You are subscribed as | Unsubscribe | View online version | Forward to a friend

Insights 47: 9 December 2016
Dr Oliver Hartwich: The Year in Review on ABC National Radio
Martine Udahemuka on maths performance results for Years 5 and 9
The Local Manifesto: Restoring local government accountability

John Key: the quiet achiever
Roger Partridge | Chairman |
When assessing John Key’s legacy, context is critical.

Key came into office in late 2008 in the midst of the worst financial crisis since the Great Depression. By that time, the New Zealand economy was already in recession, with Treasury projecting sharply rising unemployment and persistent budget deficits.

In response to the GFC, governments around the world embarked on Keynesian-style stimuli, of epic proportions. Whether it was Obama’s cash for clunkers, or Rudd’s pink batts programme, the preferred prescription was to spend and, when finished, to spend more. It has left many with mountains of debt that will take generations to repay.

The aftermath of the GFC has been gruesome; littered with nations divided by inequality, rising populism, and dysfunctional governments.

During this period New Zealand faced not just one crisis, but two, with the devastating Christchurch earthquakes. Quite apart from the human costs, forecasters at the time predicted they would cause a decade of deficits.

Against this background, the Key years have been remarkable. Stable government itself has been an achievement. A simple comparison with Australia will suffice: during Key’s time as prime minster he has witnessed four leadership changes across the Tasman. Steady-as-she-goes may have been bad for our media, but it undoubtedly contributed to New Zealand’s rising business confidence, and to long term investment and growth.

The government’s fiscal discipline has also been impressive: not just by resisting the spending affliction that gripped others, but by quickly returning the government’s accounts to surplus – and healthy ones too. Again, the contrast with Australia is stark. While Bill English can take much of the credit for this achievement, it is Key who granted him the licence to be prudent.

Key’s was also a reforming government. After the Fourth Labour government, it was perhaps New Zealand’s most radical in the post-war era. The GST for income tax swap, welfare reforms (the likes of which might have brought down another government), the investment approach to social services; labour market reform, partial-privatisation, reforms in education, including national standards and charter schools: these may have occurred incrementally, but together they comprise a prodigious package of reform.

Of course, there is much more Key could have attempted. And he left many feeling he should have done so – in housing, infrastructure, education and health (not to mention superannuation).

But that he achieved as much as he did under MMP, while maintaining popular support at unprecedented levels, is truly remarkable. Along the way, his resilience and endless self-confidence proved infectious. And perhaps that will be his greatest legacy.

For a slightly different perspective, see Eric's piece below.

John Key, quite an underachiever
Dr Eric Crampton | Head of Research |
New Zealand has had a pretty decent eight years under John Key. The rest of the world’s descent into madness accelerated sharply, and New Zealand’s has looked better by comparison. 

But Festivus is almost upon us. And the Festivus tradition is not the giving of thanks but the airing of grievances. I have a few.

John Key’s National Party provided superb opposition to Helen Clark. It is not hard to imagine what the John Key of 2006 would say about the past eight years – if they had happened under a Labour government. 

Auckland’s housing affordability problems exploded into a housing crisis. Central government refused to amend the RMA to allow easier urban expansion, failed to improve council incentives to pursue growth, and pursued a supercity agenda that did nothing to get more houses built. 

While Key blamed coalition politics for blocking RMA reform, National had the numbers to do it after the 2008 election. And National failed to provide any substantive support for a return to First Past the Post, which would also have allowed it to get the job done. 

Blaming coalition partners let National have its cake and eat it too. Home-owning voters got rich off the back of National’s failure to fix the planning apparatus, and National got to jawbone about reform without ever doing anything about it. The renting victims are poorer, less likely to vote, and are more likely to vote Labour anyway. 

Auckland’s housing crisis was a sin of omission. Post-quake Christchurch was a sin of commission. 

The government allowed Gerry Brownlee to play SimCity with CERA and the CCDU, ignoring the property rights of downtown owners, causing destructive regime uncertainty in which owners simply could not tell what they were allowed to do, and failing to deal with substantial emerging problems in EQC assessments that kept costs to government down but ignored the terms of homeowners’ insurance agreements. We are lucky that Christchurch, Waimakiriri and Selwyn were not forced into a supercity before the earthquakes.

Think back to National’s campaign of 2008. They railed against Clark’s nanny-state. But can we see the massive increase in health and safety compliance costs as anything but a continuation of that regime? And what of the anti-money laundering regulations that had no reasonable cost-benefit assessment? Because of those rules, I could not even bet on iPredict that English would succeed Key.

Meanwhile, productivity continues to stagnate and superannuation’s long-term costs loom. 

Failing to follow the rest of the world’s descent into madness is good. The bar should be set higher for a country that has bigger aspirations than that.

Free to booze
Ben Craven | Project Coordinator |
I leaned at the bench, feeling exhausted. Looking around, I could tell they were all feeling much the same. None of it mattered though. We were stoked.

Now, this was not the aftermath of a rigorous gym session or sporting endeavour. Rather, our Crate Day had come to an end.

The first Saturday of December, Crate Day, has become a celebration of sun, summer, and crate beer. Bogans throughout the country ushered in the final month of the year by sharing a swappa crate with their mates, firing up the barbeque, and playing backyard cricket. Harmless fun, right?

We couldn’t have been more mistaken.

In response to the annual celebration Dr John Bonning, a doctor at Waikato Hospital, bizarrely called for the introduction of lockout laws. These laws have been extremely successful in reducing the number of pubs and pub-goers in Sydney, meaning more people now drink at home. Talk about putting out fire with gasoline.

So concerned was Dr Bonning for the health and well-being of the nation, that he was able to prescribe yet another recommendation too – a nationwide ban on Crate Day. How this would work out in practice is anyone’s guess.

Forget pubs and clubs. It’s a terrible thing that law-abiding adults be permitted to consume a legal product. If not for Crate Day people would never drink beer and barbeque in the privacy of their own backyards, or so the Dr Bonnings of this world must assume.

When I was a youngster, I recall my parents telling me to get outside and play in the sun. I needed to get off the internet, stop playing video games and instead be sociable with my peers.

While well-intentioned, my folks were unaware that such negative messages might one day result in their son growing up to be a sociable, beer-drinking, master of the barbeque. 

If only they had consulted a health professional first.

We have to thank Dr Bonning for his innovative policy proposals to save adults from themselves. Lockout laws would keep us away from pubs, while a ban on Crate Day would presumably see us drinking beer from stubbies, cans, or anything other than crate bottles. How altogether more civilised. 

And when next summer ushers in another Crate Day, the public health types will inevitably be ready to lecture us about our bad behaviour and their new ideas to keep us in line.

It’s enough to make you drink.

On The Record
All Things Considered
  • Graph(s) of the week: Explaining the housing bubble.
  • The miracle of data: Hosting a successful wine-and-cheese party.
  • The not-so empty nest: Who still lives with their parents in the US?
  • Welcome to Helsinki: Their new tourism posters.
Copyright © 2024 The New Zealand Initiative, All Rights Reserved

Unsubscribe me please

Brought to you by outreachcrm