New generation government ending failed ‘neo-liberalism’?

‘Neo-liberalism’ has become a commonly used term meaning ‘everything that was wrong with politics and society’. Was the last three decades as bad as some make out? And are we going to see a sudden solution?

Newsroom has re-published and opinion piece first published prior to the election – Dame Anne Salmond: A final, brief election thought

This election has not been a contest between left and right, but between different generations and philosophies.

For the past 33 years, New Zealand has been gripped by neo-liberalism – a cult of naked self-interest, of the cost-benefit calculating individual, in which the only aim is success.

It’s completely amoral – the ends justify the means. It’s a brutal philosophy that has given New Zealand the highest rate of youth suicide, the worst rate of child poverty in the developed world; people living in cars or on the streets, babies dying of third world diseases.

That’s a fairly extreme description, with some questionable claims.

A new generation is emerging that has lived through the neo-liberal experiment, and regards it as an abject failure – environmentally, socially and economically.

Jacindamania isn’t about personality at all – it’s a collective sigh of relief that we might finally have a kind of leadership that reflects our core values as New Zealanders. A chance for a country that’s truly ‘clean and green;’ for honesty, decency and kindness in our public as well as our private lives.

And that’s another extreme, this time idealistic, and also inaccurate.

Inferring that ‘Jacindamania’ regards the recent past as “an abject failure – environmentally, socially and economically” is quite misleading.

Ardern agreed with Jim Bolger’s assertion that neo-liberalism in new Zealand had failed, but she has failed to convince.

Stuff in September – Jacinda Ardern says neoliberalism has failed:

Labour leader Jacinda Ardern says neoliberalism has failed and New Zealand has always been served well by interventionist government.

The opposition leader, outlining her economic ideology to RNZ in a lengthy interview, was asked if she agreed with former Prime Minister Jim Bolger’s assessment of neoliberalism in New Zealand: that it had failed.

“Yes,” she replied.

“New Zealand has been served well by interventionist governments. That actually it’s about making sure that your market serves your people – it’s a poor master but a good servant”.

“Any expectation that we just simply allow that the market to dictate our outcomes for people is where I would want to make sure that we were more interventionist.”

‘The market’ has not simply dictated outcomes. There have been varying degrees of intervention by successive governments, but there has still been considerable intervention. Changes like ‘Working for Families’ subsidies, student loan changes and the first increase in benefits for decades are all examples.

And one of the biggest current problems, large rises in property values, has been at least partly caused by too much intervention in housing supply via the resource Management Act.

Ardern however ruled out major changes to the legislation that sets out New Zealand’s monetary policy.

“For me the neoliberal agenda is what does it mean for people? What did it mean for people’s outcomes around employment, around poverty, around their ability to get a house? And on that front I stand by all our commitments to say that none of that should exist in a wealthy society. And there are mechanisms we can use that are beyond just our economic instruments and acts, to turn that around”.

Past governments have acting in a range of ways, not always successfully. All governments have tried to make improvements, and that’s what Ardern’s government aspires to, but incrementally more than radically. And they have already wound back some of their election promises.

Dr Toby Boraman from Massey University – Opinion: NZ politics’ soft neoliberal underbelly

Labour leader Jacinda Ardern has asserted that ‘neoliberalism has failed’. Instead, she claims, government intervention is necessary so the market will not dictate matters. 

While such a claim signals the beginning of an important shift in parliamentary politics, in almost the same breath she supported the free trade Trans-Pacific Partnership agreement, keeping government spending within limits, and maintaining government surpluses. All are examples of neoliberal policies.

Ardern’s comments highlight how virtually all political parties – and not just Labour – have yet to fully break with the strong neoliberal consensus that has dominated New Zealand parliamentary politics since 1984. This is despite a groundswell of disquiet about the effects of neoliberalism.

New Zealand needed a quick break from the highly interventionist style of Robert Muldoon in 1984 to avert an economic crisis. That was largely successfully thanks to David Lange’s Labour government and Roger Douglas. Things have been tweaked since then, and ongoing adjustments will be required, but there is no sign of any major departures in the current term of government.

Although the causes of growing inequality, the housing crisis, poverty, low-wages, casualisation and unemployment are multi-faceted and complex, neoliberal policies and economic restructuring have undoubtedly played a major role in exacerbating these problems since the 1980s. Neoliberalism has not led to a trickling down of wealth to the poor, but instead a torrent upwards.

A tad overstated.

Yet New Zealand parliamentary politics, it appears, is still dominated by an incredible shift to the ‘centre’. This ‘neoliberal extreme centre’, as Tariq Ali calls it, is so clogged it is virtually impossible to see any fundamental differences between almost all parties.

Practically every party subscribes to neoliberal policies of:

  • keeping inflation low and unemployment high
  • keeping government expenditure within fiscal limits (witness the ‘fiscal responsibility deal’ between Labour and the Greens)
  • keeping business and financial speculation largely free from regulatory control;
  • free trade (with a few exceptions)
  • low taxes (especially on the wealthy and companies, and no significant taxes on property speculation)

There’s some straight out bullshit in that.

All parties want to keep inflation low, for good reasons, but no party subscribes to ‘keeping unemployment high’.

