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Home / Politics

<i>John Armstrong:</i> National to Treasury: Thanks but no thanks

By John Armstrong
NZ Herald·
5 Dec, 2008 03:00 PM6 mins to read

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Opinion by

KEY POINTS:

What the Treasury lacks in imagination, it surely makes up for in persistence. Like some ageing door-to-door salesman, it turns up without fail after every election offering the finance minister basically the same, but increasingly outdated prescription for dealing with economic ill health - a free market-brewed elixir guaranteed to induce rasping sounds in the throat of any politician both brave and stupid enough to swallow it.

The sales pitch never alters. If you don't buy now, minister, you'll surely pay a much bigger price later.

Perhaps the Treasury presumed it might get a more favourable reception from a centre-right government than its centre-left predecessor when it wrote its latest set of briefing papers for the incoming finance minister.

The head of the Treasury, John Whitehead, seemed to be hoping so. Referring to medium-term economic challenges in his oleaginous covering letter to Bill English accompanying the briefing papers, he wrote: "I hope it will be possible for us to take you through this analysis to get a sense of how it connects with your priorities, and how to progress from there."

It doesn't connect. Certainly not with National's immediate priorities - and most likely not with its medium or longer-term ones either. Like some sharp-eyed clay-pigeon shooter let loose on the range, English used both barrels to blast out of the air the more radical (and thus more politically challenging) elements of the Treasury's agenda - a capital gains tax, a cut in GST, drastic curbs on the growth in public spending and, longer-term, a cut in national super.

It was as firm a rejection of the Treasury's wish-list as Michael Cullen's putdown of the Treasury's post-2005 election call for tax cuts as an "ideological burp".

But it was what English said next which was interesting. National already had a plan. It was executing that plan. It would seek advice from officials only on those parts of the plan where it felt it needed advice.

The "plan" is National's 27-point, "first 100 days action plan", which covers matters as diverse as passing the party's tax package into law, tightening parole and bail laws, making full 12-month course of Herceptin available and repealing the Electoral Finance Act.

English's dismissive remark about bureaucratic advice echoed a Cabinet Office circular to the chief executives of all Government departments late last month. "[The] Cabinet has asked ministers to prioritise work in their portfolios to implement the policy and legislative initiatives in the National Party's post-election plan, especially the legislative initiatives to be enacted or introduced before Christmas. Priority should be given to submissions that give effect to these initiatives." In other words, don't try to block or obstruct us.

There has been frenetic activity since so that legislation is ready to be force-fed to Parliament during the last two sitting weeks before Christmas as National locks into implementing its action plan as its absolute No 1 priority - and for a number of reasons.

First, the plan has helped give the Government direction and momentum from the word go. Without momentum, Governments drift. While the rapid formation of John Key's Government and his whirlwind trip to Peru and London got things off to a rocketing start, the real grunt to sustain both Key's and his Administration's momentum will come from delivering on the action plan.

This is a crucial period for Key. The traditional honeymoon accorded new prime ministers means public criticism is muted. There is a tolerance of mistakes. Nevertheless, for the many people who still have only a hazy notion of him, the attention accorded a new prime minister's first actions can create lasting impressions in people's minds which, if negative, might be hard to eradicate.

So far, however, Key has given the impression of someone who knows exactly what he is doing and exactly where he is going. He has dealt capably with the unexpected which tends to end up landing on the prime minister's desk. But there have been hiccups.

The Air New Zealand crash was handled competently and sensitively. Key has turned the heat on the old enemy by ordering a ministerial inquiry into what very much appears to be Labour's flouting of the legal requirements that anything that might have a significant impact on the Government's balance sheet be declared in the pre-election opening of the books.

Left with the $1 billion ACC hangover, Key wants a ruling on whether Labour breached the Public Finance Act.

The plight of New Zealand tourists in Thailand was less of a triumph. Key was the victim of Foreign Affairs caution and Defence Force ineptitude which put the two Air Force Boeing 757's out of deployment.

Key finally cut through the continual talk about "options" to get stranded New Zealanders out of Bangkok by ordering officials to send an Air Force Hercules to next-door Malaysia.

The episode has taught him a valuable lesson: that while officials are largely cognisant of political pressures and can be highly political in protecting their patch, they are not politicians answerable to public opinion. The distinction may be subtle. But the gap it leaves can be vast. That gap has to be filled by senior ministers and advisers being acutely alert to what might go wrong and what the public might be thinking - even before the public has had the chance to do so. Labour's unseen strength lay in the effective management of Helen Clark and Cullen; matching that presents a real challenge for Key and English.

Crucial to that will be National's relationship with the Wellington-based public service, the latter obviously suspicious of what National has in mind for it.

Key and English this week fulfilled their pledge to call in departmental chief executives and lay down their expectations of "value for money" delivery of services, particularly in the front-line.

Showing some prescient thinking, Key told the chief executives that with the country facing tough economic times he did not want to read about staff training seminars at expensive resorts.

The state of the economy is the second major reason for National's giving such focus to its action plan. The Government urgently needs to get some runs on the board before the economic recession and its impact becomes the only and all-consuming topic on the political agenda.

It is also important for another reason that the action plan be implemented - keeping faith with voters. While National may have cleaned up at last month's election, the Prime Minister recognises that National is still not completely trusted.

As was the case with Labour fulfilling its pledge card promises after the 1999 election, John Key believes delivery on its commitments will go a long way towards recovering and keeping that trust which was lost in the 1990s.

It will need to do so. With the Government's books glowing more and more crimson, there are going to be some difficult choices ahead - but not the ones the Treasury would make. National might have done so once upon a time. But National now has a different leadership for a different era.

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