Poll Dancer by Keith Ng

Minority Rights

As a mother of five young children,‭ ‬she is well-equipped to deal with life in the ACT caucus.‭ ‬And it shows.‭ ‬From ACT's last list MP in‭ ‬2002,‭ ‬Heather Roy has leapfrogged most of the caucus to take the second spot on ACT's‭ ‬2005‭ ‬list‭ – ‬though it's by no means a safe spot.‭ Salient's Courtney Sanders talks to Roy about Rogernomics,‭ ‬social liberalism and feminism.


In a previous interview,‭ ‬Victoria University Political Scientist Jon Johansson suggested that this election is the end of Rogernomics.‭ ‬Do you agree‭?‬

If you look at the people in power,‭ ‬they weren’t part of the Rogernomic group in the‭ [‬Fourth‭] ‬Labour government,‭ ‬but have they changed anything that Roger Douglas put into place‭? ‬Rogernomics is going to be with us forever,‭ ‬but it won’t be identified as Rogernomics.

When‭ [‬ACT‭] ‬thinks of economic liberalism,‭ ‬we just want to have a country that celebrates free enterprise.‭ ‬There are times when markets fail,‭ ‬but that’s the only time that it’s acceptable for the government to step in.‭ ‬Beyond that,‭ ‬businesses should be able to go about as unhindered as possible.‭ ‬We need to remember that small businesses employ‭ ‬80%‭ ‬of people in NZ.‭ ‬That’s a staggering figure and it’s something that people just don’t realise.‭ ‬If it wasn’t for them,‭ ‬if there weren’t people out there prepared to take the risks,‭ ‬we’d be‭ [‬left‭] ‬high and dry.


Do you believe that the economic liberalisation‭ (‬of the‭ ‬80s/90s‭) ‬will continue‭?‬

There’s always the possibility of moving right back to where we came from.‭ ‬You can never ignore that,‭ ‬and you have to be quite vigilant to stop that slow backward slide happening.

What we need to do is build on what Roger Douglas started and,‭ ‬in particular,‭ ‬we want a thriving economy.‭ ‬We can’t just think about tax and business,‭ ‬we need to address the social issues as well.‭ ‬That’s Roger Douglas‭’ ‬great regret,‭ ‬that he got part way through the job and wasn’t able to follow through into all those social areas‭ ‬-‭ ‬health,‭ ‬education,‭ ‬welfare in particular‭ ‬-‭ ‬and get the gains from the stronger economy.‭ ‬You can be more generous to your vulnerable if you’ve got a strong thriving economy.


If ACT was in power,‭ ‬where would they take the NZ economy‭?‬

We would implement immediate tax cuts that would see us with significant economic growth,‭ ‬above what we have now.‭ ‬Treasury has costed our policy and said it would result in about‭ ‬1%‭ ‬more economic growth than what we have now,‭ ‬and that will put us in a very good position with countries we like to consider ourselves on par with,‭ ‬the UK in particular.

At the moment we’re losing many of our best and brightest,‭ ‬our new graduates and even our unskilled people because of better economic conditions,‭ ‬lower taxes,‭ ‬better standard of living‭ [overseas]‬.‭ ‬I like the idea of younger people travelling.‭ ‬You see all these wonderful things,‭ ‬you come back with a wealth of experience,‭ ‬but you come back and you also appreciate what we have here.‭ ‬Our fear at the moment is that people get overseas and there’s such a gap between what there is over there and what’s available here that it's not an attractive option to come back.

I’ve got five children who are all school age‭ ‬-‭ ‬what I want is for NZ to be up there as a viable option for them,‭ ‬in whatever career they choose.


Where do you see our generation in‭ ‬20‭ ‬years time‭?‬

I would hope that we get economic policies in place that will allow for sustained economic growth,‭ ‬so that we become a prosperous nation‭ [‬and‭] ‬individuals‭ [‬will‭] ‬have greater opportunities.‭ ‬Hopefully we’ll get our young people back from overseas.

I’m really staggered when I go to campuses these days.‭ ‬When I was a student,‭ ‬campuses were very left-wing places.‭ ‬I go to Vic now,‭ ‬and ACT on Campus are the guys who are out there doing things,‭ ‬and a bit from the Young Nats.‭ ‬And the Greens are there,‭ ‬so they’re catering for the other side of the political spectrum.

ACT and the Greens,‭ ‬we come from different places,‭ ‬but if there’s one thing we both believe in,‭ ‬it’s having a tolerant society.‭ ‬I think that’s a great sign.


You voted for most of Labour's social bills that have been through the House in the last couple of years.‭ ‬How do you think these are being received by the public‭?‬

Confidence votes are really interesting and you never get them right‭ ‬-‭ ‬you always alienate half of the community.

I don’t agree with where the Labour social agenda is taking NZ,‭ ‬but when it came to the conscience votes on those bills,‭ ‬I felt they benefited the people they were intended to help.‭ ‬For example,‭ ‬the Civil Union bill‭ ‬-‭ ‬if two people want to commit to each other,‭ ‬whatever their sexual orientation,‭ ‬they should be able to have some legally binding contract.‭ ‬Now where does Labour want to take that‭? ‬I worry about that where it's leading,‭ ‬but in itself,‭ ‬I believe in‭ [‬the Civil Union Bill‭]‬.