A National party press release in August promotes Unemployment at lowest rate since GFC

“The unemployment rate has fallen to 4.8 per cent in the June 2017 quarter, the lowest rate since December 2008. Our strong economy continues to deliver for New Zealanders,” Mr Goldsmith says.

“The number of people unemployed has dropped by 3,000 this quarter, reflecting a robust labour market and increasing employment opportunities.

“Strong job growth continues, with 76,000 new jobs over the past year and 181,000 new jobs over the past two years.”

There is a fairly good reason for supporting ‘fiscal responsibility’, which means not borrowing more and more to pay for things the country cannot afford.

Business and financial speculation is far from “largely free from regulatory control”. There are clear rules on taxation on earning profits from ‘speculation’, which the last government toughened up on and the new government promises to take further.

And the over-regulation of the RMA has caused major problems in the housing market.

There is no ‘free trade’ – all trade is governed by a variety of trade agreements with various countries.

“Low taxes (especially on the wealthy and companies)” is highly inaccurate. New Zealand has a progressive tax system that taxes more the higher the income.

“No significant taxes on property speculation” is an alarming statement from a lecturer in politics.

Inland Revenue (June 2017): Property compliance at Inland Revenue

Property remains the principle investment choice for many New Zealanders, with trade in residential property averaging over $40 billion a year. For this reason, Inland Revenue has an increased focus on this area to improve compliance. In 2008 a team was established to address any compliance risks with property development and speculation and associated tax obligations.

In 2015 the Government introduced new legislation and provided additional funding for Inland Revenue to put further focus on residential property speculation of $6.65 million each year for 5 years.

This amounted to an effective doubling of resources reviewing property compliance. We now have around 95 staff focusing on risks in the residential property market to make sure customers meet their obligations in relation to returning any applicable tax on property gains.

Speculation on the share market – in fact any profits earned – are also taxable, as anyone who checks their Kiwisaver statements will know.

Boraman continues:

However, we don’t now live in the neoliberal ‘shock doctrine’ era of the 1980s and 1990s. This was when business and government – both Labour and National – imposed violent neoliberal cutbacks and economic restructuring on society.

More extreme language that misrepresents the changes that saved the country from going broke.

Today most parties have pulled back from those extremes of neoliberalism – including National and Labour – and now subscribe to a mild ‘pragmatic’ neoliberal politics. This involves a limited degree of government intervention in the economy, and of government spending.

More nonsense. Government spending has kept increasing through most of the last thirty years. It increased through the nine years of the last Labour Government, and jumped up when National took over in 2008 when trying to alleviate the effects of the Global Financial Crisis.

Overall the differences between the parties remain minor: the choice is between soft neoliberalism (National) and softer neoliberalism (Labour).

This current soft neoliberal – or ‘neoliberal lite’ or ‘third way’ – consensus shared by almost all parties contends that all that is required to deal with fundamental issues like housing is some tinkering around the edges, such as building thousands of state houses or offering subsidies for better insulation. These policies will take some heat out of the housing crisis, and will help many people.

Yet they will not, however, solve that crisis when tens of thousands of homes owned by speculators remain empty, and the economy has become increasingly reliant on property and financial speculation for economic growth, as Jane Kelsey explores in her book The FIRE Economy (2015).

Lifting the levels of the minimum wage, working for families’ tax credits (which is effectively a government subsidy for the low wages paid by employers) and the accommodation supplement (effectively a government subsidy for private landlords) will not reverse the historically high levels of income and wealth inequality, and will not address the interrelated issues of low wages, insecure work, and high underemployment and unemployment.

This gets to the nub of why pragmatic centrist politics don’t work: while ‘pragmatism’ is often seen as a virtue in New Zealand, such tinkering around the edges of problems will not solve deep-seated issues such as inequality, housing, low wages, casualisation, unemployment and climate change. These are all systematic problems that require creative, systematic and far-reaching solutions.

Overseas we have seen the rise of various social and protest movements against the increasing concentration of wealth under globalised capitalism today – indeed the late 2000s to the early 2010s witnessed, according to some academics, the largest popular protest wave in human history so far.

It eventually reached our shores with the large-scale mobilisations against the Trans Pacific Partnership Agreement during 2014-16, which rivalled in size some of the nationwide ‘mobes’ against the Vietnam War in the early 1970s.

I think it is from this extraordinary upsurge in popular discontent that solutions to the fundamental problems in society we face can be found.

Is there really an “extraordinary upsurge in popular discontent”? There was little sign of that in the last election, with National maintaining extraordinary levels of support after three terms in government, and the radicalism of the Greens coming close to failing to survive.

And I don’t think it will require a revival of Jeremy Corbyn-style social democracy, or nationalism, but instead needs to venture into territory not often discussed today: questioning the nature of capitalism.

I often see the nature of capitalism questioned – in part here, and it’s commonn at The Standard and The Daily Blog.

At the very least it will – of necessity – involve breaking from the shackles of the neoliberal straightjacket, instead of gnawing around its edges. It will mean we stop pandering towards a mythical ‘centre’ in an era of extreme inequality, and start to talk openly about the incredible concentration of wealth in the hands of the few, and loudly about the needs of the many.

