Please, Take The Whole Policy

Over the weekend we saw another slew of policies from Labour and the Green Party that cherry pick The Opportunities Party (TOP) policy. Labour are proposing to refresh tenancy laws while the Greens are planning a levy on nitrate pollution.

It is great to see the Establishment parties picking up on the real issues facing the country, and we commend them for that. However, there are risks in cherry picking parts of policies without implementing the whole thing, as there can be serious side effects.

Well Done

First off, we have to say well done to the Greens and Labour for their weekend’s work. Policy can turn people off, which is why in politics it is usually better to remain vague (as Labour has been on tax). We agree that nitrate leaching is a major problem for lowland farming, and we also agree that tenants need greater protection

Tax housing and the environment are complex issues that require a jigsaw approach – many changes working together. A piecemeal approach can create as many problems as it solves. Let’s look at each of the policies in turn.

Greens’ Nitrate Tax

The Greens have proposed a flat rate nitrate levy across the country, similar to our polluter pays policy. The idea is to reduce nitrate pollution and encourage farmers to switch to more sustainable farming approaches. It is a similar idea to Labour’s water charge – one charge across the country set by bureaucrats.

The problem with this is that it is a one size fits all approach – one levy applied right across the country. Who sets the levy? Bureaucrats. Who doles out the money? Bureaucrats. How do they know what the best outcome is? They don’t. Canterbury has massive issues with both water scarcity and excessive nitrogen. Gisborne has no problems with either. Why set the charge on water and nitrate leaching the same in Gisborne as in Canterbury? It doesn’t make sense. This approach will penalise Gisborne farmers unnecessarily and still not solve the problems in Canterbury.

Farmers increasingly understand that we need limits on the use of water and nitrogen. They are ready to talk about how best to operate within these limits. TOP has set out a plan to do exactly that. Labour and the Greens generalized  approach risks deepening the urban/rural divide.

Why are the Greens and Labour so averse to using market mechanisms? Why do bureaucrats have to be involved to set prices and dish out grants? Why not set a limit, and let farmers bid for the right to go over that limit? Then the money goes to farmers that are willing to operate below the limit. It automatically rewards farmers operating in a sustainable way.

Labour’s Rental Rights

Labour has proposed boosting the rights of renters, similar to TOP’s tenancy reform. Again, the policy doesn’t go as far as TOP is proposing, but the major issue here is that Labour’s policy risks reducing the rental market. Why? Because it would reduce the incentive to build and rent new properties.

TOP’s proposal overcomes this issue with our tax reform, which encourages land bankers to get on and develop their land for new housing, thus increasing the supply of houses. Without the tax reform, Labour risks killing off the desire for the private sector to build new properties at all. They would be much better sitting back and waiting for land prices to rise, profiting from the capital gain.

Policy is a jigsaw. You have to be careful not to get stuck playing with individual pieces of the puzzle.