Ticket to ride

Scary pol­icy dilem­mas await the new Gov­ern­ment at ev­ery turn.

New Zealand Listener - - POLITICS - JANE CLIFTON

New gov­ern­ments are sup­posed to get hon­ey­moons, but in­stead of the Tun­nel of Love, this one’s on the Ghost-Train ride. New min­is­ters are still rum­mag­ing through card­board boxes in the Bee­hive, yet al­ready their scari­est pol­icy dilem­mas are leap­ing and leer­ing at their ev­ery turn.

Boo! Trans-Pa­cific Part­ner­ship, for­eign own­er­ship rules and Apec, all need­ing to be pro­gressed at once if not sooner, de­spite con­flict­ing bu­reau­cratic and le­gal ad­vice, and two of the gov­ern­ing par­ties op­posed to any progress at all, ever. Don’t look now, but: Argh! Here’s a major oil and gas find that the Greens will hate, but which the Gov­ern­ment prob­a­bly can’t stop even if it wanted to, which it (mostly) doesn’t but daren’t say so. And, Du­u­uck! Per­haps scari­est of all, Aus­tralia Needs to Talk About Our Re­la­tion­ship.

Rat­tling in the closet is im­mi­gra­tion, and the seem­ing im­pos­si­bil­ity of low­er­ing it by 20-30,000 a year as promised just by crack­ing down on stu­dent visa abuse, given the ra­pac­ity of hor­ti­cul­ture, con­struc­tion, teach­ing, health and other sec­tors for for­eign labour. Each day brings a new trick-or-treat ul­ti­ma­tum: abor­tion re­form, su­gar tax, pub­licpri­vate part­ner­ship ve­tos, char­ter-school con­ver­sion, Welling­ton trol­ley-bus preser­va­tion – what’s it to be, yes or no?

Still, new gov­ern­ments have a use­ful ex­cuse in the sun­set clause that’s best un­der­stood as the “A Big Boy Did It and Ran Away” doc­trine. For now, ­any­thing tricky can be sheeted home to the pre­vi­ous Gov­ern­ment’s neg­li­gence or per­fidy, and the new sta­tus of our TPP ne­go­ti­a­tions is a bot­tler ­ex­am­ple. It now tran­spires that, de­spite the urg­ings of for­mer Trade ­Min­is­ter

Tim Groser, National re­jected the long-stand­ing con­ven­tion of ­ne­go­ti­at­ing bi­par­ti­san safe­guards into the 12-mem­ber free trade deal (now be­ing rene­go­ti­ated with 11 coun­tries, fol­low­ing the US’s with­drawal).

There’s an un­der­stand­ing go­ing all the way back to Closer Eco­nomic Re­la­tions with Aus­tralia that such deals are so im­por­tant to the coun­try that the two major par­ties – then as now, National and Labour – take care to stay in lock­step on them, or as close as pos­si­ble.

For the past few years, Labour has dis­agreed with National on the ques­tion of for­eign hous­ing, land and as­set buy­ing, and made it clear it would fur­ther re­strict it if elected. Groser ar­gued that his Gov­ern­ment should build enough “give” into our TPP sched­ules to al­low Labour to ex­er­cise that pol­icy pref­er­ence.

Now, we don’t know whether National sim­ply said, “No, Labour can get stuffed”, or of­fi­cials in­ferred that it would be fu­tile to give ad­vice on ways to ac­com­mo­date Labour pol­icy in the ne­go­ti­a­tions be­cause National would tell them to get stuffed. What we do know is that National’s re­frain, that there was no way on Earth of cur­tail­ing for­eign buy­ers with­out bust­ing the TPP and other free trade deals to smithereens, was, ahem, a mis­con­strual.

That the nor­mally ebul­lient ­pre­vi­ous Fi­nance Min­is­ter Steven Joyce can sum­mon only a weak-tea sort of smile when dis­cussing th­ese is­sues sug­gests a bluff has now been called. An out­right ban on ex­ist­ing home sales to non-res­i­dents is about to be en­acted, no “work­around” or special ex­emp­tion needed.