We have the‭ [‬withdrawal of United Future MP‭] ‬Larry Baldock's bill‭ [‬last month‭] ‬about marriage being between a man and a women.‭ ‬I can’t for the life of me work out why he's taken out the bill.‭ ‬We were going to support it and he would have had the numbers to have it passed.

‭[‬The Government‭] ‬put Civil Unions forward to try and replace marriage,‭ ‬but they weren’t honest enough to tell the public that.‭ ‬That worries me,‭ ‬but two gay people should be able to have a legally binding contract if they want,‭ ‬and that’s why I voted for it.


How did this sit with the other ACT MPs‭?‬

ACT is quite a broad church in the same way that all parties are.‭ ‬If you look particularly at the conscience votes‭ ‬-‭ ‬the Prostitution reform,‭ ‬Civil Union,‭ ‬Death with Dignity‭ ‬-‭ [‬ACT MPs‭] ‬were split on all of those.‭ ‬We all come from pretty much the same place economically,‭ ‬but on social issues we are a little more divergent.

People would look at my life and say‭ ‘‬well you’re actually quite a conservative person‭’‬.‭ ‬I suppose I’ve chosen a conservative,‭ ‬more traditional lifestyle.‭ ‬I don’t believe for a moment that because somebody thinks a little differently to me they haven’t‭ [‬got‭] ‬every right to do that.‭ ‬As long as consenting adults are living their life lawfully and not harming anybody else,‭ ‬I think they should be free to do what’s right for them.‭ ‬I guess I am quite liberal socially.

‭[‬But‭] ‬I don’t buy into the social agenda of the Labour party.‭ ‬I voted for‭ [‬the social bills‭] ‬as separate entities,‭ ‬each in their own right,‭ ‬and I do think we’ve had a huge amount of social engineering under this Labour Government which I don’t agree with.


Where do you think Labour is heading with that‭?‬

There’s a lot of feminist stuff coming through,‭ ‬women in the workplace,‭ ‬children in childcare,‭ ‬while mums are out working all that sort of stuff.‭ ‬I worry about that.

It’s hard to know where it might end.‭ ‬It’s interesting to look at the comments that some of our current leaders made,‭ ‬in particular,‭ ‬a submission made to a Select Committee in the‭ ‘‬70s about‭ ‬24‭[‬-hours a day‭] ‬daycare.‭ ‬It was Soviet Russia and I don’t like that at all.‭ ‬I don’t want a bar of it.

The PM made that statement at the very beginning of this year about wanting to have all women in the workforce.‭ ‬We don’t need to have a certain percentage of the female population in the workforce.‭ ‬How dare she say that I should be working‭? ‬It’s for me and my husband to determine between us how we run our lives.


As the ACT spokesperson for women's issues,‭ ‬do you believe we live in a post-feminist society‭?‬

We don’t have the same sort of feminism that was around in the‭ '‬60s.I believe in equal rights for men and women,‭ [‬not‭] ‬special rights for women.

I don’t want to live in a society in which my sons are considered the enemy,‭ [‬and‭] ‬I think that’s what we have at the moment.‭ ‬There're minority groups all over the place,‭ ‬and every one seems to be being catered for.‭ ‬There’s one group‭ [‬that's‭] ‬always missing out,‭ ‬particularly in legislation,‭ ‬and that is white middle-class males.‭ ‬We’ve reached a point where they are the enemy,‭ ‬and you have to rebel against that.‭ ‬I guess the short answer is I believe in equal rights.


Do you believe that we have equal rights in society in general,‭ ‬and the workplace in particular‭?‬

I think that women have more choices than they’ve ever had before.‭ ‬Have we got further to go‭? ‬Quite possibly.‭ ‬I know that women hold the top jobs,‭ ‬but many workplaces,‭ ‬particularly law firms and places like that,‭ ‬report that women still are struggling to come through‭; ‬in many cases,‭ ‬women are making the choice to have a family.

Life’s a juggle,‭ ‬and you make the choices that suit your life.‭ ‬A women can choose not to have a family‭ ‬-‭ ‬there’s always a trade off.‭ ‬I certainly don’t feel disadvantaged for having made any of the decisions I’ve made about my life,‭ ‬and I find it hard to believe that we can still think of women as being oppressed,‭ ‬particularly when we look back to see where we’ve come from.


How do you reconcile ACT's economic policy with helping women into the workforce,‭ ‬with regards to the state provision of services like state-subsidised childcare‭?‬

Women,‭ ‬like men,‭ ‬make choices.‭ ‬Some women are constrained financially,‭ ‬that’s true,‭ ‬and that does limit their choices.‭ ‬But we can get around that by trying to be a more prosperous nation so that‭ [‬we‭] ‬open up choices for people.

