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| Losing The Room: One can only speculate about what has persuaded the Coalition Government that it will pay no electoral price for unreasonably pushing ahead with policies that are so clearly against the national interest. They seem quite oblivious to the risk that by doing so they will convince an increasing number of voters that they are extremists. |
ONE OF THE MOST PERPLEXING ASPECTS of the National-Act-NZ First coalition government is its perverse unreasonableness. Perverse, because in almost every instance the unreasonable nature of the Coalition’s policies generate reactions that can only be politically counterproductive to its chances of re-election.
Politicians can be radical, or reactionary, it matters little, just so long as they can a make a reasonable case for their intended course of action. A reasonable policy not only stands a good chance of being implemented, it is also likely to be well received by the electorate. If, over the course of its three year term, a government’s actions strike most voters as consistently unreasonable, then its chances of being re-elected will lessen considerably.
What makes a policy reasonable in the eyes of the ordinary voter? Principally, it is the quality of the evidence presented in its favour. If a policy is endorsed by persons with a reasonable claim to being experts, or, at the very least, by people with a long history of being right about the subject under discussion, then its chances of being accepted are high. The more questionable the credentials of those making the government’s case, however, the less faith the public is likely to place in its policies.
Public faith in government policy will dissipate even more rapidly if the only people or organisations to speak up in its favour are those with a clear vested interest in seeing it implemented. The moment the “evidence” of any given policy’s supporters provokes the ordinary voter to respond “Well, they would say that, wouldn’t they?”, then the policy is in serious trouble.
But being in trouble is not the same as being rejected. A government absolutely determined to forge ahead has the power to implement policies that are unsupported by scientific evidence, expert opinion, common sense, or even a majority of the electorate. By doing so, however, the parties responsible not only expose themselves as being unreasonable, but they may also come across as potentially dangerous.
They remind voters of the intoxicated individual who, in the face of abundant evidence to the contrary, insists that s/he is sober enough to drive home. It’s not just the drunk people worry about, but the possibility that, if s/he gets behind the wheel, then a perfectly innocent person, or persons, may be seriously injured or killed. Unfortunately it’s not as easy to take the keys away from a government as it is to take the keys away from a drunk. Voters may be forced to wait three years, or more, before they can get a government intoxicated by its own unchallengeable authority off the road.
On the subject of roads: car-lovers and the Coalition would appear to be locked in what more and more New Zealanders perceive to be a particularly worrying example of political folie à deux. The Transport Minister, Simeon Brown, unmoved by scientific evidence, expert opinion, common sense, and what is fast approaching a majority of the electorate, is prioritising the construction of more and more “highways of national significance”. His decisions, by favouring road users (and the road haulage lobby) at the expense of New Zealand’s rail network, can only further impede New Zealand’s efforts to meet its Climate Change commitments.
One can only speculate about what it is that persuades the three coalition parties that they will pay no electoral price for unreasonably pushing ahead with policies that are so clearly against the national interest. They seem quite oblivious to the risk that by doing so they will convince an increasing number of voters that they are extremists.
Only extremists are so convinced of the rightness of their cause that no argument, no matter how rational and well-supported by evidence, is permitted to prevail against it.
Only extremists would consider passing a law that allows one of three Ministers of the Crown to over-rule the previous judgements of the courts, the recommendations of expert witnesses, the advice of his/her own carefully chosen advisory panel, and the clearly expressed wishes of affected locals, if they run counter to the Ministers’ preferred solutions.
The last time a right-wing government passed such a law, the author and some comrades, under cover of darkness, chained together and padlocked the doors of the Dunedin Law Courts, on the grounds that Rob Muldoon’s “Clutha Development (Clyde Dam) Empowerment Act” (1982) had just made them irrelevant to the conduct of public affairs.
That same Rob Muldoon would spend the next two years over-ruling virtually every institution dedicated to advising the government of the day on the state of the New Zealand economy, and how best it might be served by the decisions of its ministers. By mid-1984, unable to bring together a budget that added-up, Muldoon called a snap-election. New Zealand would never be the same.
