Published 24 February 2009
“I believe we’re on a roll,” ACT leader Rodney Hide told members of the NZ Business Roundtable at their retreat at the Formosa Golf Resort on 20 February, as he set out the party’s accomplishments since the election last November, and its ambitions.
Below is an edited version of his speech:
Our aim is to shift the direction of this country for the better and, although it’s early days, I think we’ve got a good chance of doing just that….. Both National & ACT want to see a more prosperous & cohesive nation driven by the initiative & hard work of individual people. But ACT also believes our national productivity performance will need to increase dramatically to match that of Australia. Fiddling at the edges is not enough. We see Australia as a benchmark – our neighbour whom we used to rival. Until recent years, both countries had similar average incomes and a parallel standard of living. There is now a huge difference, with the average worker in Australia earning a third more than their counterpart in New Zealand. So ACT & National have agreed on the concrete goal of closing the income gap with Australia by 2025. This is the key principle of our supply & confidence agreement. Achieving it will require a sustained lift in New Zealand’s productivity growth rate to 3%/year or more.
Both parties see the need for significant changes in institutions & policies to achieve our goal, but we have very different ideas about how to achieve it.
New Zealand is facing immediate & serious economic risks due to the international financial crisis & global recession. It’s a huge challenge. We are already on the back foot due to our second-rate economic performance & falling productivity. We’ve been falling further & further behind other developed nations and the Labour Government did nothing while this collapse was occurring.
Serious and substantial systemic changes are needed. In order to work towards those goals, National & ACT will agree to the broad outline of the legislative programme, key legislative measures, major policy issues and to negotiation on policy issues & legislative measures to which ACT is likely to be particularly sensitive.
There are 7 key elements of our agreement and here is how they are being progressed [in this excerpt skipping the first, law & order, and the seventh, education]:
Second, climate change:
We campaigned to abolish the emissions trading scheme, which we believe is based on doubtful science and was rushed through without any serious cost:benefit analysis. We have differences with National on this issue, but they have agreed to the establishment of a special parliamentary select committee to review the current emissions trading scheme, including carbon taxes.
The key thing we need is a proper assessment of the costs & benefits to New Zealand of the ETS. It’s shocking that has not yet been done, with the ETS guaranteed to put up costs to families & businesses and deepen the impact of the recession…. If a rigorous select committee examination results in a credible case in support of the scheme, or perhaps a carbon tax, we will support it.
Thirdly, controlling Government expenditure:
We believe in small government. Currently, Government spending is grossly excessive and needs to be brought under control. I am now a member of the Cabinet expenditure control committee and a focus of our work is eliminating programmes that do not deliver value for money.
ACT does not want nibbling at the edges of spending. We want whole programmes that are wasteful & not necessary to go. It’s not just central government that is spending wildly & irresponsibly. Local government is too. And in my role as Local Government Minister I will be looking at ways to reduce needless regulations & compliance costs, and encourage councils to keep rate rises to inflation level or below.
ACT believes that, as a timid initial step, we should align personal, trust & company taxes at a maximum of 30%. National has agreed that’s a desirable medium-term goal. We remain fundamentally committed to substantial reduction in tax rates, and that involves cutting back Government spending.
Fifth, reducing red tape & bureaucracy:
New Zealand businesses are being held back, if not bludgeoned to death, by a raft of unnecessary & petty restrictions, rules & regulations. National has agreed to set up a task force to carry forward work on the Regulatory Responsibility Bill. And as the Minister for Regulatory Reform, I’ve started a sweeping review of rules & regulations in order to cull out the unnecessary, the small-minded & completely outdated. Once the initial cull is complete, we’ll be holding annual reviews to make sure the improvement process is ongoing.
We will look at exploring the concept of a New Zealand Productivity Commission associated with the Productivity Commission in Australia, in order to support higher productivity growth & improvements in the quality of regulation.
Six – we’re reviewing & reforming the RMA:
The initial changes were announced recently. There will be more. Beyond the short term, consideration will be given to further improvements, including better mechanisms for water allocation and compensation for regulatory takings of property rights. High-quality advisory groups will be established for such tasks. We’re also looking at changes to the Building Act & the Local Government Act. All of these reforms will have a huge impact on productivity and benefit businesses, communities & individuals.
So are we making progress? We have our tough sentencing & parole laws going through Parliament. We are reviewing the ETS. We are cutting red tape & petty over-regulation, and you will see real progress in this area in the coming months. Reforms to the RMA have already been announced, with more to come. And that’s just the first 3 months.
Attribution: Hide release, story written by Bob Dey for the Bob Dey Property Report.