NZ POLITICS DAILY: National Government in precarious position

Has the National Government ever looked in so much trouble? Certainly over the past five years there have been plenty of scandals and major policies problems for John Key’s government to navigate. So far National has been able to use its strong political management skills to minimise its losses. But some contemporary challenges are suddenly making re-election less likely next year.

Business reporter, Pattrick Smellie writes today’s must-read column about the state of the National Government, reporting that ‘As we approach the end of the year, widespread assumptions in the business community that there is no likelihood of the Government changing next year are fading’. He argues that National has to deal with a ‘clutch of complex issues’, which are suddenly looking very ‘dangerous’ due to a resurgent and dynamic Labour Party under David Cunliffe. Smellie outlines the four difficult policy issues as being housing affordability, the ‘ultrafast broadband kerfuffle’, environmental issues, and the Government’s partial privatisation programme – see: Tricky issues could haunt Nats. [Read more below]

Reflecting National’s difficulties is the third opinion poll in a row showing very good news for the Labour Party – see Stuff’s Labour support highest in five years. There’s actually both good and bad news in this particular poll for National, but there’s no getting around the fact that with National on only 42% in this poll and no obvious coalition partners, a Labour-led coalition in 2014 is looking more likely than ever. This is also reflected in the iPredict trading stock for There will be a National Prime Minister after the 2014 General Election currently at 48% likelihood (with Labour’s likelihood at 52%).

Housing affordability
Housing affordability has become the key political issue of 2013, and Duncan Garner argues that the Housing war will decide election. He says that ‘The gloves are off in the housing scrap – and first blood goes to Labour’s new leader David Cunliffe. By saying he will reverse the Reserve Bank’s requirement for 20% home loan deposits, he’s got first home buyers listening. He’s stolen the march. National’s missed the boat; it’s now playing catch-up’.

National has fought back with its new FirstHome policy – which Colin Espiner labels The great state house giveaway. Espiner is scathing of the policy, pointing to the two major caveats in the policy which make it a rather weak solution and seem as if it’s simply a quick response to the fact that the ‘Government is taking a kicking’ over housing affordability. He says, ‘If you needed any persuading that housing is the new political battleground, look no further than the Government's increasingly desperate moves to shift blame while simultaneously dealing with the impending crisis’. Today, the Herald appears to agree - see the editorial, FirstHome policy long on shortcomings.

National will need to do much more, and quickly, because the housing problem appears to be getting worse – see Hamish McNichol’s Building cooling in 'hot' areas. One of the more innovative answers is to bring in the so-called third sector to help provide social housing – see Simon Collins’ Deal paves way for 300 affordable houses.

Luckily for National, Labour hasn’t exactly been at the top of its game this week on this crucial issue. Labour ‘is in a deep slumber’ on housing affordability according to a very critical Dominion Post editorial – see: Labour misses its chance. National-aligned blogger, David Farrar has also written some very good blogposts on the issue – see Labour’s pin up example for a needy first home buyer and Dom Post on Labour’s own goal. Also, on Labour’s opposition to the new Reserve Bank loan-to-value ratio restrictions on housing mortgages, Farrar asks: Does Labour even understand what the Reserve Bank is doing?

Partial privatisation
National continues to be vulnerable on its controversial energy company share floats, especially with signs that the Meridian partial privatisation may not net as much money as hoped for – see more analysis in Brian Gaynor’s Political risk at the heart of Meridian Energy float. But the public referendum might be less of a concern for the Government – see John Armstrong’s National hopes Friday 13th will kill fight and Adam Bennett’s Ballot won't stop asset sales – PM.

It’s the price of electricity – regardless of who owns the companies – that resonates most with the public. That is why Labour is focusing more on this issue at the moment – see Adam Bennett’s Power price games. Also see David Farrar’s Fisking electricity price claims again.

Arguably the state-owned Solid Energy has also just been partially privatised due to the deal that National has done with the company’s bankers who will receive shares in Solid Energy. But don’t expect protests in the street about this particular privatisation. In fact the news has been well received in some parts of the country – see Dan Satherley’s West Coast 'ecstatic' with Solid Energy bailout.

The Broadband ‘copper tax’
If you want a succinct explanation of National’s dilemma over the ‘ultrafast broadband kerfuffle’, you can read it in Pattrick Smellie’s Tricky issues could haunt Nats: ‘Who is right in this debate depends on where you stand. If fast uptake of fibre-based broadband is the goal, then making copper wire-based services a similar price to fibre will encourage switching to fibre. But if low-earning New Zealanders need lower cost more than fibre services, then attempts to gerrymander broadband pricing are a rort’. The issue is also examined by Chris Barton in Copper tax debate continues. For the latest on the issue, see Tom Pullar-Strecker’s Govt awaits ruling over 'copper tax'.

