Policy-making as a weapon
Policies should outlast a government’s turn at the wheel, Shamubeel Eaqub writes.
When a new government forms, there is usually a flurry of studies, task forces, working groups and advisory panels.
This is not surprising, not new, nor should it be derided. It is better than rushing into action that may be ill-thought out.
Opposition is a lonely and poorly resourced existence – where it is more about adversarial political brinkmanship than dispassionate policy analysis.
These processes allow time for input from a broad range of experts to get the best evidence and counter-evidence in one place.
They also give time for consensus building through airing of issues, and being deliberate rather than impulsive about making policies.
The last National-led government had a bunch of these too. The Job Summit that gave us the cycle ways.
The cycleways are good, but did not move the needle on jobs. Other ideas like the nine-day fortnight and large investment fund went nowhere.
The Capital Markets Taskforce was to grow and deepen our capital markets. Yet our capital market is still under-developed.
Recently Kiwi success story Xero decided to leave the New Zealand exchange for Australia. There have been few new listings.
The 2025 Taskforce was to explore ways to close the 30 per cent wage gap with Australia. The taskforce was disbanded, and its recommendations were ruled out.
Those recommendations included slashing spending by $9 billion, cutting taxes, reducing beneficiary numbers, raising the pension age, selling state-owned assets and vigorously encouraging foreign investment.
The current government’s Tax Working Group released its first paper. It had similar themes as the Victoria University’s Tax Working Group under the previous regime.
The latest report emphasises an ageing population. With more of the population dependent on government transfers, we can no longer rely so heavily on income tax and GST.
The taxable group will be too small relative to the escalating spending on health, superannuation and housing subsidies for old folk.
They noted that our tax system is generally sound. One glaring discrepancy was on how we tax savings, where houses were lowly taxed compared to all other forms.
This leads to the natural conclusion that we should explore some kind of land tax that is broad based but low. And perhaps a capital gains tax. The group is taking submissions.
No doubt the reaction to increased taxes on land and property investments will be met with the usual outcry from the property and farm owning voters.
Perhaps this clamour will fade as the number of renters increase over time, and the country will become more polarised on tax and social policy.
Already there are more renting adults than owners, but they don’t vote as much.
On tax, we have seen little leadership. The Helen Clark-led Labour government raised income taxes for high income earners, because it wanted a progressive tax system.
The John Key-led government then lowered those taxes, as it took its turn at the policy-making helm.
This kind of turn-based policy making which favours ideology is bad. It creates instability and loses sight of the long-term issues.
Instead we need a long-term and deliberate approach which can overcome this kind of policy yo-yo.
The civil service has a role here, as the generators and repositories of policy ideas, rather than just the delivery mechanism of ministers’ ideas that it has become.
We are trapped in a very adversarial approach to policymaking in government. Parties fight on political lines, not for good policy. Too many policies are populist, or just ill-thought out.
The demands for action and leadership are justified. But we should not be so hasty to deride collaborative and transparent approaches to policy development.
They are a good counter to the current situation that has allowed big social and economic issues to accumulate over decades.