Policy by Panic

In too many areas the government is avoiding taking policy decisions. When it has to its panic measures are knee-jerk and quick-fix 

Just nine years ago, John Key, then leader of the opposition, spoke to the Auckland branch of the New Zealand Contractors Federation about housing affordability which he described then as a ‘crisis [which had] reached dangerous levels in recent years and looks set to get worse.’

             ‘We now have what has been described as the second worst housing affordability problem in the world. Make no mistake; this problem has got worse in recent years. ... This problem won’t be solved by knee-jerk, quick-fix plans. And it won’t be curbed with one or two government-sponsored building developments. Instead, we need government leadership that is prepared to focus on the fundamental issues driving the crisis. National is ready to provide that leadership’ and not just ‘rinky-dink schemes.’

A month ago – nine years later – under pressure from the Labour Party the government had knee-jerk, quick-fix reactions to the continuing deterioration of home affordability. A policy reversal was literally announced on Twitter. Such was the panic that the Minister for Business, Steven Joyce, said Labour's policies were very similar to the government's policies, while the Minister of Finance, Bill English, said Labour policies would be ineffective. (They may not be disagreeing.)

Another instance of policy panic appears to be the bowel cancer screening roll-out. The problem – our death rate is much higher than Australia’s, which has long had a screening program – was identified over a decade ago, and the Labour government instigated pilot programs. However, when a national roll-out was announced, again under public pressure, the Treasury grumbled there was no business case. Probably if it were made, the case would more than justify the roll-out. The point here is that the government seems, as in the case of housing, to have no coherent policy development strategy other than reacting to pressure.

There are many other long-standing policy issues which the government has not addressed and on which it seems to have no coherent approach. They include

            The aging population, with life expectation rising but no corresponding adjustment to the age of entitlement for New Zealand Superannuation, one consequence of which is that health and residential services for the aged are underfunded.

            Capital gains tax and tax avoidance.

            Our response to climate change is promise without delivery of emissions reductions and neglect to planning on how adapt to the rising sea levels. .

            The lack of a coherent and comprehensive freshwater strategy that deals with both existing quality and quantity pressures and prevents them worsening, while giving away precious water to commercial users.

            The very high and rising level of private household debt, reflecting the inadequacy of household savings.

            Economic inequality and its impact on social coherence and our long term economic performance.

            Energy sustainability.

            The failure to make a public case for the open economy. Instead, those against it (such as those who oppose the TPPA on grounds of principle rather than having pragmatic doubts) have led the public discussion without challenge.

            We are still lagging on investment in public urban transport.

            The regulation of the quality of the building industry remains inadequate despite the problem first appearing (as ‘leaky buildings’) fifteen years ago. (The most recent example is the debacles about the quality (and testing) of steel from China and elsewhere, used to reinforce concrete so that the building (or road tunnel) is reasonably earthquake proof.)

            The failure to build up reserves to meet another global financial crisis.

Others may add to the list, but these are examples I recall discussing a decade and more ago. In each case progress since has been, at best, patchy but very often just sound and fury, signifying nothing.

To be honest, we were grumbling a decade ago because the Labour Government of the time seemed to be taking its time to address the issues. But generally, it eventually got around to them without panicking and there was some progress. In each case such progress has largely since come to a halt.

What is going on is twofold. First, this is not a government with a vision – even less than the Clark-Cullen Government. Second, it has been squeezing resources out of the public service and that, together with its erratic or quiescent leadership, has meant that the policy development process has broken down.

Nine years ago John Key identified housing affordability as a major issue for his government but, apparently when faced with a political crisis, there was no policy waiting to be proposed and implemented and all we got was rinky-dink schemes.

I would not want to make exact parallels, but I am reminded of the Muldoon Government which was so short term, so political, that it deferred difficult decisions hoping they would go away or they would be dealt with by the next government (which often got them wrong). I shant be surprised if future historians judge the Key-English Government similarly.

PS. I am grateful to Bernard Hickey for reminding us of Key’s 2007 speech.