Prime Minister Jacinda Ardern. Photo / Mark Mitchell
Prime Minister Jacinda Ardern. Photo / Mark Mitchell
OPINION:
While we were focused on Covid, Labour announced an electoral review. One proposal is extending the parliamentary term to four years. It is a bad idea.
Two knights put it best:
Sir Keith Holyoake: "Three years is too short for a good government but it is three years toolong for a bad one."
Sir Geoffrey Palmer: The New Zealand Parliament has "unbridled power". There is no constitution or second chamber to check the abuse of power.
Today in Parliament there is the Covid-19 Public Health Response Amendment Bill (No 2), that requires any laboratory to "deliver Covid-19 testing consumables that the Minister considers necessary".
Rako Science has the rights to a rapid reliable Covid saliva test. For a year the Government has ignored expert advice to use rapid testing. The bill enables the Government to override Rako's contracts and seize the company's testing kits. There is no compensation for this de facto nationalisation. Any payment for "testing consumables" will be what the Government decides is "the market rate".
Only the knowledge that MPs must stand for re-election prevents more abuses of power.
The New Zealand Parliament can even vote to delay an election. Labour has just given itself the power to delay the next local body election even though it is postal. Voter anger over the Three Waters, the great big robbery of ratepayer assets, might be the real reason for any delay.
This electoral review was not in Labour's manifesto. The party's ability to make any electoral change has proved too tempting.
It is possible to achieve reform in three years. When I was made minister of state-owned enterprises, every one of the government trading departments was losing money and providing appalling service. The waiting time for a new phone was six months. Three years later all 21 businesses were profitable, providing world-class service. If Telecom could not connect a new phone in 48 hours the first month's rental was free.
The Government's elimination strategy has failed not because of inadequate time but because ministers have wasted time. If ministers had purchased the Pfizer vaccine last year like the UK, then this present lockdown would have been avoided.
Having got elected by promising to eliminate Covid, Labour's failure will have electoral consequences. With vaccination and vigorous action Labour still has time to recover from its Covid blunders.
Even if there was a four-year term, Labour and the Greens cannot recover from last week's other event.
The Reserve Bank has raised interest rates. The bank now predicts inflation will reach 4 per cent, twice its target.
At a seminar organised by the Federal Reserve, Boston, Auckland University economist Professor Robert MacCulloch presented research demonstrating "inflation reduces average life satisfaction". He has even discovered a formula for calculating how miserable inflation makes us.
As an aside, if Labour had appointed the Professor to the Reserve Bank Board the Government would not be in this mess.
Inflation is a thief in our pocket. Inflation hits those on wages and fixed incomes hard. Mortgage interest rate increases devastate households.
In the period of high inflation from 1972 to 1984, at every election, every government lost the popular vote no matter how big their majority or popular the prime minister. Inflation is electoral poison.
The Reserve Bank predicts inflation "returning towards the 2 per cent midpoint over the medium term". The Bank presents no evidence.
Inflation is rising worldwide. Inflation in America is over five per cent. Transport bottlenecks are getting worse. Oil is $80 a barrel. The Government ban on offshore exploration is reducing our gas supply just as the international gas prices are rapidly increasing.
Inflation is a psychological phenomenon. Once we expect price rises, we get price rises. As we buy petrol or shop at the supermarket we know prices are rising.
The only way to stop inflation is a savage increase in interest rates or a recession or both together. We could get both.
The Reserve Bank has no credibility. The Bank denied its money printing was causing house price inflation. Former Reserve Bank chairman Arthur Grimes in an article in this paper pointed out "house prices have risen by 30 per cent in just 16 months since the pandemic lockdown started, despite rampant house building and virtually zero net migration ... The central culprit has been monetary policy that has flooded the economy with liquidity". It is a "catastrophe".
The money printing was underwritten by the Government. Finance Minister Grant Robertson gave the Reserve Bank a taxpayer guarantee. Now interest rates are rising the taxpayer is on the hook. We are about to be guttered.
In election year Labour and the Greens will face the political nightmare of rising prices and increasing interest rates
No wonder the MPs would like to have a longer parliamentary term. All the more reason for saying no.
- Richard Prebble is a former leader of the Act Party and former member of the Labour Party.