Forty years later, another Finance Minister, against the advice of just about every reputable economist and responsible interest-group in the country, is proceeding with the Coalition’s promise to cut personal income tax. The consequences of this Muldoonesque intransigence are already apparent in public sector lay-offs, health sector cut-backs, and social-welfare sanctions. Not even the latest report from the OECD, which not only recommends against tax-cuts, but actually advocates for a Capital Gains Tax, carries sufficient weight to persuade Finance Minister Nicola Willis to see sense and act reasonably.
An unwillingness to be advised. Turning a deaf ear to ideas that challenge one’s prejudices. Insisting upon following a course of action that is more likely than not to result in unnecessary and avoidable harm to people, animals, and/or the natural environment. Starting down a road that seems to be leading to disaster, but refusing to turn back. These are not the actions of reasonable human-beings. On the contrary, they are the actions of the individuals, parties, and even the nation states, that have dragged humanity into it worst catastrophes.
Barely six months into its three-year term, the Coalition Government of Christopher Luxon cannot avoid the charge that it is manifesting all the self-destructive behaviour listed above. In circumstances where good ideas, no matter their provenance, should be given a fair hearing. Where concessions and compromises aimed at achieving consensus are more than ever necessary to steer the New Zealand ship-of-state through what Leonard Cohen called “the reefs of greed”, and “the squalls of hate”, we are given only the jutting chins of men and women who will not be told.
This essay was originally posted on The Democracy Project Substack site on Monday, 13 May 2024.
27 comments:
Nah!
A lot going on in this. The one sore thumb that stands out is come hell or high water, National cannot seem to see is those stupid tax cuts. We're broke, but have a tax cut really undermines the former claim. And their rationale and credibility.
But on the subject of roads, can I assume Simeon Brown and most of his colleagues think climate change is a political lie, as in we can do a thing about it? Remember, the scientific evidence was all agreed on Covid as well. Once upon s time that is. It too could bear no tolerance for questioning. Authoritarian agendas are like that.
What is never ever explained by climate change apostles is where society goes if we implement "solutions" such as private vehicles bans. It will make the current ressession look like the best of times. We will go backwards in magnitudes of de-growth percentages and so will this countries quality of life
Brown and the rest of us have been watching NZ go backwards. The evidence is Northland. Rotting on the vine, it's landlocked by a lack of roads or rail. It's poverty and hopelessness is a warning to the rest of us. It should offer so much more but it's less and less accessable. But the freshly opened Puhoi to Warkworth motorway link is a hugely tempting insight into what the future could hold to unlock Northlands potential. Around that area, things are flourishing .That is the case for road building.
Rail just cannot shake that imbedded state incompetence that inflicts it. The Cook Strait ferry replacement that was heading into the multi hundred millions under Labour (hopeless project management so typical in many government departments), the latest example. Aucklands unreliable track network another, regardless of lengthy expensive closures to rehabilitate it once and for all. Wellingtons network, another. If we are going to be left reliant on the state for transport, a state that proved so incompetent under progressive Labour, the current exodus of citizens to overseas will look tame.
I don't think the road building is unpopular. What would be is the alternative that climate change believers carefully hide.
I haven't even read this article yet -- I am just commenting to say "Glad you are back blogging, Chris!" after more than two weeks' absence! Now I'll go and read it.
I struggle to fathom some smart people's inability to comprehend simple economics.
We have a dollar to spend so we spend it or the Government taxes us that dollar and they spend it. Either way that 1 dollar gets spent therefore not inflationary. What creates inflation is when a certain Finance minister in collusion with a certain Reserve Bank governor decides that we don't have enough money spinning around in our economy so they collude to "print" a extra few billion dollars so we have the same level of goods and services available for purchase but we have more dollars to pay for those same goods so we get ... Inflation.
We now come to that old question, "who is better placed to spend my money, the government or me?"
