Sunday, 17 December 2017
Up Where We Belong? In the end, the promise to be a “transformational” government is a promise to put the need of the many ahead of the greed of the few. Keeping that promise is unlikely to retain the confidence of the business sector, but it just might be enough to win the confidence of that “other half” of the New Zealand people whose votes made this government possible.
THE LABOUR PARTY has never been very tolerant of dissenters. It is, therefore, unsurprising that very few within its ranks have reacted positively to my recent posting on The Daily Blog. No matter how many private reservations Labour supporters may be harbouring about Grant Robertson’s “fiscally responsible” economic policies, they would rather his critics refrained from giving public voice to their concerns.
The case they make for maintaining radio silence on the new government’s performance is that criticism, no matter how well-merited or constructive, will only reinforce the National Oppositions “shambolic” narrative. What Jacinda Ardern and her team need more than anything else at this time, argue their supporters, is a few weeks of relative calm in which to prepare themselves for the challenges of 2018.
Convincing New Zealanders that their new finance minister is not a swivel-eyed economic loon is regarded as crucial to this process of political consolidation. Grant Robertson winning accolades from mainstream journalists for his fiscal and economic responsibility is much more to be desired, at this stage of proceedings, than receiving the hearty endorsement of radical leftists. It’s “baby steps” that Labour needs to take right now – not giant strides.
One critic of my criticism put it like this:
“What you are dealing with in NZ today, is a fairly conservative political climate. The political Left is no longer a strong and coherent force. The electorate is split roughly down the middle between Left and Right. Any government somehow has to bridge the conflicts and disunity to represent the voting population, and it’s going to be centrist. The new government is treading carefully very deliberately, so as not to alienate the business sector or impede market confidence. The new government has to gain confidence and that imperative guides it for now.”
But, if the electorate is “split roughly down the middle”, then describing the Left as no longer “a strong and coherent force” makes no sense. Equally nonsensical is the suggestion that in a society characterised by “conflicts and disunity” the only viable strategy is to embrace the politics of centrism. Governing on behalf of the centre makes sense when, on social and economic issues, there is a broad measure of agreement. While that may have been the case in the 1960s, it is certainly not true of today.
Nor is it true that New Zealanders are living in a “fairly conservative climate”. Mainstream newspaper and magazine editors may like to think that their own conservative views are also those of the majority; and talkback hosts like Leighton Smith will loudly insist that they are; but that half of the population routinely excluded from mainstream political discourse seethes with entirely justifiable resentment and barely suppressed rage.
These New Zealanders are unlikely to be mollified or impressed by the spectacle of a Labour-led government “treading carefully very deliberately so as not to alienate the business sector or impede market confidence.” They have, after all, seen this happen many times before and they know that the moment “their” government makes the maintenance of business confidence its No. 1 priority, then all hope of it ever living up to its promise of “transforming” society flies out the window.
Because, of course, gaining and maintaining the confidence of the business sector involves a great deal more than managing-down Crown debt and building up healthy surpluses. Nothing requires more in the way of constant state intervention and control than a laissez-faire economy. The slightest hint that the plethora of legal constraints required to keep the markets “free” might be thinned-out or, horror of horrors, done away with altogether, is absolutely guaranteed to send the confidence of the business sector into a nosedive.
Just recall the howls of outrage that accompanied Metira Turei’s promise to make a bonfire of the MSD’s hated “sanctions”. New Zealand’s brutal social welfare regime fulfils exactly the same role as Britain’s nineteenth century workhouses: it is a means of ensuring that workers will accept low wages and poor working conditions in preference to enduring the humiliation and material deprivation of life on “the benefit”. Any relaxation of the “rules” governing beneficiaries’ lives would shake the business sector to its core.
Even more destabilising to the business sector would be any serious attempt on the part of a “transformational government” to rebuild the strength and fighting spirit of the trade union movement. Restoring “compulsory unionism”, and lifting the current legal restrictions on the right to strike, would instantly provoke employers into full-scale revolt. They do not need to read the works of Karl Polanyi to know that “the only way politically to temper the destructive influence of organized capital and its ultra-market ideology [is] with highly mobilized, shrewd, and sophisticated worker movements.”
My point is that just about any measure aimed at loosening the controls that keep the “free market” running smoothly will be deemed unacceptable by the business sector. Any attempt to make the lives of working-class people less constrained and fearful; any move to emancipate and empower the inhabitants of the social depths; will be interpreted by those who occupy the commanding heights of our society as a direct thrust at their interests and privileges.
Yes, raising taxes and/or increasing the deficit would be regarded as an unfriendly act, but so, too, would decriminalising marijuana, or emptying the prisons of all those found guilty of victimless crimes, or following the example of Costa Rica and abolishing the armed forces.
In the end, the promise to be a “transformational” government is a promise to put the need of the many ahead of the greed of the few. Keeping that promise is unlikely to retain the confidence of the business sector, but it just might be enough to win the confidence of that “other half” of the New Zealand people whose votes made this government possible.
This essay was originally posted on The Daily Blog of Saturday, 16 December 2017.
Friday, 15 December 2017
Same As The Old Boss?Robertson’s fetish for paying down Crown debt and amassing government surpluses will limit this government’s options to doling out some extra cash to beneficiaries and the working poor; increasing public servants’ pay; and making a handful of modest improvements to the nation’s infrastructure.
IT’S OFFICIAL – there is now no prospect of this government living up to its promises of introducing “transformational” change. Thanks to Grant Robertson, the Labour-NZ First-Green Government will, with one exception, be fundamentally indistinguishable from the Clark-Cullen ministry of 1999-2008.
The exception? After its initial “Free Tertiary Education” and “Families Package” spending splurges, the Ardern-Robertson ministry intends to keep new spending at levels well below those of both Clark-Cullen and Key-English. Robertson’s fetish for paying down Crown debt and amassing government surpluses will limit this government’s options to doling out some extra cash to beneficiaries and the working poor; increasing public servants’ pay; and making a handful of modest improvements to the nation’s infrastructure.
Now, don’t get me wrong, all of these things are “nice to have”, but we must be very clear about the sort of economic policy Robertson’s “Mini-Budget” is locking-in. Essentially, what we have is a new government offering to be – at best – a slightly more generous version of the government it replaced. At worst, we may be looking at an initial burst of generosity followed by years of the most flinty-faced parsimony. Very much a case of “meet the new boss, same as the old boss”.
