Boris keeps on gambling

Boris Johnson has done a great service for politicians everywhere by testing the political waters for tax increases.  He and his Chancellor of the Exchequer, Rishi Sunak, are ratcheting up Britain’s taxes to pay for care homes.  And Covid of course.  Pretty much everything it seems.

The new tax is not really that new: a levy on labour incomes (i.e., salaries, wages and self-employment) of 2.5 percentage points, with an increase in dividend taxes of half that. Boris – with flagrant disregard for Econ 101 – claims that business will share this burden. Sorry Boris and Rishi – labour taxes fall on labour.

Meanwhile, the Financial Times gloomily opines that the move will raise the UK’s tax burden to the highest level since 1950 – about the time when Boris’s hero, Winston Churchill, was heading for a second term as PM.

Boris has a reputation for being better on the strategic than the tactical decisions.  So, will the tax increase work?

NZ public service reform for the UK?

It’s not unusual for governments to decide the solution to their frustrations is to tweak the machinery of government.  Nor for senior public servants to channel those ambitions to safety.

But things look more serious in the UK.  A sequence of reports from high-powered ‘independent’ commissions and well-connected think tanks are floating proposals which bear more than a resemblance to the state sector reforms implemented in New Zealand at the end of last century.

For one of the key players, the seeds of change were planted back in 2010. Back then, Michael Gove (now the Minister for the Cabinet Office) was put in charge of education.  He coined the term ‘the Blob’ to describe the coalition of resistant civil servants and external ideologists who opposed his proposals to change the school system.  And helping him on the Blob job was Dominic Cummings – PM Boris Johnson’s erstwhile chief strategist.

Good for Northlanders – but how about the rest of taxpayers?

Hosannas for one of the latest handouts from the so-called Provincial Growth Fund – a $94.8m “investment” to bring up to operational standard a 54km section of the Northland rail line – were muted, not surprisingly.

NZ’s state-owned KiwiRail, which racked up a $235m loss in the 2018 year, and a $197m loss the year before that, looks as if it will be saddled with yet more loss-making services – but Deputy PM Winston Peters justifies the investment on the grounds the rail line to Whangarei would otherwise become “unsafe” and have to close within 5 years.

Is PM Ardern’s halo beginning to slip?

Is the Prime Minister Jacinda Ardern at risk of losing the halo she has worn so gracefully for so long?

No way, say her legions of supporters.

Just look at the reaction when Sydney radio veteran Alan Jones called on Australian PM Scott Morrison to “shove a sock down her throat”.

Political appointments – see who landed jobs in the latest batch of ministerial announcements

Ethnic Communities Minister Jenny Salesa earlier this month announced the Cabinet decision to have ethnicity data collected for candidates appointed to State sector boards and committees.

These data would  be used “to identify opportunities and challenges in delivering our goal of ensuring Government bodies have a balanced membership reflective of wider New Zealand society.” 

This raises the question of whether “political” considerations come into the attempt to balance membership and – if so – to what extent.

Governments notoriously find jobs for political croneys and friends, although the glare of publicity sometimes can trigger a reconsideration as happened in the case of millionaire Derek Handley who will received $100,000 after the Government pulled the plug on his appointment as chief technology.

More interesting, Salesa’s press statement drew attention to the numbers of croneys and friends for whom jobs could be found – potentially – if ministers paid no heed to the need for “balance” and/or relevant competence.

Every year the Government makes appointments to 429 State sector boards and committees, she said.

The political power game: energy company resignations suggest the trough has been tipped

Earlier  this  month Jenny  Shipley  announced   she would step down as  chair of Genesis  Energy  at  the  annual meeting  in  October after nine years  in the role. Her decision  followed   a week  after  Transpower’s    chair, Tony  Ryall, said he had notified the company’s shareholding ministers  he will retire from the board of Transpower effective December 31.

Only  people   prone  to  conspiracy   theories    would  see anything other than a coincidence in the timing  of  these  two  announcements.

Yet those familiar  with political events   over  the   past two  decades –  or three – may recall  both Shipley  and   Ryall    share a  bit  of  history  with   none other than  Winston  Peters, who happens to be something more than Deputy PM  in the Labour-NZ  First  government and Minister of Foreign Affairs.  He also  holds  the   State-owned Enterprises  portfolio.

State services: what’s behind the “upheaval”?

State  Services  Commissioner  Peter Hughes, announcing five top appointments in the state sector,  said he  decided to deal with the vacancies as a package to remove uncertainty and maintain momentum in key roles and portfolios.

The Dominion-Post headlined the news as“Upheaval for public service”.  Richard Harman  in  Politik, labeling it  as the   most comprehensive  reshuffle of  top public service  management  “ever”, argued the govt is saying the move reflects its desire that a more unified old-style public service be further developed.  David Farrar, in Kiwiblog, noting the  appointments  were  made by transfer,  thought this is the first time this power has been used.

“It is very good to see these decisions made before most of the roles fall vacant. This means no need for an Acting CE, and gives good continuity and direction”.

Equal Employment Opportunities  Commisioner  Dr  Jackie  Blue has  a  different  take  on it.  She  blasted the process  as  unfair to  top  women in  the  public service,  and contended  the  vacant    positions  should have been contestable.