Any veto would be 9+ months away
April 11th, 2012 at 9:00 am by David FarrarDanya Levy at Stuff reports:
Labour’s proposal to extend paid parental leave looks likely to have enough support to pass Parliament’s first hurdle – but the Government could still block it by using its power to veto costly policies it does not support.
A bill by Labour’s early childhood education spokeswoman, Sue Moroney, drawn from the members’ ballot last week, aims to extend the paid leave from 14 weeks to 26.
The Government’s support partner UnitedFuture, which campaigned during last year’s election campaign on extending paid parental leave to 13 months, could give Labour the numbers it needs to send the bill to a select committee for consideration.
UnitedFuture leader and sole MP Peter Dunne called the bill a “step in the right direction” and said he was inclined to support it.
Even if Labour has the support to pass the bill, Parliament’s standing orders enable the Government to exercise a financial veto on legislation that would have a significant impact on the Budget.
However, there could be enormous moral pressure from both inside and outside Parliament for National not to veto the family friendly bill.
The Government can issue a financial veto certificate under Standing Order 321 if a bill, in its opinion, “would have more than a minor impact on the Government’s fiscal aggregates”.
However Standing Order 323 states a a certificate relating to a bill “may be given only when the bill is awaiting its third reading”.
What this means is that if Labour, Greens, NZ First, Maori, Mana and United all vote for the bill it will have its first reading. It would then go to a select committee for six months, and return to the House for a second reading. If still supported by those parties it would then go to the committee of the house stage, and if reported back from there, then and only then can the Government veto it as it awaits third reading.
So any potential use of the veto is likely to be in 2013, not even this year.
UPDATE: It is worth giving some background to the veto. It was formalised in 1996 in response to MMP, specifically to allow minority governments to govern. If a Government can’t control its own finances, then it isn’t the Government as we know it – we would have a US style Government where the Executive has limited financial powers (and we’ve see how well that system works with earmarks and the lpletoike).
The veto has been used often in the past. From 2000 to 2008 Labour used it on at least a dozen occasions to veto amendments to bills. Also the minority National Government from 1997 to 1999 used it on several occasions, including (I believe) on a bill, not just amendments.
Interestingly even before 1996 there was an effective veto. The Speaker could refuse amendments which had a fiscal impact. The decision was made that it was more appropriate for the Government rather than the Speaker to decide, as they have to manage the consequences.
UPDATE2: The Government has said they will veto the bill, but as I explained above they can not actually do this until after it has completed committee of the house stage and is set for third reading.
Tags: financial veto, paid parental leave, Standing Orders
April 11th, 2012 at 9:07 am
A lot of the speculation is premature, as if a balloted bill has to be instantly decided on in the media and blogosphere.
It should be allowed to proceed through the old fashioned parliamentary process and see what happens at the appropriate times.
Vote:April 11th, 2012 at 9:18 am
Pete – speculation is what the blogosphere and the media live for, it would be a dull old world if they only talked about things that had already happened.
I think it would be very unwise for National to block this bill, if it had majority support in parliament, using a financial veto. Much more likely that National would negotiate to phase in the provisions (and costs) of the bill over a longer time period.
Vote:April 11th, 2012 at 9:28 am
Unlike any other benefit except superannuation, this one isn’t means tested. Can anyone explain why it is a public responsibility to pay wealthy people who choose to have a baby?
Vote:April 11th, 2012 at 9:38 am
homepaddock:
a) wealthy people pay taxes and deserve some benefits
b) we should encourage wealthy people to breed wealthy future generations so we don’t end up with Idiocracy
c) when wealthy people are on parental leave other people get wealthier due to the available positions
d) women can be “wealthy people”
Most women don’t have the advantage and flexibility of being able to raise their babies in the home paddock.
Vote:April 11th, 2012 at 9:40 am
DPF,
Presumably the Bill would go to the Transport and Industrial Relations Select Committee?
The Government has a majority on the Committee (5 National, 3 Labour, 1 Green) and could therefore either:
(1) Recommend the Bill not be passed;
(2) Amend the Bill to (for example) increase paid parental leave from 14 weeks to 15 weeks (rather than 26)
In saying that, the point is somewhat moot. Should Ms Moroney have the numbers in Parliament she could (1) push ahead with the Bill; (2) change it back by way of SOP in Committee of the Whole House.
Vote:April 11th, 2012 at 9:45 am
PS, and wealthy people know all about the benefits of investing now to save money in the future.