Even scep­tics con­cede that cur­tail­ing that money’s-no-ob­ject end of the mar­ket will help sta­bilise house prices.

THE DEVIL’S WORK

Still, that funny in­dus­trial smell that peo­ple may have no­ticed lately is from all the fu-fu valves be­ing welded shut, as Labour,

Green and NZ First legions of TPP-de­niers try to re­strain them­selves from ex­plod­ing. On the one hand, it’s a bit early to go dog on the Gov­ern­ment they scarcely dared hope they’d ever see elected; on the other hand, the TPP is the devil’s work.

In full knowl­edge of this, Prime Min­is­ter Jacinda Ardern came out of the blocks at full speed with a pro-TPP stance within days of form­ing the Gov­ern­ment. Un­der her watch, Labour is again a pro-free-trade party. She “re­fused to ac­cept” the for­eign buy­ers’ is­sue would stop New Zealand ­sign­ing the deal – a clear mes­sage to unions, the Labour Party coun­cil and the many TPP op­po­nents that the deal was on and no cor­re­spon­dence would be en­tered into.

Ardern is lucky the TPP re-ne­go­ti­a­tion has come to a head at the start of her ten­ure, when she has the po­lit­i­cal mo­men­tum to out­pace the Gov­ern­ment par­ties’ grass roots on this is­sue. There will be bit­ter gar­ment-rend­ing on the party-con­fer­ence cir­cuit, as Ardern has said the deal will be done even though it’s un­likely that other dead rats, such as in­vestor state dis­pute rules, can be dis­posed of.

Mean­while, the Gov­ern­ment will have to en­dure a cho­rus of “Xeno­pho­bia!” over the for­eign buy­ers ban. But even scep­tics con­cede that cur­tail­ing that money’s-no-ob­ject end of the mar­ket will at least help to­wards sta­bil­is­ing house prices.

“A TRAGIC FLAW”

Those who say for­eign buy­ers, mea­sured at just 3% of our ­hous­ing mar­ket, don’t make a dif­fer­ence ig­nore two rather co­gent fac­toids. First, we don’t mea­sure the ex­tent or im­pact of for­eign buy­ers com­pre­hen­sively – for de­lib­er­ate po­lit­i­cal rea­sons, as National was ­im­pla­ca­bly op­posed to re­stric­tions – so it’s pos­si­ble it’s higher than it ap­pears. Sec­ond, Chi­nese in­vestors have long been buy­ing heav­ily in many other coun­tries’ mar­kets, and have been mea­sured as mak­ing an em­pir­i­cal dif­fer­ence there. As the Econ­o­mist ob­served ear­lier this year, Canada’s hous­ing mar­ket in par­tic­u­lar ex­posed “a tragic flaw in the global econ­omy”, which is the dearth of in­vest­ment av­enues for newly pros­per­ous and de­vel­op­ing coun­tries’ mon­eyed cit­i­zens. China in­dus­tri­alised in just a few decades, but has yet to match its high-qual­ity goods with safe places to store the re­sul­tant earn­ings.

The Chi­nese have in­creas­ingly sought de­vel­oped coun­tries’ real es­tate as a safe, read­ily un­der­stood place to stash their money. Those coun­tries have been un­able to stop this from in­flat­ing hous­ing prices. Even mas­sive stamp du­ties are lit­tle de­ter­rent. The Chi­nese just pay them.

The TPP topsy-turvy­ing also un­der­scores the old say­ing about be­ing care­ful how you treat peo­ple on the way up, lest you meet them on the way down. Ap­petites were keen among our new lead­ers to sum­mon Groser home from his ­Wash­ing­ton am­bas­sador­ship. His newly

­dis­cov­ered role as lone de­fender of bi­par­ti­san­ship may not quite qual­ify him for the Tun­nel of Love, but at least it may al­low him to stay on the merry-go-round a bit longer.

Chi­nese in­vestors have long been buy­ing heav­ily in many other coun­tries’ mar­kets.

Prime Min­is­ter Jacinda Ardern: each day brings a new trick-or-treat ul­ti­ma­tum.

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