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Be Careful What You Wish For

It’s been over 30 years since a National party last bribed its way into power using taxpayers money, and in so doing wrecking a superannuation scheme that today would have seen this country enjoying a vastly higher standard of living.

And yet, incredibly, it seems that the electorate is quite happy to fall for the same trick, and vote for a National government on the promise of more money, wilfully ignoring thoughts about where that money is going to come from. We’ve all got a horrible sneaking suspicion of course, but we just want the money.

I find this extraordinary given that poll after poll confirms that, given the choice, New Zealanders would rather have better health services and cheaper education (let’s not even try to maintain the fiction that education is free) than tax cuts. Don’t get me wrong — I’m looking forward to my “fiddy bucks” come October: smoking is horrendously expensive these days, and we get no credit for dying early and saving the country a superannuation bill.

The real wonder though, as week after week National announces another Labour policy that it will keep, is why we are even considering a change of government. There has never been a more graphic example of the old political maxim that Oppositions don’t win elections, governments lose them.

The secret taping of National party MPs expressing what most of us suspect is a sideshow. Lockwood Smith says that you’ve got to get the people’s trust before you unleash your real agenda. Secret agenda? Is this really news? Is it really a secret? Surely he was doing nothing more than stating the bleeding obvious. Wasn’t this particular tactic first deployed by the Fourth Labour Government? And then perfected by Mr Jim “No ifs, no buts, no maybes” Bolger and his mother of all flip flops?

Speaking of the Great Helmsman, he must be beaming at John Key’s daily mangling of the English language. A Herald article (6 August): “Who knows whether these tapes are actually sort of completely real they could well have been doctored.” Or his claim that the hippy — Nicky Hager — was “listening to National’s emails”.

Bill English says that they’ll sell Kiwibank. Is this a surprise to someone? Then he retracts it — just in case the tapes were actually, kind of, maybe, well, true, I suppose. What do people think National will do with the Air New Zealand shares? And Kiwirail? Jesus, are we really that dumb? That we’ll say yes to the money and not wonder what’s in the bag to pay for it all?

What has been mildly interesting is the current debate over the funding of infrastructure. Michael Cullen reckons National’s plan to borrow to pay for infrastructure is “credit card economics”. No comment better illustrates Cullen’s approach to fiscal management.

First, a bit of context: Michael Cullen is from a working class background and attended Christ’s College in Christchurch — possibly the very pinnacle of old-money knobbery. He must have had a terrible time. Consequently, there is no person in the Labour party who hates “Tories” with more savagery. He loathes them. While politicians from both (all) sides of the House will often adjourn to Pickwicks Bar (also known simply as “3.2” , or room two on the third floor of the Beehive) to unwind after a hard day on the benches, Cullen would rather be disembowelled than fraternise with the enemy.

This poor, working class upbringing has coloured Cullen’s whole approach to the finance portfolio. The comment about credit cards first: used wisely credit cards are fantastic — six weeks free credit at no cost, provided you pay the full balance. Not sure how that applies to National’s aim to borrow for infrastructure. One hopes that Key’s old mates in the capital markets will at least see their way to lending money at a bit less than 20-odd per cent.

Michael Cullen’s fiscal approach is, in fact, very similar to the approach that your grandmother would take, if she were running the economy. First rule: no borrowing, sonny. If you want something, then you have to save up for it. Second rule: we’re all children, really — give us some money and we’ll just go out and blow it on lollies. Best put it in the bank and you can have it later — you’ll thank me one day.

Except we never did, we went through life slightly scared of the old tart and thinking she was just mean and cranky — just like Cullen. When Michael opens his purse you can just about hear the creaking. You get the impression that he didn’t so much finally see the sense of tax cuts, as get mugged for $10 billion by his caucus colleagues. If Labour wants to blame anyone for alienating the public and turning us off Labour, they need look no further than Michael Cullen. In this sense Key is just the strange man offering us all lollies … and a ride to the promised land … Hmmm.

National are right to fund infrastructure through borrowings, though. In the main, these assets will benefit not just this generation of taxpayers, but the next and the next after that. Why should one cohort of taxpayers pay for the lot, as Cullen seems to want to do. Borrowing to fund infrastructure is a mechanism that ensures inter-generational equity. By taking out long term loans to fund roads, broadband and other assets the burden is spread and we all have to personally carry less. To paint this as “credit card economics” is simply wrong.

What we should be concerned about is Key’s stated belief that the private sector should implicitly be involved in the development and maintenance of these types of assets. There are a few examples of B-O-O-T (build-own-operate-transfer) schemes working well, but there are many more total disasters — the Channel Tunnel and Sydney’s tolled motorway come to mind. And the examples of Air New Zealand and TranzRail (and the BNZ) in private ownership should serve as fair warning to anyone who believes that the private sector is inherently better than public ownership. Does anyone buy that shit anymore? It seems we just might…

Read last week’s column here