Budgeting expectations: New Zealand Fiscal Budget 2018

Today is the day that New Zealand and the world see the first budget of the Labour-New Zealand First-Greens coalition Government. It will be the first delivered by Labour Treasurer Grant Robertson. In anticipation of the budget, here is a recap of what has been announced and what can be expected.

The broad shape of some large expenditures have already been announced. The details that are still to follow on these will come later as those expenditures are put into effect. So, what are they?

  1. Transport – A total of $28 billion has been announced for fixing transport in Auckland, a sum that caught many by surprise, and which will be spread out over a 10 year period
  2. Housing – KiwiBuild was given a N.Z.$2 billion capital advance in December to get underway the construction of 100,000 new homes in New Zealand, and $100 million was allocated in the first pre-Budget announcement of which $37.1 million comes from existing budgetary measures
  3. Christchurch – The Government made significant election promises to Christchurch, which include supporting commuter rail, assistance for those struggling with insurance claims
  4. Foreign Affairs – you can see my earlier article acknowledging the $1 billion allocated to the Pacific and other aspects of New Zealand foreign affairs, but it is worth noting the reopening of the embassy in Sweden which closed under the National government

With so many big announcements already made, one might be wondering if Labour has any more tricks left in the bag. Mr Robertson will no doubt be acutely aware of other areas of funding for which announcements will need to be made at some point. They include the courts, prison and Police so that we may get on with dealing to the methamphetamine epidemic taking hold as well as trying to address why going to prison does not seem to be working as a sentencing tool.

At some point Mr Robertson will also have to address the potential of a nurses strike for better pay and conditions, which if answered will cost several hundred million dollars. In this case though, I wonder if it not so much an inadequate budget as inept District Health Board planning – shortly after Labour was elected in 2000 I heard that scrapping the District Health Boards in favour of a central funding model would save $750 million per annum, and whilst I am not necessarily suggesting such a move, a review of them is tempting.

Other areas that will need an increase in funding are Research, Science and Technology – New Zealand has lagged behind other O.E.C.D. countries for years in terms of investment into science. Some scientists have observed what appears to them to be a war on science by politicians with agenda’s that do not necessarily conform to the known facts, particularly around environmental issues.

I personally doubt Labour will make any radical new announcements today. Most of what happens I suspect will be building on existing announcements. Still, this is a big day for Labour, New Zealand First and the Greens. Voters, despite National’s attempts to show the contrary will probably go easy on them until a sense of direction (or lack of)becomes obvious.

Mr Robertson will deliver the Fiscal Budget at 1400 hours.


Centre-right commentators show their desperation

When National lost the election in 2017, the centre-right of New Zealand politics was in a state of despair. Shock! Horror! How could Winston Peters support a centre-left Government?

Quite easily it seems. After all, Mr Peters did leave National in 1993 to form New Zealand First because he thought that the market policies of the party were going to cause irreparable social damage to New Zealand. He had opposed asset sales as a means of raising money and many of his supporters felt betrayed by both major parties.

Determined to get back at the Government that they are convinced is going to turn New Zealand into a socialist nirvana, the centre-right have wasted no time trying to undermine in any way they can the new Government. But there is just one problem: their cheer leaders seem to forget National were not any better at the same time in early 2009.

Mike Hosking, well known as a avowed National Party supporter, has spent much time trying to give the appearance of the centre-left Government of Prime Minister Jacinda Ardern being a disorganized, ill disciplined group that has no plans. He has been joined in recent days by columnist John Armstrong, who has criticized the Governments handling of the spy situation regarding Russia.

But are they disorganized? We are talking about a Government that has not even had time to deliver its first fiscal budget. We are talking about a Government that has not even reached the six month stage of its first year in office.

The situation with the Russian spies is one such case of the centre-right commentators trying to cast a misleading appearance. The New Zealand Secret Intelligence Service says it is not aware of any Russian spies operating in New Zealand. That is not to strictly say there are none, but that the Government is not aware of any and thus cannot expel anyone. It is also important to note that the New Zealand Government preferred to ascertain how New Zealand might be affected before it announced measures against Russia, instead of rushing into a knee jerk reaction.

