NZ POLITICS DAILY: The 'Backdown Budget'

History will now record this year’s government Budget as the "Backdown Budget".

That’s how significant it is. Virtually all commentators have pointed out that despite the small amount of money that the ill-fated increased class size policy aimed to save, the political implications have turned out to be anything but insignificant.

The problem is it took Hekia Parata and the government a lot longer to realise that. This shouldn’t have been the case with a major Budget policy. After all, wasn’t a "run it up the flag pole" proposal designed to test the waters.

Instead, it was part of the main government planning document immortalised in print (and even in a smart phone application). And, although the $174 million savings are indeed relatively small, they’re only slightly less than the carefully crafted $197 million surplus forecast for 2014.

"Complete and utter capitulation" is how John Armstrong (and just about every other commentator) describes yesterday’s backdown. Armstrong says that, as worrying as the political blundering will be, the reaction of "Middle New Zealand" to what are actually fairly minor cuts will be as worrying: "While middle New Zealand buys the idea of Budget surplus, it seems less keen to make the necessary sacrifices to achieve it. English can only suck so much by way of savings out of the lower ends of the income scale without inflicting real pain" – see: Total surrender inevitable on botched policy.

The education sector shouldn’t be under any illusions that the government is admitting the policy is wrong. John Hartevelt reports that Parata and Key’s U-turn was motivated by what Parata described as "a disproportionate amount of anxiety" among parents over the plan – see: Class size backdown political.

Gordon Campbell makes the same point, citing the conference call involving Key, English, Joyce, Brownlee and Parata when it was decided that the political fall out was too great to bear. Campbell also makes an interesting comparison with the debate on National Standards: "when it comes down to getting runs on the board… Anne Tolley, Parata’s widely derided predecessor as minister got her national standards policy through. Parata failed to do likewise" – see: On Hekia Parata’s big backdown.

The education minister will keep her job in the meantime but the consensus is that she can’t afford another stuff up. The most likely scenario is that she will retain the portfolio in the short term but will be shuffled into another at the next opportunity.

There is plenty of advice for her, particularly that she should do her homework on the detailed effects of proposed policy and to consult the sector on change before making big decisions.

Although Parata is trying to spin the backdown as a case of her listening to the sector, the reality is that polling made the difference and the stoush will have left scars on both sides which will make future "consultation" harder not easier.

The backdown was the only option but the damage has been done according to Duncan Garner: "They struck at the heart of the frontline they promised so many times not to touch" Garner says, what is more vulnerable than the ephemeral surplus, is National’s grip on power and that the two weeks of stumbling around has seen Key and National spend a "pile" of their political capital – see: Humiliating backdown, but damage done.

National has taken a big hit agrees Matthew Hooton, but he also thinks that Key personally may come out of it on the plus side in the long term as he is seen to have protected middle New Zealand from the worst of economic austerity – listen to Hooton and Massey University associate professor Claire Robinson in RNZ’s National governmentt 'lacks filtering process'.

In his NBR column, Hooton is withering in his criticism of the government for stumbling on such a fiscally insignificant policy while being unwilling to address superannuation and the cost of Labour’s 2005 so-called election bribe: "National’s refusal to touch those areas means that Bill English’s fourth Budget is more accurately described as Helen Clark and Sir Michael Cullen’s 13th, which perhaps explains why the government knighted him last weekend" – see: Govt fiscal strategy to unravel after humiliating education u-turn. And from an entirely different perspective, there are some similar fiscal and ideological questions on The Standard: Flip-flop still leaves hole in education budget.

In the latest Listener, Jane Clifton is particularly critical of the Budget, suggesting that it’s "not exactly been a battle cry of triumph for National" – see: Hekia Parata and the Budget burble. Clifton says the blunders and backdowns over the class size issue "underlines a curious new development in the nature of Budgets under this Government: they are no longer set in concrete". And if the Government can get the numbers wrong on the class size policy, this immediately begs the question of "how much else in the Budget cannot be relied on?"

Certainly, we will see further backdowns in the future because modern governments are increasingly ready to re-position themselves whenever their principles are found to be out of sync with the electorate.

Without the strong ideological anchors that political parties used to have, they’re more adrift in a sea of opinion than ever before. So one minute they firmly believe in, say, extending the use of mining in conservation land, then the next minute they don’t.

Consequently, there’s no room in modern politics for MPs, ministers, and prime ministers such as Michael Joseph Savage or Roger Douglas. And Margaret Thatcher’s once-admired motto of "This lady is not for turning" is now seen as completely out of place in our era of ‘backdown politics’.

Other important or interesting political items today include:

It seems a capital gains tax would hit some MPs quite hard, as Alex Tarrant reports that 121 MPs own at least 292 properties between them. There’s some very interesting detail of "who owns what" in Parliament – see: Who owns all the homes? MPs own all the homes.

As Labour and the Greens try to present themselves as an alternative Government, Chris Trotter points out that political necessity is actually driving them further apart ideologically – see: Green/red alliance makes unappealing brown. In another opinion piece from Newswire, it is argued that a Labour-Green coalition "will not be a marriage made in heaven" – see: Greens could be hard to handle. Meanwhile, Vernon Small also has an interesting analysis of future coalition possibilities – see: Peters predictions gather pace.

Paula Bennett’s breeding ban has little support from editorial writers – see editorials from the Herald (Ban on abusers breeding a step too far), The Press (Bennett's loose talk) and the Waikato Times (How far should we go?).

The Government’s claim that it already has its mandate for asset sales ignores fundamental parliamentary processes according to opposition politicians – see: Danya Levy’s Asset-sales law 'being rushed' to dodge poll. One specific objection is that Treasury will not be able to complete an official comparison of private versus publicly-owned electricity prices which independent energy analyst Molly Melhuish claims are 12% higher – see Adam Bennett’s Expect power bill rise if state assets sold: analyst.

Pokie machines have been under attack as a blight on poor areas but now the Lotteries Commission is facing the same accusation – see David Fisher’s Lotto targets poor areas, claimed health official.

Pokie Charities are also under attack for using their funds to lobby against Maori Party MP Te Ururuoa Flavell’s Gambling Harm Reducation Bill which aims to stem the flow of pokie funds from poor to wealthy areas – see the Timaru Herald’s editorial – Gambling bill on track and Denise Roche’s Pokies and porkies. A critique of the bill is put forward by Gareth Morgan: Politics and pokies a bad mix.

Following on from Colin James’ overview, Rod Oram and Bernard Hickey both preview presentations to The Voyage seminar this weekend – see: Bernard Hickey’s The Voyage: The Engine Room Dilemma - All Hands Below Deck and Rod Oram’s The Voyage: On Interpreting and Sending Messages From the Deck.

Steve Kilgallon has a comprehensive backgrounder on Dunedin’s new stadium and the large debt now facing the Dunedin City Council – see: Dunedin's House of Blame.

Finally, the Government’s alter egos on the walls of the Backbencher pub were also feeling the heat as a fire broke out at the iconic bar – see: Puppets charred in Backbencher fire and Embattled minister woken by fire at iconic pub.

Bryce Edwards

NZPD Editor (bryce.edwards@nzpoliticsdaily.co.nz)