Colin James on strategy

February 8th, 2011 at 10:00 am by David Farrar

Colin James writes:

Several one-off factors will conspire to make this year feel OK, if there is no new international shock. But getting the economy solidly based will take a decade.

This is not an argument about the budget, though it shows up there. It is about how to earn our way. For 40 years we did not, culminating in a bubble economy from 2002 – what Bill English has taken to calling “pinko- economics”. We still don’t.

Getting to equilibrium requires a massive shift from consumption to exports: start with a $5 billion lift in savings just to hold net liabilities at 85 per cent. That requires both a mindset shift and an interlocking set of policies: tax (more to do yet), savings (some initial ideas from the working group), more rigorous asset funding and management (the December investment statement and the SOE selldowns), tighter management and trimming of welfare rolls (the working group reports in two weeks) and maybe a bit more support for innovation.

I think James is right on the time–frame – it probably will take a decade.

AT LEAST that is the Government’s current strategic mix. A major challenge will land soon in the form of the much-delayed report by Chief Scientific Adviser Sir Peter Gluckman’s group of social scientists, fresh off the back of high-level international academic backing for the Dunedin longitudinal study’s findings that much teenage failure and crime stems from fixable bad starts to life.

The Gluckman report will make 10 or 12 major and many detailed recommendations: an expensive programme but ultimately a strategic economic investment.

That report will be fascinating.

Mr Key can’t stretch that far yet. But that he, with Mr English pushing, has taken on the SOE selldown bogey to get a longer- term return suggests he intends his second term to have purpose and he figures that purpose requires strategy, not ad hoc tactics, and longer-sighted policy, not myopic poll-watching. In fact, to look purposeful, strategic and a capable economic manager is shaping as his election campaign theme.

It is too early to tell if Mr Key really has gone strategic. But the past few months look like a turning point. Look again this time next year.

Key steps on the way will be what gets announced today by the PM, the 2011 budget and then finally the election manfesto.

Colin James on Key

July 13th, 2010 at 3:00 pm by David Farrar

Colin James writes:

How long will John Key stick around? Even before Kevin Rudd was suddenly rolled last month, this question was doing the rounds in the Wellington political hothouse.

The speculation goes like this: Key has not come to the top job with a burning ambition to change the world in a particular way, as distinct from a desire to do some good; he is not a career politician despite a teenage desire to be Prime Minister; he is not a loser and won’t want to go out on a loss; he has the sort of personality that could enjoy time at the top and then move on.

I think this is fundamentally correct. I don’t think John Key wants to try and break Seddon’s record as longest serving Prime Minister. He is not a Helen Clark who still seethes at being removed from office after *only* three terms.

Add into the mix the gulf between Key’s written speech notes and what he actually tells audiences. Audiences, particularly of businesspeople, often leave enthused by Key’s energy and optimism and with a much more uplifting sense of his purpose than they would get from the formal speech.

Key is definitely at his best when talking to (not at) an audience. He shares very candid assessments on issues such as Afghanistan in a way which makes the audience feel he is talking to them as equals, not lecturing them.

National has a leader who can win power, win hearts and minds and keep Labour out. And one likely to edge, term by term, in a business-friendly direction, as John Howard did in Australia.

The direction is more important to me than the speed.

This term Key has a super-majority, with ACT to support some measures and the Maori party to support others and deliver some Maori voters.

If in the next term National needs both parties for a majority (likely if, say, Labour gets 38 per cent and the Greens 6 per cent), managing their antithetical positions to pass contentious legislation will be very challenging — or paralysing.

Even if there is a super-majority again (a real possibility), can Key keep both in the tent?

He has given the Maori party some big mana wins and whanau ora. There is not much more mana he can deliver without upsetting conservative National members and voters.

This is an issue I’ve been reflecting on in recent months. The Maori Party have done pretty damn well under this Government. I don’t expect any other major policy “gains” before the election. But what few have thought about, is what will they want in a second term? It is unlikely to just be an implementation of existing policies. And as Colin James says, what they want may be just too much for National supporters. The second term will be far more challenging.

And all the while, the economy will not be flying high and might even have another bad turn, given the debt-driven turmoil and huge uncertainties in the global economy. The 2014 election might look grim. Will Key want to risk a loss?

I can’t see Key retiring in just his second term. I absolutely can see a scenario where he retires say 18 months into a third term. Key has said he doesn’t want to leave the job of PM angry considering that it is a huge privilege to be one of around 40 NZers who have held the job.

So I think Colin’s column is quite perceptive, but that he is a term too early.

Work Testing and the Bill of Rights

March 30th, 2010 at 1:00 pm by David Farrar

Colin James writes:

Paula Bennett says “most people” will see last week’s welfare changes as “fair and reasonable”. She is almost certainly right. But is that the limit of her ambition?

