Sunday, May 18, 2008

Scoring ACT's 20 point plan

Act's come up with its own version of Labour's pledge card and seems to be showing a bit more backbone than it ever has before. Of course perhaps it was a political miscalculation to have 20 points, as nobody will remember most of them. Far easier to have 3 or 5 at the most as the key messages, but we'll see if this fires up enough of the public to give ACT a go. Rodney Hide's speech on Sunday where he announces the 20 point plan has some juicy tidbits that are hard to disagree with:

"Who would you trust to manage New Zealand's $175 billion economy in a crisis?

Michael Cullen - who's squandered the best global conditions of a generation to make us poorer than Greece?

Bill English - who did nothing much the last time he was Minister of Finance, and is proudly promising to do nothing much again?

Or Sir Roger Douglas - the Finance Minister who transformed New Zealand from the East Germany of the South Pacific into one of the freest and most respected economies in the world?"


So what are these 20 points? Are they substantial, or are they waffle and would they make a positive difference? Here's my verdict one by one (this will take some time). I'm judging ACT on clarity of policy and contribution to economic or personal liberty. To make it slightly more interesting I'm giving up to 5 points for being bold:

1. Government waste. Cut state spending to Australian levels: I presume this means as a proportion of GDP, but isn't entirely clear. This is clearly positive, modestly ambitious, but only worthy of 2 points, after all Australia is far from free from government waste.
2. Cut and flatten tax rates: Well yes, but what does this mean? This could be anything from getting rid of the 39% top tax rate to promoting a single flat tax rate. Last election ACT promoted a two tier rate of income tax, in 1999 and 1996 it advocated flat taxes. Make your mind up. Lack of clarity shows lack of commitment to what this means. National may cut tax rates and you flattening is a point further, so only 2 points here. If ACT comes out with a single low income tax rate then it would deserve 4 points.
3. Limit local government to core activities: Again, lack of clarity. What does this mean? Does it include owning water, rubbish collection services and running roads? Does it include subsidised housing? In principle, it is good, but again lacking clarity means what am I to judge? I'm giving ACT 1 point for this, it could be 3 if it was specific to what are often referred to as "public goods".
4. Reform the public service: This is described as cutting Parliament to 100 (fine but symbolic really), close departments "we don't need" (like?) and limit Cabinet to 12 members (again symbolic). The first and last proposals do little, and closing departments without naming them is rather odd. I'll give ACT 2 points for this if only because it has promise, but little more.

5. Red tape: Back into the vagueness brigade. Saying things like "Get rid of all nutty regulations" without one example is fuel to fire Labour. The Regulatory Responsibility Bill would be a small step forward, but there already are Regulatory Impact Statements prepared, albeit often ignored and with poor analysis. Only 1 point with this, as it sounds like little more than rhetoric.

6. Reform the Resource Management Act: Again nothing in terms of substance. If I'm optimistic it might mean including private property rights, but Rodney says nothing else useful about it. I'll give him 1 point for reform, but it's woefully inadequate to not say more. He gets four if he RMA makes private property rights paramount (three if dominant).

7. Create a competitive market in education: At last something more substantial, education vouchers. Now this would make a positive difference. The need to tackle education is critical, and this will break the centralised bureaucracy and the unions, I'm giving it 3 points for being a worthwhile step forward.

8. Same in healthcare: Well I'm not sure ACT means health vouchers or being able to buy health insurance with a tax rebate, for that it loses a point for being unclear. However, having competitive delivery and choice in healthcare would be be worthy. 2 points for that assuming it does really mean choice.

9. We'd reintroduce competition to accident compensation: This isn't that vague, although remember competition was only for employer accounts, not motor vehicle cover or personal cover. If it is just employer accounts then it is only 1 point, the Nats are already going to do that. Add motor vehicle and it gets another, and personal accounts adds another two. So more clarity needed there.

10. Welfare. We'd create competitive markets for sickness, invalid and unemployment insurance: Now this appears bold. Presumably this insurance would be compulsory (which knocks a point off), and doesn't mention the DPB (which is rather critical too). However, having people buy insurance rather than pay taxes for welfare is a bold step forward indeed. ACT gets 4 points for this, as it has the potential to be a quantum leap forward in how the public treats welfare and insuring against misfortune, I'll assume not mentioning the DPB is an oversight, as not including that would knock a point off, because it is too important to ignore.

11. Immigration: Uh oh vagueness returns with talk of "welcoming more high quality migrants". There is literally nothing to hang an opinion on here, so I give it 1 point to be kind assuming something positive might be done.

12. Labour reform: Rodney says this means "Allow freedom of contract to make it easier to trial new workers and replace poor performers". Nothing to argue with there, assuming this is further than the former Employment Contract Act then it deserves 4 points.