Vote:April 11th, 2012 at 9:47 am
@homepaddock – as it’s only for those mothers who were earning already (or fathers who work and choose to take time off) if you are a non-working ‘wealthy’ mother then you don’t receive it.
If you are a working ‘wealthy’ mum then you are already paying your share of taxes so a rebate from the IRD when you have a baby makes sense as it allows you to spend important ‘bonding time’ with your child before returning to work (if that is what you decide to do).
Also it’s limited to $458 per week.
Vote:April 11th, 2012 at 9:53 am
That would be far preferable to the way we pay for mums to get back into the workforce early.
Vote:April 11th, 2012 at 9:54 am
Pete George;
Giving the wealthy benefits is dangerous; especially when they begin thinking they ‘need’ them. They don’t ‘need’ them, they just appreciate extra money so they can indulge in taxpayer funded (WTF!) courses of IVF at age 38, buy overpriced organic baby food a $1500 off-road pram to push Oliver and Amelia around Wadestown/Grey Lynn in. It’s nothing more than a bribe, which we shouldn’t pay, let alone can we afford it. Just look at the mess Working for Families created.
Vote:April 11th, 2012 at 9:55 am
It was good of Annette King to say on ZB this morning “why shouldnt some of the costs be put on the employer”. FFS.
Then she used the line “i love rugby. we can afford a new rugby stadium but not money for new mums”. fuck off. I would rather see the money go on a national stadium! i would argue a new stadium brings more joy and morale to this nation a new “entitlement” would.
im not saying the govt should be building stadiums by the way.. just making the point that it would be a better use of money.
fucking entitlements make me sick
Vote:April 11th, 2012 at 9:55 am
Interesting point – what’s the per-child cost of the ECE subsidy versus this benefit?
Vote:April 11th, 2012 at 10:00 am
Pete and YesWeDid – Benefits are supposed to be for people in need, not a return on taxes paid.
Your reasoning suggests tax is like an investment from which we get a personal return rather than like an insurance premium we pay and get something back only when we need it.
Wealthy people do get a general benefit from tax paid in other ways, as we all do eg in education, health, infrastructure.
YWD – I know it’s only for working women – or their partners – but a wealthy working woman and her partner should be able to support themselves and any chidlren without tax-payer assistance.
I have no argument about the benefits of bonding and breast feeding, I just don’t understand why the public should pay people who can support themselves, especially when the need to return to surplus is so pressing.
Vote:April 11th, 2012 at 10:07 am
Try thinking of it as an incentive for tax payers to breed the next generation of tax payers…
Vote:April 11th, 2012 at 10:07 am
Homepaddock is quite right. I’ve found it odd that our cleaners on $15/hr should have to subsidise Mrs RP who bills at $450/hr. But that aside, why the media fanfare? This one won’t get past “Go”.
Vote:April 11th, 2012 at 10:33 am
James it’s not much of an incentive for wealthy people, more a subsidy for their employers who would have given PPL anyway, and often do still in addition to the publicly funded benefit.
Vote:April 11th, 2012 at 10:44 am
They don’t. Cleaners earning $15 an hour don’t (individually, or I think, collectively) pay enough tax to cover the PPL of cleaners.
Mrs RP, billing at $450/hr almost certainly pays enough tax in a year to more than than cover 14 weeks (or 26 weeks) of her own PPL.
Given the share of the taxes that the wealthy pay, it seems a little miserly to tell them they shouldn’t benefit from them during times of financial stress (which you are likely to be under whenever one partner ceases paying work, almost irrespective of amounts received).
[DPF: I disagree strongly. It is not miserly. It is a huge waste of money to take taxes off people, and then give it back to them. It is called tax churn and is a deadweight cost to the economy.
Welfare should where practical be targeted towards those who need it. We should not over-tax people, just so we can give them a portion of their taxes back as welfare]
Vote:April 11th, 2012 at 10:50 am
Whether it would be claimed as a confidence and supply issue has also been raised, which would force United Future and Maori Party to vote with government. Dunne commenmts on this: (from FB):
I think National will have to tread very carefully considering use of the veto (C&S seems superceded by this option). I expect they’ll do their usual research and find that it’s something heavily supported by women – it’s mostly men arguing against it.
Vote:April 11th, 2012 at 10:54 am
I don’t see why my parents should pay for people who have more money than them to have children.
