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Insights 40: 26 October 2018
NBR: Dr Bryce Wilkinson discusses global debt and the next financial crisis
 
Newsroom: Dr Oliver Hartwich explains how Italy's debt crisis could lead to a real Euro tragedy
 
Interest: Dr Eric Crampton writes about freshwater management and the current state of play
No case for waka jumping
Dr Oliver Hartwich | Executive Director | oliver.hartwich@nzinitiative.org.nz
Political scandals usually have a policy core – unlike Botany MP Jami-Lee Ross’ falling out with his now former party, which appears to be about personal issues as much as anything else.

Yet at least one policy question has arisen out of this political train crash – whether using the new ‘waka jumping’ law would be appropriate to allow a party to remove defectors from Parliament.

Deputy Prime Minister Winston Peters watched with wry amusement as National struggled with its rogue MP. Peters also intimated this is the scenario the new legislation dealt with.

Still, Ross’ case shows why the waka jumping legislation is a democratic aberration and National is right not to use it.

Ross won his parliamentary seat as the constituency MP for Botany. His constituents elected him with a substantial 12,840 vote majority. Like any other constituency MP, Ross owes his loyalty to his local voters, not his party.

Some of the people who voted for him may be disappointed with Ross’ behaviour. They may condemn his reported behaviour towards women; they may disapprove of him recording private conversations with his party leader; they may even be critical of his attacks on his former party.

In short, Botany voters may not have expected such behaviour from their MP when they had voted for him.

In a representative parliamentary democracy, however, that is not the MP’s problem. It is the voters’ problem. With hindsight, they may have elected someone else.

The essence of parliamentary democracy is we vote for people who will represent us in Parliament for the next three years. The people we elect are our representatives, not our employees. Which means we better choose wisely (but sometimes we do not).

Voters can show their disapproval of their elected representatives, but they cannot recall them between elections. Neither should parties be able to throw out elected MPs when they fall out with the party leadership.

As Edmund Burke put it, “Parliament is not a Congress of Ambassadors from different and hostile interests; which interests each must maintain … but Parliament is a deliberative Assembly of one Nation”.

When the waka jumping bill went through Parliament last month, National had objected to it based on high principles. By not invoking this monstrosity of a law even as it would benefit them, National showed it believes in those principles.
Ins and outs of campaign finance reform
Dr Eric Crampton | Chief Economist | eric.crampton@nzinitiative.org.nz
The past fortnight’s shenanigans have raised calls for campaign finance reform. But campaign finance regulation is like squeezing a balloon. Tightening it in one place tends to make other areas bulge out – bringing unexpected results for the reform campaigners.

Parties seek donations to help fund election campaigns. They would not do this if campaign spending did not help draw votes, but the relation between spending and votes is complicated.

The best empirical work on campaign finance tends to use American examples because of the plethora of election data across the 50 states. But even that work yields mixed results. Some work suggests additional campaign spending helps challengers more than incumbents, but other work suggests that states with stricter limits on contributions see more competitive races.

Restricting campaign donations can easily encourage third-party issue-based campaigns – with endless updating of spending rules around those to account for the most recent changes in tactics.

Public financing of election campaigns provides no panacea.

Giving every party an equal amount of public money would be obviously unfair and encourage people like me to start political parties for the sole purpose of drawing that subsidy. I would have endless “Don’t vote for me” parties, and you all would be invited. But apportioning money by vote share in the prior election or by polling figures protects incumbents at the expense of new parties. We already do this in the Broadcasting Allocation; extending it more broadly while excluding private funding could be disastrous for competition. How could Gareth Morgan have given TOP a go in that scenario?

Canada has had its own fun with publicly funded election campaigns. There, candidates earning at least 10% of the vote are reimbursed for 60% of their election expenses. Candidates are known to take out a home mortgage to help fund their campaigns, anticipating an electoral reimbursement.

The reimbursement system invites shenanigans. Canada’s Conservative Party wound up repaying more than $200,000 after rorting the system in the “In and Out scandal” – but senior members avoided facing potential jail time as part of a plea deal.

Campaign finance reform is more complicated and probably less beneficial than you expect. But it also has serious implications for freedom of speech and should not be entered into lightly.
Thinking time for adults
Dr Bryce Wilkinson | Senior Fellow | bryce.wilkinson@nzinitiative.org.nz
A very long time ago, as long ago as last Friday, Yvette, 5, and Rupert, 6, committed their grandparents to 100 years of thinking time.

For the uninitiated, thinking time is a penalty some parents impose on their young kids for misbehaving. Older readers might think of it as a substitute for a one-second spank. The errant kid must sit still on the floor and think for, say, 5 minutes. Five minutes may not be purgatory for a hyperactive child, but it is up there.

The children are told to use the thinking time to dwell on their error. If they are unable to recite its nature accurately a few minutes later, they are reminded and given – here is the rub – more time to dwell on their mistake and explain it correctly.

The system works in the sense kids do change their behaviour when faced with thinking time.

So how had Yvette and Rupert’s grandparents transgressed? Well, the kids were rolling marbles along open runners that zigzagged downwards between two plastic towers. One marble was Nana, the other Grandad. The marbles kept jumping off the runners. So those marbles were given some thinking time.

Two replacement marbles were selected, similarly named. They also misbehaved – and were given further thinking time.

By dispassionate judicial deliberation, the kids decided that extending the thinking time to 100 years for the Nana and Grandad marbles for failing to explain satisfactorily their misbehaviour was appropriate. Not eternity, but fair and proportionate on an age-adjusted basis!

Perhaps the kids had a point. After all, even professional basketballers take time-outs.

So why not thinking time for adults transgressing civil norms?

People who record private conversations with colleagues without their consent break a civil norm and likely make themselves near unemployable. They surely qualify for serious thinking time.

Much worse was the recently revealed willingness to contemplate trading a donation from a foreign-aligned source for the real prospect of a seat in Parliament. Members of Parliament must represent only New Zealanders’ interests. MMP’s party list system fails to ensure that.

Thinking time for such transgressors may not help. They might even use it to think about how to extract bigger political donations or break more civil norms.

Before we, the public, find we are literally losing our marbles to foreign interests we should think hard about our rules for eligibility to Parliament. We don’t have 100 years of thinking time.
 
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