The week in politics: Debt, infrastructure funding and a born again Christian party

As the government struggles to meet the expectations on its public spending Finance Minister Grant Robertson has announced he will relax the net debt target – but not just yet.

And faced with that pressure, Coalition ministers are having to think laterally about how they find the money to pay for much-needed infrastructure. Both Infrastructure Minister Shane Jones and Housing and Transport Minister Phil Twyford are looking at new ways to pay for the building of pipes, roads and public transport.

The week in politics looks too at Brian Tamaki’s reborn political party, now named Coalition New Zealand, with his wife Hannah named as its leader. Meanwhile, National list MP Alfred Ngaro is considering setting up his own Christian party and apparently has the blessing of his leader, Simon Bridges.

But first debt. Grant Robertson told a business meeting in Auckland on Wednesday that from 2021-22 the government would relax its target of getting net debt as a proportion of GDP below 20%. Instead two years from now it will introduce a range of 15-25%.

“The range is consistent with the Public Finance Act’s requirement for fiscal prudence but takes into account the need for the government to be flexible so it can respond to economic conditions,” Robertson said.

National’s finance spokesperson Amy Adams accused the government of breaking its promise on the net debt target.

The albatross

Political commentator Dr Bryce Edwards said the 20% target had been an albatross around the government’s neck and had constrained it. The new target range would give it more “wriggle room.”

“Remember this was all about satisfying the right and business community that thought Grant Robertson wouldn’t be responsible enough with the economy so they’ve loosened it, especially under the criticisms of a lot of economists and a lot of people from the left saying they’re not willing to spend enough. So, to my mind this really is a concession that they got it wrong with that 20% target and now they’re willing to spend a bit more.”

Edwards said the government could have gone up to 30%, as a lot of economists and left-wing critics would argue but it remained worried about attacks from the right.

Is it a broken promise and will the public care?

“I don’t really know to what extent the public really cares about 20% or 25% of GDP as a debt target but it does sometimes pick up on these consistent messages. Does National have a consistent message on fiscal policy? Does Labour? And they do vote accordingly, I think.”

While the government might be constrained by its own rules about how much it can borrow, cabinet minister Shane Jones is promoting the idea of bringing all the government’s commercial assets under one entity and operating in a similar way to Singapore’s government-owned investment company Temasek.

“Those commercial entities that are still owned by the Crown – and in a sense the Crown you could regard as analogous to a private equity stakeholder – and there’s a lot of money still tied up in our various energy companies, in Air New Zealand and it’s time for us to conflate them into one well-run entity, the dividends of which could then be dedicated or hypothecated to meeting the infrastructure needs of the country,” Jones said.

Singapore obsession

Government ministers have been talking about the proposal and it has the support of Phil Twyford but it is not yet policy.

Edwards said this was an example of New Zealand First doing what a junior coalition partner should do by promoting new and different ideas. New Zealand First had always had an obsession with Singapore and how it managed its economy.

On the party front all the talk was about whether a new Christian party could be National’s answer to its problem of finding an ally to help it into government.

Alfred Ngaro is investigating the possibility of setting up a Christian party and Bishop Brian Tamaki has just relaunched his new party. What prospect is there that either of them might succeed?

Edwards said with the New Conservative Party already in existence that could mean three Christian-based, socially conservative parties fighting for the same vote.

“Unless they can sort of somehow unite, and I don’t think they’re capable of doing that, this is really turning into a shemozzle.”

Botany lifeline

He said Ngaro was a capable leader and, with abortion, euthanasia and cannabis reform all figuring in the political landscape, a morally conservative party should be capable of winning 2-3% of the vote. But it would need a safe seat to ensure it got into Parliament and that was where Botany – held by former National MP Jami-Lee Ross – became important.

Ngaro has said he would not stand in Botany and that there was no deal on the table.

Edwards does not believe him.

“Even if he believes it himself if the opportunity arises and that’s the difference between political life and death he’ll go with Botany.”

Edwards concedes though that if National did a deal with a new Christian party it would cause problems for National’s liberal wing.

“It’s going to be really uncomfortable for National [people] if they’re seen to be aligned with this socially conservative Christian party and it will do them damage, I think.”

That could make the ACT Party just that much more important. If National retained ACT as a liberal party supporter on one side it could act as a balance to a morally conservative political party on the other, he said.