It also smacks of hypocrisy. China most probably has significant spies in New Zealand, and indeed some people wonder if because of his training the National Party have a former Chinese spook in their ranks. Jian Yang denies he is a spook and so does the National Party, yet the latter works hard to cultivate significant Chinese investment here – no problem with that – but was often silent when credible concerns were raised about Chin

Another claim being made is that the Government has no plans. This could not be further from the truth. A quick look at the list of Bills of Parliament that are open for public submissions on the Parliament website show Bills of Government and a couple of ones submitted by Opposition parties. More importantly those Bills represent some substantial changes coming:

  • The Employment Relations Bill deals with a wide range of changes to employment law that the Government intends to put into law
  • The Charter Schools Bill ends the charade that is charter schools
  • International Treaty examination of the Comprehensive and Progressive Trans Pacific Partnership
  • Education (National Education and Learning Priorities)Amendment Bill
  • Education Amendment Bill

So, the Opposition and the centre-right commentators can grumble all they want, but how much better had the National-A.C.T.-United Future coalition done at the same stage of their nine years in office? From memory, it was about the same time that their lack of a long term plan for New Zealand was in the early stages of revealing itself. I gave that Government the benefit of the doubt until about mid way through their second year, so I intend to do the same with this one.

The maverick that is Shane Jones

I imagine most Houses of Representatives around the world have a maverick or two in them – slightly unhinged, seemingly clever and charismatic, yet one for any party leader to keep a wary watch on. If that is the case, Shane Jones of New Zealand First is undoubtedly one of this community.

Mr Jones entered Parliament as a Labour M.P. in 2005 and served until his departure in 2014. He was Minister for Building and Construction from October 2007 through to Labour’s defeat in 2008. He was found to have used a credit card to hire pornographic films and to charter an executive jet at cost of $1,200 when his schedule allegedly changed. This led to him being demoted in Labour and stripped of his shadow portfolio’s.

Viewed as a potential vote winner by some, Mr Jones extensive networks in Maoridom, his chairmanship of the Waitangi organizing committee give him considerable influence. His support of Talleys and Sealord, both of whom have been linked to Mr Jones’ various election campaigns, however may put him offside with the union activists for supporting the companies attack on the largely Maori Afco workforce.

Later Mr Jones was at the centre of a citizenship probe when he was found to have supported a Chinese businessman wanting New Zealand citizenship on humanitarian grounds. Whilst the charges against the businessman, William Yan were dropped eventually, Mr Jones was investigated by the Auditor General at the request of the then Labour leader David Shearer.

Mr Jones however also has his critics and they are many. They range from New Zealand rank and file members through to members of the public. Their reasons for opposing Mr Jones range from his questionable history in the Labour Party; his lack of coal face time in New Zealand First – he got selected over and above candidates who had been with the party for several years; concerns about whether or not anyone would be able to keep Mr Jones in check should he start rabbiting of to the media. Another cause of concern was that Talley’s fishing company was bankrolling Mr Jones’ 2017 election campaign.

Mr Jones however has gone himself into a potentially damaging mud fight with Air New Zealand. For years the national carrier has been slowly cutting out Link routes such as those that go to/from the Kapiti Coast. This week in a rather ugly spat claims and counter claims all came to the surface in a way that does not really cast any of the major players in a favourable light.

In the course of the dispute so far Mr Jones who is Minister for Regional Development lambasted the Chief Executive of the airline, as well as the Chair of the Air New Zealand board. This followed a decision by Air New Zealand to cut some regional links that are viewed as important to the well being of those regions. The airline hit back, stating that any view of a lack of independence would be view as damaging to the interests of all involved, including the Crown. However the National Party alleges that Mr Jones accepted an R.S.V.P. to attend a dinner hosted by Air New Zealand that would feature former United States President Barak Obama.

Prime Minister Jacinda Ardern told Mr Jones to tone down the attacks on Air New Zealand. It remains to be seen whether this maverick Member of Parliament, Minister for Regional Development and apparent friend of New Zealand First leader Winston Peters will comply or keep up his attack.

The Government’s looming water fight

There is an issue simmering in the background of New Zealand politics that threatens to split the Government. For all the scenes of unity and co-operation coming out of the Beehive, a combination of an ideologically divisive issue, indigenous claims to ownership and fears of a gravy train is threatening to erupt into a major three way water fight.