When we see the utter waste the ardern etc government embarked on I think the answer is very simple. When we see the obscene growth in the public service with zero increase in delivery I think the answer is pretty clear so I for one will welcome any cuts this finance minister decides to introduce. Fancy being grateful for being allowed to keep some of my own money!
It seems to me Chris that what you have written can be applied to both the Key and Ardern governments. They were basically "do nothing" governments and I daresay we are merely witnessing more of the same with this one. Did we expect anything radically different?
As an aside, I have become very cynical when the word "expert" (which you used numerous times) is invoked to presumably add authenticity to a given issue. It is a constant with mainstream media. But these so-called "experts" are neither named nor their qualifications and affiliations revealed. Their neutrality cannot be taken for granted. For me, therefore, they are cast into the dustbin of irrelevance.
Mark Simpson
'Extremists'? Methinks you have spelt 'idiots' wrong. Or are you just being polite?
This country badly needs another Bill Rowling or maybe a Michael Cullen. Sensible fellows with ability. I'd even settle for a Helen Clark, occasionally wrongheaded, methought (MAI, TPPA), but not wanting in common sense. The Chump Coalition we have now lines up 'nicely' with the Western idiotocracy comprising the likes of Joe Biden, Rishi Sunak (the last of a long line of klutzoid dolts), Justin Trudeau, Anthony Albanese, Emanuel Macron, Olaf Scholz, Jens Stoltenberg, and the purblind Scandinavian crazies that, all of their own accord apparently, decided to join NATO.
Whom the Gods wish to destroy, they first make mad. Unfortunately, the Gods, playful types, are apt to garnish their destruction with copious quantities of collateral damage.
Cheers,
Ion A. Dowman
Another five posts dropped at once?
I'm sorry to say that the laws of blog world mean that you'll get most of the comments on this latest one and few, if any, on the others.
It hasn't been like this before, even as you've published pieces on other forums. Is that where you wish your commentariat to go?
I think it would be fair to say the vast majority of our legacy media loath the new coalition government.
Completely oblivious to the little shop of horrors the previous government was because they were "kind" and had the woke values they subscribe to, the new government cannot win a trick and it reminds voters, in their superior opinion, we got it so so wrong, on a daily basis
That it's seen as unreasonable should surprise no one with our god awful media crying into by their cornflakes.
Just today we learn retail crime has spun out of control, One NZ forced to close an Auckland central city branch because they crime is too bad. But they are still paying the lease . This is a direct result of Labour and their naive, hand wringing kindness to criminals policy.
Now to that's unreasonable!
Well I guess they could just gaslight whilst destroying our willingness to love one another and fuelling the great robber of the poor -inflation.
Or they could give the working class some money so they can feed their family
Filthy right wingers what are they thinking
I work on the assumption that this country has gone way past the Rubicon as to where the best interests of it's citizenry were.
We are the Titanic where the lower classes feel the water coming in; the upper classes don't.
You are never going to solve the problem of a low wage economy for some or of superanuation painlessly.
The solution to this dilemma is censorship by concensus.
The issue of people moving to Australia has been around before and now they are using the same arguments; they say people will come back because we are a great place to bring up kids. But is Asia-Zeeland the great place it was in 2000 when Austin Mitchell said it?
Bottom Economist Michael Reddell made/makes this point:
....we have a relatively high rate of natural increase in population.
But we also have a large and persistent outflow of NZers (large by any comparative
international standards). That outflow should best be seen as a rational response to
perceived opportunities - those abroad are better than those here. Outflows of New
Zealanders should generally act as a stabilizing force, helping to rebalance the
economy. Economies with slow growing populations need to devote a whole lot
smaller proportion of their real resources to simply maintaining the capital stock per
worker.
https://www.treasury.govt.nz/sites/default/files/2017-11/mi-jarrett-comm.pdf
It is by no means assured Chris, as you suggest, that there is a definite measurable and definitional link between tax cuts and lower government expenditures.
