I’ve been thinking a bit recently about the whole MMP referendum and our options for reform. I’m of the view that MMP has delivered greater representation of society and more consultative government. This has been at the expensive of electorate-specific accountability for MPs and the ability of Governments to enact the manifestos they’re elected on; and a lot of tail-wags-the-dog horse trading that ensures bad policy making.

Essentially what we have is a single chamber Parliament with MPs elected in FPP contests in electorate, and behind-closed-doors party lists. The most worrying aspect of MMP is the continued lack of oversight when it comes to legislation, particularly when it’s rammed through under urgency. New Zealand ought to have an upper house, along the lines of the Australian or Irish Senates, offering proper legislative oversight. We’ve already got the facilities for it (a whole chamber in Parliament set aside since the 50s).

To meet these competing requirements, I propose:

• House of Representatives with 99 MPs, elected by STV every 3 years
• Senate (upper house) with 30 members elected every 4 years
• Senators elected nationally by proportional vote and no threshold (in affect, a 3.33% threshold) from open party lists.
• Senate has the ability to reject any Bill of the House of Representatives, except Bills of Money and Supply (that is, Governments are formed and dismissed by the House of Representatives not the Senate)

I think this solution not only balances the need for representation, but also legislative oversight and stable government with the ability to implement its manifesto promises.

Thoughts?

FCINO – Fiscally Conservative In Name Only – is the campaign of Carly Fiorina, former CEO of HP running for the US Senate:

Hat tip: Whale.

Key says personal tax cuts still on Govt agenda

Excellent news. Harmonise the personal tax rates with corporate tax rates by cutting wasteful government spending and increasing GST.

The Sunday Star-Times reports there’s now an ongoing debate about whether New Zealand’s national flag is re-designed, following Cabinet’s decision to allow the Tino Rangatiratanga flag (note: I didn’t say Maori flag, since many Maori aren’t pleased with the decision) to fly from Government buildings on Waitangi Day. Meanwhile, John Ansell has some excellent designs. My favourite is above. Ansell says:

In the 21st century, the New Zealand flag should not be a British flag, or a Maori flag, or an Australasian flag.

It should be a New Zealand flag – for all New Zealand, and only New Zealand.

The symbol that best unites us is surely the ponga or silver fern, first worn  by the NZ Native Rugby Team of 1888.

The silver fern says nature. It says Maori. It says New Zealand.

How to decide? I say put the flag to a preferential vote – including the existing defaced British union ensign, alternative designs should be put forward. Since the current government has a predilection for referendums there shouldn’t be a problem.

The NBR reports research by Westpac economists showing that cutting income tax will lead to lower house prices:

A reduction in the top rate of tax to 30 percent would see house prices fall 13.6 percent and rents rise 6.8 percent, the Westpac economists estimated.

This is because of our fairly generous rebates for the losses from investment properties:

Landlords received a tax rebate for losses on their rental properties at their marginal rate of income tax. If the marginal rate of income tax changed, so would the size of the rebate.

If I had the time I’d work out what the actual impact on the government’s books would be – if anyone has the figures, please drop a note in the comments. Also, an interesting note on land tax:

A land tax of 0.5 percent was estimated to cause house prices to fall 4.4 percent and rents to rise 2.2 percent. The fall in house prices was based on the median house, for which land made up 40 percent of the value. Land values were estimated to fall 11 percent.

Put them together, and you get:

Under a land tax of 0.5 percent combined with income tax of 30 percent house prices would fall 16.9 percent and rents rise 8.4 percent. The Westpac economists said such a combined approach was “politically plausible”.

Politically plausible, but not necessarily the best scenario for New Zealand. If Australia’s federal government cuts their business tax rate, New Zealand businesses will be left in a less competitive position internationally, and will be more likely to move to Australia, taking their profits and jobs with them. We ought to be aiming for a 25% business tax rate in 2010 – 2011. Because, as Bill English used to say “Us Kiwis can beat those Aussies!”.

Lisa Lewis opines:

Got wild on stage last night and wripped a guys shirt. It was apparently his best flannel.., has texted me today requesting a new shirt. Thought I would see what you all would recommend…

I recommend telling the guy to STFU. Seriously, if you went to a strip show and lost you’re shirt, you should be happy. Don’t be such a loser. And we’ll be around for the man card you owe us.

Auckland needs a new harbour bridge. Some clever folk have designed one. Now all we need to do is figure out how to pay for it – at $2.5 billion it’s cheaper than the estimated $3.7-$4.1 billion for tunnels under the harbour, but still a big ask for a country with ongoing fiscal deficits. Luckily the clever folk who designed and backed the new bridge (who, let’s be honest, are the ones who gain the most from its construction) have also had a feasibility study written, which proposes using a Public-Private Partnership (PPP).

Now you’ll hear some lefties moan that PPPs will force the Government to accept the risk of the project while the private sector profits from it. I say suck it up: Auckland needs a new harbour crossing. In tight fiscal and economic circumstances, the choice is not between a PPP or Government funding (where the state would have to accept all the risk anyway), it’s between having the infrastructure built or not. Private concerns are going to profit from the bridge’s construction in any case – why not let them invest and benefit from the infrastructure directly, by enabling the bridge to be built sooner?

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