ACT: Free Press, 12 November - Rubbing Up Against Reality
Free Press, 12 November - Rubbing Up Against Reality
Rubbing Up Against Reality
I
Any of Australia’s last
five Prime Ministers can tell you what happens when energy
prices rise and people are hit hard in the hip pocket. Our
Prime Minister knows this. She got elected saying that
climate change is her generation’s nuclear-free moment
then rushed legislation through Parliament to harass petrol
companies for charging motorists too much. A recovering
dollar and falling global oil prices (an Ardern-Trump common
interest through 2020, more later) have cut prices at the
pump, but a bigger energy problem is coming that she cannot
duck so easily.
Low Lakes
Lake levels
across the South Island are low and a dry summer is
forecast. Wholesale electricity prices are over five times
higher than normal at this time of year. Retailers who
promise consumers a fixed price are exiting the market and sooner or later
those prices will be passed through to consumers. At this
point the recent petrol price increase will look like a
minor inconvenience to consumers. What will the Prime
Minister do then?
The Solution is
Coal
Huntly, which can run on either coal or
gas, will pick up the slack. Its owner, Genesis, has ordered 120,000 tonnes of Indonesian
coal in four shipments scheduled to arrive from December
to February. Will the Government’s confidence and supply
partner, the Greens, be picketing these shipments? Will the
Prime Minster decry the arrivals, or protect the
consumer’s back pocket (and summer beer chillers)? We hope
she does not attack the electricity market like she did fuel
retailers. As with fuel, the problem is the fundamentals
that underpin the market.
Rubbing Up Against
Reality II
Last Thursday, the Reserve Bank
Governor announced the Official Cash Rate will remain at
1.75 per cent for six months, and probably into 2020. At a
time of record low unemployment this is an extraordinary
statement. With 1 per cent economic growth last quarter,
other central banks raising interest rates and inflation
returning, he might have said there’s at least a chance of
raising interest rates. However, he is dovish because he
knows this Government is rubbing up against
reality.
Where Confidence
Goes…
Growth follows confidence sooner or
later, and confidence is still in the tank. The Reserve Bank
says growth will stay strong for the next year or so due to
fiscal and monetary stimulus. In other words, the Government
is going to start running down the surplus while the Bank
keeps interest rates low. Those can’t cancel out all the
silly bans, random actions, and low quality spending this
Government has undertaken, not to mention its labour law
reforms that are coming down the pipe. The Governor’s
surprising dovishness is really a vote of no confidence in
the Government’s economic policy.
Politics Makes
Strange Bedfellows
President Trump came through
the mid-terms well, all things considered, especially
compared with recent previous presidents at the same point.
Trump is now running stimulatory fiscal policy and hoping
the economy keeps humming until 2020. The other person who
needs that to happen if she wants to get reelected in 2020
is none other than Jacinda Ardern.
Rubbing Up
Against Reality III
If KiwiBuild homes are not
being subsidised then they are being sold at market rates.
If they’re sold at market rates, then nobody should expect
to make a profit off them. There needn’t be a ballot for
who gets them because they’re no more attractive than
homes in the existing market. If KiwiBuild houses are being
sold at market rates, then there is no need to restrict
those who receive them from on-selling. Of course, none of
that is true, KiwiBuild is but a program to subsidise
existing projects and hand off the gains to a qualifying
subsection of voters.
What Else is the Government
Doing?
Just last week we finally heard from the
Government on RMA reform. They intend to introduce
legislation that will reverse the changes made by National
and the Maori Party in 2017 after years of stalling,
effectively taking the RMA back to the 2010 reforms. Then,
next year, they intend to start work on bigger changes that
don’t touch the Section II principles that make the RMA an
affront to property rights. Altogether, by 2020 the prime
piece of legislation that stops homes from being built will
have barely changed in a decade.
What They Could
Be Doing
ACT has set out the reforms that would boost housing
supply, change councils’ incentives by giving them half
the GST on construction they consent for building
infrastructure, replace the RMA in urban settings with the
Productivity Commission’s Better Urban Planning principles, and
replace clunky council building inspections with mandatory
private insurance on new builds. This plan was endorsed by the New Zealand Initiative
and its time will come.
Rubbing Up Against Reality
IV
The Government is now promising to introduce
more specialist teachers to deal with a wave of behavioural
challenges. Free Press picks up many and varied theories
from teachers and principals, P-babies, kids whose parents
talk to their phones more than their kids, parents starting
families in their late thirties when their grandparents
might have been popping out the odd tail-end Charlie.
Whatever the cause, the challenge is real and crosses
socio-economic groups.
Remember
When...
The current Government has viciously
attacked and ultimately terminated charter schools. Nearly
every charter school was using its flexible funding to
employ mentors who connected schools with community. Former
Highlanders lock and Manu Samoa captain Filipo Levi, who
works as a Community Liaison Manager at Middle School West
Auckland, is a good example (Filipo’s rebuke of charter
school critics is still worth a read here).
A Charter School by Any
Other Name Would Smell As Sweet
Meanwhile the
Government has put a rather curious tender on the GETS (Government
Electronic Tender Service) website, asking for
“expressions of interest from expert providers to develop
and implement innovative approaches to foundational learning
including oracy that support more students to experience
effective learning.” It is not clear that the Government
is asking for whole schools, or just programs in existing
schools, but it is asking for help from
edupreneurs.
Own
Goal
Once again, the Government
is rubbing up against the reality that the state system
can’t provide all the answers for all kids. Ironically,
they got rid of charter schools because union bosses
didn’t like them, but they are having to introduce
charter-like policies to address the non-pay concerns that
teachers are striking over. And people wonder why New
Zealand needs an ACT Party.
End of Year ACT Events
Galore
If you’d like to meet some fellow Free
Press readers, ACT has events coming up in Tauranga,
Christchurch, Hamilton, Wellington and Auckland over the
next month. There are also End of Life Choice public
meetings in Napier and Auckland. Please check out the events section on our new website to
find out
more.