When we’re a more prosperous nation,‭ ‬families actually sort out who the breadwinner is.‭ ‬In some cases,‭ ‬it’s the woman who make more money,‭ ‬and the man stays at home.‭ ‬That’s socially acceptable now‭ ‬-‭ ‬and that’s great.‭ ‬I just want the environment to exist so that women can make the decisions they want to make for themselves,‭ ‬within the constraints that are in their lives.‭ ‬I don’t think the state should be there providing childcare so women can get back into the workforce.‭


ACT does not do well with women voters.‭ ‬Why do you think this is‭?‬

It’s always been a hard one for us.I think it’s because‭ [‬of‭] ‬the perception that ACT's about taxes and the economy,‭ ‬and women aren’t so interested in those things.‭ ‬They keep in the back of their mind that those things are important at the big picture level,‭ ‬but‭ [‬women‭]‬,‭ ‬particularly women with children,‭ ‬are thinking at a much more fundamental level.‭ ‬You know,‭ ‬what am I going to have for dinner,‭ ‬what have I got to do to get the kids ready for school tomorrow,‭ ‬how do I balance that with work,‭ ‬etc.‭ ‬I think those things are much more important to women at a fundamental level.

Now,‭ ‬again,‭ ‬it’s a gross generalisation,‭ ‬but I think when we go and talk to people,‭ ‬it’s the men who are more interested in politics as a subject and the women who are looking after their families.

What we have to do is get better at marketing our message.‭ ‬We have to tailor our messages more to attract the attention of women,‭ ‬and it does help having three women in our caucus who have tackled the social issues together.


Do you think it’s a problem with the Right in general‭?‬

That’s right,‭ [‬the women vote‭] ‬predominantly goes with Labour.‭ ‬It’s about getting out there and marketing our policies.‭ ‬The other thing is that women have a real social conscience,‭ ‬and Labour has been the party that’s supposed to care for people.‭ ‬I think many of the laws‭ [‬that‭] ‬this Labour Government have put in place over the last‭ ‬6‭ ‬years aren’t about caring at all.‭ ‬In many cases,‭ ‬it seems they’re the opposite.‭ ‬But that perception still exists and that’s a battle we have to take to people.


What's the difference between ACT and National‭?‬

We set ourselves up as a party of influence,‭ [‬and‭] ‬we’ve always prided ourselves on being the party with fresh new ideas.

If you look back to our first election,‭ ‬we had a very specific treaty policy.‭ ‬Every party now has got the same policy‭ ‬-‭ ‬there should be time limits‭ [‬for‭] ‬Waitangi Tribunal‭ [‬claims‭]‬.‭ ‬If you haven’t filed a grievance after all this time,‭ ‬then you probably haven’t got a genuine one.‭ ‬We were called racist for putting that policy forward in‭ ‘‬96‭ ‬and now every party agrees with most of those principles.

We’ve got plenty more new ideas to come that only ACT will have the courage to promote.‭ ‬That’s why New Zealand needs ACT‭ ‬-‭ ‬so that we can keep promoting those things,‭ ‬keep moving forward and progressing as a nation.‭ ‬The National party has always been known as the party of the status-quo.‭ ‬We want them to be the main party in government,‭ ‬but ACT needs to be there to implement what Don Brash wants to do.‭ ‬He has got much more support,‭ ‬philosophically,‭ ‬from experienced and battle-hardened ACT MPs than he has from his own caucus.‭ ‬Don Brash needs ACT because we’ve got the courage to give the National party the spine it needs to go ahead and do those things it says it’s going to do not just get into government.


You don't believe that National will make good on their promises‭?‬

They will on some of them,‭ ‬but I think they’ll find that some of them aren’t doable or some of them aren’t affordable.‭ ‬Tax cuts would be one of the things that we push very hard for,‭ ‬but,‭ ‬for example,‭ ‬we’re not in favour of the tax deductability for a lot of the things National are announcing now.‭ ‬They will actually result in less savings for individuals and won’t be for the benefit of new Zealanders at all.

We also think we can go about some things better.‭ ‬Student loans are a very good example.‭ ‬This bidding war that’s erupted with student loans‭ ‬-‭ ‬I think very few people are saying‭ '‬yay‭'‬.‭ ‬Most people are saying‭ '‬oh well,‭ ‬that’s of little benefit anyway‭'‬.‭ ‬Students,‭ ‬when they’re earning,‭ ‬are actually much better off with tax cuts that allow them to pay back their student loans more quickly than they are with tax deductability and certainly with interest-free loans.‭ ‬All that’s going to do is encourage people to borrow as much as they can,‭ ‬and then there’s no incentive to pay that back quickly,‭ ‬so people are going to have loans for much longer.‭ ‬It makes no economic sense at all,‭ ‬and what the National party is proposing is not economically liberal its economically conservative.


Do you think that this is the major difference between ACT and National‭?‬

I think we actually differ in many areas.‭ ‬People often say to me,‭ ‬if things turned to custard with ACT,‭ ‬would you go and join the National Party‭? ‬And I would say‭ '‬no,‭ ‬I wouldn’t,‭ ‬I’m not a National Party person.‭'


Why not‭?‬

I think it would be harder to be socially liberal in the National Party,‭ ‬although not impossible.‭ ‬The luxury of being with ACT is that when it comes to election time you’re looking to convince a smaller proportion of the voters.‭ ‬The National Party has to pull from a much bigger pool of voters,‭ ‬so they have to make compromises,‭ ‬and those are compromises that I’m not prepared to make.