13. Privatisation: Rodney says "Sell state businesses where private firms can serve customers better". Now limiting it to businesses (not hospitals, schools and roads) easily knocks a couple of points off, but also limiting it to selling AND the condition that "private firms can serve customers better" seems a little odd. It gets 2 points for being less bold than it should be, and because the next policy wouldn't be necessary if it was more bold.

14. Infrastructure: Rodney says "We need to build better networks, like roads, water and electricity", well you could sell electricity and water with little effort, and roads with a bit more. He then says "replace user charges with tolls that reward off-peak use". This means roads of course. Electricity and water can do this easily, now. Roads you could allow this by following the commercialisation/privatisation model you talked about before. It gets 1 point for noting the economic point, but no more for failing to note how this best can be done.

15. Cut the remaining tariffs on imports: Excellent, clear policy, cut appears to mean abolish. 5 points for this, all of New Zealand being a free trade zone is clearly bold.

16. Free up more land for housing: I'd like to know what this means. It could mean getting rid of urban growth limits, it could mean the government selling land. It could mean changing property rights. I don't know, how can I give it a single point, unless it is a combination of all of the above, and four points if private property rights were paramount (I can hope).

17. Strengthen law and order policies: A perennial favourite. This time it means private prisons (a point for that), private sector helping the Police (a point there too, as long as civil liberties are respected), then speed up the courts (Night Court time apparently) and zero tolerance of minor offences all seem rather positive. Of course no talk of reviewing victimless crimes or the war on drugs. I'll give ACT 2 points for this because although it is positive, the truth is it isn't that particularly bold. A bit more commitment to zero tolerance might squeeze a third point out of this policy.

18. Climate change: Now this is very unclear. It appears ACT supports a carbon tax by Rodney saying "A low carbon tax would be a lot more affordable than carbon trading". Then he talks about the US, Australia and British Columbia doing this better, though they all have different policies. There is definitely a minus three from this one. This policy wont add anything positive to the status quo.

19. Strengthen our constitutional framework: This means a Taxpayers' Bill of Rights (a point of that), return to the Privy Council (maybe a point for that at best), and a referendum on MMP (no points for that Rodney, it's neutral). Nothing on private property rights, nothing on getting rid of the Maori seats, nothing about treating the Treaty of Waitangi as historically important but no more. 1 point for the Taxpayers' Bill of Rights. I wont double count the Regulatory Responsibility Bill.

20. Appoint mentors to families at risk: Hmmm one point for this. How about denying convicted criminals welfare? How about withdrawing custody from those convicted of violent or sexual offences? How about dealing to the DPB?

OK, so what does ACT get. It could get 100 for being radically bold and innovative towards pushing freedom and personal responsibility. If it gets 50 I'll say it will have taken the chance to be a major difference from National and staked a claim for reform ala the 80s, early 90s. So now I'll count. 33 points at worst, and if the vagueness I identified came out as positive as is likely it would be 47. Of course to get 47 would mean advocating a single low flat tax, reforming the RMA meaning private property rights were paramount and local government reform made a serious difference.

So I give ACT a D, but showing promise. If it dumps talking about a carbon tax as being positive, advocates flat tax, advocates private property rights, spells out what local government should do explicitly and is bolder on privatisation (such as giving away shares and going beyond the SOEs) it could get a pass. Its brightest points appear to be on welfare and trade, shifting welfare to an insurance model and abolishing tariffs are two rather bold innovative steps. I hope the vagueness is clarified, and a bit more boldness can be squeezed out.
Of course the Nats should hold their heads in shame. Five of these policies were once Nat policies, now they are not.
On the other side, Libertarianz have nothing to be concerned about. There is plenty of room for practicable pro freedom policies on all of these areas, and I'll be blogging on what these could be tomorrow. Frankly if it was 1987 or 1991, I'd expect almost all of the ACT policies to be mainstream with either Labour or National - oh how times have changed.
UPDATE: Lindsay Mitchell describes it as "what real commitment looks like", even though it doesn't explicitly even mention the DPB, which is a passion of hers (and rightfully so).
Clint Heine provides a handy link to the pledge card (PDF) and is enthusiastic as well saying "The pledgecard is a briliant piece of work, and something EVERYBODY of any political persuasion should look at and debate. I personally think this IS the agenda the right in NZ should be following and I challenge National/United and any other centre right party to come up with anything that will be as successful as this is." Yes , centre right is the term. I could see most of this being National policy on a good day, but I can do better, and it isn't even going as far as Libertarianz.

1 comment:

peteremcc said...

interesting comments.

i'd just add that it's important to remember that this is just a pledge card - an advertisement if you will.

i'm sure we'll see policy documents as the election approaches.

besides, the 'pledge card' is a little wordy as it is anyway!