Mike Williams: Impossible to imagine September election

Will there be an election in September? Mike Williams very much doubts it. Photo / File

The Government's economic package aimed at mitigating the effects of looming coronavirus-driven recession has been widely welcomed and should go a long way towards saving at least some jobs and businesses, though it's likely that this crisis has many months to run and will result in the September election being postponed to early next year.

The best guess in a highly unstable situation is that the peak of the pandemic is months away and all elements of government, including the opposition parties, should focus single-mindedly on the unprecedented crisis that the country faces.

It is impossible to imagine a normal election campaign taking place under pandemic circumstances, particularly one that includes referenda on marijuana legalisation and euthanasia.

Parliamentary elections in New Zealand require physical attendance to vote and involve lots of close contact via rallies and door knocking. Not the best formula in a pandemic environment!

There is a precedent for a delay. The general election scheduled for 1941 was postponed until 1943 because of World War II with the agreement of both major parties.

The Triennial Parliaments Act of 1879 which mandates three-yearly polls will be "entrenched" and will require the agreement of the National Party to be suspended or overridden.

It's hard to imagine Simon Bridges blocking such a measure.

A delay offers no advantage to either side of politics and makes sense.

Finance Minister Grant Robertson has produced a bundle of measures which all parties in the governing coalition can claim credit for at the same time as he puts money in the hands of those who need it most.

All this, and an endorsement from leaders in the business community, shows just how adept and mature Roberson has become as a politician and Finance Minister.

Grant Robertson has been a largely unheralded star of the Jacinda Ardern coalition Government though it is his steady management of the country's chequebook that has been largely responsible for the country's ability to afford the economic stimulus which the now certain recession required.

The National Party's inability to score points against Robertson was thrown into bold relief over the past week and reflects weak leadership of the party and the absence of an economic and moral compass that has characterised the post-Bill English history of that party.

Mike Williams

The National Party's first finance spokesman under Simon Bridges' leadership was Amy Adams, once seriously mooted as a potential party leader.

An intelligent and diligent politician, Adams made no impact whatever and announced a premature retirement last year. She amounts to a significant loss to the National Party and one it can ill afford.

Her final speech on the recently passed Abortion Legislation Act is a model of the inclusiveness that National has lost with its recent crop of morally conservative ideologues dominating the debate in that party.

Paul Goldsmith followed Amy Adams as National's finance spokesman and has adopted a more right-wing economic stance but again has made little impression.

It's clear that it is Goldsmith's influence on Simon Bridges that has nudged the National Party towards positions like delaying or abandoning the increase in the minimum wage and opposing the increase in benefits that was announced in the Government's stimulus package.

Opposing an increase in benefits at a time of recession makes no economic or political sense at all.

Sir Bill English's last Budget as Finance Minister featured a $25 increase in benefits which blunted National's hard-nosed image amongst the poorest in our society and was excellent politics. As beneficiaries, almost by definition, spend every cent they get, increasing benefits makes good economic sense as well.

If you're on the dole or the domestic purposes benefit, you are very unlikely to stash your little windfall away or spend it overseas. It is a quick and sure-fire way of stimulating the economy, just what's needed in the present circumstances.

As for opposing the increase in the minimum wage, Goldsmith hasn't kept up with research on the subject, though to be fair, neither has the Treasury.

Though it seems obvious that increasing the minimum wage would constrain job growth among the lowest paid, this is not necessarily true.

American economist Paul Kreuger studied the effects of increasing minimum wages in a wide range of American states and cities over many years. His work revealed that raising minimum wages did not necessarily have the negative effect on job creation that Paul Goldsmith, the National Party and economists in general had always assumed.

Though on the face of it, this is counter-intuitive, it does make sense that the poorest people are likely to spend extra money at job-rich enterprises - retail outlets and takeaways like Macdonald's - and therefore create more jobs.

With a delayed election and work-from-home advisories, Paul Goldsmith will have time to catch up on some more modern economic ideas.

Mike Williams grew up in Hawke's Bay. He is CEO of the NZ Howard League and a former Labour Party president. All opinions are his and not those of Hawke's Bay Today.