That sounds more like a fringe activist at The Standard or The Daily Blog or Frog Blog rather than a political lecturer at a New Zealand University.

The country is hardly in “the shackles of the neoliberal straightjacket”, and Boraman contradicts himself, having also claimed we had moved to “a mild ‘pragmatic’ neoliberal politics”.

Inequality is a valid issue that should be addressed better, but ‘extreme’?

Saying “It will mean we stop pandering towards a mythical ‘centre’” is remarkable, given that most people are closer to the centre than the extremely poor or rich. The centre is a bit vague but it is far from a myth.

Like John Key and Bill English, Ardern will no doubt try to improve on what we currently have, and will no doubt have some successes and failures.

There’s a good reason why governments don’t make major untested changes unless they are forced into drastic action.

There are signs the the new government will represent a new generation of politics, but there is no sign that the new generation (apart from a few on the fringes) wants to throw out capitalism.

New Zealand politics doesn’t lurch from left to right. Just as we didn’t suddenly get a distinct ‘neoliberalism’ that has continued virtually unchanged for three decades, we are unlikely to suddenly acquire a new form of governance.

Under Ardern we may have taken a bigger step than normal but it remains in a similar direction, albeit more carefully tread.

Can Peters be Trotter’s Trotsky?

It has been entertaining watching activists on blogs and other social media trying to influence the outcome of the formation of a new government, from imploring parties to do what they want to subtle attempts at influence.

Chris Trotter has been in activist overdrive at hos Bowalley blog, and also at The Daily Blog and in weekly media columns.

Adults In The Room?

WHAT’S GOING ON, JACINDA? Why has the former Labour Finance Minister, Sir Michael Cullen, and Helen Clark’s former Press Secretary, Mike Munro, been invited on to your team of negotiators with NZ First? And, while we’re on the subject of Labour’s Rogernomics Generation, why was Annette King sent to ride shotgun alongside you for the duration of the election campaign?

These are important questions, because when Jacinda talked about ushering in “generational change”, most New Zealanders fondly assumed that she was committed to taking their country forward – not back.

The other assumption New Zealand made, as the baton of leadership passed from Andrew to Jacinda, was that she was completely up to the job of carrying it without assistance.

I think she’s up to doing it without Trotter’s assistance.

“Dear Winston” – An Open Letter To The Leader Of NZ First.

Changing the government will require a wise head and a great heart. You have until Thursday, Winston, to prove to New Zealand that you possess both.

The Hallelujah Song.

Winston needs to know that Labour’s reach continues to exceed its grasp: that its MPs strive for something beyond mere political power; that it is still a party of nation-builders.

He will be studying Jacinda Ardern especially closely. Does she fully appreciate the sheer weight of the hopes and dreams New Zealanders have heaped upon her? Is she ready, truly ready, to fulfil them? And, does she show even the slightest sign of knowing how? Is hers the principal voice among Labour’s team of negotiators? Or, does she constantly defer to her friend and ally, Grant Robertson? And does Grant, in turn, look to his mentor and patron, Sir Michael Cullen, for the right words at the right time? And has Sir Michael ever known how to sing the Hallelujah Song?

In the absence of the Left’s uplifted voices, Winston will take what he can get from the Right.

When he’s not in despair Trotter is often angling for his revolution.

Play It Again, Winston: An Article Written 12 Years Ago For “The Independent”.

Jesson took a kinder and more measured view of his subject:

“Perhaps the truth is that Peters is a sensationalist with an element of sincerity? Who knows? Probably not even Peters. It doesn’t matter anyway because Peters’ importance is his role not his motives. His role is indicated by the name he has chosen for his party: New Zealand First. And it is indicated by the things he campaigns about, because there is a consistent thread running through them. He is as fiercely opposed to foreign investment as he is to the government’s immigration policies. Peters is a rarity in New Zealand, he is a nationalist – probably our only serious nationalist politician since Norman Kirk, or perhaps even John A. Lee.”

It is significant, I think, that both of the politicians to whom Peters is compared by Jesson were from Labour.

At this point in its history, New Zealand stands in need just such a nationalist politician. Already, in the private seminars and political briefings paid for by the big corporations, there is talk about the changes our association with the burgeoning economies of Asia is bound to bring. Hints that our Enlightenment faith in individual liberty and the Rights of Man may have to be modified if we are not to antagonise our new “partners”.

Winston Churchill heard similar whispers in the early months of 1940 – and rejected them. Britain, he knew, was more than a collection of islands, it was a collection of ideas. Ideas too valuable to surrender for the paltry “rewards” of a dictated “peace”. Ideas worth fighting for.

It’s that same determination to stand and fight that lifts the movie Casablanca so far above the ordinary Hollywood fare. The unlooked for appearance of the idealistic Ilsa, draws forth a kindred response from the world-weary Rick. In the end we discover that the hero’s dead-pan, wise-cracking persona hides something altogether more admirable – more noble.

So play it Winston. Play it one more time.

You know what we want to hear.

You played it for Bolger, now play it for Clark.

If he could stand it, so can she.

Play it.

Play out the revolution for Chris. In his next post he actually headlines the ‘R’ word.

Talkin’ ‘Bout A Revolution – Or Not?