A majority doesn’t make something right. Attorney-General Chris Finlayson, a lawyer’s lawyer, ruled that, under the Bill of Rights, Ms Bennett’s changes are not fair: they discriminate on grounds of sex, marital status and family status in applying the work requirement to those on a domestic purposes benefit whose youngest child is six but not to those on a widow’s benefit or a woman alone on the DPB. Her new law does not qualify for exemption from the Bill of Rights either on the ground that it “serves an important and significant objective” or that it is “proportionate to that objective”.

I’ve been meaning to blog on this issue. It is important to understand that what the Attorney0General has said is not that work-testing beneficiaries is against the bill of rights, He has said, that applying the work test to the DPB but not the Widows Benefit is unjustified discrimination.

He’s right. But the solution is not to not implement work testing. It is to indeed apply it to the widow’s benefit and woman alone benefit also.

In fact I would go further. I would abolish those benefits. They were well intentioned benefits from the days when most women did not work, and relied on their husband’s income. Those days are gone.

I would grandfather in existing recipients, and have some sort of temporary allowance(say six to 12 months) for any non working person who relies on their partner’s income, and the partner dies. It should apply to both genders, and after a period of time, then they should be in employment or go onto one of the mainstream benefits.

The widow’s benefit and woman alone benefits are sexist relics of our past. They were necessary when we lived in a society where women were not encouraged to work, but as 50% more women are now going to university than men, those days are long ago.

Colin James gives Turia Politician of the Year

December 21st, 2009 at 2:00 pm by David Farrar

Colin James writes:

The Maori Party’s Mr Harawira also spent taxpayers’ money on personal fun, in Paris. Confronted, he reverted to Hone, the abusive teenage protester. For that he earned a grandmother’s fierce disapproval.

That gutsy, determined kuia five years ago held off Labour’s heavy hitters and earned their fury for what they saw – and see in exchanges as late as last week – as duplicity. She went solo and now has four MPs alongside her. The party’s future is far from secure and many National policies are anathema to its voters. But it is in the game and winning points.

In that game it is Tariana Turia who anchors the party. Whacking Mr Harawira quarantined a threat to its important third constituency (after two sorts of Maori): an intrigued and respectful white middle-class that ungrudgingly (so far) concedes the points the party wins.

Mrs Turia is my politician of the year.

Kiwiblog readers also voted Tariana the Minor Party MP of the Year. I can recall the days when she was seen as electoral poison. She has achieved something quite remarkable with her establishment of the Maori Party, as I suspect it will be one of the four parties still existing in 2030.

Parliament and the Courts

September 11th, 2009 at 2:00 pm by David Farrar

The Australasian Study of Parliament Group had a seminar in the Beehive on Wednesday on the issue of Parliament and the Courts.

The first speaker was Professor Philip Joseph, who is widely considered the leading constitutional scholar in New Zealand.

Professor Joseph discussed the issue of parliamentary sovereignty and whether or not it exists or is absolute.  There were references to musings from Lord Cooke and Chief Justice Elias that such sovereignty is not absolute.

This does not mean that the judiciary is sovereign either. In fact the theme pushed was neither institution was sovereign, and there is mutual respect for the roles of each, with boundaries between them.

There was a suggestion you could call this co-sovereignty, looking at it being the Crown through her Parliament and the Crown through her Courts being co-sovereign, but sovereignty tends not to be shared (the Roman Republic did effectively share it through having two Consuls but that didn’t work too well eventually).

The example by CJ Elias was whether the judiciary would uphold a law that (for example) said all blue eyed babies must be killed.  Of course that would never be passed (and if it was, the Governor-General might not assent to it) so it is an academic argument.

Professor Joseph said that the rule of law does exist outside of legislation and that it pre-dates the concept of parliament sovereignty by many hundreds of years.

An example would be in countries that have had a coup. Often the judiciary will adopt or refer to the doctrine of necessity to maintain the rule of law – even without legislative backing.

The second speaker was Labour MP Charles Chauvel, in his role as Chairman of the Privileges Committee. He had some interesting historical facts such as how Magistrates were not seen as Independent Judges until just a few decades ago, and how the Minister of Justice used to actually be accountable in the House for their decisions.

His main theme was respecting the boundaries between Parliament and the Judiciary, and how the Privileges Committee decision to recommend limitations on an MPs ability to breach a court suppression order, helps respect those boundaries – especially as it was initiated by Parliament voluntarily.

He took a swipe at both Justice Minister Simon Power and his colleague Trevor Mallard for their recent comments, plus also at Attorney-General Chris Finlayson for not publicly defending the Judges concerned. Power criticised CJ Elias’ call for prisoners to be released early and Mallard criticised the lack of jail in the Moses exorcism manslaughter case, saying they would have got jail time if they were not Maori.

