Politics Taking Precedent over ‘Policy’

Over the course of the last two years in Wellington, I have come to realise something. Many people enter politics with the best of intentions, however, they end up becoming a part of the system. In my opinion, the majority in the House of Representatives place poll numbers ahead of effective governance and public administration. And this is failing the public. There appears to be no vision, let alone a direction, for the future of Aotearoa New Zealand from either the government or Opposition.

Those who know me well will recall that I campaigned for Labour four years ago, and at the time I was genuinely enthusiastic about Jacinda’s message of hope, change and progress. I was proud to be part of a movement that fostered change. Solving the problems surrounding the housing market, inequality, education, health, well-being, and climate change was a moral imperative for me.

The Labour Party is now in power. But how well have they done on objective metrics such as Housing? With the exception of our crisis management – such as our containment of Covid-19 – they are worse.

In the past year, house prices have increased by 32%. The inequality gap in wealth and income worsened under the current government than under any of the previous three governments combined. PISA rankings in Math, Science, and Reading have all fallen significantly. We have inadequate public health measures due to a limited number of intensive care units, and our doctors and nurses are not receiving the salaries they deserve. Meanwhile, the Ministry of Health bureaucrats have more money in their coffers without delivering any meaningful results. In spite of government commitments to spend billions on mental health, the situation continues to worsen. With regard to climate change, our oil and gas ban has caused market externalities – we burn more coal to generate electricity, which resulted in higher emissions. This is utterly unacceptable.

Politicians always claim in the media that they tried their best. In a company or in the private sector, if this was the performance result, they would all be severely questioned by the Board of Directors. However, in politics, there is no direct accountability. Failures are not grounds for dismissal, except for the voting system every three years.

However, one of the reasons for government failures have to do with the lack of competition. Currently, the Opposition is in disarray. Instead of proposing public policy solutions of their own, they are fighting among themselves. There is little incentive for the leading party to push for positive change when they are dominating the polls without much being achieved. Essentially, there is no need for them to perform better. Furthermore, the quality of politicians throughout the House is abysmal. The fact that the Minister of Justice, Kris Faafoi, had to remain in politics – despite wanting to leave – tells us much about the lack of talent within the party.

Personally, I really don’t care who is in charge so long as the performances are excellent. In a similar manner to when the CEO of a company changes, where outputs and profits stay high. For this to occur in our political system, we must cultivate more competent and talented individuals across the political spectrum. We need people that care more about ‘policy’ not ‘politics’ in the future. This is essential to the economic growth and well-being of the country.

It matters for all of us.

The Hell of Good Intentions – Climate Change

Far too many times across history, I’ve seen and read about policymakers causing blunders. At every step, most people utter the claim that they have ‘good intentions’. Well, as Samuel Johnson quipped, “hell is paved with good intentions”. This applies to both sides of politics.

We see the classic example on climate change. Indeed, we have the moral obligation to do everything we can to lower our emissions and achieve net-zero by 2050 (the earlier the better for me). The centre-left so far failed despite the good intentions, and the centre-right under National refused to put the agriculture sector into the ETS (explained later).

The centre-right did very little with the global issue when they were previously in government. Under the National government (2008-2017), the Emissions Trading Scheme (ETS) prices dropped with a ‘flexible’ cap, not binding like now; NZ maintained the status quo for climate change. The agriculture lobby within the right of politics made the sector exempt from the ETS. This was a problem and still a problem for those that want lower emissions as efficiently and effectively as possible.

Nor have the current centre-left government made much progress. What really frustrates me is that both the Climate Change Commission (CCC) and government failed to make empirical cost-benefit assessments. According to Stats NZ, our emissions have not fallen but increased by 2% in 2018-2019. This is criminal. Our net emissions are actually set to increase, not decrease. Why?

Let’s start with the oil and gas exploration bans. This caused ‘substitution effects’ in the market – where one consumption of a good gets replaced by another due to higher costs. Consequently, we have a record high imports of coal into the country. The passage of the Zero Carbon Act in Parliament means nothing when we are failing to reach our targets. The energy market shifted towards alternative resources that emit more carbon dioxide in the air.

To give some credit, some good policy mechanisms have been introduced, primarily under Climate Change Minister James Shaw. We have a binding emissions cap within the ETS. This follows basic economic logic – having a binding carbon tax, or ETS, is the simplest and fastest way of lowering emissions. According to the Pigou Club – with renowned members such as Joseph Stiglitz, Daron Acemoglu, Kenneth Rogoff, Greg Mankiw, and Paul Krugman – such a scheme corrects market externalities. Fortunately, New Zealand leads the way with a binding cap now.

The starting point and main tool in lowering emissions should be with the ETS, not government pet projects. Spending millions of dollars on EVs and other government-led projects do not reduce our net emissions overall. It simply allows other market players to purchase carbon credits that will pollute anyway. If the government decides to lower its emissions, other people can pollute more because of the binding cap. According to Professor Hazledine from Auckland, the CC has not made it clear whether we are sticking with the ETS or a carbon tax. We should focus on improving the ETS and finding other technological, urban planning and public transport solutions to lower emissions.

Free trade agreements with a sustainable development framework is excellent too – Switzerland and Peru signed one with the first ever ‘carbon offset scheme’ which lowers net-emissions between both sides by finding comparative advantages of their respective economies. Peru finances sustainable development projects in Switzerland and takes credit for emission cuts.

Climate change is a global issue and requires our country to play its role. Efforts from all of us, but primarily the largest emitters such as China, the US, and India are also imperative – we live in a global village and all our actions have consequences. New Zealand is a responsible stakeholder in the international rules-based system. I remind people that we must stop becoming doctrinaire to the government’s intentions and focus on the effectiveness of the policy.

Lower emissions with cost-effective policies should be the goal. For example, imagine sending your broken car to a repairer, and he fails. Would you be happy if he gave you excuses and just said “I tried and I had good intentions”. You’d be like, “screw that, do it again, and get it fixed properly”. Similarly, good intentions mean jack-all when it comes to climate change. Some good work has been done, but a lot of the policies that have recently emerged will do very little to lowering our emissions.  

This is why fighting climate change is so urgent | Environmental Defense  Fund