National’s not alternative budget: Budget 2014

There is excellent commentary on the Budget here (Kiwiblog, Economics NZ) and really cool visualisations by Keith Ng here (his post here).  I suggest looking at those, it is much better than anything I can offer here.

However, I can’t help talking.  And looking through the budget documents I felt that something has been confirmed for me:  The National party has a stronger focus on social justice, equality of opportunity, and outcomes for the ‘worst off’ than either Labour or the Greens.  This came out here:

While the Labour and Greens alternative budgets were focused on industrial subsides (the “Green energy bank” is a form of industrial subsidy) – subsides that will benefit those who have the money to invest in the first place – National has come out with a budget focused on families/parenting, and a sixth budget that boosts real expenditure on education and health (at a time when the government was generally hesitant to spend).

Don’t get me wrong, Labour talk about poverty, but their policy solutions are … running a surplus, giving money to “winning” firms, and “magically” having lower unemployment for no given reason.  I had assumed that after they canned the tax-free threshold policy they were going to announce something – seems not.  Labour, the Greens, and National have all focused on the fact they are “responsible”, they are going to “run surpluses”, and they are going to “pay down debt” – and those statements are popular with the voters.  But I’ve only seen one party target education and vulnerable families with policy suggestions – the two biggest concerns regarding inequality of opportunity – and that has actually been National.

However don’t get me wrong – I think National is involved in some “industrial subsides” of their own here, with their continuing focus on irrigation schemes.  I struggle to see the free-rider problem here, and would also note that the lack of charging for water in many of these schemes is a huge concern.  Furthermore, I’m uncertain why the removal of tariffs on building materials is only temporary – it is a start at least 😉

But with regards to social policy, it is now undeniable that Treasury’s work on the ‘Living Standards Framework‘ (in association with MSD and Stats NZ of course) has had a significant impact on the National party, and the types of policy programmes they are putting through.  Now it isn’t clear whether it is National convincing the policy wonks, or the other way around, but this seems to be the sort of government that is in power.

This is just an interesting point – our centre-right party is currently more focused on social inequities than both of our centre-left parties.  I first realised this when Cunliffe took charge, and I said to Labour party supporters “why doesn’t he take on welfare/education instead of IT as his shadow portfolio, and focus on these outcomes” – they told me there was no votes in that, because people don’t really care and there wasn’t much need to do anything different to National.  If that is the case, I don’t know what the left is offering other than industrial subsides – and I find those abhorrent, and a direct affront to social policy issues.

This is unnatural to me.  I grew up in the 1990s, and had it ingrained in me that National was the party that reduced transfers to the most vulnerable, while Labour was the party who would go the other way.  It is an illustration of how changeable actual political parties are.

To quote NRT:

However, I wouldn’t really call this a Labour budget – this is the way National has been, within a version of the ‘capability framework‘, for some time now.

Of course, if you disagree with this type of redistribution (which is totally legitimate) this would be incredibly frustrating – the three major parties are determined to have a government of the current size.  In that case a strong ACT party would be a good foil to express your preference, if they only discussed policies sensibly …

9 replies
  1. Sam Murray
    Sam Murray says:

    Interesting points. Agree with the influence of the Living Standards Framework. People often forget the role our Westminster public policy system plays in politics. Beyond all the sensationalise reporting of politics and wailing of teeth on the Internet, politics is actually pretty straight forward. Generally, ministers rely on their departments for advice. Even a good chunk of their speeches are written by public servants. Evidence and logic tends to win out in the long term.

    • Matt Nolan
      Matt Nolan says:

      Indeed, however there is always a question of whether analysts are given the time to research things – and where there research efforts are pointed. The fact that work on this was underway during National’s first term may suggest it is an issue they came with – or it could be an issue departments felt strongly about. I do not know!

      • Sam Murray
        Sam Murray says:

        I may be able to help there. I went to a talk by two senior officials from the Treasury recently. They said it was all Treasury’s idea. Treasury wanted to counteract the idea that all they focused on was economic growth. Their Minister Bill English was lukewarm on the framework, but did not oppose it. According to the officials his comments on the framework included: ‘you’re not going soft are you’ and ‘I know you geeky types need things like this’.

          • Sam Murray
            Sam Murray says:

            It is interesting, turns out frameworks may be useful, sometimes.

            I suspect the other reason for the framework is the rising economic literacy of other government departments. It is now expected that policy analysts across government understand key economic concepts. This does undermine the policy side of Treasury a bit. The framework is perhaps their attempt to stay relevant.

            • Matt Nolan
              Matt Nolan says:

              I see the framework as a way of trying to clarify equity-efficiency trade-offs – which is really what policy advice should be doing, and what public conversations should be about. Which is great!

              I find the willingness to obfuscate either efficiency or equity costs an irritating (although also likely accidental) trait of politicians and pundits – and a clear framework makes that a bit harder to do that!

  2. Wilbur Townsend
    Wilbur Townsend says:

    I’m not sure you’re being fair about Labour forgetting about social policy. What about Best Start? It seems to be kinda what you’re asking for. https://www.labour.org.nz/beststart

    The opposition talk about ‘economic’ issues around the budget because that’s what people are focused upon.

    • Matt Nolan
      Matt Nolan says:

      Ahhh the best start policy – that had slipped my mind as they hadn’t linked to it in their alternative budget. My workplace discussed it (http://www.tvhe.co.nz/2014/02/28/does-the-best-start-policy-make-sense/) – but their criticisms apply equally to what National has done.

      Social issues are “economic issues” in terms of their impact on the distribution of income. Even with the “best start programme” I’d argue that the complete package of policies by National (the progressive changes to the tax system, the focus on education and the bottom 20% of outcomes, and now spending on vulnerable families) represents a more consistent focus on capabilities – and they focused on it at “Budget” time, when the opposition parties thought it was important to ignore said issues.

      It is in that context my post came from I suspect.

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