What's the Key Government ever done for us?

Mike Reddell provides a short list, after the latest Australian leadership spill cited Key as example Australia might follow:

I grabbed a piece of paper from my bedside table and starting trying to jot down on the back of the envelope the “very significant economic reforms” in New Zealand over the last seven years.

It was a short list.  I couldn’t think of any.

Perhaps Turnbull had in mind the tax package of 2010?  Some of it might have been useful, but (a) it was pretty small in the scheme of things and (b), as the Treasury pointed out at the time, the net effect of that package was to raise the average tax rate on business income, not lower it.

From almost seven years of a Key-led government, I managed a few other small useful items for the list of reforms:

• Some modest welfare reforms  (but 10.3 per cent of the working age population – and one in three Maori – is still on working age welfare benefits)
• Partial privatisations (of minority stakes only) in several state-owned companies
• The wind-back of Kiwisaver subsidies (but, on the other hand, policy is now to make Kiwisaver compulsory)
• The establishment of the Productivity Commission
• Some very modest reforms to the Resource Management Act
• Some modest labour market reforms (probationary periods)
• Minor planned changes to the anti-dumping regime.

No doubt there are others, but if anyone can point me to a “very significant economic reform” undertaken in New Zealand since November 2008 I’d be grateful. 

Anything Mike's left out? National's done a bit to reduce the negative effects of the minimum wage on youths. Plus, having inherited a large structural deficit from Labour thanks to Working for Families and zero percent loans, they managed to clear most of that while cutting taxes. Reddell notes that corporate tax rates are high, but the gap between corporate tax rates and the top marginal income tax rate isn't too bad. On other margins, we can credit the government for things it didn't mess up. Uber has entered the NZ market without being legislated or regulated out of existence. The Financial Markets Authority has allowed neat innovative moves in larger scale crowdfunding and in alternative indices like Unlisted. Nobody has yet banned parallel importation of digital product like geounblocking Netflix, and nobody has yet killed parallel importation of physical product through hamfisted application of GST at the border. The government would have been under strong pressure to do harm on most of those margins, and resisted it.

Otherwise, they've done the more typical conservative thing of making things worse more slowly than the other team might have. Civil asset forfeiture has gotten worse. Treasury has gotten worse and seems mostly to care about being politically palatable. The Ministries have gotten worse for generally not having Ministers who insist on robust analysis. RBNZ's taken its eye off targeting the centre of the band.

Here's Reddell's other list:

And the problem with even the list above is the list of measures that could appear on a  “steps backward” list:

• Higher effective corporate tax rates
• The debacle of the earthquake-strengthening legislation
• The continuing debasement of our skills-based immigration system, both in the way it is administered and in formal announced policy.
• New overlays of financial market regulation
• The re-establishment of direct government controls over who banks can and cannot lend to
• The continuation of a regime of “corporate welfare”, including for example the Sky and Tiwai Point deals, and the smell that the Saudi sheep deal gives off
• The degree of central government control of the Christchurch repair project, involving both wasteful projects (some of which may not finally go ahead), and the way central government has artificially boosted land prices and impeded the prompt redevelopment of the central city.
• The continuing apparent decline in the rigour of public sector policy advice, and the use of robust cost-benefit analyses in underpinning policy decisions.
• Increased first home buyer subsidies.
• Undermining housing affordability with mandatory insulation etc requirements for rental properties
• Continuing increases in minimum wages, from very high levels (relative to median wages) at a time when unemployment is quite high, and policy was supposedly oriented to getting people off welfare.
• Heavy investment in the newly state-repurchased loss-making Kiwirail

But, mostly, the story is just about the failure to do anything much. 

It feels like National has convinced itself, and many of its supporters, that it has done the most it can do given the political constraints it faces: that this is the best of all possible worlds.

Perhaps that's the ambition Turnbull has as well. Lowering supporters' expectations does make the job a bit easier.