Chauvel said he thought both Power’s and Mallard’s comments pushed against the boundary of mutual respect, or comity.

In fact he revealed the Opposition was concerned enough about Mallard’s comments they their Justice Spokesperson wrote officially to the Chief Justice disassociating themselves from the comments, and saying he was speaking as a local MP only and not on behalf of Labour. The letter and response from the CJ was shown briefly on the screen.

The seminar was well attended and ably chaired by Colin James, with extra chairs having to be found for everyone. Definitely only a topic for constitutional geeks, but it is a fascinating area for New Zealand as one of the few countries with no written constitution.

Colin James on tax

August 24th, 2009 at 10:04 am by David Farrar

Colin James writes:

Three interlocking principles underlie the group’s approach: tax should be fair, efficient and sustainable. Taxpayers should feel they are paying a fair share and everyone else is, too. The tax system should cost no more to run than necessary and should contribute to productivity growth. And it should survive over time with limited need of repair.

To meet these principles the structure should be coherent, should have integrity – there should not be incentives to avoid or minimise tax, for instance, by channelling income through trusts, as large numbers have done this decade – and should be simple to administer and comply with.

During the past 10 years tax changes have chipped away at coherence, integrity and simplicity. The top income tax rate was raised, Working for Families added complexity and high marginal tax rates for some, special rates were set for some long-term saving and KiwiSaver added more complexity.

In addition, aggressive bracket creep lifted the proportion of income ordinary folk paid in income tax. Add that many other countries, including those we most compare ourselves with, have cut some tax rates, notably on personal and company income.

Australia cut tax rates every year for the last eight or so.

Next, note the global movement of people, capital and finance. There is a strong argument for taxing immobile factors, such as land and spending, and not internationally mobile ones, such as company and personal income and investment.

Yep. The challenge is how you do that, without significantly disadvantaging people who have made decisions based on the status quo.

There was a chorus of complaints last week that raising GST would disproportionately hurt the less-well-off. And it would. But over their lifetimes, many less-well-off people increase their incomes. And in any case, the group argues, it is better to compensate the less- well-off through spending measures than by manipulating the tax system. But is the group exploring all options for broadening the tax base?

This is key. The tax system should be as simple and efficient as possible. If that creates problems for those on low incomes, then the welfare system is the better option to use, than having an inefficient tax system.

The final Colin James article in the Herald

December 30th, 2008 at 8:44 am by David Farrar

The Herald has dropped Colin James after ten years, so today is his final column. If you want to receive his weekly column by e-mail, contact him directly.

In his final column, Colin looks at all the reasons why NZ can still prosper, despite the credit crisis and its aftermath.

Colin James on Economy

October 28th, 2008 at 6:43 am by David Farrar

One sentence worth extracting:

Helen Clark has resurrected a goal of getting into the top half of the OECD in wealth but is promising more of the policies that have taken us down, not up, that ladder.


Colin James on National’s candidates

August 13th, 2008 at 11:00 am by David Farrar

Colin James touches on some of National’s new candidates in his column yesterday:

… the parliamentary party’s future looks brighter now than for a very long time. That is not because National is streets ahead in the polls and odds-on to lead the next government. It is because there is an impressive crop of late-20s to early-40s new candidates: Nikki Kaye, 28, in Auckland Central, part-Maori Simon Bridges, 31, in Tauranga, Amy Adams in Selwyn, Sam Lotu-Iiga of Maungakiekie and Louise Upston in Taupo, all 37, Todd McClay, 39, in Rotorua, and Michael Woodhouse in Dunedin North and Melissa Lee, both 42, on the list.

Most of these hold multi-degrees, some with first-class honours, and have useful life experience. In intellectual potential they look more like a Labour intake than a traditional National one. Add Harvard- and Oxford-alumna Hekia Parata, 49, and media mogul and campaign chair Steven Joyce, 45.

The class of 2008 looks to be indeed a good one. I just hope as many of them make it in as possible.

So when National ranks its list on Saturday it has rich pickings. A Prime Minister Key reshuffling cabinets would have quality replacements for old lags he could not avoid initially appointing.

Indeed. If National wins in 2008, I would not expect initial Ministers to serve a full nine years (if re-elected). Rejuvenation is key and I would not be surprised if by 2011 the majority of Cabinet is taken from the classes of 2005 and 2008.

The message to Labour when it does its list on August 30 is that to stay competitive it will not be able to afford passengers. That is a crunch test for Clark.

Labour have a real challenge. Will they protect incumbent MPs as they usually do, or put enough new blood higher up the list, so that they will come in even if they get a poor result.

