Slow Learners

Bribery and Electoral Suborning

Since we have entered an election year, political bribery is in full swing.  At his first major announcement, the Labour leader, David Cunliffe announced new government spending that will cost well over $1 billion dollars per year.  Will the electorate be seduced by this bribe?  We will have to wait and see. 

New Zealand is just emerging from a long, dogged recession.  In the early days of the Global Financial Crisis (which hit just after our recession began in earnest) we were at risk of having a run on our banks.  The country was in a dangerous position of rapidly rising fiscal deficits at a time when no-one was lending.  Credit had dried up.  How come?  Because the previous Labour government had spent all the fiscal surplus and had committed to spending way beyond that in various electoral bribes, middle class welfare and unaffordable programmes, so that our deficit was inevitably going to become a black necklace around the nation’s throat. 

We can still hear the gleeful tones of the then Minister of Finance, Dr Michael Cullen as he taunted the Opposition with a peculiar channelling of Mother Hubbard  that the fiscal cupboard was now bare.  He had “spent it all”, he chortled.
  Apart from his reckless spending on Kiwi Rail, buying it back at a price no-one with a smidgen of financial prudence would have ever approved, the biggest new spending was upon Early Childhood Education (also known as over-engineered, gold plated, daycare centres) and Working For Families (a middle class welfare programme). 

They say that socialism eventually runs out of other people’s money.  Election bribery was in such full swing that not only had Labour run out of other people’s money, it had started spending money no-one had, thereby debt-enslaving our children and grandchildren. 

Through the last six difficult years the government has worked to reduce wasteful spending, increase its effectiveness, and return the nation to a fiscal surplus (before starting to pay down the billions of accumulated debt).  We are now just on the cusp of a surplus.  Economic growth is picking up pace.  Employment is starting to rise.  The hard and difficult climb is coming to an end. 

Labour’s response?  Reckless bribes of new spending to drive the country back into deficit and to start the cycle of spend, boom, bust, recession/depression all over again, making the struggles of the last six years a waste of time.  The question before us now is, Has the electorate learned its lesson, or will it be seduced and suborned by the bribes?  We will see. 

Cunliffe is denying that his bribery will increase the deficit.  His reckless new spending is going to be paid for by raising taxes, he says.  Oh, don’t worry.  It’s only the “rich” who are going to pay these new, higher taxes–but we won’t talk about that until after the election.  Two problems: Cunliffe has already defined households earning $150,000 per year as being worthy recipients of his new welfare bribes–so clearly, they are not rich in Cunliffe’s world.  So, a very, very small percentage of taxpayers are going to have to pay huge tax increases to pay the bill for the new spending.  And then there is the airily announced and long promised Labour capital gains tax, which is a fig.  Such taxes are very costly and complex to administer, and raise relatively little revenue.  We already have capital gains tax in New Zealand, but it is rarely enforced for those very reasons. 

Here is the most odious of the egregious bribes:

Most parents of newborns will get $60 a week until that baby turns 1, while those on middle and lower incomes will continue to receive the payment until the child turns 3.  Mr Cunliffe said the party had set the income threshold relatively high so that it would be near-universal, although its primary aim was to help address child poverty. (NZ Herald)

Cunliffe is either too dumb to consider, let alone understand, the perverse consequences of ill-conceived government policies, or he is too reckless to care.  The worst poverty occurs in the underclass, which is ridden with solo-mothers, dependant upon government welfare.  One of the easiest ways for such folk to achieve an increase in income is to fall pregnant and have another child. You get more of what you pay for.  Under Labour’s bribe, every new child born will increase a household’s income by over $3,000 per year. 

The perverse outcome?  A rapid increase in the numbers of solo mothers with four or more children with multiple anonymous fathers leading to further social dislocation and much worse child poverty, suffering, and degradation.  Cunliffe’s policy will exacerbate child poverty, not alleviate it.  He appears ignorant of human nature and its motivations–or, more likely, he foolishly tells himself that, “this time, it will be different”. 

The real issue is whether the electorate is going to be seduced or offended by such crass, reckless bribes.  We will see.
Go to Source

Comments are closed.