Vote:They had to pay for other people to have children when they were young (’70s), they missed out on recieving the benefits when I was a child, and now they are being asked to pay again and again now they are “empty nesters” trying to afford a modest retirement.
April 11th, 2012 at 10:56 am
so..this will give the opposition parties nine months to bash national with this stick…
..they will likely get their arguments finely-honed…eh..?
..and the gods weren’t smiling on national when this one was drawn from the ballot..
..esp. because the public support for this is so high..
..and i dunno about the/us mug-punters accepting the ‘we can’t afford it!’ handwringing/arguments..
..(dosen’t joyce do a good/believable uriah heep…?..he has the perfect dead/cold eyes for the role..)
..becaust that argument loses potency when they remember that this govt paid out ($1.8 billion was it?) to the looters of south canterbury finance..
..the reasoning being:..if they can afford $1.8 billion for that..
..they can afford $150 million for the widespread good this one will deliver..
..(and hard to argue against that sort of reasoning…as national/key will find out over the next nine months..
..i am picking they will cave long before that…if they don’t..even more poll-perfidy will be their lot..
..how can it not..?..)
phillip ure@whoar.co.nz
Vote:April 11th, 2012 at 11:00 am
gazzamaniac – I suspect the families that earn more money than your parents are paying enough taxes to more than cover their own PPL.
Vote:April 11th, 2012 at 11:00 am
A compromise would be to double the holiday period and halve the amount of the entitlement.
Vote:April 11th, 2012 at 11:03 am
..i can’t type..
..i can’t formulate an argument to save myself…eh?..
..i am a bum and don’t have a job..
..i once told everyone i sit at the library on the internet but i don’t even know where the library is..
..the laughing stock of the blogosphere…eh?..
..something irrelevant..
..nobody knows what the fuck i am talking about…eh?..
Vote:April 11th, 2012 at 11:04 am
Graeme – then why do they need PPL? If they want time off they can afford to pay for it themselves.
Vote:April 11th, 2012 at 11:06 am
Graeme – that’s an argument for lower taxes not PPL. Far better to let people keep more of their own money than churn it through a bureaucracy.
Vote:April 11th, 2012 at 11:07 am
“..and now they are being asked to pay again ..”
i didn’t realise it was coming directly out of their pension..
phillip ure@whoar.co.nz
Vote:April 11th, 2012 at 11:12 am
Yep, lets spend some more.
And lets make sure we model European policies as they show to work so well.
Stock and bond markets rocked by fears of Italian and Spanish debt spirals
Global stock and bond markets suffered a rout as traders fled the renewed spectre of a eurozone default and fresh evidence of a global recession.
http://www.telegraph.co.uk/finance/financialcrisis/9196534/Stock-and-bond-markets-rocked-by-fears-of-Italian-and-Spanish-debt-spirals.html
Vote:April 11th, 2012 at 11:13 am
I’m not using it as an argument for PPL, I’m using it to argue that particular arguments against PPL are unsound.
There are good arguments for PPL and good arguments against it. That it is a tax on the poor to subsidise the rich is not a good argument.
Vote:April 11th, 2012 at 11:21 am
The financial veto goes way back into parliamentary history and originates from the Westminster Parliament. It is designed to prevent parliament committing the Government to pork barrel spending. You can be sure Sue Maroney will not have done any analysis of the fiscal implications nor the employment consequences for women of child bearing age.
Vote:April 11th, 2012 at 11:25 am
philu – they’re in their 50s, they don’t get a pension. They work for a living, unlike some. Dickhead.
Graeme – I think the debate should be about the role the government should play, and the size of the government. And yes, a tax on the “poor” to subsidise the “rich” (and both sides are neither, since they’re both really either end of the middle part of the spectrum) is a perfectly good argument against it. They would be better off cutting taxes for everyone and letting everyone decide for themselves what to spend it on.
Vote:People earning under $50k per year shouldn’t be subsidising people over $100k (or millionaires for that matter).
April 11th, 2012 at 12:11 pm
If the Nats had any cojones they would make this a confidence vote, if it passes the government falls.
Vote:Of course it would piss a lot of women off but the Nats do not need their votes
April 11th, 2012 at 1:19 pm
“..they’re in their 50s, they don’t get a pension. ..”
once again..i didn’t realise it wd be directly debited from their income..
..aren’t you personalising the impersonal..?
phillip ure@whoar.co.nz
Vote:April 11th, 2012 at 1:21 pm
I assume that this will cover ALL new mothers, whether they are working or not ?
