Friday, November 14, 2008

Kneecapping government

On his Stuff blog, financial commentator Bernard Hickey suggests that ACT might try and push its Taxpayer Bill of Rights Bill during coalition talks. Hickey thinks that this is a "subtle" bill which would "take the politicians out of government". I covered the bill back in 2005 as part of my "In the ballot" series, and there's nothing subtle about it. Like ACT's other members’ bills, it is a piece of calculated Libertarian wrecking behaviour, designed to kneecap government so it can be drowned in the bathtub.

The bill would legally limit increases in government spending to the rate of inflation plus population growth. This sounds fine - until you think about it for more than five seconds. The consequences are incredible. By capping spending, it restricts the state to doing only what it does now, and no more. It locks in existing underpayments in the public service, so that education will be permanently underfunded, and frontline staff such as doctors, nurses, and teachers permanently underpaid. And because the cost of e.g. medical technologies is always rising, it ensures that public services will never get better - only worse. The overall goal is the same as that of National's health policy in the 90's - to make government suck, so that people lose faith in it and turn to the private sector, where they can be bled for a profit.

This bill would mean no new large government projects, unless something else was slashed to compensate. So, no new roads, or public transport - Auckland can kiss its rail network goodbye. No government solution to the housing market. No expansion of paid parental leave, or further assistance with childcare. And of course Labour's interest-free student loans and Working For Families packages would have been right out. But it gets worse - the bill would also effectively strip all flexibility from the government budget. So, no emergency flood relief, unless it was pre-planned (and if natural disasters don’t abide by budgetary rules, tough). No increases in pensions or education spending to allow for changing demographics. And - most insanely - no ability to increase welfare spending when a recession arrives and unemployment rises. Hide has had a long time to think about this bill - he's been pushing it for years - so these consequences will not be unanticipated. Instead, they are deliberate. It is wrecking behaviour, pure and simple.

(On the plus side, it also means no money for new prisons. So much for "three strikes and you're in"...)

The thousand or so radical libertarians in the country will think this bill is an excellent idea. But New Zealanders have historically preferred a government able to actually do things. Whether its building a railroad, making sure every kiwi family has a decent home, providing for the sick and the old, or enabling gender equality in the labour market, we have looked to government to provide a solution. Hide's bill would put an end to that. And that is why it must never be allowed to pass.