The immediate issue for tax in the May budget was the 2010 and 2011 personal tax cuts promised before — and after — the election. There is bigger work ahead.
Personal tax cuts in part just undo tax rises. During Michael Cullen’s time tax rose as a proportion of income not just because he raised the top rate to 39c but because he did not raise the thresholds at which higher rates cut in.
Colin James on government board appointments for Management, June 2009
Want a government board appointment? Then check out the lie of the land. The geography has changed.
The appointment to the Families Commission of “divisive and controversial” and potentially “very damaging” Christine Rankin (as aggrieved and unconsulted support-partner Peter Dunne, the commission’s architect, described her) signalled two aspects of that change of geography.
The good thing about being a government is that you don’t have to make ends meet. You just borrow. Bill English is borrowing big and will go on borrowing big after his budget on May 28.
The 1960s Prime Minister Sir Keith Holyoake used to talk about the government budget rather like a household budget: spending out had to equal income in, plus maybe a bit over for a rainy day. But governments learnt to borrow in the 1970s. Now the big rich economies are borrowing heavily to maintain their citizens’ lifestyles.
Rodney Hide used to chase taxis carrying overspending MPs. Since he went dancing with the stars he has been happier hunting regulators.
His Regulatory Responsibility Bill in 2006 lacked drafting rigour, Sir Geoffrey Palmer of the Law Commission said. But both Labour and National endorsed its general intent and under the National-ACT support agreement a task force has been set up to “carry forward” the bill.
It is one of politics’ ironies: ACT has got itself into the ministry just as its credo comes under heavy assault.
ACT carries the neoliberal (or neoclassical) banner: lower taxes, less government, lighter regulation, a reverence for markets and a belief that almost invariably individual and private enterprise produces better results than collective enterprise.
Where is the government? Scattered through dozens of ministries and departments and myriad other agencies, each with a separate brief. Small wonder it can’t get its act together. Well, self-help is on the way in the form of chief executive groupings.
Since the balkanising and efficiency-focused state sector reforms 20 years ago, there has been much agonising over the “silos” the reforms produced and a variety of attempts to improve coordination.
Elections might change Parliaments but they don’t dispose of issues. And there are some whoppers.
First, the economy must navigate the flash flood that followed the bursting of the debt dam.
Step one was the immediate assurance of credit and avoidance of a spiral of consumer and business confidence. Step two is to convert stopgap, on-the-hoof decisions during the election campaign into durable policy settings that don’t take us back to the counterproductive interventions of the 1970s and early 1980s.
Most hangovers are unpleasant, even if the genesis was fun. But in government some hangovers can be just what the doctor ordered.
The government over the next three years will have to deal with the hangover from the nation’s debt binge. Its options will be limited by the need to restore the balance sheets of households and the economy as a whole.
Colin James on business and the election for Management Magazine October
Through the Labour-led governments’ nine years business has been gloomy about the operating environment even though profits have been good and at times in bonanza territory. Is the gloom about to lift?
A superficial reading of the spring lift in business confidence might credit it to the prospect of a National-led government led by a man from business.
The factory state is dead. But the state still grows. How come? And what will future governments do about it?
The theory has been that in developed economies large-scale mass-produced state activity delivered by large monoliths would follow the private-sector mass-production factory into oblivion. British Conservative party leader David Cameron gushed, by video, to the National party conference in August about a coming “post-bureaucratic age”.