Conservative politicians and commentators are forever telling us that problems cannot be solved simply by “throwing money at them”. This simply is not true.
If a business is failing to grow; if it’s employees are being lured away by promises of higher wages; if the technology in use is out-of-date and prone to breaking down: what does the business owner do? If he’s smart, he borrows additional capital and ploughs it into the business. With the additional funds he buys new technology which, in turn, allows him to employ fewer staff at higher wages. The resulting uplift in the business’s productivity generates higher profits, out of which he repays the borrowed capital sum.
Throwing money at problems works a treat. If it didn’t, Capitalism would never have gotten off the ground.
Unfortunately, Robertson does not appear to grasp the critical fact that if New Zealand is to be “transformed” then he, as Finance Minister, is going to have to lay his hands on a very large sum of money. But, not only is Robertson averse to increasing the level of Crown Debt (even though it has never been cheaper for governments to borrow money) but he is also absolutely determined not to use the most important tool which governments – and only governments – possess: the ability to raise “capital” by levying taxes.
Raising taxes is important not only because it would allow the government to accumulate the financial resources necessary to do more than deliver a one-off lift in the incomes of the poorest New Zealanders, but also because a significant increase in the taxes of the wealthiest New Zealanders would begin to undo the transformation that the neoliberal policies of the past 30 years have already accomplished.
The transformation I’m talking about is the transformation which brought an end to the humane and generous social-democratic society for which New Zealand was renowned internationally, and which, in its place, erected the brutally competitive and grossly unequal society the vast majority of New Zealanders are required to live in today. If that society is to be transformed into something more decent and caring, then a substantial redistribution of wealth and power will have to be accomplished.
That could have been the brief of the much-ballyhooed “Tax Working Group”. (On the subject of which I penned a small political fantasy for The Daily Blog back in September.) But, once again, Robertson erred on the side of caution – not transformation. The Tax Working Group, chaired by Robertson’s mentor and political patron, Sir Michael Cullen, has been given a ridiculously narrow brief, whose less-than-transformational outcomes will not come into effect until after the 2020 General Election.
By when, of course, it will be much too late to rescue this government from its all-too-evident parsimony and political gutlessness. Robertson’s tight rein on spending can hardly fail to set the coalition partners at each other’s throats. And as for that “Hallelujah Song” of emancipation and transformation, which Jacinda Ardern somehow convinced Winston Peters of Labour’s willingness to sing. Her ruthless finance minister will, long since, have truncated its stirring verses to a few discordant bars.
There will be some who take umbrage at my uncompromising pessimism. To them I say: “It is only because I have been here before.” I remember another inspirational Labour leader who put an end to nine long years of National Party rule by promising to take New Zealand “up where we belong”, and who then allowed his Finance Minister to wreak havoc on the expectations and aspirations of his party’s electoral base.
David Lange’s was a “transformational government” and no mistake. As transformational in its way as the First Labour Government. Except that, the transformation Labour wrought was not the transformation the people who’d voted for it were expecting.
“Rogernomics” was able to destroy New Zealanders’ humane and generous society because the political resistance to it was too little, and came too late. If the members and supporters of this government similarly fail to act immediately and decisively against the give now/withhold later policies of Finance Minister Robertson, then the best chance New Zealanders have had in 30 years to heal the harms of the neoliberal “revolution” will be lost.
Not that you’ll hear the National Party and their friends complaining. The low debt and large surpluses bequeathed to them by Grant Robertson will be more than enough to fund yet another round of generous tax cuts – for the rich.
The right-wing transformation of New Zealand will continue apace.
This essay was originally posted on The Daily Blog of Friday, 15 December 2017.
Change Agents? Grant Robertson’s economic orthodoxy bodes ill for the expectations of Labour, NZ First and Green Party followers that Jacinda Ardern will, indeed, preside over the “transformational” change promised in her new government's coalition agreement.
LABOUR’S ECONOMIC ORTHODOXY presents its supporters with an A-Grade conundrum. If all you ever do is all anyone has ever done, then what are the chances that anything will ever change? Something in the Marxist nucleotide of Labour’s DNA continues to carry forward the message that economics and politics are inextricably linked. Stuff up the former and the latter will swiftly follow suit. That being the case, Grant Robertson could be Labour’s worst enemy.
Not that he should feel too badly about that, because Labour finance ministers have a well-established historical reputation for being their party’s worst enemies.
One has only to think of Philp Snowden, Chancellor of the Exchequer in Britain’s first and second Labour governments. While no one could fault the old man’s dedication to Labour’s working-class voters, his utterly conventional economic ideas left him helpless in the face of the Great Depression. In the words of his biographer, Keith Laybourn: “He was raised in an atmosphere which regarded borrowing as an evil and free trade as an essential ingredient of prosperity.”
It was Snowden’s unwavering faith in these nineteenth century liberal orthodoxies that broke his party and discredited his government. The people who paid the price for their Chancellor’s intellectual rigidity were (as is so often the case) his beloved working-class.
Things might have gone the same way here in New Zealand just a few years later had the proposals of Labour’s economically orthodox leaders (Michael Joseph Savage, Peter Fraser and Walter Nash) not been voted down by the more radical members of their party’s caucus.
It was thanks to this latter group that Labour went into the 1935 election with an economic policy calling for the “immediate control by the state of the entire banking system; the provision of currency and credit to ensure adequate production, guaranteed prices and wages; readjustment of all mortgages” – along with a policy of state-fostered industrialisation which, today, would be described as “economic nationalism”.
How very different these policies were from the policies of Roger Douglas, the Labour Finance Minister who championed the same laissez-faire economic policies implemented by Philip Snowden between 1929 and 1931. “Rogernomics” radically transformed New Zealand’s economy and politics – and very nearly destroyed the New Zealand Labour Party!
The two politicians most responsible for rescuing Labour from political oblivion were Helen Clark and Michael Cullen. In a double act of extraordinary sophistication, Clark and Cullen kept hold of the political reins for nine years by cleverly masking both the true extent of their government’s economic success, and the political opportunities it opened-up.
As Finance Minister, Cullen proved a master at making his burgeoning revenue surpluses, which might have funded a much more ambitious social-democratic programme, disappear.