This country can afford tax cuts and‭ [‬people‭] ‬would be better off choosing how to spend that money themselves.‭ ‬The National Party is more‭ '‬that government has a bigger role to play and that perhaps government can make some of those decisions for people‭'‬.‭ ‬I don’t think that’s the right thing to do.

--

[Next week: Is there a doctor in the House? I'll be talking to Dr Michael Cullen next week about ... well, money. Lots of it. We'll be discussing the surplus, student loans, the Cullen Fund, and the spike that runs through them all - intergenerational cross-subsidy. Uh - we'll be talking about money. It should be good, so be sure to tune/log in next week, and tell your friends/acquaintances/spam-list.]

[More shameless self-promotion: Salient's interview with Mallard earlier in the year got a good run in Parliament last week, making three appearances at the last Question Time this sitting, as well as finding its way into John Armstrong and Jane Clifton's columns (though it was misquoted in the latter, and nobody mentioned that it came from Salient). You can find the original story here. While you're at it, check out Geoff Brischke's hilarious "Warship Commander" series, parts 1, 2 and 3. There's been an even funnier one where he goes to a recruitment agency to try to buy "permanent workers" for his plantation, but that's still not up on the website yet.]

[Nippert-grade self-promotion: I've got a few entries in a photo competition aimed at encouraging young people to become more engaged with political issues. Go check it out - and of course, if you want to vote for me so I can win that camera, that would be great, too. If you're interested in that sort of thing, you can also check out my photo archive, featuring Hikoi, hair gel, and a bloody skinhead.]

Newsflash: Economists are Wrong

This just in, from the office of Trevor Mallard:

A Treasury report released today forecasting the take-up of student loans following the introduction of the no-interest-while-studying policy shows just how inaccurate economists' forecasting of behaviour can be, Education Minister Trevor Mallard said.

"This report highlights how out of touch with human behaviour some economists can be. Even the Treasury report, which was reasonably conservative, got it badly wrong. This makes a further mockery of extremist economists who have used wildly inaccurate figures to bag Labour's proposal to scrap interest on student loans.

Alright, attacking WestEvilGreedyCapitalistPac is one thing, but slamming Treasury, too? Economists are "out of touch with human behaviour"? Forgive my geeky bias and Vulcan tendencies, but, uh, this seems rather illogical. After all, *somebody* has to make educated guesses about the future, and if not economists, who? Astrologers? Soothsayers? Press secretaries?

It utterly begs the question - oh, let me stress that again - it's crawling on its hands and knees, begging, begging for the question: If economists are useless, out of touch, inhuman and generally wrong, *who the fuck did Labour's costings?*

Are they: a) Inaccurate economists who are out of touch with human behaviour? b) Economists spliced with human genes? c) Not economists at all?

All I can says is: Does not compute. Does not compute.

The New Old Right

"If you're not a liberal at 25, you have no heart. If you're not a conservative by 35, you have no brain." Well, he's got the second part down pat. At 35, self-confessed conservative Simon Power is National's Senior Whip and bright-young-thing. Salient talks to him about conservatism, his generation, and visiting Mary-Jane. This is the second in a series of interviews conducted with young MPs for Salient magazine, and reprinted here with kind permission from Editor Emily Braunstein.

[At a candidates forum on 20 July, Vic Politics Professor] Margaret Clark told us that you had wanted to be in Parliament since university. Did you have political ambitions before that?

No, not really. I went to Vic to study law and picked up first-year politics in 1988. I was one of those rugby-jersey wearing, back-row sort of fellows who had a relaxed view of lectures, and at the end of the first year politics class, Margaret said, 'look, if you feel passionately about politics, you should get involved, don't just sit on the sidelines'. That rang pretty true for me, and she's been a bit of a mentor in the sense that she really ignited in me my interest in NZ and US politics from the late 80s. [She's] someone who I have very high regard for.

At that stage, where did you see yourself in 20 years' time - now, I suppose?

I was practicing law busily in Auckland for Kensington Swan and I got a phone call from a friend of mine to say that they thought [sitting MP Dennis Marshall] was going to retire from [the] Rangitiki [electorate seat], and if I wanted to run, I'd better get back. So I gave up my job in the law firm and came back home to run, primarily because I thought if I didn't do it now, that's the kind of seat where somebody could hold it for 20 years and you'd never get another go at it.

When you first started out, did you see yourself where you are today, in terms of your position and the views that you hold?

I'm probably more conservative that I thought I'd be, at a younger age. And I represent a conservative electorate. Yeah, I guess perhaps I always thought I'd be doing it a bit older, but the opportunity came along and had to be taken.

You think in another 20 years, you'll be even more conservative?

No, I don't think so.

You've hit the ceiling?

I think I have - I'd be disappointed if I was more conservative in 20 years, to be frank.

Do you have any aspirations to be leader of the National Party one day?

It's not something I've turned my mind to.

Yeah? Okay... So, what do you see as the important issues for the country in the mid-/long-term?

