Ideas@TheCentre
Policies in an election year
In the past week or so, New Zealanders have had two significant announcements from Prime Minister John Key.
The first is that the general election will be held on November 26th. The Prime Minister rejected using an election date for political advantage in order to give public certainty while the nation hosts the Rugby World Cup 2011.
The second major announcement was that the government will go to the election on a platform of, among other things, partially-privatising some public assets. This takes quite some courage, because in the last two decades very negative mythology has been built around 'selling the family silver.' Privatisation, for all its merits, is about as politically popular as All Black losses.
What is being proposed is a 49% float of some energy companies in order to introduce more private disciplines to these companies, and allow injections of capital. The companies will still be 51% government controlled. This is hardly radical and it is unclear why, conspiracy theories aside, this would be opposed by anyone.
But mixed with these changes, is going to be public service restructuring, welfare reform, modest spending reductions, and likely more tax realignment. The National-led government is turning out to be extremely democratic in the sense that major policy initiatives are likely to be on the table prior to the election, with National seeking an electoral mandate to implement them.
While these are not what you could call radical reforms, they do resemble the beginning of a program. It is part of a continued effort to realign the economy away from government dominated industries and towards an exports-led private sector.
Many people do not know that up until recently, the New Zealand tradeable sector had been in recession since 2004. It was only massive in government spending that kept New Zealand out of recession until early 2008. This situation obviously requires quite a concerted reversal.
While 'reform' is a somewhat dirty word in New Zealand politics, it is encouraging to see the government moving in a more market direction and getting the public onside, even if it is softly-softly.
In the meantime, advocating detailed policies, known to be unpopular, in an election year takes some bravery – and the government should be applauded for it.
Luke Malpass is a Policy Analyst with the Centre's New Zealand policy unit.