Vote:April 11th, 2012 at 1:23 pm
and the plight of the double-income empty-nesters..eh..?
..(we don’t hear about that often..)
phillip ure@whoar.co.nz
Vote:April 11th, 2012 at 1:25 pm
phil – it is deducted directly from their income. It is called tax, and it will be higher (or they will get a lesser future tax cut) if this scheme ever gets implemented, than if not. It is the same as WFF – the government needs to tax more to pay for it.
But you wouldn’t know about income tax, since you’ve never had to pay any.
Vote:April 11th, 2012 at 1:27 pm
phil – the “plight of the double income empty nesters” depends entirely on how big that “double income” is and on how big the asset base of the couple is.
Vote:April 11th, 2012 at 2:11 pm
‘It is the same as WFF – the government needs to tax more to pay for it.’
Look National are in charge so it’s not ‘tax more’ but ‘borrow more’.
And I wouldn’t worry about your empty nester parents; they aren’t going to have to pay for all this debt, it’s those kids you are moaning about whose parents are getting a few dollars PPL, they will be working off this generations debt (and buying this generations over-priced houses and paying to go to university to pay for this generations super…..)
Vote:April 11th, 2012 at 3:05 pm
And those kids will end up not getting WFF for their kids, and after their kids leave home they’ll get a labour government who will bring it back in, meaning they will have to pay and pay and get no benefit from it – they’ll be in the same situation as my parents but in 2060 instead of 2012.
Vote:April 11th, 2012 at 4:29 pm
But any announcement of a veto might be today.
It will be interesting to see how “pragmatic” the public reaction is.
Vote:April 11th, 2012 at 5:32 pm
Well that was a quick 9 months…eh?
[DPF: Well the Government can not use it for nine months or so. All they can do is announce their intention, which they have done. Won't stop it passing first reading and going to select committee]
Vote:April 11th, 2012 at 6:02 pm
The Government was only recently explaining how it was borrowing $200 million a week. That makes the bill of $150 million a year for this look like peanuts. So spinning the veto as pragmatic is going to be pretty hard work for the Government, unless they can show it will cost a lot more (and I’ll bet treasury is working hard on that right now).
Vote:April 11th, 2012 at 6:19 pm
“.aren’t you personalising the impersonal..?”
Something you would never do right Phil
Vote:April 11th, 2012 at 6:36 pm
watch national plunge in the polls…
..really..when you consider the wide benefits…and how we so lag behind the rest of the world..
..(brownlees’-folly…finland..has one year..)
..(150 million is relative chump-change…)
..when compared to both the borrowing for the tax cuts for the rich..and the south canterbury finance-looting by the elites/1%..
..and most people can see all that..
..and i guess lots will finally realise that this government isn’t there for them..
..but is running some crony-capitalism-scam…
..national are going to tank over this one..and it will dog them for the rest of this term..
..a big stinking dead-albatross they have slung around their own knecks..
..(it’s gonna be fun to watch..)
phillip ure@whoar.co.nz
Vote:April 11th, 2012 at 6:52 pm
[DPF: Well the Government can not use it for nine months or so. All they can do is announce their intention, which they have done. Won't stop it passing first reading and going to select committee]
Is there any point in proceeding if it’s a dead duck already? Seems like a waste of parliamentary time and effort. Does it just become a farce, or do parties use it for some politicking (which would be a farce)?
Vote:April 11th, 2012 at 7:13 pm
Philu
Have you done a cost/benefit analysis on $150m pa. and ranked it in priority along with other demands for a limited resource?
Vote:Where does it rank and how have you measured the rankings?
April 11th, 2012 at 7:55 pm
What is annoying is that National is only arguing against it on the basis of affordability. No attempt to actually debate the merits of middle class welfare. As far as one can tell the Nats fully endorse middle class welfare! They just need to get the tax take up enough to be able to pay for it.
Vote:April 11th, 2012 at 8:58 pm
no nookin..i am taking a macro-view…
..as will most others..
..this is one of those gut-issues..
phillip ure@whoar.co.nz
Vote:April 12th, 2012 at 3:00 pm
” If a Government can’t control its own finances, then it isn’t the Government .” You should have stopped the sentence there. The veto is a bloody silly idea. Either the government has supply and confidence and governs or can’t get through / prevent legislation and should resign.
Vote: