Pre-election promises underwhelming

19:39, Aug 31 2014
GOOD THINGS: NZ First has the policy of taking GST off food and rates. Detailed costings have not been provided to date.

Ten thousand cheap houses here, a cycleway there. Free GP visits, removal of GST from food, maybe even some tax cuts.

In the final months before an election, politicians drop hints about future bounty to the electorate like the kind of deluded parents who think that playing "Santa Claus is coming to town" all through December will improve a wayward child's behaviour.

Sometimes, the child (or the electorate) steps into line and takes the bribe. But promises are funny things. They're not always believed. They can be broken. And sometimes they're just not enough to make a difference.

Recent weeks have seen a slew of promises, but compared to previous elections, the bribes are pretty thin on the ground, says political commentator Bryce Edwards. That's partly because in the wake of the GFC there's not a lot of cash to sling about. Yet the current fashion for austerity goes beyond that.

"Parties seem to think that when they make policy promises to any particular constituency it's seen as somehow self-interested, or unbelievable."

The result has been a spree of ostentatious under-promising.


Last week Labour performed the extraordinary trick of spiking six election policy announcements before they'd been made, because the pre-election financial update showed state coffers were fractionally emptier than expected. Labour also said it would delay by six months the rollout of free GP visits for the elderly - a policy announced only 10 days earlier.

Meanwhile, National has tried to have its cake and not eat it, by raising the prospect of tax cuts, while sternly insisting they'll be teeny-tiny.

It wasn't like this back in 2005, when Labour and National ran a crazed cash auction for the heart of the New Zealand voter. Labour knew National would offer big tax cuts as an election-year carrot, so they made a pre-emptive strike in the 2004 budget with the Working for Families tax credit. Then just before the election Helen Clark trumped that with interest-free student loans. Labour won.

By comparison, the 2008 and 2011 elections, held in the shadow of the GFC, were miserly affairs.

But even when there's money in the kitty to fund them, do back-pocket election bribes really work?

According to Marc Wilson, Victoria University lecturer in political psychology, the answer is a definite maybe.

The mistake many politicians and economists make is to assume people vote on rational grounds when in fact the data collection and computation required to make fully informed comparisons is often impossible.

In reality, we make cognitive approximations: research has shown that promises and rewards come a distant second to things like how a party's leaders make us feel - whether they seem trustworthy or competent or likeable.

What's more, people will knowingly vote against their own financial interest. Well-paid metropolitan leftists support parties that promise to raise tax rates for the well-off. Right-wingers on low wages vote for parties that slash social spending.

Part of this, says Wilson, is because voters demonstrate "sociotropic self-interest" - voting not for your own back pocket as such, but the collective back pockets of a wider group of people you feel aligned with. And many important issues aren't even: you don't have to be directly affected to have a view on gay marriage or the drinking age, or the right to smack children .

All that said, election bribes can work, says Wilson. They're most effective when it's crystal clear who will benefit and by how much.

Labour's 2005 student loan policy was a pretty good example. So too was National's hugely popular "tax calculator" from the same election, where the nation's salary-earners could log on (gleefully or guiltily) to find out just how much their pay-cheque would grow under National.

Last week, an online survey of young voters beliefs suggested self-interest will play a role on September 20.

The website asked would-be voters to give a thumbs-up or thumbs-down to 63 different policies, without saying which party's policy they were.

In the week to August 27, the second-most popular policy, with a 48 per cent approval rating, was for "Quality and free public education" (Greens) and the least popular, with 16 per cent, was a call for an end to free student loans (ACT). Also ranked high were policies to get all under-20s into work, education or training (Labour), a review of student support services (Labour), and improvements to primary and secondary education (Maori Party).

Other ratings, though, suggested self-interest is only one factor. The top-rated policy, at 49 per cent, was a call to clamp down on tax evasion (NZ First), and in third place was "promoting public transport and cycling" (Internet Mana).


But are the promises we're being sold realistic?

One way to keep track is to count up the likely cost of all the policies announced in the election run-up. The New Zealand Taxpayers Union (NZTU), a group that advocates for "value of money" in government spending, has been doing just that.

So far, the NZTU's "bribe-o-meter" shows National has promised policies that will cost $558m over the next parliamentary term. Labour's figure is $4.7b and the Greens' is $4.9b.

The NZTU came under attack from Nicky Hager in his book Dirty Politics, where he derided its claim to be politically independent when it is clearly aligned with National. Perhaps to fend off such criticism, the NZTU has contracted independent economist Michael Dunn to crunch the bribe-o-meter numbers.

Last week, Dunn demonstrated that independence by explaining that his own numbers should be treated with some caution.

National's figure is relatively low at $580m, but Dunn points out that as boss of the incumbent government, National controls the Budget, which last May contained a net $4b of new spending over the next few years. This doesn't show up in a "bribe-o-meter".

Conversely, the "bribe-o-meter" ignores tax cuts or increases, meaning Labour's and the Greens figures take no account of the parties' respective plans to raise more revenue via capital gains and other taxes.

It's also important to keep things in perspective, says Dunn. Four-and-a-half billion dollars over three years might sound like a lot of new spending, but over the same period the Crown is already committed to "core" spending of around $225b.

All the same, Dunn says kicking the tyres of the election promises has still been an interesting exercise. Some of his findings are:

Labour's estimate of the cost of NZ Power (where the government takes control of electricity pricing) is rather low. Labour says it will cost around $92m. Dunn says Labour hasn't fully accounted for the effects on non-government owners of power companies, and says the cost will be more like $276m. (On Friday Labour's finance spokesman David Parker said he stood by Labour's figure, and that if Dunn was counting the effect on private shareholders he needed to account also for the benefits of lower power prices to consumers.)

NZ First's policy of taking GST off food and rates would cost around $11b, though the party is yet to release its own detailed costing.

ACT's policies would theoretically return $12b to the government coffers - but don't forget that this would be done by slashing government services.

United Future's policy of income-splitting for parents of dependent children would cost more than $1b over the parliamentary term. (The NZTU has asked Dunn not to include this figure in the bribe-o-meter, because it is a kind of tax cut.)

Overall, Dunn agrees the major parties have been relatively restrained in their promise-making this election: "National, Labour and the Greens all say they want to maintain surpluses."

It's a pity , says Bryce Edwards, that promises and appeals to the self-interest of voters have become so unfashionable. He reckons there's nothing wrong with a party of the right pushing the interests of middle-income and professional people, just as there's no problem with the left pushing the interests of poorer people.

"There is something to be said for parties representing their own party bases. It means stronger democracy and better choice when parties are more upfront about making bold promises.

"If in the 1930s there was an attitude that parties shouldn't focus on any particular group in society to improve their lot, the first Labour government wouldn't have been able to set up the welfare state, because it would have been seen as a bribe."

Sunday Star Times