When I came out of university, I had ten good mates. We all went through together. Seven of those live overseas and are bringing up their families in [other] countries. So the medium-term goal for me is to get some of those people back to New Zealand.

And what will bring them back?

I think a country that's run on a basis of freedom and less involvement by government will attract people home. People of my generation don't like being told what to do all the time. This is the generation that has had to balance student loans with retirement savings, this is the generation that has had to balance higher overseas earnings with lifestyle and family choices in New Zealand. They are capable, bright people, who don't need to be told what to do by Helen Clark and her government.

They don't want help from the government?

I don't think that the expectations that people of my generation have of the government are high, in the sense that I think they'd just rather they were left alone.

Do you think it's a product of your generation's experiences?

Yeah, I do. This is a group of people who were brought up in the Roger Douglas, Reaganomics, Thatcherite years, and are capable of making their own decisions in a pretty smart way. They won't need to be told what to think or what to do by people who, frankly, have pretty minimal life experiences themselves.

What are the other defining characteristics of your generation?

It's probably a generation who have had to come to grips with the fact that there is no something for nothing, whether it be in tertiary education, saving for your retirement [or] battling floating mortgage interest rates. It's a generation of people that are kinda squashed between wanting to exercise their own overseas ambitions to better themselves and to repay loans [and] trying to balance that with wanting to make a contribution to their country and stay in New Zealand. And at the moment, certainly if my friends are anything to go by, we're losing that battle a bit, because more of them are away than they're here.

Would you say that they've had a bad experience of government?

Yeah, that may be right. Reagan always use to say that government isn't the answer to the problem, government is the problem, and I have some sympathy for that view.

What's your interest in American politics, anyway?

It's just something I've always taken an interest in. Did a couple of courses at Victoria in the later part of my degree, and always really enjoyed it. It's a complex political system, and I enjoy following it.

Who's your favourite American leader?

Different leaders bring different qualities. I suppose it's a combination of recent US President that have got a combination of qualities that vary from ease, to battler... having an optimistic and sunny disposition is always a helpful thing for a politician to have. I think that if people see that politicians are grim, it's pretty hard to get enthusiastic about politics.

Who's qualities would you most like to have?

Oh, I'm quite happy with my own qualities, Keith!

If National had its way and Don Brash's vision was carried out, what would race relations in NZ be like in 20 years' time?

I hope that it would be harmonious, I hope that controversy would have fallen behind some time ago. I hope that [the] issues that still provide the stinging nettle for people around treaty negotiations and settlement would have been concluded. And I'm pretty confident that NZers are tolerant, fair-minded people who just want to see everybody have a fair go.

Do you think that, in that future, there will be a place for independent Maori identity?

There'll always be a place for ethnic diversity across the board. Because [the Treaty of Waitangi is] between two parties, [it] will always provide a special place for those two parties. The trick is not to allow it to create a whole lot of unclear division and undefined legal rights, I think that's where some of the difficulty has arisen in recent years.

Things like including the Principles of the Treaty of Waitangi in legislation... as a lawyer, I look it that and find it quite difficult to get my head around, because it doesn't give any certainty as to the meaning. Don Brash has said very clearly that we will remove from legislation, where appropriate, any references to the Principles of the Treaty of Waitangi.

So it's the "Principles of the Treaty" that you're concerned with, rather than the Treaty itself?

Yeah, I think that if you attempt to turn a historical document into a living document, you have to be clear about what it's terms are, and I don't think that we've had that clarity.

How's National going to get that clarity?

I think that these things evolve, I think that New Zealanders have a generous view of where their country is going to be in the next 15-20 years. And I think that stuff will naturally grow. What I don't think is helpful is Parliament attempting to create a sentiment in legislation which is ambiguous.

Would you say that Don Brash is of the Rogernomics generation? With the Ruth Richardson crowd?

No, I think that Don has proven himself to be one out of the mould, actually. Quite a different politician to any politician that we've seen in recent history. He brings a unique set of built-in credibility as a former Governor of the Reserve Bank, and [he's] sort of an anti-politician, which makes him a good politician. I think he's doing a great job.

Would you say that, philosophically, he's still part of the Rogernomics era?

No, I wouldn't say that. That was nearly 20 years ago. Politics of New Zealand has moved on, in my view, from a straight left-right debate, and is becoming more about finding a path that meets people's expectations about government in their lives without returning to a highly interventionist state that you saw before 1984.

Isn't that a left-right debate?

No, not necessarily, because [that] can occur as much in social policy as in economic policy, and we've seen that in this last term in Parliament with legislation around prostitution law reform, and civil unions, smoking in bars, etc. It's not whether you agree or disagree with those issues, it's whether you think government has a role.

Isn't more or less government intervention the left-right debate?

I see it as being wider than that, because the left-right debate in the 80s and 90s was very much focused on the economic theories. We've seen a debate emerge in the last 5 or 6 years which is much more based on social policy, I think.

So is economics no longer the primary axis of contention in New Zealand politics?

