I don't want to comment on the architectural merits of the proposal
to shift the Beehive and finish the Parliamentary Building. Nor
do I want to comment on the longterm costtobenefit
ratios of this proposal compared to the "Parliamentary Palace"
proposal, or any other proposal to house our MPs and their staff.
I am concerned at the extreme fiscal conservatism implicit in
the opposition to the proposals; conservatism that comes as much
from the Left as from ACT on the far Right. One result of this
very ungenerous mindset that we have adopted is that any public
spending proposal is inevitably criticised, on the zerosum
assumption that any spending on one project is automatically spending
lost to other projects. Representative democracy itself is threatened
by this economic dryness; we come to believe that it is better
to have 100 MPs than 120, and, by logical extension, that 50 MPs
are better than 100.
The Beehive proposal has two important virtues. First, the implementation
of the plan makes it more rather than less likely that "social
wage" expenditure will be increased. And second, it is a
proposal that has the potential to spark a constructive debate
on the true meaning of "fiscal responsibility".
The basic economic argument is that which, though not formalised
by Keynes until 1936, was understood before the publication of
the General Theory. Julius Vogel launched his public works
schemes in the 1870s. The citizens of Melbourne built a comprehensive
sewerage scheme in the 1890s in the middle of a depression that
was more severe than the Great Depression of the 1930s. And the
Sydney Harbour Bridge was completed in 1934.
The general idea is that public works should be expanded at a
time of waning private sector investment. 1997 is such a time
in New Zealand. Such public works do not take place at the expense
of other private or public projects; they have a low opportunity
cost. Instead of crowding out the rest of the economy, they boost
it. The multiplier effect that occurs when the public "costs"
of the project become private "incomes" acts to both
stimulate confidence in the private sector, and to enlarge the
tax base ensuring that other public projects can be afforded even
without further easing of fiscal policy.
The more profound argument - the ethical argument - notes that,
in seeking to spend more on itself, the government is taking a
softer approach to the concept of fiscal responsibility. The political
response of the Centre and the Left therefore should not be a
kneejerk reaction to block the proposal and to punish the government
(and ourselves) by forcing it to spend much less on itself. Rather,
it should be to exert moral suasion to expand spending on other
public projects - eg on health, education, housing - in proportion
with its increased spending on itself. We should be getting our
politicians to explore the wider ramifications of a softer line
on public expenditure at a time when they have an incentive to
listen.
A number of issues are coming together as the century ends, and
should become the basis of an intelligent public debate in 1998
and 1999. Those issues are the concepts of "fiscal responsibility",
"fiscal contract", "social contract", "social
responsibility contract", and "human rights". The
government is going to have to conform with human rights legislation
from 1999 (see "Credibility at stake in human rights proposal",
Sunday StarTimes, 14 September), unless we allow
it to exempt itself. The present Fiscal Responsibility Act - itself
a dubious companion of human rights in that it puts money before
people - could be used to justify such an exemption.
Is the Beehive proposal fiscally responsible? Yes, it is.
But it is not in sympathy with the skinflint ethos of the 1994
Fiscal Responsibility Act. So, instead of us all behaving like
Scrooge, let us get into the issues and produce a radically new
Fiscal Responsibility Act; legislation that incorporates Social
Responsibility proposals which go far beyond an obligation for
the unemployed to seek work.
By saying we cannot afford to shift the Beehive, we are accepting
the harsh logic that perpetuated the Great Depression; the logic
of annual balanced budgets and acceptance of chronic unemployment.
And we are accepting the moral leadership of Richard Prebble and
Rodney Hide.
While I am not sure that ACT wants to get rid of MMP, the Labour
leadership, in following the same fiscally conservative path,
is using the issue to disavow MMP. Helen Clark (16 September)
is talking about putting major political decisions on hold and
having another referendum on the electoral system in 2001. The
kind of expenditure paralysis suggested by Labour really would
be a disaster. To further the shortterm political objectives
of Labour and National, it would create an artificial environment
that served no purpose other than to demonise MMP.
The irony is that Labour's rejection of proportional representation
in 1934 ensured that it would spend 36 of the last 48 years in
opposition. (British Prime Minister, Tony Blair seems to appreciate
better than Clark the longer term interests of social democratic
parties.) If Clark stokes the antiMMP sentiment to try to
force a change back to FirstPastthePost in 2002,
then Labour will be consigning itself to once again being the
natural party of opposition. (According to the old FPP formula
which added about 7 MPs every 10 years, we would have 103 MPs
in 1999 and 140 MPs in 2050, compared to 120 under MMP. The significance
of MMP in fixing the size of Parliament has not often been noted.)
Let's move into the 21st century, give our MPs decent permanent
accommodation and ourselves a Parliamentary complex we can be
proud of, and establish a charter on social responsibility that
spells out the obligation of government to pay a social wage,
to conform with human rights, and to stop stigmatising the unemployed.
We need a charter that recognises that we will no longer need
to have more than 35 percent of our population in fulltime
employment, and that acts to ensure that all of our population
is able to draw dividends from future productivity growth.
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