No more one pagers please

July 29th, 2008 at 8:22 am by David Farrar

Colin James has beaten me to the punch, on the issue of National’s one page policy papers:

So in behind the bland one-pagers lies quite a lot of study, consultation with outsiders and internal shadow cabinet debate. A 34-page paper backed the workplace relations one-pager. Law and order policy was well footnoted.

That applies in all major policy areas. In some, such as education, welfare and the environment, the background papers have been reworked over some years. Immigration and local government papers have been honed down. In some, as in housing, science and in a complex set of policies on infrastructure, some work remains to be done. In some, the background is essentially a statement of principles.

In 2006 Key, freshly leader, backed an English programme to publish discussion papers, to be refined into policy after feedback (much as Kevin Rudd did in Australia). But only a handful emerged before the health paper’s bungled release last September abruptly ended the process. Now some policy is being released without the supporting papers. Outsiders have to take on trust that the policy is based on solid thinking. Key read out to me the workplace relations paper’s headings but I have not seen it.

Having previously worked in Parliament, I was pretty certain that there was a lot of work and detail behind the one page policy summaries, and Colin has confirmed this is the case – which is good.

99% of NZers are not interested in the details. In fact they won’t even remember too much from the one pagers – the average voter will have a vague idea of half a dozen key policy pledges probably.

But the 1% do not want the detail behind them. The 34 page backgrounder on workplace relations for example probably has some great details on how the 90 day trial period works overseas, the issues around the Holidays Act etc. Releasing the background paper doesn’t detract from the one page summary – it complements it. It demonstrates the work done by Spokespersons and staff over the last two years.

Yes, Mallard will jump up and down over a minor detail on page 27 and scare monger about it. But Trevor will scare monger on the smell of an oily rag. Don’t let the fear of scare mongering detract from showing to pundits and the public that the policies National is campaigning on are based on extensive research.

So can we have the full policy background papers please. If you don’t want to release them on the day of the main policy that is fine, but can we have them at some stage.

Blog Bits

June 10th, 2008 at 6:42 pm by David Farrar

Karl du Fresne calls the Media 7 show on the Pacific immigration debate a gang-up on Dom Post Editor Tim Pankhurst.

Steven Price points out to the Ministry of Justice that their site for court decisions of public interest, is missing all the interesting ones. To be fair I think it is up to the Judge to tick the box on whether it should go there, but regardless someone in the Ministry should use their common sense and make sure the EFA judgements and the abortion law one go up asap. The latest EFA is here for those who want it.

JafaPete asks whether people are just voting for change for change’s sake. He agrees with Chris Trotter that the anti-smacking bill may have been a turning point. He also says the EFA may have had an impact on the Government’s unpopularity.

No Right Turn covers the abortion debate and High Court decision. I am not surprised with the High Court ruling – it has been apparent for some decades that we have a de facto abortion on demand regime, despite a legislative framework that reserves it for serious danger to physical or mental health. Now I support abortion (up to a certain date) on demand and even though it would probably be a very heated debate, the proper way to change laws is through public vote or the legislature – not through the back door. The issues were covered on this blog back in March, and in a sign of hope it was a reasonably rational debate with analysis, not just name calling.

Graeme Edgeler covers issues in the Criminal Procedures Bill, and does a summary of each of the dozen or so changed. Excellent.

Colin James is not a blogger (in fact I would call him an anti-blogger!) but his op ed on inflation is worth reading.

Colin James on Key and Broadband

April 26th, 2008 at 10:04 am by David Farrar

A typically thoughtful column from Colin James:

So Key wants voters, especially those under 45, to contrast big plans for broadband against buying back the trains. There is a century-and-a-half between the two inventions. …

But that misses the electoral purpose. That is, as one party notable put it, “to establish the character” of Key as bold and imaginative – investing in infrastructure for an unimaginable future – and to contrast that with a business-as-usual Clark. …

Over time, however, National’s general policy thrust presumes Labour has reached a high tide with its redistribution of the fruits of strong economic growth – that there is not much more to do – and that from here on, once the economy gets back to 3 per cent growth after the current slowdown, the fruits should go to tax cuts and investment in innovation and education to lift productivity.

So Key’s tax focus will not just be on cuts but on a bold restructuring of the system. …

This week Key stole a march, and he will now bang away on that drum for the next six months, counting on hard times generating eager and hopeful buyers for his promise – and for the meat in the policy.

Clark and Co will try to get the electoral contest down from Key’s atmospherics to the earthbound realities of experience and knowledge where they claim the advantage as dusk draws in on the economic boom.

For now, however, the window shoppers are quite taken with Key. This week he started the hard sell: come and feel the goods, was the invitation in his big bang.