwi talent is important.

There are, however, other parts of the report that appear to lack sufficient analysis:

• The attribution of New Zealand’s decline in economic performance to “the impact of the protectionist regime put in place in the 1930s” is questionable given that our best economic performance occurred in the 1950s and 1960s under such policies;

• There is little in the way of consideration of how new research, science and technology can help drive faster growth rates and diversity in our economy.

• As most business people will tell you selling assets is not a very well thought through strategy for long term economic prosperity. Raising productivity and skill levels – together with NZ-based research capacity is likely to deliver longer term gains for the country’s prosperity.

2010 represents a year of opportunity for the government to introduce overdue economic reforms. The studies it has commissioned in 2009 will offer a useful base of work from which to consider remedies for New Zealand’s economic ailments. Social policy considerations - such as social cohesion- will have their place alongside economic goals in any intelligent programme of reform in 2010.

Clear Election Win for National

The November 8th election gave National a strong win and, with United Future and ACT pre-election support, an outright majority.

The outgoing Prime Minister Helen Clark departed the Labour leadership without rancour. Her commitment to New Zealand cannot be doubted - even if we might debate the way she tried to implement it. Michael Cullen can take pride in a solid track record of debt repayment and a series of surpluses in the government accounts.

The new Labour leadership the Goff-King ticket will ensure a strong parliamentary opposition. It also helps Labour to rebuild support among those traditional supporters who opted to stay at home on election day.

For the incoming government the work is ahead of them. John Key has made a great start with assembling a new Ministry in eight days. He has wisely recruited the support of the Maori Party - as well as ACT. With smart strategic decisions we could be seeing a fundamental re-alignment of political loyalties in NZ politics. The challenge for National is to follow through with their policy programme and to build a strong platform for sustained economic growth, social cohesion and responsible stewardship of the environment.