Just as our now structural national deficits do not automatically! arise from other particular sometimes cited "economic forces" ... so much as from plain and simple and politically driven ... governments profligacy.
Just as Micawbers formula for poverty still holds true so does the quaint old adage that tax cuts ... in times of excessive government expenditures, borders on ... nay! clearly equates with... economic insanity.
I'm sorry Chris, but we need those roads long before we need the railway pipedream. We simply don't have the taxbase to trackify NZ in meaningful way. It should take no longer than 5...5.5 hours from AKL to Wellington with a high speed road network. The other day I spend 4 hours traveling 200kms north...50km an hour average!!!
We are trying to save the entire planet, singlehandedly, at the expense of economic progress and on behalf of the big players who couldn't give a rats about 'climate obligations' whatever the fuck that means. Every other country looks after its own progress before playing 'saviours of the world'. Except us.
I think the stubborn staying-of-course come hell or high water attitude comes from the fact that they promised this stuff before the election and cannot afford to fail in delivery.
We have a dollar to spend so we spend it or the Government taxes us that dollar and they spend it. Either way that 1 dollar gets spent therefore not inflationary. What creates inflation is when a certain Finance minister in collusion with a certain Reserve Bank governor decides that we don't have enough money spinning around in our economy so they collude to "print" a extra few billion dollars so we have the same level of goods and services available for purchase but we have more dollars to pay for those same goods so we get ... Inflation.
Actually, no.
You have a dollar, so you can do one of three things: spend it, save it, or borrow an additional dollar to spend (you spend two dollars).
The Government equivalent is balanced budget, budget surplus, or budget deficit. A balanced budget has zero effect on either output or prices (government is spending what it taxes). A budget surplus depresses output and prices (government is taking in taxes, and not spending). A budget deficit increases output and prices (government is spending more than it takes in via taxes).
A tax cut increases the budget deficit, and hence increases pressure on inflation.
Most of middle New Zealand is struggling with high prices/costs for energy, rent, rates, insurance and mortgage interest. A bit of tax relief doesn't seem unreasonable to me - particularly considering that they have been pushed into the top tax brackets; brackets that should have been adjusted many years ago.
From what I'm seeing I think we are in a recession, inflation pressures will ease considerably as a consequence of that and supply chains getting back to normal. A bit of cash in the pockets will help keep the economy ticking over and not add unnecessarily to inflation so long as government spending is restrained.
It's also important to enable and encourage productive enterprise and it's consequent wealth and surplus; cutting red, green and brown tape will help with that.
I think the moves by this government are entirely reasonable given the situation - a consequence of fifty years of failure to address our chronic current account deficits and lacklustre productivity. We had better start strengthening our economy and enhancing our financial security; there are some very dark clouds on the horizon.
DS: "A tax cut increases the budget deficit, and hence increases pressure on inflation."
Not in and of itself it doesn't.
It doesn't make any real difference, with regard to inflation, whether it's the government borrowing money into existence or the private sector. The RBNZ release the credit (C5) figures. They show private sector (housing, personal, business and agriculture) credit growth stalling below the inflation rate. While the extraordinary government deficits by Robertson & Co juiced up the economy and inflation there will be a reckoning. I think the government could cut more spending, there is a lot of waste, but since we've become addicted to borrowing and spending, it won't be an easy road for a few years.
Perhaps, with articles like these, Chris is trying to make amends with some of his angry left wing mates, like Martyn Bradbury, who of all things, accuses him of being a NZ1 apologist. I think you're on the money DG with your comment. And deep down, I believe that Chris will also find it entirely reasonable for a govt to roll out what it campaigned on...unlike the last Labour govt. It's called keeping a promise. NZ is just not used to that.
Most of middle New Zealand is struggling with high prices/costs for energy, rent, rates, insurance and mortgage interest. A bit of tax relief doesn't seem unreasonable to me - particularly considering that they have been pushed into the top tax brackets; brackets that should have been adjusted many years ago.