Some of Cullen’s billions were invested in the special superannuation fund that still bears his name. Even more went into Working for Families, the massive employer subsidy which Cullen introduced in preference to allowing the trade unions to extract the money from corporate shareholders. Most of Cullen’s surplus billions, however, were directed towards paying down Crown debt.
The opportunity cost of these fiscal diversions would only become apparent towards the end of the next decade, when New Zealand’s physical and social infrastructure began to, quite simply, fall apart.
That Michael Cullen has for many years been Grant Robertson’s political patron and mentor bodes ill for the expectations of Labour, NZ First and Green Party members that Jacinda Ardern will, indeed, usher in the “transformational” change promised in the new government’s coalition agreement.
Even before he received his ministerial warrant, Robertson was at pains to bind Labour to precisely the same diversionary economic strategies pioneered by Cullen.
A Finance Minister who repeatedly swears allegiance to his own “Budget Responsibility Rules” is unlikely to champion the sort of creative and progressive economics that makes for creative and progressive politics.
Unless, like Savage, Fraser and Nash; Ardern, David Parker and Robertson are reined-in by a Labour caucus determined to fulfil their government’s “transformational” ambitions, then the long-deferred renovation of New Zealand’s disintegrating institutional and physical infrastructure will not receive the resources it requires.
A transformational government cannot be brought into being except by means of transformational economics. For all his faults, Roger Douglas understood this fundamental proposition. Progressive voters need a Finance Minister whose economic policies are as bold as his government’s political promises.
This essay was originally published in The Waikato Times, The Taranaki Daily News, The Timaru Herald, The Otago Daily Times and The Greymouth Star of Friday, 15 December 2017.
Wednesday, 13 December 2017
Yanis Varoufakis Would Tell Grant Robertson That Neoliberalism’s Rules Are For Breaking – Not Keeping.
Progressive Economist: YanisVaroufakis is one of neoliberal capitalism’s most outspoken and acute critics. Winston Peters might have declared his determination to give capitalism a human face, but Varoufakis would likely argue that the necessary transplant operation would entail far more effort than it was worth! Hardly surprising given his belief that the leading capitalist nations have been waging an unrelenting war on their poorest citizens for the past forty years.
IMAGINE THE REACTION if Finance Minister, Grant Robertson, announced a broad-ranging, government-sponsored seminar on progressive economics chaired by Yanis Varoufakis. Vilified and demonized by EU bankers and politicians for his heterodox economic ideas, Varoufakis resigned as Greece’s Finance Minister in 2015 rather than impose yet another of the European Central Bank’s crushing economic diktats on his impoverished homeland.
Inviting Varoufakis to chair a seminar on progressive economics would constitute the clearest possible proof that the Labour-NZ First Coalition’s promise to be a “transformational government” was genuine. International and domestic market reaction to such an announcement would, however, be instantaneous and extreme. New Zealand’s government would be portrayed as having taken leave of its senses.
And, in many respects, the markets would be right. Varoufakis is one of neoliberal capitalism’s most outspoken and acute critics. Winston Peters might have declared his determination to give capitalism a human face, but Varoufakis would likely argue that the necessary transplant operation would entail far more effort than it was worth! Hardly surprising given his belief that the leading capitalist nations have been waging an unrelenting war on their poorest citizens for the past forty years.
Writing for the latest newsletter of Project Syndicate, Varoufakis marvels at the “bourgeois rage” directed at the “militant parochialists” responsible for Brexit and Trump:
“The range of analysis is staggering. The rise of militant parochialism on both sides of the Atlantic is being investigated from every angle imaginable: psychoanalytically, culturally, anthropologically, aesthetically, and of course in terms of identity politics. The only angle that is left largely unexplored is the one that holds the key to understanding what is going on: the unceasing class war unleashed upon the poor since the late 1970s.”
As evidence for his class war claim, Varoufakis presents the following stark statistics:
“In 2016, the year of both Brexit and Trump, two pieces of data, dutifully neglected by the shrewdest of establishment analysts, told the story. In the United States, more than half of American families did not qualify, according to Federal Reserve data, to take out a loan that would allow them to buy the cheapest car for sale (the Nissan Versa sedan, priced at $US12,825). Meanwhile, in the United Kingdom, over 40% of families relied on either credit or food banks to feed themselves and cover basic needs.”
Unleashing Varoufakis on the equivalent New Zealand data would doubtless produce a series of equally startling conclusions. Which is why Grant Robertson, himself, would, almost certainly, resign rather than invite someone like Varoufakis to draw the obvious policy conclusions from the last 30 years of class war in New Zealand – especially since many of that war’s most destructive campaigns were conducted under the generalship of Labour Party politicians!
Robertson’s pitch to New Zealand’s capitalist class is very different from Varoufakis’s unabashed “economic humanism”. Only this morning, (11/12/17) speaking to the Auckland Chamber of Commerce, Robertson declared:
“For us to keep being able to afford the policies necessary to achieve higher living standards we must remain fiscally responsible. It goes without saying that a Government that presides over high deficits, increasing debt, or a shrinking economy could not provide the quality public services that New Zealanders want and deserve. That is why we have developed and committed to our Budget Responsibility Rules.”
Which is precisely the sort of language that Varoufakis encountered when he travelled to Brussels on his doomed missions to secure a more rational approach to managing the consequences of Greece’s crippling indebtedness. That Robertson shows every sign of being as committed to following “the rules” as the European Central Bank’s pitiless bailiffs, strongly suggests that, even if he could, somehow, be prevailed upon to organise a seminar on progressive economics, and invite Varoufakis to chair it, the maverick Greek economist would feel obliged to decline.
The former Greek Finance Minister’s own experience tells him that “the rules” formulated by the world’s economic and political elites; “the rules” bankers and politicians consider themselves bound in solemn duty to uphold and enforce at all costs; are, in reality, no more than “the rules of engagement” in neoliberal capitalism’s “unceasing class war” against the poor. If Varoufakis was ever to accept an invitation to chair a government-sponsored seminar on progressive economics, it would only be because he had already been convinced, by their actions, that the politicians asking him to elaborate a more “transformational” political economy were rule-breakers – not rule-keepers.
This essay was originally posted on The Daily Blog of Tuesday, 12 December 2017.
