Wobbly and messy

The benign winter is over but spring is proving autumnal for the Government

The Government is having another wobbly period, similar to its travails in May. Then we had the Richard Worth saga and Melissa Lee’s by-election campaign unfolding ignominiously. Now we have Bill English’s accommodation expenses problem coupled with the messy handling of a number of significant issues – Auckland governance and the Emissions Trading Scheme.

On the English issue, Labour will be taking some satisfaction at the payback being meted out to one of its chief tormentors. English in Opposition was a particularly effective (and harsh) prosecutor on issues such as the pledge card and the Electoral Finance Act. While all MPs are wary of upsetting the fetid trough that is their beloved Parliamentary allowance system, the fact that English is the target explains Labour’s increasing enthusiasm for this particular hunt.

Of much more significance, however, is the shenanigans around the policy process with respect to Auckland governance and the Emissions Trading Scheme. Are they just making it up as they go along? It certainly seems like it. Why, for example, put up the proposal to split Rodney Council in half, provoke the ire of virtually everyone, before working out there was no good reason for it, and then reverse the decision a week or so later?

Officials must be sweating like Steve Hanson watching a line out every time a draft cabinet paper comes back from their minister’s office. ‘Let’s see what Rodney’s decided today? Put Auckland’s water reservoirs, paid for by Auckland ratepayers for decades, into Waikato. Hmmm. Interesting.’ Putting sensible proposals to the Minister must be like an excerpt from Little Britain: ‘Minister says no.’ One shudders at what Hide will come up with next.

It’s a bit like that for the long-suffering officials over at the Emissions Trading Group. Once labelled ‘the public service dream team’, they have watched their design, once the envy of climate change officials from around the world, be slowly pecked to death as ministers toy with the scheme in pursuit of a Parliamentary majority amid general business intransigence. As Brian Fallow has pointed out, the latest incarnation seriously undermines the rationale for the scheme in the first place. The provisions are now so generous to large emitters that the signal it sends to reduce emissions is significantly reduced.

New Zealand business needs to take its head from the inefficient pit of cheap energy it usually resides in and start planning for a carbon-constrained future. The ETS will be put in place. Initially, we now know, it will be very weak, but it will get significantly tighter over time. National will find that it has little option but to toughen up the provisions, as New Zealand moves to meet what will be increasingly onerous provisions. The sooner our business leaders work this out, grit their collective teeth, and get on with it, the better placed we will be to compete in a world which increasingly values low carbon options.

As has been pointed out before, those in the business community calling for a carbon tax to replace the ETS do so simply to delay further what needs to be done now. A carbon tax will have similar effect to an ETS, yet without the flexibility and the creation of a trading market which one would assume these free market acolytes would embrace. An ETS is preferable in that it provides that flexibility and is the preferred option internationally. But if international sentiment moves in favour of a carbon tax, the mechanics of an ETS can be reasonably easily transformed into a carbon tax. All that would happen is that the business community would start moaning about the carbon tax and demanding it be replaced with a trading scheme.

When the dust settles on these issues and the Official Information Act delivers the considered views of officials to the various edicts issued from the Beehive, we should be able to read between the lines just what the public service thinks. That’s if the thick black pen labelled ‘free and frank advice’ isn’t employed too heavily by the ministerial political advisors nervously editing the documents.

And while it will be providing Labour with a bit of a morale lift, it’s likely the Government will emerge unscathed from these affairs in terms of polling preferences. Not because they’re a good government, but simply because the public sentiment lies so heavily in their favour. The resilience of National’s poll numbers send a message to Labour that they really did indeed upset quite a few middle New Zealand folk in quite a telling way. While Labour’s core support remained very loyal to Helen Clark and her government, those less smitten became very unsmitten. And they seem in no mood yet to entertain a dalliance with the new leadership – despite National’s shortcomings and Phil Goff’s mea culpa at the recent Labour conference. It will take time, blunders, and scandals. Those are slowly building.


Disclosure: the writer once advised the Emissions Trading Group and is assisting a progressive Auckland mayoral aspirant.