On the House

Colin Espiner is the political editor of the Christchurch Press and 2008 Qantas Media Award winner as New Zealand's best political commentator. He blogs on the daily dramas at the heart of government and the lighter side of life with our politicians.

A pass for Key, but much more to do

02:33pm 09 Feb 2010

145 comments

John Key has sketched out the direction he intends to take the Government this year. Now it's up to Finance Minister Bill English to fill in the blanks.

And there are many blanks in the speech that Key has delivered in Parliament this afternoon. Tax rates will change, but which and by how much is unknown. GST will probably go up, but maybe it won't. Property tax law will change, but we don't know how.

Working for Families won't be changed - or will it? Beneficiaries will face tougher work tests, but what? If their benefits go up because of a rise in GST, by how much? Mining will be introduced in the conservation estate, but how much and where?

Some things we do now know. Property investors have not been clobbered quite as hard as they worried. There will be no land tax. There will be no capital gains tax. There will be no Risk Free Return Method tax for landlords to pay.

Indeed, the only thing Key is promising in this area is to close the loopholes that allow mum and dad property investors to declare big losses on their rental property as a way of cutting their taxable income and clawing some tax back from the IRD. That had been well signalled, and even Labour doesn't oppose it.

A Key speech for National

12:29pm 08 Feb 2010

37 comments

Let's play a little game shall we? Let's try to guess what's going to be in Prime Minister John Key's speech at the opening of Parliament tomorrow.

I admit I'm a bit late off the mark with this. Labour leader Phil Goff has already started, releasing a speech to the Sunday Star-Times that he claims he will deliver tomorrow. In it, he puts himself in the shoes of the PM and says what he would do.

It's a ballsy idea, fraught with risk. If he doesn't deliver it with precisely the right tone - i.e. ironic - he's going to come across as a bit of an egg, frankly. Goff isn't the PM, and people might be either confused or annoyed at his pretence.

Also I think his prescription is unlikely to be offered up by Key tomorrow. The PM ain't going to scrap national standards, raise the minimum wage, change benefit abatement rates, introduce retraining allowances, or change monetary policy.

So what will he do? What should he do? We all know what the problem is, and most people seem to agree on it: low productivity, poor wages, slow economic growth, only average standard of living, growing gap with Australia, boom and bust housing market, poor savings record, high overseas debt and exchange rate.

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Jobless number a cold dose of reality

03:22pm 04 Feb 2010

104 comments

Revelations that Telecom is thinking of outsourcing hundreds of IT jobs and a higher-than-expected unemployment figure have come as a bit of a splash of cold water.

Most economic commentators - including the Treasury, the Reserve Bank, and indeed the Government itself - had been predicting unemployment to peak at 7 per cent or below in March.

Instead, we've got 7.3 per cent for the December quarter, which tends to point to unemployment still being on the up.

At the half-year economic and fiscal update in December, Treasury reckoned it would top out at 7 per cent, while the Reserve Bank thought 6.6. The much higher figure might give governor Alan Bollard pause for thought on his plans to begin tightening monetary policy from April.

The figure might also come as a bit of a shock to Social Development Minister Paula Bennett and Prime Minister John Key, both of whom speculated before Christmas that we were through the worst on unemployment, and that better times were just around the corner.

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National's standards - a fight it won't win

09:00am 03 Feb 2010

225 comments

In taking on the teacher unions over national standards, Prime Minister John Key is picking a fight he cannot easily win.

The history of the National Party in particular is littered with the corpses of education ministers who thought they could prevail - from Merv Wellington's ridiculous idea of making all school children salute the flag each morning to Wyatt Creech's opposition to pay parity for primary teachers, to Lockwood Smith's plan to bulk-fund secondary school teachers' salaries.

Smith's dream in particular should provide a salutary lesson to Key and Education Minister Anne Tolley as they declare war on the New Zealand Educational Institute (NZEI), the primary teachers' union.

Like national standards, bulk funding was (in the opinion of the National Party) for the good of the country. It would lead to higher standards, more accountability, and more freedom of choice for schools in the way their allocated their staffing. Students would be the winners.

Except the unions didn't see it that way. Indeed, they were implacably opposed. Cue strikes, marches, communities divided, and angry parents and students. The row severely eroded relations between the education sector and the National Party - indeed the divisions have taken 15 years to (partly) heal.

Goff goes back to Labour roots

09:20am 29 Jan 2010

175 comments

Yesterday's "state of the nation'' speech by Labour leader Phil Goff represents a return to the party's blue-collar roots, and an accomplished one at that.

His "For the Many, Not the Few'' speech in Hamilton hits all the right notes for a Labour leader. He criticises the fat-cat millionaires ripping off the taxpayer by evading tax, gives the PM a swipe for the measly 25c an hour increase in the minimum wage, calls for better wages and conditions for "hard-working Kiwis'' and has a crack at dole-bludgers who "rip off'' the working class.

After his ill-fated foray into race relations before Christmas, the speech represents a return to form and to type for Goff, with nothing in it likely to anger the membership or scare the horses.

Neither, however, is there anything in the speech that's likely to make voters sit up and take notice. Certainly not in the explosive style of former National Party leaders delivering state-of-the-nation addresses, anyhow.

The best news hook in Goff's address is a call for the chief executives of the public service to be paid no more than the prime minister. Labour in office would introduce a cap on the salaries of state sector CEOs, Goff says.

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