Tuesday, 12 December 2017
Magnificent Loser: Boudica may have raised the Ancient British tribes against their Roman rulers, but she proved to be no match for the discipline and experience of Suetonius's XIV Legion. If Jacinda Ardern is to successfully overthrow the Neoliberal political and economic consensus and establish a genuinely "transformational" government, then she will have to weld her disputatious political tribes into a fighting machine every bit as formidable as Bill English's disciplined and experienced National Opposition.
ANYONE WHO VISITS the British Houses of Parliament cannot fail to notice her. Upright in her war-chariot, the Ancient Britons’ warrior queen, Boadicea, and her daughters, burst out of history like a trio of avenging angels. The bronze statuary does not, however, celebrate a victory. In the bloody revolt against Roman rule of 60AD, Boadicea (or Boudica, as she is properly called) was the loser. It was Suetonius, commander of Rome’s XIV Legion, who won.
Jacinda Ardern’s sudden emergence as New Zealand’s warrior queen, though nowhere near as bloody as Boudica’s, certainly bears comparison in terms of its sheer drama. Like Boudica, Jacinda was able to draw together all the political tribes determined to end the incumbent government’s rule. Also like Boudica, she has enjoyed considerable initial success.
What lies ahead of Jacinda, however, is an enemy who, though outmanoeuvred, has yet to be decisively defeated. Like Suetonius’s XIV legion, the National Party is well-equipped, highly-experienced, and, most importantly, formidably-disciplined. Jacinda’s ragged tribes may outnumber them – but can they outfight them?
The Colmar-Brunton opinion poll, released by TVNZ’s Q+A show on Sunday, brings that latter question into sharp focus. National’s level of support, measured at 46 percent, has not only held up, it has actually improved slightly over the 44.4 percent it won at the General Election.
For the governing parties, the news is not so good. When translated into seats in the House, the Government’s numbers (Labour: 39 percent; Greens: 7 percent; NZ First: 5 percent) deliver no advance on its current tally of sixty-three. If Jacinda was anticipating a “post-election bounce” in the polls, then she and her colleagues will find it hard to avoid feeling ever-so-slightly jumpy.
It’s not only the fact that National continues to enjoy a substantial lead over Labour that must be vexing the Government, but also the sheer size of its opponent’s electoral base. Unlike the Centre-Left, the Centre-Right in New Zealand is not required to continually marshal political parties as diverse as they are disputatious. Instead, they can range themselves against the Left’s warrior queen as a formidable unitary force commanded by a single leader. If Jacinda is Boudica, then Bill English is Suetonius. And if the Government represents the fractious war-horde of the revolting British tribes, then the National Opposition represents the XIV Legion.
Historical metaphors aside, the disposition of political forces revealed in the latest Colmar-Brunton Poll reflects a dangerously divided society. National’s voters clearly remain unconvinced by the new government’s arguments for change. Certainly, this poll has registered nothing like the decisive 10 percentage-point shift in voter allegiance that followed the election of Helen Clark in 1999, and John Key in 2008. Branded by its enemies as a “coalition of the losers”, the Labour-NZ First-Green Government is beset by legitimacy issues entirely absent from previous MMP configurations.
These legitimacy issues are unlikely to be ameliorated by the Government’s apparent determination to keep its spending within the narrow bounds of its “Budget Responsibility Rules”.
The strategic thinking behind this self-imposed restraint is unclear – to say the least! For parties and candidates pitching themselves against the status-quo, boosting electoral turnout is everything. Donald Trump and the Brexiteers did not win by offering their angry constituencies careful and measured policies! For Labour’s share of the popular vote to overtake National’s, its leaders need to roll-out policies of sufficient boldness to mobilise the tens-of-thousands of New Zealanders who have, hitherto, seen little or no point in voting. Proud reiterations of your government’s “fiscal and economic responsibility” will likely strike many of these potential voters as a pretty odd way to bid for their support. Very much a case of “meet the new boss, same as the old boss.”
National’s strategy, by contrast, is clear and simple: take confidence in our strength; remain united and disciplined; and seize every opportunity to inflict maximum damage upon the Government. The Centre-Right seldom requires special policy carrots to lure its voters to the polling-booths. Conservatives know who their friends are.
When Suetonius set the XIV Legion across Watling Street and waited for Boudica to come at him, he was supremely confident that, providing his men remembered their training and followed their orders, the Britons would be unable to translate their numerical advantage into victory. On the contrary, he anticipated that the massive casualties inflicted by his legionaries would soon break the British tribesmen’s fighting spirit and send them into headlong retreat.
If Bill English and his National Opposition are similarly able to hold the line, and drive back every government advance, then he, too, will be rewarded with a loss of confidence in his enemies’ ranks. Moreover, if he takes advantage of Labour’s ridiculous determination to limit the Coalition Government’s room for fiscal and economic manoeuvre, then Bill English, like Suetonius, will bring down his warrior queen.
This essay was originally published in The Press and The Dominion Post of Tuesday, 12 December 2017.
Saturday, 9 December 2017
Ominous Warnings: The Briefings to Incoming Ministers, released this week, paint a bleak picture of the previous government's consistent under-funding of public services.The veteran political journalist, Richard Harman, puts it like this: “What the Government is confronting is two separate pressures on its spending – one deferred spending from the austerity imposed by the last Government as a response to the GFC in 2008 and a new force in the form of a rapidly growing, ethnically diverse population.”
THE BRIEFINGS TO INCOMING MINISTERS (BIMs) have laid bare the accumulated failures of nine years of National Party Government. In sector after sector senior civil servants paint a grim picture of incompetence and neglect. The clear message which emerges from this sorry record is that New Zealand has been the victim of a nine-year austerity programme that nobody – other than the poor – seems to have noticed. Taken together, the BIMs offer stark proof of just how deep the class divisions in this country now run.
The veteran political journalist, Richard Harman, puts it like this: “What the Government is confronting is two separate pressures on its spending – one deferred spending from the austerity imposed by the last Government as a response to the GFC in 2008 and a new force in the form of a rapidly growing, ethnically diverse population.”
One of the reasons the three parties making up the present government were able to secure the votes necessary to win power was because the National-led Government was no longer able to confine the effects of its austerity programme to the poorest – and brownest – working-class communities. The effects of prolonged underfunding were beginning to be felt in New Zealand’s leafy suburbs as well as in its meanest streets. More and more people shared in the common agreement that something must be done.