When you look at the Reserve Bank Act and Fiscal Responsibility Act, those pillars haven't changed. Do we agree that inflation should be kept capped somewhere between 1-3%? Well actually, yeah, the two main political parties do agree about that. Has the Labour Party adopted what could be seen as a fiscally prudent approach to managing the economy? Arguably. So yeah, I think the debate has probably shifted more to the social context than the economic one, in many ways.

Economically, are the differences between Labour and National still significant?

Yes, I think there are some areas that are still significant, and that relates to the extent - the size - of government, rather than completely different economic foundation for making policy decisions, which you saw in the difference between the 70s and then the 80s and 90s. Looking back now, between the late 80s and early 90s, in many ways, it was a continuum of the same type of political policies.

Would you characterise this as a consensus on key economic issues?

Superannuation is a good example. There is consensus there. The two major political parties have agreed: 65% of the average wage at 65 years old, and to maintain the Cullen Fund. That's consensus.

Is that consensus a temporary phenomenon?

Who knows? The political personalities of the time will decide that. I think that people would be surprised at how much the two major political parties agree on, in the sense of voting for or against legislation in the house. If we vote with the Labour Party on different issues, that never makes the headline, because there's no story there. Free trade is a good example. [It'd] be pretty churlish of us in Opposition, to oppose free trade agreements when we would do the same in government. You have to maintain your credibility on the issue itself.

You said that you're more conservative than you thought you'd be. What's your position on raising the drinking age?

I voted for the bill to go to a Select Committee, but I haven't made my mind up about what I'm going to do about it when it comes out of the Select Committee, which now will be after the election.

What's your position on decriminalising marijuana?

No. I've spent a bit of time doing some criminal work as a lawyer, at the courts on a Monday morning. And the prisons cells, police cells, etc. I don't believe that cannabis is something that we should be, in any way, encouraging usage of in New Zealand.

And you think that the current legislation is the best way of tackling the problem?

I think there needs to be a lot more work done in the education field, but I don't think that any form of decriminalisation or legalisation will help the issue.

Back when you were at Weir House, did you ever smoke pot?

At Weir House, no.

During your time at university?

Once.

That would have been illegal, right?

Well, it's not something that I've ever done since, and with the benefit of hindsight, I wouldn't have done it.

So what would you say to other young people who want to try it?

Don't waste your time.

And the people that have tried it - should they be considered criminals?

I think the current situation is right where it is.

How do you justify saying that government should intervene less in peoples' lives and then saying that the government should ban personal drug use?

It's what you're always balancing, the right of the individual against the right of others. But, oh, I don't really see it that way, actually, to be honest. I just think there are certain fundamental things that the state has a role in. It's a question of where you draw the line. Simple as that.

ACT would probably say you're a freedom-hater, because you're saying that the individual doesn't have the right to do his/her own body as they please...

And ACT's message is very popular with the electorate at the moment.

Well, come on, I think that issue needs to be address. If you're saying that the government should stay out of people's lives, then shouldn't drugs be part of that?

No.

Why not?

Because the public elects a government to sanction certain things, and not to sanction other things. Presently, drug use is illegal, and there is no call for a change of law.

But *you* are calling for a government that gives more freedom to people.

It's just an extreme on the continuum. It just depends on where you draw the line on the continuum. I don't draw it that far down the continuum.

So you think that the government is going too far in areas like taxes and social welfare, but not in its drugs policies?

Yeah. I would draw the line more closely on those issues that you related to formerly.

Matters of Interest

If David Farrar's blog is anything to go by, it looks like National has discovered from the failure of their own policy the trick to torpedoing Labour's - throw screeds of meaningless numbers at the problem and bury any semblance of sense. While it might serve National's purpose to obfuscate what "no interest" means in dollar terms, it misses the point: The interest-free policy's strength is not financial, but psychological.

Have you ever seen a student loan statement? On my $50,000 loan, each interest line is around $300. Per month. That's more than a quarter of my income (no, Salient does not pay well).

I *know* that I'll get some kind of interest write-off, but it doesn't help. For the whole year, all I can do is stare at the spinning Loan-o-Meter, worrying about how much I'm earning, what kind of write-off I'm eligible for, what I actually have to do to get it... then I contact IRD, spend hours on hold, get an earful of arcane Bureaubabble, fill out forms, and at the end of it, nothing. No cheque in the mail, no flashing lights. The statement comes again eventually. It might show a slight dip in the balance. It might not, in which case I have to stick my head up the tax wazoo again.

A lot of it is poor communication and IRD being IRD. A lot of it is the sheer terror of seeing a wall of numbers signifying owed money with your name on it. Either way, it sucks.

The biggest problem with student debt has always been the *feeling* that paying off the loan was a Sisyphean task. And as with Sisyphus, it's not the boulder that's the problem - it's the bloody hill! Get rid of the hill, and pushing the same boulder will seem like a much more straightforward (and less epically torturous) task.

And it is for that reason, dear National partisans, that nobody gives a toss about how much the difference is between this policy and a top-rate tax cut of 6% over 45 years (see endnote). Sure, students & co. are being bribed, but it's not about the money.

