The National-ACT Agreement

National has put the coalition confidence and supply agreement online (staff are working long hours!).

• goal of closing the income gap with Australia by 2025
• require a sustained lift in New Zealand’s productivity growth rate to 3% a year or more
• agreed on the establishment of a high quality advisory group to investigate the reasons for the recent decline in New Zealand’s productivity performance
• Rodney to be Minister of Local Government, Minister for Regulatory Reform and Associate Minister of Commerce and a member of the Cabinet Expenditure Control Committee

Very pleased to see Rodney get Local Government – he will be a champion for ratepayers.

• Heather to be Minister of Consumer Affairs, Associate Minister of Defence and Associate Minister of Education

Also good to see Heather get more than Consumer Affairs. I hope she can keep her role in Territorials despite being Associate Minister – the Forces will appreciate a Minister who is one of them! Education will also be a key area for change, if we are to close the gap with Australia.

• National agrees to introduce the ACT Three Strikes Bill
• National agrees to a review by a special select committee of Parliament of the current Emissions Trading Scheme legislation and any amendments or alternatives to it, including carbon taxes, in the light of current economic circumstances and steps now being undertaken by similar nations

Having it reviewed by select committee is sensible as that gives a voice to all parties. And the ETS legislation was so complex it needed another look by select committee anyway.

• National further agrees to pass forthwith an amendment to the ETS legislation delaying its implementation, repealing the thermal generation ban and making any other necessary interim adjustments until the select committee review is completed
• Establishing a series of Task Forces that include private sector representatives and private sector chairs to undertake fundamental reviews of all base government spending in identified sectors, and to report findings progressively to the cabinet control expenditure committee and relevant ministers.

This should have been happening for the last nine years. The status quo is not an adequate reason to keep funding something. Public funds should be spent on areas where they actually achieve good outcomes.

• Support, within six months, the referral of ACT’s Taxpayer Rights Bill to the Finance and Expenditure Committee of Parliament as a government measure with the aim of passing into law a cap on the growth of core Crown expenses.
• National and ACT note that United Future favours reducing and aligning personal, trust and company taxes at a maximum rate of 30%. They agree that such a tax structure is a desirable medium-term goal.

Who would have thought – United Future gets to se the tax policy for the nation 🙂

• National and ACT agree that the government will establish a task force to carry forward work on the Regulatory Responsibility Bill considered by the Commerce Committee of Parliament in 2008.
• National and ACT agree that the National-led government will explore the concept of a New Zealand Productivity Commission associated with the Productivity Commission in Australia in order to support the goals of higher productivity growth and improvements in the quality of regulation.

I can’t stress how important this might be. However to be truly successful, it would need bipartisan support. It is in all of our interest to improve productivity – even if not always popular with every lobby group. National should try and work with Goff and King to get their support for such a Commission.

• The National-led government will establish a high quality advisory group to recommend short-term amendments to the RMA, including but not confined to those which National has put forward, as a basis for select committee consideration early in 2009.
• National and ACT have agree to set up an inter-party working group, which shall be resourced as necessary to consider and report on policy options relating to the funding and regulation of schools that will increase parental choice and school autonomy.
• National has identified the initiatives on National’s “My key commitments to you” and “National’s Post-Election Action Plan” publications as priorities for them. ACT agrees to support the legislation required to give effect to these policies. These publications are attached as Appendix 2.

This means National can implement its key manifesto items.

• ACT agrees that it will support the government on procedural motions in the House and in select committees unless ACT has previously advised that such support is not forthcoming. National agrees that it will operate a no surprises policy with ACT on procedural motions it intends to put before the House or a select committee. If National fails to give ACT 48-hours notice of intended procedural motions, ACT shall not be bound by its obligations under this heading.

And means ACT will generally support National on procedural motions, so long as they are given enough notice to decide. There will inevitably be urgency to deal with the 2008 legislation that has an election mandate. I do hope in future urgency is not used too often – or if it is, only to increase sitting hours, but not to rush laws through more than one stage.

Rodney has delivered a good agreement for his supporters, and he also did well in taking ACT from two MPs in 2005 to five MPs in 2008. That gave him the increased clout he needs.

Key has also done well. He has secured support for National’s key manifesto items, and many of his own supporters will welcome the concessions to ACT. Yet nothing there to really scare away the centrist voters – at this stage – that will depend on how certain items are implemented. Issues around the ETS should not be allowed to drift for too long.