Thursday, October 22, 2009

"Financial discipline"

Since getting elected and giving away over a billion dollars a year to their rich mates, National has spun hard on financial discipline, lying about "cutting waste" (there wasn't any), being left "unfunded commitments" (wrong again), and being left a "financial mess" (no net debt and the strongest books in two generations) by the previous government in an effort to tar Labour's legacy of good economic management and paint themselves as the financially respectable party (Yeah, right). So you'd expect that having made all that noise, when they propose major changes to ACC with significant financial flow-on effects to other departments (e.g. Health and Social Development) and private individuals, they'd bother to cost those changes, right?


The Treasury’s adequacy statement in the [ACC] Bill says it does not contain required cost information and the Government’s analysis is incomplete. The cuts to ACC entitlements will shift costs to other government departments or onto workers and there is no quantification of these costs.

Treasury stated: “The proposal to introduce experience rating and risk sharing in the ACC Work Account will increase administrative and compliance costs for business and for the ACC scheme, yet these costs have not been investigated.”

Why haven't they been? Because of the hurry. Having talked up a crisis in ACC, National wants to be seen to be "acting decisively" to "solve" it. And of course, if they wait too long, the moment of low interest rates (and therefore of imbalance in ACC's books) could pass - and the "need" for "reform" with it. So we get policy made in a mad rush, with no thought, no costings - and certainly no checks and balances.

(This of course assumes that National is serious in its proposals. A more cynical person might say that they haven't costed it because the costs are irrelevant; the goal is privatisation to give their insurance industry mates a $200 million windfall, and they don't care who pays for it...)

This is no way to run a country. But sadly, we're stuck with it for at least the next two years.