“THESE TALKS ARE ABOUT A CHANGE in the way this country is run. Both economically and socially.” That is how Winston Peters characterised the government formation negotiations currently drawing to a close in Wellington. But, what could his words possibly mean, in practical terms?

If seriously intentioned, Peters’ call for economic and social change would have to encompass the thorough-going “de-neoliberalisation” of New Zealand.

A well-organised campaign to root out neoliberalism from all of our economic and social institutions would signal that Peters was serious about changing the way this country is run. And for all those who pretend not to know what the term neoliberalism means, let me spell it out. I am talking about the deliberate intrusion and entrenchment of the logic and values of the marketplace into every aspect of human existence.

Replacing it with the deliberate intrusion and entrenchment of the ‘logic and values’ of the government into every aspect of human existence.

Governments often seem to lack logic, and struggle to appreciate that singular values cannot be applied evenly and fairly onto millions of people.

Neoliberals have been hard at work in New Zealand society since 1984 and the damage they have inflicted upon practically all of its institutions is enormous.

There have been large scale changes for sure – but they have been a mix of success and failure, improvement and deterioration.

New Zealand has significant social challenges for sure, but going back to a type Muldoonism, that Peters seems to hanker, would be as misguided as it is impossible.

I somehow doubt that trotter was a fan of the pre-1984 government. He hankers for winding the calendar back further, to 1972 and to 1938. The world has changed a wee bit since then.

It is possible, of course, that Peters is talking-up his disdain for the Greens in order to avoid spooking his core supporters in the countryside; and that, privately, he is right behind the eco-socialists’ radical policy agenda. Except, if that is the case, then he must surely be bitterly disappointed by Labour’s extreme policy timidity.

In other words, non-revolutionary.

Is the sort of party that invites Sir Michael Cullen and Annette King to join its young leader at the negotiating table, really the sort of party that is getting ready to throw its weight wholeheartedly behind “a change in the way this country is run. Economically and socially”?

Labour and National got by far the biggest share of the vote (over 80%). NZ First got 7.2% – even if Trotter can convince Peters to lead his revolution it would be with small minority support.

Trotter is an opportunist, imploring what he thinks is the most likely way to swing his revolution. Winston Peters is a very unlikely Che, but it seems to be Trotters’s best and possible only chance right now.

An Expression Of Democratic Interest.

REGARDLESS of NZ First’s ultimate decision, Writ Day, 12 October 2017, was a day for celebration. The 2017 General Election, now completed, will, eventually, deliver a government which has been shaped by the will of the New Zealand people – in full accordance with democratic principle.

The tragedies and injustices that impelled the electorate’s judgement will carve-out for themselves a substantial and urgent claim upon the new ministry’s programme.

How many votes were compelled by “tragedies and injustices”? No evidence, Trotter is speaking for himself only.

The priorities of government will change, for the very simple reason that we, the people, have changed them. Any politician who believes it possible to simply pick up where he or she left off before the voting started, is in for a rude awakening.

Not that our elected representatives need to be told this. Those who live and die by the democratic sword require no lessons in the keenness of its blade. Of much more concern to us should be the people in our community who wield delegated authority. Those employees of central and local government whose daily decisions influence people’s lives so dramatically. The class of persons who used to be called “public servants”, but who are, increasingly, taking on the appearance of our masters.

It’s a process which has been underway for the best part of thirty years; set in motion, as you would expect, by the radical “reforms” of the Rogernomics era.

Back to this again.

That these free-marketeers seized upon the “public choice” theories of the American economist, James Buchanan, is unsurprising.

It was only after Buchanan’s death that researchers uncovered his life-long links to the most extreme anti-democratic elements of the American Right. Buchanan’s concern, like that of his wealthy backers, was that the stark contrast between private selfishness and public altruism would, in the long term, prove politically unsustainable. Only by forcing the public sector to become as vicious and unaccountable as the private sector could the dangerous example of collective caring be negated.

Labelling the private and public sectors as vicious could itself be seen as vicious.

If our new government is serious about wanting to bring public spending under control, it could do a lot worse than to start by reversing the perverse reforms of Buchanan’s “public choice” disciples. After all, if there is one group these free-market theorists hate more than responsible and caring public servants, it is responsive and caring politicians.

Who are “these free-market theorists” in New Zealand? Straw men and women?

It is a measure of the free-marketeers’ success in undermining the credibility of anyone claiming to serve the public good, that merely suggesting a politician might be responsive and caring is enough to invite instant incredulity and derision.

That’s extreme ideological nonsense – one could say inviting incredulity and derision.

Buchanan and his ilk’s hostility to democracy arises precisely out of its ability to create public institutions capable of responding positively to the expressed interests of ordinary citizens. Democracy also makes it possible for ordinary citizens to redirect economic effort away from purely private purposes and towards more publicly beneficial endeavors. In other words, the expressed will of the people is able to override the “logic” of the market.

“Politics without romance” was how Buchanan described the substitution of market forces for Democracy’s “expressive interests”. If the 2017 election was about anything, it was about turning that around.

Trotter seems to be trying his hardest to turn one claimed extreme (grossly exaggerated) into his own preferred extreme.