If it was, then National's $70m bribe should have had a quarter of the effect. The analysis of the Herald poll, sampled mostly before Labour's no-interest announcement, showed that National's own complicated bureaucratic tangle of a tax rebate actually *cost* them a whooping 12 points among students! (And to a lesser extent, their parents.) It proves that throwing money doesn't necessarily help; throwing money in a way that necessitate explanation by way of an IRD Bureaubabble sonnet *certainly* doesn't help. I'm sure National would have seen this as a major defeat. If only they didn't get nuked to oblivion afterwards.

Anyway...

An interest-free student loan might look like debt on paper, but it doesn't work like debt, and most importantly, it doesn't feel like debt.

Labour should consider that this works against them, too, in that this is bound to affect borrowing behaviour. They argue that when they introduced partial interest write-offs, there was only a modest jump in the number of borrowers. Well, it didn't give them a gigantic boost in the polls, either! The partial interest write-off scheme was another complicated bureaucratic tangle that didn't have as much of a political impact as it should have because it wasn't well understood. *That's* why it didn't affect borrowing behaviour much.

By the same rationale, everyone understands "no interest". The political impact reflects the attitude change, which should be a good indicator of change in borrowing behavior.

But even without changes to borrower behaviour, the cost of Labour's policy will *at least double* within a decade, simply because student debt was already projected to double. This was a projection made before Labour's announcement and is a plain, simple, apolitical Ministry of Social Development/IRD projection that is uncontested and uncontroversial.

Contrary to the oh-my-god-the-Debt-Monster-is-out-of-control scaremongering of the Greens and NZ University Students' Association, the growth in the total debt is simply because more people are entering the tertiary system and thus more people are borrowing. And because it takes graduates a decade to pay off debt that they accrued in 2 or 3 years, you need at least three or four times as many graduates working and paying off their loans to offset the number of new students borrowing. This is the "breakeven" point, after which the total debt would stabilise.

But here's the interesting part - the original projection for the breakeven point was in 2015, with total debt at $13b. Even if we play along with Labour's fantasy that making loans painless will not encourage more people to borrow, there's still the matter of voluntary repayments, which Mallard has been conspicuously quiet about.

How would this projection look if people stopped voluntarily forking out real money to repay an interest-free debt? For all the combined might and wisdom of IRD and MSD, they say "it is not possible to calculate the amount of voluntary repayments made in a year". However, we know that around 47% of repayments are made directly by borrowers. Some of this is from self-employed or overseas graduates, but one would expect a lot, if not most, of it would be from voluntary repayments. Given that this represents nearly half of all repayments, that's er... a lot. Without behaviour modelling, I can't give an educated guess on how much this will change, but put it this way - total repayments *can* go down by as much as 30-40%, and the only reason it might not is that people are not rational about it.

Stuff the borrowing - this alone will move the breakeven point back massively, and the point at which the loan stabilises will be much higher than $13b.

But put borrowing changes back into the equation. Around 20-40% of students eligible for a loan don't get one. Again, all we know is that total borrowers *can* go up as much as 20-40%.

[UPDATE: I've lowered the rough estimate from 40-50% after a statement from Mallard's office saying that the Westpac numbers (which, like mine, used the total eligible students vs total borrowers data) doesn't take into account the part-time students, who are much less likely to borrow. Seems reasonable.

They also burn Westpac, big-time, for sticking their necks out into the poltiical arena when they have a financial interest in it (banks + loans = duh!). "Inflammatory, self-motivated garbage like the analysis from Westpac is totally unacceptable." Burn!]

The two don't just combine - they compound. More borrowers who repay less on their loan will mean a multiplied increase on total student debt.

And Labour's $300m costing excludes the write-offs that are already part of the system, too, which stands at $208m in 2003/04 (I'd overlooked this before, and this explains why the costing seemed so low). If more borrowers come into the system and pay it off at a slower rate, not only will the $300m increase, but also the existing interest write-offs.

I won't bore you with more factors, lest I be accused of trying to obfuscate the issue on National's behest. But, all the factors are big, and they all point to one direction: Up.

That doesn't mean I think the policy is bad. As economically irrational as a non-inflation-adjusted loan is, it can also be considered as an ingenious equaliser. Those who take the longest to pay off their loan (who can be considered to be most disadvantaged or burdened by the loan system) will receive the most benefit out of this. Back to the Sisyphus analogy, it's as if the boulder is being pushed down a very gentle slope.

That, in itself, is a piece of mad, loopy genius. But just because it's good, it doesn't mean it's good at any price. $300m sounds perfectly reasonable and affordable now, but what about 10 years down the track, when the total student debt is two, three or five times its current size?

As much as I love Labour's bribe, I have to join the chorus asking them to go back and give us a real costing, and what it's going to look like a decade down the line - since we're paying for it and all.

--

[Funny aside: One of my reporters at Salient, Matt Jones, covered Mallard's visit to Vic at the beginning of this year.

Mallard suggested that that major changes in student loan policies were only likely to happen "if the country struck oil, and we were guaranteed economic security for the next 50 years". In the meantime: "I want to keep improving things but it will be at the margins rather than a massive change."



(The article was part of a "Topless Politicians Talk About Your Lives" series of reports, which is why it looks a bit funny on its own.)]

