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Peter Wilson: Nick Smith's Numbers Game

Peter Wilson
Peter Wilson
Nick Smith
Nick Smith

Wellington, Oct 18 NZPA - A minority government, as Prime Minister John Key pointed out last week, has to talk to its partners to get legislation through Parliament.

No one is more aware of that right now than Nick Smith, the minister in charge of two of the most troublesome bills on the Government's agenda.

How he manages to handle negotiations around the amended emissions trading scheme and controversial changes to ACC at the same time is something to wonder at, but he does.

Under pressure in Parliament on most days, Smith has got his act together.

What he hasn't got is the numbers to get the ACC bill through its first reading.

A draft bill was released last Wednesday, when Smith announced proposals to reduce entitlements and raise levies in the face of massive deficits the corporation faces.

Labour won't support the bill. It accuses Smith of scaremongering and argues ACC's predicament is not nearly as dire as he makes out.

Figures are hotly disputed, Labour MPs are just as sure of theirs as Smith is of his.

With Labour intending to vote against the bill, Smith needs the support of either ACT or the Maori Party to hold a bare majority on it in Parliament.

The Maori Party has real concerns about reduced entitlements and its co-leader, Tariana Turia, holds ministerial responsibility for disabled people.

Maori Party MPs haven't yet finalised their position on the bill and will discuss it on Tuesday.

They are likely to decide they want changes to it in return for their votes, and those changes could in part wind back the measures Smith believes are essential to get ACC's finances back on track.

His other option is ACT, and there are problems there as well.

As soon as it became known that Smith didn't have the numbers stitched up on the bill, ACT leader Rodney Hide called in the media to let it be known he wasn't going to rubber stamp it, as he put it.

ACT's policy is to open up ACC to competition from private providers and on Friday Hide confirmed that was being discussed in the negotiations to secure his party's votes.

"The issue is do you stay with the state-run system, where you don't have choice, or are there some opportunities -- this is what we're exploring -- where you open it up and allow a bit of choice," he said.

This is dangerous territory. For the Labour Party "a bit of choice" means one thing -- privatisation of ACC.

In Labour's hands it is a powerful political weapon. The scaremongering Smith has been accused of will seem insignificant compared with the doomsday scenarios Labour can present when its MPs get a sniff of privatisation.

It is National Party policy, and it was up front about this during the election campaign, to investigate opening up the part of the scheme that covers work-related personal injuries to competition from private providers.

The Government hasn't shown much enthusiasm for starting the investigation, probably because the last thing it wants to do is hand Labour a loaded gun while it is trying to fix ACC's problems.

Asked about National's policy when he announced the proposed changes to ACC, Smith said there was no timetable for an investigation and it wasn't a priority.

ACT will probably try to make it a priority. Hide hasn't said ACT has problems with the bill itself, he could seek progress on setting up an investigation into private competition.

Smith might go along with that, although not very far, in exchange for the votes he needs on the bill's first reading.

The emissions trading scheme (ETS) legislation has been on Smith's agenda since he became minister in charge of climate change policy.

The bill he has produced after a review of the existing ETS significantly changes the carbon trading regime and gives industries an easier ride before they come under its emission reduction provisions.

It was under bi-partisan discussion until Smith struck a deal with the Maori Party and an enraged Labour Party quit the talks. Offers of reconciliation from both sides came to nothing and the bill is now with the finance and expenditure select committee.

This process is outside Smith's control and the committee ran into trouble last week when many submitters were phoned and told at short notice they had to appear the next day and would be given 10 minutes each to state their case.

There will be one more day of submissions this week and the committee has a deadline of early next month to report the bill back to Parliament.

Smith's problem is that he has to have the bill in law quickly otherwise the ETS passed by the previous government will take effect at the beginning of next year.

As he has pointed out, arguments over the ETS were thoroughly canvassed during hearings on the previous government's bill and during the review.

So it isn't likely to be changed to any important extent as a result of the hearings that are taking place now and the Maori Party's support for it appears to be holding up, in an uncertain sort of way.

Although an ETS is vital to climate change policy and has important economic implications, it hasn't really grabbed public attention outside of sectors which will be affected by it.

This is complex, divisive legislation and the Australian government is having an even more difficult time with its own version.

A report from Canberra last week cited surveys, which showed the Australian public was largely baffled about what an ETS is supposed to do and how it works.

It probably isn't much different in New Zealand.

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