I doubt that Peters is the one who will deliver it for him. If Winston starts a Trotterite revolution (very unlikely) there is likely to be a very unhappy electorate. That’s not what most of us voted for.

Trotter should try to get himself appointed to the NZ First board. Too late this time round but he might then be in a position to choose the government in 2020.

But Trotter joining NZ First is about as likely as Peters taking his pleas for revolution seriously.

Winston’s legacy – economic and social reform

Winston Peters seems to have high ambitions for the leader of a 7% party – economic and social reform, referring to current negotiations about the formation of the next government as “these talks are about a change in the way this country is run both economically and socially.

Non-specific but that sounds wide ranging.

Peters has long criticised the current direction of the country, and hankers for a return to Muldoonist type interventions.

He has slammed the post Muldoon ‘neo-liberal experiment’ for some time. In a speech in 2010:

New Zealand First was born from those who rejected the radical reforms of National and Labour and who wanted a party that represented ordinary New Zealanders – not overseas interests or those of a few ever mighty subjects.

So, after the blitzkrieg neo-liberal policy destruction of Labour between 1984 and 1990 – and National until 1996, New Zealanders decided they wanted change.

They had experienced enough economic pain, while the promised land of freedom and plenty was still a pipe dream, and we had missed out again on winning the Rugby World Cup.

Enter New Zealand First, a First Past The Post party in 1993.

We were established to bring back some of the traditional values of New Zealand politics.

Our mission was to restore moderate capitalism with a kind, responsible face.

After nearly 50 years as the natural party of government in New Zealand, National hated sharing power.

In less than two years Jim Bolger was rolled by Jenny Shipley whose mission was to smash the centre-right coalition and to continue the neo-liberal experiment supported by the Business Round Table and any other stragglers they could cobble together.

We saw some of this recently in the economic prescription of a failed politician who simply could not see that pure neo-liberal economics is a pathway to economic servitude for all but a small privileged elite.

In June he tweeted:

After 32 yrs of the neo-liberal experiment the character and quality of our country has changed dramatically, and much of it for the worse.

For those who try to refute that statement let them give us the evidence of how we’ve risen in the graphs of real economic comparisons and not have countless alternative facts susceptible to various sociological interpretations and beloved only in the eye of the beholder.

He has also campaigned against immigration, especially involving some ethnicities:

Anyone else notice how Asiany it’s got around here since the 70s?

From an interview on Q+A in July:

CORIN DANN: You talked in an interview with Richard Harman this week about your fondness for Robert Muldoon. Is that what you’re proposing – a return to pre-1984, much bigger government, much more intervention in the economy?

WINSTON PETERS: Richard got it 100% wrong. I said no such thing. I was just explaining the kind of propaganda and scam that accompanied the neo-liberal experiment of 14 July 1984, from which after 33 years, we have slid right down the OECD; massive ownership of New Zealand’s assets are offshore; 95% of our banking is foreign-owned; eight of our top forest companies foreign-owned. I was telling– I was saying and talking about the propaganda as to how they got to begin this experiment, because they said the country was broke.

He still seems to be a fan of Robert Muldoon’s interventionist government, and seems to be claiming New Zealand wasn’t in dire financial difficulty in the 1980s – when my mortgage rates got as high as 19.5%.

CORIN DANN: Okay, fine, but are you proposing an economic policy where we buy back assets, where we intervene, where we run industries, where we provide subsidies, because your speeches this week to the region, in various regions, make it clear that you are.

WINSTON PETERS: Look, with the greatest respect, we had to buy back after privatisation in this experiment Air New Zealand. We had to buy back New Zealand Railways when Faye Richwhite and Wisconsin Central Railroad got it in a bargain, took the shares to $9.34, then busted the whole outfit, and the taxpayer had to buy that back, and we’ve suffered from a lack of rail ever since. We’re not going to get caught here with the far- and neo-right liberals in this country trying to excuse their hopeless performance, whilst the tremendous capacity of New Zealanders to own through the Cullen Fund, through KiwiSaver, our resources is what we should be doing.

We have spent and wasted a lot of money on rail, but Peters wants to invest the Cullen Fund and our private Kiwisaver savings in reviving it.

CORIN DANN: You’ve announced a number of policies over the last wee while. One of them was your education policy – $4.6 billion. Although you argue, it’s only an extra half a billion on top of what’s already being spent. But if we also look at GST back to the regions – 1.5 billion, 3 billion for taking GST off fruit and vegetables. It’s a pretty expensive shopping list. Can you do it without going above those $1.8 billion caps that the government– this current government has put in place, and which Labour and the Greens are buying into?

WINSTON PETERS:  Well, they can buy into it, because that’s the phenomenon in this campaign. You got Labour and the Greens and the National party all going along with this neo-liberal experiment of 1984. I don’t – never did back then and still don’t – and I think there’s nothing so, you know, as antiseptic as the statement ‘I told you so’, but I kind of well did way back when I labelled it in the late 1980s as The Erebus Economy. And here we go again.

You’re talking about me being profligate. Well, quite the converse. They are talking about surpluses. We’re talking about, for example, on GST on international tourism in New Zealand alone was last year $1.5 billion, and they virtually gave nothing back to the regions where that money was earned by the provincial economies. And the provincial economies in the regions of this country have had a total gutsful being forgotten.