Most of middle New Zealand won't get much at all from these tax cuts, especially once one factors in the extra costs (car rego! prescription fees!) associated with this government thus far. Never mind higher unemployment and lower wages meaning that many people's earnings are dropping.
The only people winning from these tax cuts are people who don't need them.
An excellent read, The Graduation Speech You Need To Hear by Professor Robert Parham
You see, I believe we currently live in the golden age of humanity. Things have never been better for human beings. Yet it seems we have never felt worse about our prospects.
...
Based on every objective measure of well-being—safety, health, wealth—if you are a college student in America today you are better off and wealthier than the king of England was 300 years ago.
A budget deficit increases output and prices (government is spending more than it takes in via taxes).
An assertion refuted not just by economic theory but by the reality of many nations running budget deficits for years now with low inflation - see USA 1983-2022.
"Inflation is always and everywhere a monetary phenomenon".
And while governments are the source of inflation it's not because of budget deficits but because of them allowing the money supply to grow faster than the supply of goods and services, and massively increasing State spending as a proportion of that money supply is one aspect - plus the other key player, central banks controlled or influenced by the State.
We, and you DS, don't know the size or intended recipients of the tax changes; the budget's not out yet.
Its not that complicated Chris. The National coalition want more NZrs to be able to look after themselves and not be so reliant on the State. The more people that can look after themselves because they have work and housing the more money the state will have to spend on the less fortunate, health, education and infrastructure.
If they fail to deliver that or at least show progress toward that in the next two years they will be out. Most National led governments have tried to do this and because they have spent their fair share of time in power we would have to assume they are partially getting it right. What the National coalition are doing at present is mostly in the manifestos of the three parties. They are acting in what seems to be a ruthless way because of the economic situation they have been left with and the three year election cycle which gives them little time to implement policy and get the financial situation under control. We haven't seen their first budget, and in two years the people will need to be in a better position than they are now for the government to survive. At least they have had the courage of their convictions in quickly implementing policy, unlike Labour who did nothing but happily spent other peoples money.
Excellent analysis of situation. What amuses me is the attitude of the public and the media: a party campaigns on say 'painting all houses pink' and gets elected. And when they paint the houses pink, as promised, the public has a fit because the houses are now pink. The devious media, govt funded at that, stoke the fire by saying 'new poll: nobody wanted pink houses'. Frankly, fuck that - it's pink houses and that's that!
Well DS there are them that know and them that think they know.
I'll leave it to you to figure out where you sit.
A dollar saved is merely a dollar that someone else will spend. A dollar borrowed is someone ele's dollar unless you are a moron that just increases the money supply without a corresponding increase in production.
I'll leave you to figure out who that epithet may rest on.
It's simple Econ 101 and there are plenty of dooks out there to get anyone interested up to speed. Let's hope Nicola has one in her library and bothers to read it.
I periods of low inflation printing money doesn't cause inflation.
As experienced from the 2008 crash till 2019 ie Covid.
Look at the EU printed $ billions China continues to print.
The US printed Trillions.
No inflation.
Inflation can also be caused by shortages of goods.
Thats what has happened in Covid with supply interuption and the Russian invasion of the Ukraine.
Read a little more than just repeating the monetarist mantra.
Sounds to me like you are describing the last govt, not this one
Simple economics is usually the best but a multitude of factors are in play at all times therefore simplicity is an impossible target.
Increasing the money supply without increasing production is the most simple explanation and the last government's intervention to boost the economy backfired because they poured too much money in over a very short time allowing a speculative nature to creep into housing as well as other areas. Why the increased demand for utes when supposedly tradies were doing less work? They also boosted employment in the public service by 20,000, mostly in Wellington and with an average wage of $95,000 boosted demand for housing well above a normal sustainable and achievable level therefore increasing inflation. "It was the best of times, it was the worst of times" with the most incompetent group imaginable at the helm.
The GFC was an entirely different beast and to conflate the two is pointless.
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