David Seymour: Our virtue-signalling Government

Opinion 06/03/2020

David Seymour, ACT Party Leader, MP for Epsom.

Our virtue-signalling Government

ACT has long argued that we have a marketing-led Government. Jacinda Ardern is one of the best political marketers in the world, but the worst deliverer. The last few weeks have provided more proof of this damaging virtue signalling than New Zealand can afford.

Whipping oil and gas…

Oil and gas is one of the Government’s whipping boys. It provides an essential service to households and businesses up and down the country, but Labour and the Greens are morally opposed its existence. So, the Government has said: “if you’re one of 700,000 New Zealanders with a default KiwiSaver provider, you’re not allowed to invest your money in this legal and essential product.”

…harming the economy and the environment

This isn’t just a paternalistic, it will be counterproductive for the environment and the economy. Default KiwiSaver providers invest $1 billion in oil and gas. 

That represents about 0.001 percent of the global oil and gas industry. The industry will find replacement investors more easily than KiwiSavers will find replacement investments. The Government’s decision will have no impact on the oil and gas industry, but it will hurt people with default KiwiSaver providers – the kind of people a Labour government is supposed to help.

Numbers don’t add up

Also last week, the Government promised to pass a new law that will bring down petrol prices. Commerce Minister Kris Faafoi says the Government could bring down petrol prices by 32 cents a litre. But petrol companies’ profit margins are on average only 25 cents. Does he believe petrol companies will work for free?

Economics 101

The Government says it will bring prices down by making them more transparent through “terminal gate pricing”. That’s where wholesale suppliers must set and publish the price at which they’ll sell fuel to wholesale customers on a spot basis. Normally, it’s illegal to share your prices with your competitors like this. It is called collusion. The economists at Treasury say this policy will reduce competition and could push prices up – the opposite of the Government’s goal.

Economics 201

Treasury also says price terminal gate pricing will lead to higher delivery costs. This goes to the fundamental problem with the Government’s approach. Delivering an essential service reliably up to five million people spread over 1500 kilometres of mountainous country is a tough business. Having a bureaucracy telling businesses how to do it might increase competition, but it will almost certainly introduce complications and increase costs at the same time.

Landlords under attack…

The Government’s new Residential Tenancies Amendment Bill will restrict landlords’ ability to remove bad tenants and add a new layer of bureaucracy and red tape. The anecdotal evidence is that landlords are threatening to leave the market, increase rents, focus only on the high end of the market, and weed out bad tenants before the legislation becomes effective and it becomes impossible to remove them.

…tenants getting hurt

The effect of the Government’s policy is that tenants will get hurt. Even the Government’s own officials at the Ministry of Housing and Urban Development say the law will reduce the number of rentals available and increase rents, demand for state housing, and homelessness. As with countless other policies, the Government has shown that it is out of touch with how the real world works.

It's now coming for vapers…

Low-quality law-making from this Government also extends into public health. The Associate Minister, Jenny Salesa, has been under pressure to react to stories of children vaping. Fourteen months on and she’s produced legislation that will undermine the health of adult smokers, fail to protect children and will unjustifiably limit free speech.

… and smokers will suffer

The policy will lead to more smoking. Salesa’s own officials at the Ministry of Health told her that, by banning vaping ads and flavours, the proposed law creates a risk that “we fail to achieve the potential of vaping and other reduced-harm products to contribute towards Smokefree 2025.” (Read: Fewer incentives and less information about vaping means fewer smokers will switch from tobacco.)

What about the kids?

The bill also fails to take steps to stop kids vaping. This could be achieved by requiring ID when purchasing from a New Zealand vaping website, or when couriers drop off vaping products. To top it off, the Government’s own Attorney-General, David Parker, has told Parliament that the blanket ban on vaping advertising is inconsistent with the Bill of Rights Act and an unjustifiable restriction on freedom of expression.

David Seymour is leader of the ACT Party and MP for Epsom.