CORIN DANN: I’m not trying to argue the merits of this policy or otherwise. I just want to know – would you stick to the current spending limits set by not just National but Labour and the Greens? Would you stick to those?

WINSTON PETERS: No. I’m not subscribing to their brand of economics.

What New Zealand First– What New Zealand First intends to do. Listen. You need to understand why we are different. We intend to take public spending towards productivity and exports and real growth, not consumption and negative growth once you take out mass population increases of 2% per year. They claim to have a 3% growth rate. Take out your 2% population growth, and you’ve got what? 1% and down at the bottom of the OECD.

We’re going to stop this bulldust winning a campaign, and in the next nine weeks, we want New Zealanders to know what the actual truth is, rather than this propaganda and spin of which Goebbels would have been proud.

CORIN DANN: So you won’t stick to their spending limits. Would you run deficits in order to carry out your policies?

WINSTON PETERS: Can you tell me why you’re asking me, a party that’s going to come in far higher in this election with support than you’ve ever conceived, that I should be constrained by some other party’s misguided spending limits? Whilst the National Party is promising you tax cuts. Excuse me, get a grip on this.

This is a fight between three different movements – National, New Zealand First and Labour-Greens combination. This is a fight– It’s the battle for New Zealand, and we intend to win it.

All I’ve ever promised is to export us to new market discovery exporters and to everybody who can change the outcome of this country so that we are an export-wealthy nation like we once used to be; not like now, where imports cost more than our exports are making, and so we’re permanently going into debt.

If you can tell me why that is not a sound policy to change the export performance by incentivisation, then you are out of touch with what other smart countries including China is doing, for example Taiwan has been doing, for example Singapore has been doing with enormous success, and indeed Norway has been doing.

Speaking to media after a government forming meeting yesterday Peters said:

Look, the extraction of our ownership to foreign interests whether it be from a present foreign interest or another foreign interest it’s the continuing story of this country’s decline since the 14th of July 1984. Nothing has changed.

A huge amount has changed.

But these talks are about a change in the way this country is run both economically and socially.

Peters wants to make major changes of his own.

In response to “Are you asking both parties to maybe adopt the policies that you think will best make that change?

How can I possibly answer that question, given that these are confidential conversations and discussions.

But he then answered this question – “Is foreign ownership a large part of these talks?”

I don’t think there’s anybody in the press gallery that would not think that foreign ownership is not part of these talks.

So have you got that? It’s a yes.

Asked about what the day’s talks had covered:

…this is actually about policy. It’s about the economic and social progress of this country.

So Peters has ambitious plans to reform our economic and social systems. This is a lot to ask for a 7% party leader. And it makes this comment from his 2010 speech a bit ironic.

Democracy under MMP is patently, obviously more representative, abandoning minority government for majority rule.

Peters has a small minority mandate, but seems intent on achieving a significant and lasting legacy. He will have to convince either National or Labour+Greens to enable his economic and social revolution – and they don’t have mandates to do that.

Peters in 2010: “Our mission was to restore moderate capitalism with a kind, responsible face.”

It would be remarkable if an old school politician wanting to turn the clock back half a century could successfully transform a modern New Zealand in a greatly changed world. There are certainly serious issues that need to be addressed better.

There is probably popular support for a kinder more caring form of capitalism. We may find out later this week what Dr Winston’s prescription is.

Ardern has failed the left, apparently

I’ve seen comment in various places along the lines of how Jacinda Ardern could have embraced Metiria Turei’s sacrifice and led the revolution that would rescue new Zealand from a calamitous era of ‘neo-liberalism’.

Much of this is encapsulated here:

For there really was a window. An opportunity. Instead of playing her part in the political assassination of Metiria Turei, Ardern could have used her new position and her extraordinary popularity to stand by her side.

Together, she and Turei could have broken the siege that has prevented beneficiaries – which is to say, a significant portion of the working class – from leading a dignified life and participating in society.

Hope rippled around New Zealand’s far left that revolution was finally in the offing.

Yesterday, it was Jacinda Ardern’s turn to take the pledge, and she didn’t hesitate for a moment. ‘Yes,’ she said. Neoliberalism has failed. This may be what the majority of her supporters wanted to hear her say, but it also turned every other answer she gave in the course of the half-hour interview into a test of that premise.

This in turn underscored that it is one thing to look at Labour’s policies going into this election as a series of discrete (and largely desirable) interventions into various areas of New Zealand’s life; quite another to view them in aggregate as an expression of an overarching political project. Which – since the leader is so adamant that neoliberalism has failed the country – ought to be a project of anti-neoliberal reform.

It’s expecting rather a lot of a new leader who has risen in urgent circumstances leading in to an election to suddenly ignore all of the policy development done by her party over years and to adopt reforms demanded by a radical but small minority outside the party.

The term ‘neoliberal’ is often said to be excessively vague, but its value in this context was in fact to give specificity to Espiner’s line of questioning. Most obviously: would Ardern consider revisiting the Reserve Bank Act, the Public Finance Act or any of the other legislative instruments that have allowed the last four governments to put neoliberal reforms into practice?

The answer – need I say it – was no.