An understanding that a great deal more money would have to be raised and spent, should have been at the heart of that agreement – and Labour should have been the party that put it there, imbuing it with the moral and intellectual force required to overcome the Right’s inevitable resistance. This had been the strategy of the Labour Party in the early 1930s, and it succeeded brilliantly. Labour took power in 1935 with a comprehensive and progressive manifesto, backed by the irresistible weight of an informed and impatient public.
Sadly, this was not the case in 2017.
Rather than build a broad consensus around the need for a substantial increase in public expenditure, funded by an equally large increase in taxation, Labour set out to convince voters of the exact opposite. No increase in personal income tax contributions were necessary, they were told, not even from the very wealthy. Corporate taxation, similarly, would not need to rise. The rate of the Goods and Services Tax could remain fixed at 15 percent. There would be no Capital Gains Tax, Land Tax or Inheritance Tax. Labour was at pains to let people know that it intended to cleave faithfully to the broad fiscal and economic settings bequeathed to it by the outgoing National Government. Gusts of rhetorical stardust notwithstanding, the new Finance Minister, Grant Robertson, was determined to run a tight fiscal ship.
In essence, Robertson’s strategy was the same as Steven Joyce’s, his predecessor: keep the middle-classes happy. National had done it with rock-bottom interest-rates, and by allowing the value of their personal assets to soar. Labour hoped to keep them happy with promises of free tertiary education and affordable homes for their kids; decent pay raises for teachers, nurses, hospital doctors and civil servants; and the gradual upgrading of New Zealand’s ailing infrastructure as and when finances permitted. For the working-class and beneficiaries there would be lots of smiles and hugs – and bugger-all else.
But, as Harman puts it on Politik: “There is a subtle but strong message running through the Briefings to Incoming Ministers […] which comes near to putting a price that the Government is going to have to pay to implement its promises.”
Unsurprisingly, given the neoliberal predilections of senior Treasury officials, the price envisaged is a capitulation to the idea of opening-up the renovation of New Zealand’s public services and infrastructure to private investors. Robertson’s principal advisers are steering him, very quietly, in the direction of Public-Private-Partnerships. In this they will be greatly assisted by Robertson’s personal aversion to unorthodox economic ideas, and by his determination to stay within the bounds of his “Budget Responsibility Rules”.
No matter that New Zealand is short 75,000 houses, or that 700,000 Kiwis cannot be sure of the purity of their drinking water. Too bad that there aren’t enough beds for the mentally ill, and that the prisons are full-to-overflowing. Unfortunate that our courts are so under-resourced that justice is being denied by trial delays of up to 18 months. Labour will continue to resist the rising clamour for increased spending via the tax rises essential to the maintenance of a civilised society.
The grim picture painted in the BIMs is the consequence of National’s class-driven programme of austerity. Labour’s seeming helplessness in the face of the multiple crises they reveal, is the direct consequence of its refusal to accept that the wounds of austerity can only be healed by applying the sovereign remedy of substantial increases in state spending – facilitated by a radical expansion of the tax base.
This essay was originally posted on The Daily Blog and Bowalley Road of Saturday, 9 December 2017.
Friday, 8 December 2017
There Can be Only One: No matter how eloquently the partisans of a Jewish homeland reassured their Arab neighbours that they had nothing to fear from a future State of Israel, the brute logic of Zionism argued against the longevity of any such attempt at cultural and religious cohabitation. Sooner or later, the sheer impossibility of the two communities, Jewish and Arab, rubbing along together in peaceful coexistence would become apparent. And when that happened, one of those communities would have to go.
“APOCALYPSE IN THE VALLEY OF ARMAGEDDON”. The Daily Blog editor, Martyn Bradbury, certainly displays a gift for evocative language! On the subject of President Donald Trump’s recognition of Jerusalem as Israel’s capital, however, I believe Martyn’s evocation of the apocalypse is premature. Trump’s decision is less a sign that Armageddon is imminent, and more a signal that the Zionists’ end-game is about to begin.
By announcing the United States recognition of Jerusalem as Israel’s capital, Trump has sent two very important messages to the extreme Zionist elements in Israeli society. The first message is brutally simple: the so-called “two-state solution” to the Israeli-Palestinian conflict is dead. The second, to the government of Benjamin Netanyahu, is that, as the political logic of the two-state solution’s demise is followed to its inevitable and brutal conclusion, the United States has got Israel’s back. Not just at the UN Security Council, but everywhere Israel needs American support.
The political logic of the two-state solution’s demise is inextricably bound up with the relentless colonisation of the West Bank by extreme Zionist “settlers”. Essentially, the so-called “settlements” were planted on the West Bank in order to render the formation of a viable Palestinian state impossible. The larger those settlements grow, the tighter the hands of Israeli politicians are bound. The political cost of dismantling the settlements has risen so high that no sensible Israeli any longer believes that a Palestinian state is achievable.
This leaves the Israeli authorities with two options. They can either continue to act as an army of occupation on the West Bank of the Jordan River: controlling every aspect of the Palestinian people’s lives, while Zionist settlements metastasise into every corner of Palestine’s shrinking body. Or, they could simply transform the West Bank into a Palestinian-Free Zone.
This latter option has lain dormant in Zionism from its very inception. No matter how eloquently the partisans of a Jewish homeland reassured their Arab neighbours that they had nothing to fear from a future State of Israel, the brute logic of Zionism argued against the longevity of any such attempt at cultural and religious cohabitation. Sooner or later, the sheer impossibility of the two communities, Jewish and Arab, rubbing along together in peaceful coexistence would become apparent. And when that happened, one of those communities would have to go.
Ethnically cleansing the West Bank would, of course, be a gross violation of international law. It would constitute a crime against humanity on a scale not seen since the break-up of the former Yugoslavia, the Rwandan genocide and, more recently, the expulsion of the Rohingya people from Myanmar.
Protected by Donald Trump and the American veto in the UN Security Council, however, Israel is unlikely to much care what the world thinks or does. When all is said and done, isn’t its fifty-year occupation of the West Bank a blatant contravention of international law? And, haven’t Israel’s repeated incursions into Lebanon, and its brutal bombing of the civilian population of Gaza, occasioned many crimes against humanity?
If a decision to expel the Palestinians from the West Bank is taken by the Israeli authorities, it would undoubtedly provoke fury in the Arab world. So great is Israel’s military power, however, that launching any kind of meaningful retaliation against such forced expulsions would risk a potentially devastating Israeli counter-strike.
