On the travel perks, and Ireland’s demise

On RNZ this morning, Speaker of the House Lockwood Smith took us back down memory lane to a bygone era when MPs lived in log cabins and traveled by horse and buggy around their vast domains, while members of their extended family licked the stamps and ran errands through the snow on their behalf, to keep the family’s political enterprise ticking over… And in return, a grateful nation compensated MPs with heavily subsidized business class travel to overseas holiday destinations of their choice. Or something like that. Given their early hardship out on the political frontier, should such individuals now have their travel perks wrenched from their grasp, while in their dotage? Smith thought not.

I’m exaggerating what Smith actually said, but not by much. The Speaker’s decision to scrap the current system of travel perks and replace it with a subsidy system for parliamentary – related travel is a good one. The decision to retain the overseas travel perk for current MPs elected before 1999, and for former MPs, is a scandal. Contrary to Smith’s absurd depiction of the homespun virtues of electorate life pre 1999, MPs and Cabinet Ministers fared extremely well back then, relative to the income of the taxpayers who paying for their perks. By some estimates, Cabinet Ministers were on something like 5 times the average wage for much of the 1990s, and MPs on around three times that figure since the 1980s. The notion that the nation is now somehow duty bound to pay such already highly-compensated individuals an additional and outrageous perk for life, is ridiculous.

The motive for revisiting the perks issue has been a shabby one. All week, the mooted changes to the perks system have been pure political diversion, to distract attention from Cabinet Minister Pansy Wong’s abuse of the overseas travel entitlement, via her colluding with her husband to use the perk for personal gain, to advance her husband’s business activities – which on the evidence, have also been run out of Wong’s taxpayer funded electorate office. Not that Wong herself is answering any of these allegations, since a cone of silence has been dropped over her by her leadership, which has sent the media haring off after changes to the system as a whole. Judging by precedents with other ministerial ‘errors” Wong’s abuse of the system will probably be judged to have been a mistake, and she will be simply allowed to repay the money – which is an indulgence not extended to beneficiaries who abuse their entitlements, and who are routinely handed over to the Police.

The focus now is on what level of compensation MPs will get for losing the travel perk. According to Smith, they part-subsidise the current system – so presumably no fresh money should be involved, but merely a rebate of the current deductions back into their salaries. Should they continue to be asked to make some contribution to the new system of parliamentary – related travel? Give the current economic climate, there is a strong moral argument for them doing so.

For the same ethical reasons, some current members of Parliament elected before 1999 and former MPs should be willing to lead by example. How many of them would be willing to voluntarily surrender their pre-1999 overseas travel perk, for the general good – and to enhance the standing of Parliament in the community? Over to you, Phil Goff, Jim Anderton, Bill English, Trevor Mallard, Nick Smith, Murray McCully, Tony Ryall, Annette King….etc etc.


Ireland’s Troubles

Ireland’s inexorable slide into a EU/IMF bailout situation is a tragedy. Left to its own devices – and with a rational injection of funds into its banking system – it would be able to trade its way out of its current troubles by 2014. It doesn’t look as though it will get the chance, as the EU leadership is clamouring for it to buckle and accept a full scale bailout, before the contagion spreads to Portugal, Spain and – hello again – Greece.

As some of the English media are pointing out….have the centuries of struggle by the Irish for independence from England now culminated in this abject surrender of political and economic sovereignty to Germany, and its bankers? Some are envisaging a kind of digital potato famine as those who can leave, will leave – and those who stay behind will be ground down by the austerity programme. The reality is that during a major recession, the eurozone can be particularly cruel to its smaller members – Ireland, Portugal etc – who suddenly find that their debt and their export goods are denominated in one of the world’s least benign currencies. Pretty hard to export your way out of that bind when your costs bear that currency burden and when the markets tend to be merciless, and contradictory. For most of this year, the markets have hammered Spain for not enacting austerity measures to sufficiently address its deficit. Then a couple of months ago when Spain finally started doing so, the markets hammered it again for showing this sign of ‘instability.’

Still, who would want to be running the EU right now? In order to stave off the collapse of some of its smaller members, the EU is rushing to implement a bailout regime that will bring in its wake a highly centralized system of control over the tax rates, deficits and public spending programmes of several countries within its loosely federated membership. The last time we saw this on the world stage, we called it the Soviet Union. That didn’t end very happily, did it? The presidency of Barack Obama is not the only thing reliant for its survival now, on economic recovery.


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