Environment
Pattrick Smellie says ‘support for changes to the Resource Management Act's balance between environmental protection and economic opportunity has evaporated’. There are plenty of other environmental issues that are proving challenging for National at the moment. Climate change is one, and today Brian Fallow argues that ‘The Government's refusal to do much of anything to curb New Zealand's emissions is as economically myopic as it is morally contemptible’ – see: Dire response to climate change.

Nick Smith’s alleged intervention in the Department of Conservation’s submission over dam-building is dealt with in Andrea Vance’s Interference over river smells bad. And Chris Trotter explains why Control of water shapes up to be leading issue. As an aside, Gordon Campbell connects these issues with the current local government elections, saying that ‘The furore over the Ruataniwha dam proposal has shown just how crucial local government can still be, even on projects of national significance. Hastings mayor Lawrence Yule has conceded that Hawke's Bay Regional Council is both the environmental regulator and the promoter of the Ruataniwha dam project. Incredibly, the Hawke's Bay Regional Council is guarding with one hand what it is touting for commercial reasons with the other’ – see: Wellington voters smarter this time.

Economy
The economy might prove to be National’s strongest platform during next year’s election campaign. There are some signs of improvement – see TVNZ’s New Zealand economy tipped to speed up and Jazial Crossley’s Business confidence soars. But also note Josh Martin’s Employment confidence dips.

The strong economic performance of ACC – see Vernon Small’s ACC surplus opens way for levy cuts – is also a potential saviour for National. The worry for Labour is that National will be able to offer some significant cuts to ACC levies in election year – see Newswire’s Govt 'bribing voters with ACC levy cuts'.

Free trade issues are both challenging and promising for the Government, especially with the possibility of obtaining a deal over the Trans Pacific Partnership. There are growing demands for more openness about exactly what such a deal would commit New Zealand to – see Calida Smylie’s Calls for Govt to release draft text of TPPA. There is an interesting debate going on about whether it will be Parliament or the Government that has the final say about whether to sign up to the trade agreement – see Dan Satherley’s Key accused of spreading TPPA 'mistruths'. The best clarification on this comes in Grant Duncan’s The TPPA: Is it democracy?

National’s rejuvenation
National’s chances of gaining a third term in government will depend a lot on whether it is perceived as being old and tired in 2014. Therefore the party appears to be giving some strong attention to finding some fresher faces to put to the electorate. This, in turn, means some MPs have to go. For the latest retirement announcements see Andrea Vance’s List MP Auchinvole stepping down and Chris Tremain to quit politics for his family. See also, David Farrar’s More National retirements.

If there’s any doubt that National desperately needs renewal in its ranks, blogger Andrew McMillan dispels this in his analysis of the ‘Most Ineffectual MPs’, which is dominated by National – see: A Baker’s Dozen of dud MP’s. He says that National has ‘some real dead wood and are in desperate need of a prune’, and points to speculation that Colin King and David Bennett ‘may also retire at the end of this term’.

There are other areas in which National is currently looking very proactive, but not without risk. The Government appears to be winning the war on crime – see: Drop in youth crime figures heartening turnaround. In Christchurch, parts of the central rebuild might be sped up with news of: Crown uses compulsory acquisition powers to acquire nine sites. Reform is coming to the governance of universities and wananga – see Radio NZ’s Proposed tertiary shakeup opposed.

Finally, with polls looking poor for National, should Labour activists take a break and put their feet up in the knowledge that victory next year is ‘in the bag’? Scott Yorke answers this in his satire, Our boat is faster than theirs.

Today’s links

Housing

Herald: Editorial: FirstHome policy long on shortcomings

Simon Collins (Herald): Exclusive: Deal paves way for 300 affordable houses

Herald: Akl house sales drop - few signs of loan rule rush

Dan Satherley (TV3): Cunliffe: FirstHome scheme a 'desperate sideshow'

Stacey Kirk (Stuff): Govt housing announcement 'too little, too late'

The Standard: Housing: the options, the new left narrative?

Ellipsister: A question on selling state houses

Nelson Mail: Editorial: New restrictions target wrong people

Anna Pearson (Stuff): Special housing areas considered for Chch

Radio NZ: Labour fears elderly state house tenants will be evicted