Some of the most extreme Zionists might even welcome an Arab attack. What better justification for levelling the Al-Aqsa Mosque and laying the foundation-stone for the Third Temple?
Certainly, the rebuilding of “Solomon’s Temple” and the expansion of the State of Israel to the full extent of its biblical boundaries would be welcomed by the tens-of-thousands of so-called “Christian-Zionists” (and fervent Trump supporters) living in the United States. In their eyes, such developments would constitute proof-positive that the “End Times” had well and truly begun.
“Apocalypse in the Valley of Armageddon” would only be the beginning.
This essay was originally posted on The Daily Blog of Friday, 8 December 2017
Avuncular Intervention: Regional Economic Development Minister, Shane Jones, tells TVNZ's Q+A programme that he is determined to introduce measures which will ensure that his "ne'er-do-well nephews" get "off the couch" and into work. Historically, breaking the vicious circles of unemployment has required the state to become the employer of last resort.
YOU’VE GOT TO hand it to Shane Jones – he sure knows how to seize control of the political agenda! Ever since his provocative performance on last Sunday’s Q+A, his name has seldom been out of the headlines. More impressive still, his ideas are being debated everywhere.
Sparking a genuine national conversation on anything other than sport and celebrity sex isn’t an easy thing to do. Generally speaking, it’s evidence of somebody, somewhere, striking a nerve. In Jones’ case, the phrase that caused so many Kiwis’ knees to jerk was the one prompted by his determination to get his ne’er do well nephews “off the couch” and into work.
In many ways, Jones’ arguments for unemployed youngsters to be forced into the world of work are classic Labour. Traditional working-class New Zealanders have little patience with slackers and bludgers. Decent men and women measure their worth by the hours they put in. Neither are they fussy about the jobs they put their energies into. The main thing is to be busy; to contribute; and be seen to be doing everything possible to stand on their own feet and pay their own way.
The problem (if problem is the right word) with this “can-do” attitude, is that it’s, almost always, a reflection of the “virtuous circles” in which its exemplars have been raised. Families in which the virtues of hard work, and the need to “better oneself”, have been drummed into children from birth tend, strangely enough, to produce hard workers who better themselves. Success is thus rendered intergenerational: fixing the family’s upward social trajectory; and ultimately carrying them out of their class altogether. No matter how high such families may rise, however, the values that drove their success, providing they continue to be inculcated, prevent them from falling.
But, what about the much less fortunate inhabitants of “vicious circles”? Families broken by massive economic dislocation and enforced idleness. Families in which hope curdles and faith in the future withers. Households where all sense of self-worth is undermined by repeated knock-backs and rejections; where, even when work is secured, it is precarious, wretchedly-paid, and subject to conditions that only further erase any semblance of personal dignity. In these circumstances, the wonder is not that such vicissitudes precipitate addiction, desertion, violence and abuse; but that so many men and women struggle to resist the vicious downward spiral into indifference and despair.
The puzzle which Shane Jones has set himself, and (through sheer chutzpah!) the coalition government, to solve is: how to rescue those trapped in these vicious circles; and how to then install them in virtuous circumstances of sufficient permanence for that virtue to become self-sustaining?
Significantly, Jones is reaching back into New Zealand history for answers. Because, of course, this country has broken vicious circles before. To secure a decent life for the social casualties of economic depression and world war, the First Labour Government expanded dramatically the employment opportunities offered by the state. Tens-of-thousands of workers who might otherwise have subsisted from odd-job to odd-job, found permanent employment, with union-negotiated wage-rates and conditions, in the state-owned railways, postal and telegraphic services, and infrastructure projects. They may not have been the world’s most productive workers, but these state-provided jobs allowed them to establish homes and families, and to raise children untroubled by the viciousness of the downward spiral.
That Jones is experiencing resistance from his former Labour colleagues is one of history’s little ironies. Or, maybe not. Because it was the Fourth Labour Government who made such an issue out of the alleged “inefficiency” of New Zealand’s “feather-bedded” government departments. The much-vaunted process of “corporatisation”, out of which emerged the significantly-titled “State Owned Enterprises”, saw thousands of workers lose not only their jobs, but the economic and social security that came with them. Virtuous circles of fifty years duration were broken, and the vicious circles, which have become such a feature of the free-market era, began sucking thousands of New Zealanders into their whirlpools of dysfunction.
Shane Jones, and his boss, Winston Peters, both know that short bursts of employment, even for the minimum wage, cannot cure the effects of structural unemployment. They’re aware that the vicious circles of dysfunction can only be broken by the state-subsidisation of permanent employment.
And that will require the Labour-led Government to “get off the couch”.
This essay was originally published in The Waikato Times, The Taranaki Daily News, The Timaru Herald, The Otago Daily Times and The Greymouth Star of Friday, 8 December 2017.
Tuesday, 5 December 2017
Dangerous Politics: Both Jacinda Ardern and Grant Robertson were up-close witnesses of the racist backlash that scuttled the Helen Clark-led Government’s attempt to “Close the Gaps” between Rich and Poor/Maori and Pakeha in the early 2000s. The National Party does not have a monopoly on redneckism. Many Labour voters also have plenty of unpleasant things to say on the subject of “the Maarees”.
THE WORST SIDE-EFFECT of New Zealand’s thirty-year “free-market” experiment is the way the words “Maori” and “dysfunctional” have become interchangeable. That the poor in New Zealand are disproportionately brown has made it much easier for the Pakeha majority to submerge their racial animosity in the less inflammatory vocabulary of socio-economic prejudice. Just like their White American counterparts, Pakeha racists have found a way to communicate their hatred and intolerance of ethnic minorities by couching their attacks in the language of economics and sociology.
As newspaper columnist Dave Witherow, and the former National Party leader, Dr Don Brash have both discovered over the past fortnight: to rant and rave publicly against Te Ao Maori is to invite instant, extensive and very loud condemnation. Condemning the poor for their ignorance, improvidence, laziness and criminality, however, provokes no such backlash. Liberal and progressive New Zealand is content to keep ethnicity and social deprivation in separate conceptual boxes. In the racist imagination, however, being poor, and being Maori, remain kindred categories.