There are several major issues with the way the use of fresh water is governed in New Zealand, not least:

  1. Iwi have significant claims vis-a-vis the Treaty of Waitangi to how water is used, and the aesthetic properties of fresh water bodies such as the mauri or life force
  2. Everyone by biological default needs clean drinking water – which makes this a medical issue, as well as a planning issue for councils
  3. The rate of use in New Zealand is not sustainable – the known fresh water resource in many catchments is 100% allocated
  4. On numerous waterways, the minimum flow set by regional councils is too low and subsequently the creeks, streams and rivers in question are not able to perform its natural functions as well as they should

The politics of water became complicated long before the Government of Prime Minister Jacinda Ardern took office. Having a minority Government with two significantly smaller minority parties propping up a larger party and all of them having significantly different views of water as a resource, has only served to complicate the picture further.

So, why do I say a fresh water fight is looming? Simple. The Green Party is categorically opposed to further irrigation projects siphoning off more of New Zealand’s precious fresh water resource. New Zealand First’s drive for the rural vote might intersect this. But it will not be that which starts the water fight. It will be the Government attempt to address water rights with Maori and the potential – as New Zealand First believes – to start a gravy train of other claims.

I am of the belief no one person, company, party, country or other entity can claim ownership of water as a resource. Its common physical properties mean everyone needs water to survive. Everyone needs it for hygiene, drinking, cooking purposes at the very least and that the totally fundamental common nature of this resource means that by default if a claim can be made at all to ownership, that claim is made by all people. All people have a common responsibility to ensure the stewardship of water is sustainable.

I agree with New Zealand First that Maori should not have ownership rights per se. One reason is the potential for a gravy train of other claims to form in terms of natural resources. The slippery nature of the slope and where New Zealand might end up as a result of being on it, suggests to me that this is an issue that might be best avoided altogether.

And so, New Zealand First and Labour’s first big scrap is looming. Unavoidable, but perhaps too big to want to try to avoid. Before anything happens in Parliament, a lot of water is going to flow under the proverbial bridge.

Labour surges; National dives – and a smorgasbord of issues demand action

A new political poll came out yesterday, which put Labour ahead of National. Prime Minister Jacinda Ardern’s popularity is also well ahead of out going National Party leader Bill English.

The recent poll of support for our political parties should not really come as a surprise. Despite the best attempts of the National Party to get a fix on Ms Ardern and her Labour led minority Government, Ms Ardern’s popularity is soaring just like her party’s.

At 48%, Labour’s support is the highest it has been in 15 years. It would have have enough to be able to jettison one of its minor support parties and govern with the other. In this case it would not have any choice, as on current support of just 5% the Greens would be the only one returned to Parliament. At 3% New Zealand First would not be returned to Parliament, the lowest support that the party of Winston Peters has seen in nearly a decade.

If an election were held today, these results would show a radically altered Parliament.

  • LABOUR = 48%/58 seats (59 seats)
  • NATIONAL = 43%/52 seats (54 seats)
  • GREENS = 5%/6 seats
  • ACT = 1%¹ = 1%/1 seat

¹David Seymour holds the Epsom seat, thus A.C.T. has a place in Parliament. ²Remaining seats needed to fill the 120 seat Parliament come from the party lists.

But the real pressure on Labour is still to come. The real pressure comes from the smorgasbord of issues demanding action from a Government that promised much. Issues with crime, the economy, mental health, waste, education and a host of others are ringing loudly. In a year where the rise of particular social movements – one calling for better recognition that sexual harassment is totally not okay, and the other a seemingly sudden declaration of war on single use plastic – Labour can grab an opportunity to steal a march with legislative changes or other support to shore up its base.

Labour needs to be careful though as many of the other issues are ones where normally one hears an emphasis on them from conservative parties, such as justice and the economy. Labour needs to move on one or more of these to deprive National of political oxygen. With almost daily violent crime being reported up and down the country, and an alarming level of it involving drug addled individuals wielding weapons, it is not a great look for a country that prides itself on being safe.

So, whilst Labour can take some pleasure in the results, there is much to be done and the public are hungry for action.