Saturday, 12 March 2011

The Government Is Using the Chch Quake To Push Its Agenda

The Earthquake Aftermath
Amid a busy weekend with the Golden Shears, the Martinborough Fair, and the Wai Art portrait exhibition, a number of us gathered for an hour at St Mark’s in Carterton at 2-00pm last Saturday for a service to reflect upon those who have suffered through the Christchurch Earthquake. As I drove to the service I passed people going about their lives, drinking coffees, shopping or picking kids up from sports and I was reminded that regardless of suffering life goes on and the human spirit continues. Yet despite that we all in our own way share and in some way will contribute to the rebuilding of Christchurch. We all want in some way to do something, we all want to help.
The government’s emergency response to the Christchurch earthquake was fast and effective. No doubt mistakes may be made but in times of crisis we appreciate strong leadership.
However, we must safeguard against our national desire “to do something” to allowing the government by default to push through policies which would otherwise be rejected outright by the public. Policies such as privatization, benefit cuts and welfare “reform” now marketed under the guise of “earthquake relief.”
Despite Bill English assuring the country that rebuilding Christchurch can be covered by the Earthquake Commission and by re-insurance policies, National has begun speculating on cutting Working for Families, Kiwisaver incentives, and interest-free student loans. People will find it even harder to save, and higher education will be even more out of reach. The impact of the Earthquake will be spread around New Zealand workers and families.
The central point of the Kiwi-Spirit is that we gain strength and are at our best when we help our neighbours not clobber them! The reconstruction of Christchurch requires a combined effort and should not be advanced on the basis of targeting and harassing the unemployed and sole parents into looking for jobs that aren’t there.

It appears that middle New Zealand and those less fortunate are being softened up to bear more of the burden. Currently of the $300 million New Zealand borrows monthly $120 million of that goes to fund tax cuts. In the wake of the Christchurch Earthquake why isn’t there any thought about reducing GST and revisiting those tax cuts rather than hitting families that can least afford it? It is my feeling that most people in the higher income bracket would be more than happy to have their tax cut reduced to help in this time of national disaster.

There’s no doubt that some of the economic problems which arise from the earthquake can’t be fixed by earthquake insurance. The economic effects of business destruction, job loss, redundancy, and retail collapse will of course have serious effects on the government’s coffers. But the cost to the country of losing assets, and losing control of those assets, is enormous, as is the cost of having to buy them back (e.g. Kiwi Rail). So selling assets compounds the crisis rather than alleviating it. And cutting Working for Families when it is families that are bearing the brunt of the earthquake is ludicrous.
Michael Cullen, as Labour Minister of Finance had a sound approach to government finances. – one which will ring true to anyone who has struggled with a family budget. “We save in the good times, and we spend in the bad times”. It’s a policy that is hard to argue against. Labour left office, after a long period of good times, with the coffers full. The tax-cuts are unaffordable and demonstrably have not promoted economic growth. To sell assets which generate a return and bluntly attack social spending in a time or recession is questionable.
The ideal model for handling a national emergency is to step back from politics as happened with the Napier Earthquake in 1931: assessing the costs that need to be met, then formulating a method to pay for it through a consensus with other parties and local government, and then appointing non-political rebuilding commissioners.
The rest of the model is Michael Cullen’s – the government’s role in a recession, and certainly in a recession which is compounded by a national emergency, is to boost care, education, health, job creation, and production. It’s just a pity that mice got at the reserves before they were needed.

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