This ethnically-coded discourse about poverty and the poor explains the otherwise puzzling phenomenon of the former National Government’s ability to embrace much of the programme of the Maori Party without provoking the mass desertion of the sort of National voter who had responded so dramatically to Dr Brash’s in/famous “Orewa Speech” of 2004. John Key may have basked in the praise of liberal New Zealand for throwing his arms around Tariana Turia and Pita Sharples, but National’s less “politically correct” supporters had only to observe his government’s hard-line approach to beneficiaries to be reassured that their party’s intolerance of all manifestations of “Maori/Dysfunction” remained as fierce as ever.
As political subterfuge goes, it was a pretty sophisticated double-act. On the one hand stood Chris Finlayson: working his way through the backlog of Treaty claims with admirable dispatch. On the other, Paula Bennett and Anne Tolley: wielding their punishing sticks against the undeserving poor – a disproportionate number of whom just happened to be brown. The urban liberals were moved, but so, too, were National’s provincial conservatives. A win-win strategy for everyone – except the Maori poor.
And on 23 September 2017, the Maori poor had their revenge. Unwilling to give the Maori Party the benefit of the doubt a fifth time, Maori voters drove its two remaining representatives out of Parliament altogether – thereby securing Labour a clean sweep of the seven Maori electorates. Between them, the Labour, NZ First and Green parties making up the current government contain an unprecedented 19 Maori MPs.
For these Maori politicians, the linkage between ethnicity and poverty is as important to the overall conduct of Jacinda Ardern’s government as it was to John Key’s – but for diametrically opposite reasons! Maori, both inside and outside the House of Representatives, will not tolerate an economic and social strategy that is not committed unequivocally to freeing their communities from the consequences of thirty years of racist neglect: those crippling social dysfunctions which so many Pakeha cite as justification for their prejudice.
This is dangerous politics. Both Jacinda Ardern and Grant Robertson were up-close witnesses of the racist backlash that scuttled the Helen Clark-led Government’s attempt to “Close the Gaps” between Rich and Poor/Maori and Pakeha in the early 2000s. The National Party does not have a monopoly on redneckism. Many Labour voters also have plenty of unpleasant things to say on the subject of “the Maarees”.
Enter NZ First’s Regional Economic Development Minister, Shane Jones. His mission, to unite conservative provincial New Zealanders, Maori and Pakeha, around an economic nationalist programme committed to uplifting both communities. Anyone who watched Jones’s bravura performance on TVNZ’s “Q+A” current-affairs programme of Sunday, 3 December – during which he openly talked about forcing his feckless Northland “nephews” “off the couch” and into paid work – can only have felt for Finance Minister Grant Robertson. Jones, undoubtedly speaking on behalf of his boss, Winston Peters, made it very clear that Robertson’s business-oriented commitment to “fiscal and economic responsibility” cut little ice with him – nor, one suspects, with the Coalition Government’s other Maori MPs.
“Some trust in chariots and some in horses, but we trust in the Coalition Agreement”, quipped Jones, paraphrasing Psalm 20:7, and making it very clear to his political cohabiters that the Maori members of the Government will not be truncating their Maori-centred agenda to satisfy either Robertson’s “Budget Responsibility Rules” – or the prejudices of Pakeha.
What Jones and his comrades have come to understand, finally, is that the “market-failures” which they are determined to correct were also, perversely, politica successes. The free-market policies of the 1980s and 90s contributed to the disintegration of many Maori communities. The resulting “Maori underclass” spawned a host of seriously dysfunctional behaviours – creating fears which were exploited politically to “weaponise” Pakeha racism.
Fix the first problem, and the second falls apart.
This essay was originally published in The Press of Tuesday, 5 December 2017.
Saturday, 2 December 2017
Labour's Responsible Fiscal and Economic Manager? Or, will Grant Robertson's unwavering adherence to his own "Budget Responsibility Rules" strap New Zealand into a fiscal and economic straightjacket, the primary effect of which will be to render the Labour-NZ First-Green Government’s “transformational” promises incapable of fulfillment?
TO ACCUSE POLITICIANS of being part of a “tax and spend” government is just another way of calling them social-democrats. By the same token, politicians who explicitly renounce the policies of tax and spend are signalling that they are anything but social-democrats. What, then, should we make of Grant Robertson’s speech to the ANZ Business Breakfast of Friday, 1 December 2017? The short answer is: if Finance Minister Robertson is a social-democrat, then he’s not a very good one.
Let’s begin with the most positive paragraph of his address to the assembled business leaders. Unfortunately, it’s not his. Robertson is merely quoting the core objectives of the Labour-NZ First- Green Government’s “common mission statement”:
“Together, we will work to provide New Zealand with a transformational government, committed to resolving the greatest long-term challenges for the country, including sustainable economic development, increased exports and decent jobs paying higher wages, a healthy environment, a fair society and good government. We will reduce inequality and poverty and improve the well-being of all New Zealanders and the environment we live in.”
There is no avoiding the radicalism of this declaration. “Transformational government” is what happens when the old ways of doing things are jettisoned in favour of news ways of managing a nation’s economy and society. The 1984-1990 Labour government of David Lange and Roger Douglas was unequivocally transformational. It cast aside the political, economic and social assumptions of the previous fifty years of New Zealand history in favour of a market-led society in which taxing and spending would be relentlessly “downsized”.
Significantly, the current Labour-NZ First-Green Government has, in large measure, come into being because just over half the New Zealand electorate was determined to bring an end to and, if possible, reverse, that downsizing.
Unfortunately, it just isn’t possible – on the basis of Robertson’s address to the ANZ Business Breakfast – to see how that can happen. The Finance Minister makes it very clear that the Ardern Government (its promises to bring about “transformational” change notwithstanding) is absolutely determined to offer “responsible fiscal and economic management”.
In case his audience was in any doubt as to what this entailed, Robertson spelled out Labour’s “Budget Responsibility Rules”:
“To recap, this means that we will deliver a sustainable operating surplus each year unless there is a significant disaster or major economic shock or crisis. We will ensure that government spending as a proportion of the economy won’t rise above the recent historical average of 30% of GDP. We will reduce net core Crown debt to 20% of GDP within five years of taking office.”
It’s important to identify these commitments for what they truly are: a fiscal and economic straightjacket, the primary effect of which will be to render the Labour-NZ First-Green Government’s “transformational” promises incapable of fulfilment.
