ACT reaches for the red-tape laser

Cross-dressing: John Key told ACT’s conference on Saturday he was going to have a “red-tape bonfire”; Rodney Hide told the conference he was going to be “surgical and laser-like” in trimming regulations.

Isn’t it supposed to be other way round, Key cool and Hide hot?

Some in National, including at high levels in the cabinet, did not want Key to go to ACT’s conference for fear it might get middle New Zealand worried that Rogernomics is about to fire up again.

And, indeed, Key was very warm with ACT, effusive in praise of Hide and deputy leader Heather Roy. Key’s “bonfire” was just what ACT-ivists wanted to hear.

And Sir Roger Douglas was on cue on Friday evening. Far from expanding as the recession bites, the government should cut back, Douglas said: a job added on the public purse is a job subtracted from the wealth-producing private sector.

In Douglas’s economics, the public-private sector interplay is a zero-sum game. Former candidate Graham Scott, Treasury Secretary in Douglas’s 1980s revolution, by contrast, canvassed theory that there are times government intervention can stop a downward depression spiral developing from a recession.

Where Scott, Douglas and Hide came into synch was on the need for any government intervention not to slow the private sector’s, and so the country’s, climb out the other side — preferably, when acting, to do things that will speed up that climb.

One is to cut away regulation which unnecessarily constrains wealth- and job-creators in the private sector. On this Hide and Key agree. So do Bill English and the Treasury.

But, just as all new law — legislation and regulation — has unintended and often unknowable consequences which then require more law, so does the removal of regulation.

A bonfire might leave a heap of smouldering ashes of unintended consequences, some of which might burst into flame. A laser stands a better chance of limiting subsequent flare-ups.

Hide’s first regulatory reform instalment, now ready to go, is to extend former Labour Commerce Minister Lianne Dalziel’s identification and removal of overlaps, inconsistencies and contrarinesses which generate compliance costs that are not needed to achieve the regulatory objectives.

This does not judge the substance of a law right or wrong — just aims to target and administer it with more precision.

Hide is also extending Dalziel’s rejig of regulatory impact statements which officials are supposed to append to all policy proposals, bills and regulations to detail the problem being addressed, the impacts and alternatives.

Hide is going to require department chiefs to sign those statements and hold them responsible — and thus to prompt them to think twice or thrice before reaching for the law book. New law might be counterproductive. There might be other mechanisms.

To bring home that message, Hide has taken himself off to meet officials on their home territory. Armed with a whiteboard, he quizzes them on their roles, functions and administrative approaches, to tease out from them how they could do it all with a lighter impact on those they are administering.

If this all sounds rather dry, it is. But it is also important. Hide originally saw his role as Minister for Regulatory Reform as being in charge of his Regulatory Reform Bill which focuses on property rights affected by law changes and proper compensation. Now he has a much broader remit: to go through the law book and remove barriers to private-sector-driven economic growth.

If the consequence of a law is that some people are less productive than they could be — more slowed down than is needed to achieve the law’s legitimate and necessary aims — we all pay with a cut in wealth creation.

And as Hide has warmed to his task, so has Key. One of Key’s compelling strengths is his ability to build personal working relationships and he has made an excellent one (so far, at least) with ACT. That way Key gets more out of ACT’s support than votes for bills and a three-year term.

What does ACT get? The party has set in train an intelligent process, designed by Auckland University’s Jennifer Lees-Marshment, to develop a long-range political marketing strategy. A critical issue is how to get heard with five MPs alongside National’s 58. A useful pointer came obliquely in a session on climate change.

ACT-ivists mostly think there is no global warming or, if there is, no reliable measure of how much and in any case insist it is not generated by humans. But the more thoughtful among them accept National will keep, even though amend, the emissions trading scheme. How is ACT to be heard?

Long-time ACT-ivist Vince Ashworth had the answer: “We should strike out for farmers” who, he said, are net absorbers of greenhouse gases. “We aren’t going to win the climate change argument but we can win that one.” And get noticed and get votes.

That tactic applies in all policy areas. ACT is by desire a bonfire-politics party but real politics is laser-politics.