English - policy not personality
With John Key gone, more breathing room has been created for next year’s election to be fought on policies, not personalities.
Key’s farewell statements were quite revealing in that respect. Many of the accomplishments he listed were either extensions of policies he inherited or – in the case of the home insulation scheme – were conceived and developed in association with the Greens.
With pride, Key also mentioned his steering of the country safely through (a) the Global Financial Crisis (b) the Christchurch earthquakes aftermath and (c) the Pike River tragedy.
Primarily, these were triumphs of political management, not policy innovation.
As one journalist noted at Key’s final press conference as leader, hadn’t he ended up extending the same Working For Families scheme that he’d previously denounced as socialism by stealth?
As Key’s National Party predecessor Don Brash also indicated, future historians could find it hard to detect much policy daylight between the Clark/ Cullen team and the Key/English combination that succeeded it.
Pointedly though, the harsh policies of austerity practiced in the UK by Key’s mentor David Cameron were not pursued in New Zealand.
Luckily, they weren’t needed. Insatiable demand from China – which did so much state spending we didn’t need a stimulus package of our own - kept the economies of both Australia and New Zealand afloat throughout the Global Financial Crisis.
True, the charter schools experiment was a bone thrown by Key to National’s partners in government, and the partial asset sales programme offered concessions to National’s corporate allies.
Yet the longer the Key era went on, the scarcer such exceptions became. If anything, as the political centre shifted slightly leftwards, the Key government tended to follow it.
Again, it was Key’s personal popularity that enabled National to claim this new territory as its own.
During election year 2017, Bill English and his team are likely to be pulled leftwards again by the Auckland housing crisis, and by the related need to invest further in social housing.
There will be pressure to boost health funding which - as a ratio of GDP - has been in decline since 2010. Further spending on charter schools would however seem daft, given that the operational grants to state schools are still on starvation rations.
Historically, tax cuts are the centre-right’s favourite form of election handout.
However, the recent earthquake costs – which will require more money for Kiwirail – will limit the scope for major income tax reductions. Even so, the benign economic outlook gives English plenty of options.
Job creation is accelerating, wages are (belatedly) rising, and unemployment is low. Next year’s election is being tipped to come early, soon after the May Budget, in order to give the English administration its own mandate.
Crucially, Treasury is predicting budget surpluses to reach $8.5 billion by June 2021, which will fuel the political demand for spending on social needs.
In sum, English and his Finance Minister Steven Joyce will find themselves in much the same situation Michael Cullen faced in 2008, during his final hurrah as Finance Minister. Meaning : it is relatively easy for a government to look responsibly frugal.
It is much harder to look as though it is spending wisely.