Robertson’s Budget Responsibility Rules will achieve this result all on their own. Throw in Labour’s election campaign commitment to leave income and company taxes unchanged for three years, and what New Zealanders are faced with is thirty-six months of “Austerity-Lite”. Which isn’t quite the “transformation” New Zealanders had in mind when they accepted Jacinda’s invitation to “Let’s Do This”.
Somehow, Robertson’s rigid adherence to “responsible fiscal and economic management” will have to be overcome. Failure to reclaim the ability to tax and spend, or, to put it in less tendentious language: the ability to redistribute wealth from the rich to the poor while accelerating the nation’s infrastructural development in ways that both reduce social inequality and expand individual opportunity; can only result in the Labour-NZ First-Green Government being thrown out on its ear in 2020.
Most of all, the Labour caucus needs to be weaned-off the self-denying-ordinances of neoliberalism. The whole history of our democracy has been about the determination of ordinary people to claim the same rights and privileges that King John’s barons acquired in Magna Carta. Namely, that before the King can tax them, he must first obtain their consent. In other words, determining the quantum and purpose of revenue gathering is the people’s prerogative. Winning control of the Treasury Benches becomes meaningless if the winners then refuse to exercise their right to raise revenue and spend it as they see fit.
If this is, in truth, to be a radical, transformational government, then perhaps its parliamentary majority should consider delivering a small demonstration of radical, transformational politics. All the Labour, NZ First and Green MPs outside Cabinet could agree to meet as a single entity and demand that the “Red October” appendix to the Coalition Agreement be made available for discussion and debate. This revolutionary “Common Mission Committee” could then communicate to Finance Minister Robertson which of the many promises agreed to by Labour were to be financed and implemented. If he refused, a new Finance Minister could be suggested.
Fanciful? Of course, it is! Not least because the Executive could easily thwart such a rebellion by entering into a grand coalition with the National Party. Would that cause the Labour Party to self-destruct? Probably. But wouldn’t that be a more honest outcome than forever putting up with governments run by unelected neoliberal civil servants?
A Labour Party that refuses to tax and spend really should call itself something else.
This essay was originally posted on The Daily Blog of Saturday, 2 December 2017.
Friday, 1 December 2017
Clowns To The Left Of Me, Jokers To The Right: Winston Peters with his crucial nine NZ First seats can make or break the fortunes of both major parties. Jacinda Ardern, on the other hand, cannot lose Winston's support without losing office. It would, therefore, be prudent for Labour to honour the promises that secured them the Treasury Benches.
JACINDA ARDERN needs to get a whole lot smarter – and quickly. Or Bill English might stop behaving like the dimmer half of Dumb and Dumber and start thinking strategically. The object of all this clever, strategic thinking? Winston Peters.
The Prime Minister’s frantic attempts to keep the “annex” to the Labour-NZ First coalition agreement secret, suggests strongly that the rumours about the post-election negotiations are true. Labour, it is said, could not believe the radicalism of the changes Winston Peters and his fellow negotiators were seeking. Unwilling to jeopardise their chances of ultimate victory, Labour’s negotiating team were, accordingly, careful to shunt NZ First’s most radical policy propositions into the now notorious annex.
Describing these as mere “notes”, the Prime Minister is flatly refusing to acknowledge the annex as official information. The moment NZ First’s nice-to-haves become official government policy, she reassures us, they will be made public. Until then, however, the sheer scale of NZ First’s policy ambitions will remain under wraps.
What must Peters be making of all this fancy prime-ministerial footwork?
It’s hard to see him being anything other than aggrieved and alarmed. Is this how Capitalism is to be given a human face? By falling back on the secrecy and manipulation of the Clark years? God knows, there are enough of Helen’s old comrades cluttering-up the Beehive lift-wells as it is! Do they really expect him to abandon his stated preference for “change” over “a modified status quo” before he’s even had time to hang up so much as a single Christmas stocking?
Peters is by no means the first political observer to note just how completely the “Jacinda-Train” has been stripped of its radical political signage. What had looked to many like a replica of Trotsky’s legendary armoured train; a vehicle for carrying the revolution forward against all enemies; has taken on the appearance of a drab KiwiRail locomotive in the process of being rotated 180 degrees on the Wellington turn-table.
This is not what Peters and his party threw in their lot with Labour and the Greens to achieve. Clarks “glacial incrementalism” is not the stuff of which political legacies are made. As he stood beside the young prime minister in the Beehive Theatrette on Monday afternoon, is it possible that Peters was beginning to feel, ever-so-slightly, foolish? Was he wondering whether, somehow, the old grand-master of the political chess-game was being checked?
Had he and his colleagues not been so busy forwarding thousands of written parliamentary questions to the Clerk’s Office, Bill English might have registered just how taut the hawsers holding the Labour and NZ First ships together have become. He might have asked himself what the Prime Minister’s refusal to come clean about all the policy concessions NZ First had demanded, and Labour had nodded through, portended for the Coalition’s long-term prospects. He might have concluded that “a [barely] modified status quo” is the very best NZ First can hope for. He might have thought to himself: “But, National can offer that!”
Indeed, it can. Which is why the Prime Minister needs to rein-in all those lofty Labour condescenders who have plonked themselves down at the coalition table and started explaining the facts of political life to their NZ First and Green Party allies. Most of all, she needs to ban absolutely any further references to Steve Maharey’s infamous quote dismissing political promises as “the sort of thing you say in Opposition, and then forget about in Government”.
Winston Peters had every reason to give the National Party a wide berth in the aftermath of the 2017 general election. Even so, he would never have joined forces with Labour had he not been assured of the policy space necessary to construct an enduring political legacy.
If English senses that Labour is denying the NZ First leader his promised policies of change, then what’s to stop him offering Peters an alternative legacy? By setting-up NZ First as its sister-party in provincial New Zealand, National could avoid becoming “Johnny-No-Mates”: New Zealand’s largest party, but never able to win enough seats to form a government. If English can convince him to become National’s provincial partner, then Peters will be able to bestow upon his beloved NZ First Party the precious legacy of permanence.
Time to smarten-up Jacinda! Give Winston the policies he was promised.
This essay was originally published in The Waikato Times, The Taranaki Daily News, The Timaru Herald, The Otago Daily Times and The Greymouth Star of Friday, 1 December 2017.