--

[Economics wonk aside: All the working-life taxes-vs-interest-free-loan calculations floating around need to be approached with extreme caution. If they include inflation, or calculate salary growth without *cancelling* inflation, then they're not calculating in present-day value, and will therefore be horrendously skewed and completely wrong *coughdavidfarrarcough*. After that, there's the principle of the Time Value of Money to consider - that money is worth more sooner rather than later, completely separate from inflation. And finally, there's the consideration of marginal utility of money - $1,000 is worth a lot more to me when I'm a poor graduate on a crappy wage than when I'm a gazillionaire on my private fortress island with a giant Death-Ray holding the world to ransom. Grossly simplified - money is worth significantly more when you're younger and poorer.]

--

[A slightly belated congratulations to, and snipe at, NZUSA: I was originally going to do a post on how economically irrational bits can't be grafted onto a loan system. Who knew that all it took was a quick snip to make the Debt Monster harmless? And who knew that they would actually do it? I stand corrected on both counts. However, I maintain that the focus on total student debt is intellectually dishonest. The de-horned Debt Moomoo will grow massively as a result of something that's really good for students. Will they now dare voice their objections against debt? What can they say? "Government, stop making students take the money that we asked you to give away for free?"]

--

[Apologetic aside: Alright, I should really have split this into two pieces rather than have four "asides", now, shouldn't I?]

Out of the Trenches!

I have to hand it to Bill English - it took some balls to come and speak at Victoria University today. The student crowd is generally unpleasant for right-wing MPs, but for a right-wing MP trying to convince them that no interest on their student loan is a bad idea, it was downright hostile. They treated him like... well, like he was Max Bradford, and though he put up a good fight, one man was never going to be able to fight the crimson tide that is sweeping over the campuses.

There's little doubt that Labour's policy has really hit the mark. Just last week, National took a shot at the same thing, trying to create incentives for graduates to stick around and work in New Zealand, but was met with a lukewarm response.

I mean, making student loan interest payments deductible from your income for the purpose of calculating how much you pay in tax? Sure, the policy center may be chewy caramel and the money-in-pocket coating may be delicious chocolate, but when that candyball is being stuck up the tax policy wazoo, the taste gets replaced by an altogether more confused response. And a bribe not understood is a bribe not taken.

Labour aimed at the same spot, but shot a cannonball through National's arrow. It was as clear as it got - no interest, period. It was so clear, in fact, that I had trouble figuring out whether I actually understood it properly. Dumbfounded, I called Mallard's Press Secretary:

Me: "Uh, I just wanted to clarify - does that mean no base interest?"
MPS: "It's all in the press kit."
Me: "Yeah, I just read it. But there is still an inflation adjustment component, right?"
MPS: "No. It says 'no interest', doesn't it?"
Me: "Um... yeah, but... I mean, there's still an inflation adjustment, right?"

I was seriously expecting them to say that there is no interest, just an "inflation adjustment". And beside, who'd be crazy enough to offer an interest free, non-inflation-adjusted loan? After all, such a loan is not a loan in any conventional sense.

And that was the point. The student loan scheme has mutated to the point where it's no longer a loan, it's more like a universal allowance on one end and a 10% graduate tax on the other, with how much you take affecting how much you pay.

How is this different from a loan? Sure, there's a choice to pay more or borrow less, but there are no incentives and no pressure. The system is not governed by price mechanisms, but by government policy alone. I don't have a word to describe what it has become, but it doesn't look like any other loan schemes out there.

It won't behave like any other loan scheme, either, and that's why, even though it breaks the fundamental mechanisms by which loans operate, it's still possible for it to work, via the very visible hand of government, which dictates how much you can borrow and how much you have to pay back.

The real issue, as National points out, is the cost. All the smart money right now says it'll be well above the $300m costing that Labour has put out. John Key has just thrown into the hat a figure of $550m, which, to be honest, still seems quite small. Total student debt was expected to climb to $13b by 2015 anyway; if there was indeed going to be an "explosion", with more people borrowing and voluntary repayments declining, a $15-20b debt wouldn't be unreasonable. And if the current 7% interest rate was applied to a debt of $15b, the government would be missing out on revenue that would, in theory, be just over $1b per year.

It's a curious position that National have found themselves in - they're complaining that this scheme will benefit us soon-to-be capitalist parasites, at the expense of the proletariat running our factories. I wonder how that'll work out for them, especially when they finally launch their tax policy.

Is anybody else slightly perturbed, though, at how hard and fast these first four days have been? If Labour drop a nuke like this for the opening volley, what will they do for a follow-up? For that matter, what on earth have they got stashed away for the end-game?

--

[I was at an Australasian Parliamentary Study Group seminar tonight, featuring Jordan Carter and David Farrar. I'm sure one, or both of them will talk in detail about the contents of the seminar, but I found the contrast in style between the two quite refreshing. David, being the pollster, had a Powerpoint presentation on the typology of blogs, demographics of blog readers, number and trends of readership; Jordan, being the lefty intellectual, expressed his contempt for Powerpoint and talked about blogs as a medium for democratic participation and public debate. They should do joint gigs more often!]