Hooton on 2025

Matthew Hooton writes in NBR:

In the government’s defence, its two major strategic decisions have been absolutely right.

First was Bill English’s decision to resist calls to stimulate the domestic economy, beyond the effect of the automatic stabilisers and Michael Cullen’s election bribes, in response to the financial crisis.

Second was Mr Key’s absolute determination to maintain trust with the people. …

The problem is that the desire to maintain sound political strategy has overwhelmed its raison d’être. Some in the Beehive now see it as an end not a means.

Worse, one or two appear to believe that the government’s high poll ratings mean they are some kind of political miracle-workers.

Wiser Beehive heads understand that there is nothing surprising about a new government – especially one which has defeated a tired, hectoring and corrupt regime – achieving 50%+ in the polls, simply by keeping its promises, managing the daily news cycle and ruling anything out that doesn’t enjoy clear public support.

The difficult bit is turning this into a worthwhile legacy. Unfortunately, there appears to be no plan or even informal modus operandi to integrate political management with policy goals. …

Ludicrous policies will continue, like interest-free student loans, and free GP visits and daycare for the children of millionaires. Labour’s Working for Families, which traps people with massive effective marginal tax rates and which Mr Key described accurately as “communism by stealth”, is now defended.

It’s easy to accept the political logic of all these moves but their cumulative effect is that it’s difficult to see what levers Mr Key has left if he truly wants to achieve anything important with his prime ministership.

I agree that the numbers of levers remaining is relatively few. I think the 2010 budget is an important one. National needs to do more than merely announce how it has allocated the $1.1 billion spending contigency.