Wednesday, December 07, 2011

Even Treasury thinks ACT is mad

Stuff reports that Treasury - which isn't what anyone would call "moderate", let alone "left-wing" - opposes ACT's spending cap legislation as too extreme:

Officials wrote in April: ''The Treasury does not support imposing constraints on the ability of government to set fiscal strategy via hard parameters in legislation.''

In the impact statement, Treasury argued future governments which did not want to be bound by the rule would get around it by giving tax breaks or increasing charges or tariffs.

It also concluded there would be instability if the rule ''was likely to be overturned shortly after introduction'' by another government.

Treasury instead recommended a review of the Public Finance Act.

And its not the first time. Here's what they thought of ACT's other pet issue, legislated regulatory standards [PDF]:
We do not support the Taskforce’s proposed Bill [which the ACT Bill was base don - I/S]. We doubt the chosen principles can attract the broad-based support necessary to induce enduring behavioural changes, and compliance costs could exceed benefits. The interpretive direction presents a particular risk of unintended outcomes.
Instead, they recommended better Parliamentary review - a proposal which has now been formally adopted in the National-ACT confidence and supply agreement.

So, what does it say about a NeoLiberal party when even Treasury thinks its policies are mad?