And in the process of the fairly gentle interrogation that followed, the much-vaunted boldness of the Ardern project evaporated.

She thinks that climate change is the ‘nuclear-free’ issue of our time, but wouldn’t commit to divesting from coal or even ceasing to issue new licenses for deep-sea oil exploration.

She wants to end child poverty, but wouldn’t resile from her predecessor’s foolish commitment to contain spending to 30% of GDP and keep guaranteeing operating surpluses – one of the main causes of the staggering, crippling rise of our household debt – nor does she think that the government needs to seek more revenue through taxation.

She is even open to getting the TPP back on track, subject to conditions that she would not reveal in order not to show her hand in the upcoming negotiations.

Ardern has left her self open to criticism by claiming that neo-liberalism has failed and the climate change is the most important issue of our time.

But she could hardly have made as radical changes as Lange/Douglas had in the 80s, in reverse, just before an election.

Such a decision would have carried its own risks, naturally. But then this is what defines political courage, and it’s nothing if not courage that we desperately need.

That would have been crazy. it would have been political suicide, and Labour would have headed the same was as the Greens in the polls.  Winston would be vying with National to run the next government.

In other words: Ardern gave every indication that under her leadership, and with a much diminished contribution from the Greens, Labour remains committed to the continuation of the fundamental policies of the last 30 years. Call it the interlude we get to have every nine years or so in-between Tory governments.

We’ll see the back of some truly dreadful ministers, associate ministers and undersecretaries. Some people’s living conditions will improve, or at least stop deteriorating – which of course is not insignificant. It never is.

But the desire for deep and lasting change that the enthusiasm surrounding Ardern both evokes and demands will likely remain unfulfilled. Nothing illustrates this prospect better than the literal papering over of last month’s empty, self-defeating slogan – ‘a fresh approach’ – with an even emptier one – ‘Let’s do this.’ This what?

This is from a post by Giovanni Tiso: The neoliberalism question: notes on the Ardern/Espiner interview

If Tiso, and Trotter, Slater, Bradbury et al really want to start a revolution then they should stop expecting someone else to do it for them.

They should start a party, put forward the policies they want to see, and put them to the electorate.

Or they could join an existing party and argue their case in policy meetings and put themselves forward for candidacy and for the party list and sell their revolution to the voters.

This is a democracy, and like it or not that’s how things work here.

Sitting on the sidelines complaining because yet another party leader doesn’t instantly turn into a party dictator is fairly fanciful and futile.



NZ First versus “irresponsible capitalism”

Winston Peters is positioning NZ First as the party against neo-liberalism. This approach turned around Jeremy Corbyn’s Labour in the recent UK election (but not enough to win), but can Peters pull it off?

Peters has hankered for ‘the good old days’ – see Winston Muldoon.

He is challenging Andrew Little as Leader of the Opposition – see Peters: Little is on the verge of not getting back into Parliament.

Sunday Star Times has more on the NZ First strategy:  Winston Peters dismisses ‘irresponsible capitalism’ of other parties with new economic policy

Winston Peters is positioning NZ First as the party of difference and says his policy announcements today will steer away from the “irresponsible capitalism” that every other political party is selling.

The neo-liberal policy adopted by New Zealand politicians in the 1980s is a “failed economic experiment”.

“We want to confront what’s going on and set it right,” Peters said.

“I look at Parliament today and the National party, the Labour party and now the Greens are all accepting of that with a little bit of tweaking. That is astonishing, particularly in the case of the Greens – they’ve done it to try and look respectable – it’s totally disrespectable economic policy.”

Greens picked a fight against NZ First last week that looks set to continue.

“They’re talking about tweaking the Reserve Bank Act, I’m not. This idea that you’re going to set up this wholly independent organisation that’s not answerable in any way politically to anyone at all, which they’re not, unlike the Reserve Bank of England – it’s responsible for reporting to the Chancellor of the Exchequer – in New Zealand, nothing at all.”

At the time New Zealand headed down that economic route of neo-liberalism “Australia grew 38 per cent larger in real terms than we did”.

“That’s all you need to know about whether this is a sound economic policy or not,” he said.

Except that now Australians envy the New Zealand economy, which is performing relatively well compared to the rest of the world.

But Peters doesn’t care about facts like that, he deliberately promotes populist misconceptions. An increasing number of voters don’t care about accuracy, they are happy to accept rhetoric.

I think that one of the defining things of this election will come down to the business end of the election, when voters look more closely at what’s on offer and start to form their voting decisions on what they think will be best for their personal finances and for the country’s finances.

Peters is very good at pandering to perceptions on the surface, but if voters peel back the layers they may be uneasy about what they see.

Time will tell how many Peters manages to persuade that the way forward is back to the past.

The 9th floor – Jim Bolger

In the third The 9th Floor interview Jim Bolger is headlined as ‘the negotiator’ but is stirring things up on ‘neo-liberalism’ and race relations.

RNZ: The Negotiator – Jim Bolger: Prime Minister 1990-97

I think Jim Bolger might be about to spark a debate. Two debates actually. One on our economic settings and the other on race relations.

On neo-liberalism:

He says neo-liberalism has failed and suggests unions should have a stronger voice.

