National vs Labour: Economic Policy

The joke in 2008 was that National and Labour were so similar that they were each others perfect coalition partners. With that in mind I wanted to create an in-depth policy comparison between the two parties for this election. Polls often indicate that it is the economy which decides elections. Whether that is true for 2011 is yet to be seen but it seemed like a good place to start.

Economic Policies Overview:

Labour need to convince voters that they are better suited to oversee the economy that National during uncertain economic times. David Cunliffe is more than competent as a Minister of Finance and their ‘No Asset Sales’ pledge is a potential vote winner. However, they have been accused by National time and time again of being reckless with their spending and needing to borrowing too much to pay for their campaign promises:

  • Labour states that it will prevent overseas purchases of more than 25% of monopoly infrastructure, where that interest is worth $10 million or more.
  • Labour will also introduce a general ministerial discretion covering all assets worth more than $100 million which are not covered by their new farm land or monopoly infrastructure rules, modelled on the Australian equivalent. (more available here)
  • Labour will, in the case of procurement contracts over $50m, require the production of an Industry Participation Plan (IPP), which sets out how Kiwi companies can play a bigger role.
  • All IPPs must be approved by a newly established Industry Participation Group (IPG), which will be comprised of mostly private sector individuals. The IPG may also offer advice to parties in respect of any complaints and may also advise the Minister of Economic Development on any aspect of policy or implementation as they see fit.

The National Party has long been seen as the Party of businessmen but their heavy borrowing during their term in office may put a strain on that. In fairness, this borrowing could be excused as the result of a spate of disasters (natural and man-made). National strategy on the economy is to depict Labour’s spending as reckless and promise to balance the books by: promoting trade and export, cutting red tape and selling part of the Government’s stake in some state-owned assets.
  • National plans to extend a mixed-ownership model to four state-owned energy companies: Mighty River Power, Meridian, Genesis, and Solid Energy. The Government’s shareholding in Air New Zealand is also to be reduced. (more available here)
  • National are pledging to introduce and pass tougher consumer credit laws in order to target loan sharks and protect unwary consumers.
  • National will tighten the rules for company directors and company registration – including expanded powers for the Registrar of Companies.
  • They will also pass the Commerce (Cartels and Other Matters) Amendment Bill. (more here)
  • Establish the Future Investment Fund to receive the proceeds from the mixed ownership model – estimated to be worth  $5 billion to $7 billion to the NZ economy over three to five years.
  • Invest $60 million over the next four years in a series of competitive National Science Challenges, to find innovative solutions to some of the most fundamental issues New Zealand faces in its future development. (more here)

3 thoughts on “National vs Labour: Economic Policy

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