Source: ACT Party
The Haps
The world keeps changing, as Free Press surveyed last week. So far, trade wars have not affected New Zealand or interrupted our usual diet of domestic political stories about lunches and Wellington gossip. That could change quickly and we’ll be watching closely for trade trouble coming to our farmers and manufacturers. Meanwhile, New Zealand reached out to the world with the Infrastructure Investment Summit on later this week, the contrast reminds us New Zealand actually needs the world to function and invest.
Can your efforts make a difference?
For many people, the ACT Party began with them reading Richard Prebble’s excellent classic I’ve Been Thinking. The book is nearly thirty years old but the heart of the party is summed up as the line ‘this is not like bad weather’; you can change your future.
Prebble bases the thesis on an unusual but fascinating source. 1950s’ academic David McClelland took it upon himself to study nursery rhymes in different cultures, thinking that whatever parents told young children was a window into a culture’s true beliefs.
Long story short, McLelland divided the stories into luck-based stories and achievement-based stories. In some stories characters drifted along at the whims of mystical powers, in others they took charge and changed their future.
Prebble pointed out the popularity of Aladdin at the time of his book may not be good for us, we wouldn’t get rich by rubbing magic lamps. On the other hand, McClelland predicted the Japanese, with their achievement-based stories, would quickly recover from the destruction of WWII to become an economic powerhouse.
Free Press has limited intel on contemporary Kiwi nursery rhymes. We worry about hagiographies of Jacinda Ardern, and stories about the magic of being born Māori, and we hope they’re not representative.
We do know a bit about public policy since Prebble remarked on Aladdin. We think there are clues about why this country has lost its mojo, and how to lead the country back to it, in the simple idea that people should be able to make a difference in their own lives.
Since the mid 1990s basically every policy has been designed to disconnect effort from reward, and our productivity growth has tanked. Take the NCEA.
When Prebble wrote there were such things as School C and Bursary. These exams were kept secret until the moment every student at that year level and subject sat it at the same time. The NCEA changed all that, you could pick your units and do them in your own time, as many times as you liked.
This year when the Government said there would be a mandatory minimum level of numeracy and literacy testing, principals went berserk. They said it wasn’t fair, students might fail. What hope do their students have in the real world with educational leadership like that?
Subsidies and price caps have made tertiary education an offer young people can’t refuse. Interest free loans and price caps on tuition mean degrees for everyone, but the value of them has declined at the same time. You’re damned if you do spend three years and take on $40,000 of debt, but everyone else has so you’re damned if you don’t.
Remuneration has been compressed so that many people’s efforts make less difference to their outcome. Working for Families is effectively a guaranteed minimum income, but if you want to go above that you lose massively to abatement.
When Michael Cullen became Finance Minister, in 1999, there were two income tax rates, 19.5 and 33. Now there are five, from 10.5 to 39, and the top rate is nearly four times the bottom rate. Combined with Working for Families, if you work harder you get whacked harder, but the reverse is also true.
Pay equity, brought in under a National Government, has a similar effect. It compares workforces (say nurses and prison guards) and decides what to pay them. It means whole professions are paid based on what a Judge thinks their work is worth, because of who they are not what they do.
Added to all this is the thicket of employment law meaning it is very difficult to get dismissed for bad behaviour, and employers find it easier (but not easy) to just pay up rather than fight. This can be true even if they’re caught on a technicality like failing to properly tell someone how not to steal on the job.
Outside of education, remuneration, and employment policies, red tape and regulation add costs to nearly everything and prevent productive activity, but we are running up against the word count here.
One thing we can’t ignore, though, is the Treaty industry. The entire reinvention of the Treaty this century, is based on the unspoken assumption that our history is our destiny. You are either a victim or a villain because of things other people did a century or more before your own birth. That is the ultimate form of determinism.
Now, all is not lost. The current Government is putting content back into the curriculum, rolling back the mediocre Te Pukenga that briefly replaced polytechs with one-size-fits all averageness.
Brooke van Velden got rid of ‘Fair Pay’ Agreements and extended 90-day trials, now she’s on to holiday pay, health and safety, contracting, and personal grievances.
The Ministry of Regulation is going sector through sector reducing red tape, and Treaty determinism is being rolled back in multiple policy areas. All well and good. If the trick to getting our national mojo back is to reconnect effort and reward, then the Government is heading in the right direction.
ACT is one party that can point to pushing it there, but given the pervading sense of decline in New Zealand right now, ACT will need to keep the Left from taking us back again, and give the current Government the boldness to go further.
