Dave Gee: Life from Right Field

Prime Minister John Key delivered his speech to the nation this afternoon, at the opening of Parliament for 2010. It was billed as the National Party leader's most important speech of the year, but aside from a few highlights has largely failed to live up to those hyped expectations.

Kiwiblog's David Farrar had a full point-by-point analysis out in record time, allowing Labour Party leader Phil Goff to quote his "B" grade at the start of his speech in reply!

• Positives in John Key's speech:

* GST increased to 15%, but with no introduction of any exemptions (which reduces its efficiency). If there has to be taxes in some form, a consumption tax is one the better options as everyone has to pay it (many people avoid paying income tax, either through Labour's 'Working for Families', or through trusts and other structuring of their personal finances).

* Changes to property taxation, and the way depreciation is taxed (but no Land Tax because National was scared of upsetting property investors).

* Some reductions to personal (and company?) tax rates, but will have to wait until May's budget for details. Currently the top 10% of all income earners pay over 75% of New Zealand's net tax, while around 40% of people pay no income tax at all.
* No extra funding for many Government agencies for the next few years.

* An "action plan to unlock New Zealand’s petroleum potential", and opening up land locked up under the guise of conservation for mining.

* I am cautiously interested in the 'Whanau Ora' initiative of social services delivery, provided it isn't restricted to being a race-based programme.

* Stricter monitoring of standards in education, and demanding better performances from the crap teachers and schools currently failing our kids.

* Reform of the welfare system, which hopefully will translate into more than just talk. Getting people away from the idea of welfare dependency, stricter benefit rules, increased testing. As John Key points out in his speech...

"In 2010, New Zealand taxpayers will fund an estimated $7.6 billion of benefits and income support, not including Superannuation. This amounts to $20.8 million every day, or $867,500 every hour. It is critical we ensure this money is spent effectively...

...I need to be able to look taxpayers in the eye and assure them that their hard-earned wages are not being used to support those who lack the will or desire to work as hard for their living as their fellow New Zealanders."

* Reaffirming the goal of concluding all Treaty of Waitangi settlements by 2014.

• Negatives and missed opportunities in John Key's speech

* Labour's 'Working for Families' welfare regime (described by John Key as "Communism by stealth") won't be abolished, although National will tinker with the system slightly. WFF recipients and beneficiaries will be compensated for the 2.5% increase in GST.

* No Land Tax. Claims by Property Investors that this would have meant higher rates aren't quite true. NZ property prices are artificially inflated thanks to the current system. A land tax would contribute to a reduction in property investment, and a reduction in prices. This would allow more kiwis to buy their own homes, and the rental market would be forced to come down to earth.

* Opening up of land for mining and exploration will unfortunately be balanced by replacing it with other land not currently protected under 'Section 4'.
* A Conservation Fund will be established to direct some royalty income from mining on crown land towards conservation projects. Designed to appease the Greens but won't.

* Government spending will continue to increase. Billions of dollars more will be thrown at education, health, roads, etc...

Of course it is a better programme than we would have seen had voters allowed Labour and its mates the Greens and NZ First to continue running New Zealand.

However Key's speech this afternoon wasn't as bold as might have been expected, considering the PM said beforehand he expected the policy programme could erode his political popularity. The pressure is on to prove this year that he is not simply a 'do nothing' Prime Minister.

The next instalment is due in May... ;-)

* Stuff - Key confirms GST increase being considered

* NZ Herald - Bernard Hickey: Leave the country now Gen X & Y

* Not PC - Fisking that “step change”

* Kiwiblog - PM’s 2010 Statement to Parliament

* UPDATE: TV1 and TV3 6PM News Ultimate Maths Fail
Both of the country's major tv news bulletins failed with basic mathematical calculations tonight, when trying to illustrate the effect a 2.5% increase in GST would have on certain consumer goods. (TV3 also made a secondary mistake in their graphic by losing track of the decimal point).

As the post by Steve Biddle at Geekzone points out, How can you trust either network to deliver us accurate news when they're unable to calculate a basic maths equation?

(It's actually the third financial misstep at 3 News in the last month. It miscalculated the extra amount someone on the minimum wage will receive per week, and confused "million" with the slightly larger "billion" when talking about an education spending item).

ACT Party leader Rodney Hide survived a debate over his leadership last month, according to NZ Herald political reporter Audrey Young.

The challenge to Hide's leadership of ACT was apparently led by deputy leader Heather Roy, and party founder Sir Roger Douglas.

The debate came to a head in late November, following the controversy over Hide's use of his parliamentary overseas travel allowance for his partner Louise Crome. The trip wasn't seen as a good for prolific perk-buster Rodney Hide, although Sir Roger Douglas has also been a heavy user of the overseas travel entitlement, including personal family visits in England.

ACT's only electorate MP, Epsom-based Hide formally apologised to the party's board and MPs after the media controversy, and confirmed he would pay back all the travel costs.

However while the leadership issue was discussed, any considerations of a challenge were dropped, after Prime Minister John Key indicated dumping Hide as ACT leader could end the party's coalition support agreement with the National Party.
Key told Heather Roy that her own Consumer Affairs ministerial portfolio would be in danger if ACT chose a new leader. Audrey Young says the squabbling within the Government's two support parties - ACT and the Maori Party - had John Key considering the idea of a snap election.

If true, that just indicates the National Party still fails to understand the MMP system, and is blinded by polling. Key's snap election idea was to try and give the National Party an outright majority in Parliament, rather than relying on minor parties for support to put through legislation.

However, despite the apparent continuing honeymoon in the polls for National, it is highly unlikely that voting under NZ's MMP system would actually have resulted in the National Party winning over 50% of the vote.

Minor parties traditionally fare much better at election time than polling would suggest in the rest of the parliamentary cycle.
National has also alienated many of its traditional supporters recently, pushing through an unpopular (and totally unnecessary) Emissions Trading Scheme (to "keep pace with Australia"??!), along with a failure to roll back any of Labour's excessive welfare regimes.

Key also rejected the 87.4% vote in a citizens-initiated referendum about Sue Bradford's "anti-smacking" bill, essentially dismissing the views of 1,470,755 voters. Key and English were also lightening quick to dismiss suggestions from a taskforce led by Don Brash, looking at how to bridge the income gap with Australia by 2025.
The Nats are lucky that many supporters just could not stomach voting Labour, but they would be arrogant to think that jilted members wouldn't protest by finding another party to support in a snap election.

However, Key's strong support of Hide is somewhat interesting, given the media storm over the ACT leader's comments at a fundraiser in Christchurch. Hide told a table of guests that John Key "doesn't do anything", which was entirely correct but a comment obviously not welcomed by the Nats.

Hide (perhaps unfortunately) publicly apologised for those comments, despite being 100% on the money. The National-led Government has done very little to move New Zealand away from social engineering and socialist path engaged by Hillin Cluck's Labour Party over the previous 9 years.

It is certain that a Labour Government in the same position would not have moved so slowly, or been so cowardly in winding back decisions and programmes put in place by the previous administration.

Back in 2005, a slightly less wishy-washy John Key correctly slammed Labour's expansion of the Working for Families scheme as "communism by stealth", but he and English have since refused to scale back state spending even to "mid-Cullen" levels.


* NZ Herald - Key steps in to save Hide's Act job

* Stuff - Brash economic recommendations unheeded

* NZ Herald - Don Brash to Garth George: You're wrong