“They have failed to produce economic growth and what growth there has been has gone to the few at the top,” Bolger says, not of his own policies specifically but of neoliberalism the world over. He laments the levels of inequality and concludes “that model needs to change.”

So should we scrap neoliberalism?

Or fix what’s wrong and leave what is generally working ok?

On race relations:

He says Treaty of Waitangi settlements may not be full and final and that Maori language tuition should be compulsory in primary schools.

Indeed Bolger is at his most passionate speaking about Maori issues. He has a visceral hatred of racism and explains the personal context for that.

We asked him whether future generations will open up Treaty settlements again – given Maori got a fraction of what was lost – or whether they are genuinely full and final. He says it is a “legitimate” question and “entirely up to us”.

If Maori are still at the bottom of the heap “then you can expect someone to ask the question again because it means that society has failed”.

He is also scathing of former National leader Don Brash’s Orewa speech on ‘Maori privilege’. “It wasn’t anywhere near as bad as Trump but it was in that frame.” Of course Don Brash never made it to PM, replaced by John Key in 2006. ‘Gone by lunchtime,’ was the political phrase popular at the time.

Bolger also says it’s time to give power back to unions.

Being a more recent Prime Minister makes the issues he raises more pertinent to today’s debates.

Once, twice, Thrace

James Thrace posted this twice at The Standard wanting comments on it, so thrice might hive him some more feedback.

At present, we are seeing the long con strategy being utilised by National. Merkel’s Germany has been doing it to good effect.

How to do the long con.

1) Soften up the electorate as much as you can whilst retaining as many of the core policy settings that enable society to function (even while cutting funding left right and centre). This means temporarily swallow the dead rats.

2) Make the same soothing noises each time so as not to spook the horses.

3) Utilise the lack of MMP understanding to your advantage knowing that by and large, most voters don’t really care about the ins and outs. It suits National for voters to just know the ‘high level’ overview which is “vote for this party, and vote for that person”.

4) Incrementally, and surely, keep hammering home the same message of being “sound economic managers” and portraying the opposition as a bunch of inept muppets.

5) Constantly belittle any brainfart or policy ideas that erupt from those quarters.

6) Make any issues that crop up during your governing period anyone else’s fault but your own. Blame your support parties. Sheet home all responsibility to them (RMA delays = blame Maori party, Party Drug/Marijuana issues = blame Peter Dunne)

Once achieved, and the same message has sunk in, it’s odds on proof that the electorate is softened up and all the ducks are in a row, so now you can go hard.

Sell one message, and one message only.

Tax cuts, tax cuts, tax cuts.

Play to peoples wallets because 9 years of constant tax rises means people are poorer. Everyone is sick of hearing the same things – housing crisis, unclean water, mass sell offs of land etc.

Tax cuts, tax cuts tax cuts.

The majority do not care. The majority want more money to continue to obtain the things to buy to make their struggling, and probably miserable existence somewhat better. Consumerism has taught us all “feel down, buy junk, feel better.”

Tax cuts, tax cuts, tax cuts.

The majority listen, their ears perk up. More money say they! More money indeed say National.

Tax cuts, tax cuts, tax cuts.

9 years in power with constrained control under MMP, in order to keep selling yourself as the “long term” government is nothing. All people hear now are tax cuts. No one hears anything else. All talk of “30 new taxes since 2008” is ignored.

Tax cuts, tax cuts, tax cuts.

Overwhelmingly, the majority will vote for what’s good for their wallets. 9 long years of constantly struggling to get by and seeing more of your pay disappear each week means tax cuts will be a boon..

Tax cuts, tax cuts, tax cuts.

The opposition decries, “no, we can’t afford”. Shut up say the proletariat ‘You’re not the government, how do you know what we can afford. That John Key is such a nice guy’

tax cuts, tax cuts, tax cuts.

The masses hunger. They want these tax cuts. Nothing will stop them now from getting them. The party offering the message, simply, must. WIN!

Election day looms near. The repeated mantra of ‘tax cuts, tax cuts, tax cuts’ has assumed a soothing quality to the soma’d masses. No one wants to be a Delta, or an Epsilon. We all want to be Betas. Only the best can be Alphas. Being a Gamma wouldn’t be too bad, but a Beta is better.

Tax cuts, tax cuts, tax cuts.

Election day itself

Party vote “tax cuts” say the masses. The dutiful tick goes to the party with the right message.

After 9 long years of softening up the hoi polloi, the governing party is returned with an outright majority. Too late, the people awaken. The look of horror is abject. The next three years is a selloff. Too late, the damage is done, the plan is to be carried out. The bankers and merchant men took over the country.

New Zealand. The greatest experimental country for neo-liberalism to mass transfer and consolidate wealth to the few, since, well, ever.

There are comments on it here:

CV’s ideal Labour

Colonial Viper has been under fire at The Standard lately because he is prepared to challenge the Labour status quo, and  establishment Labour activists don’t like their boat being rocked. CV has had his author rights removed and there have been a number of calls to shut him up at The Standard altogether.

CV is a past Labour candidate (2011 in Clutha/Southland), and as a party member has clashed with Clare Curran in Dunedin South.

His disillusionment with the current version of Labour is obvious.

Last night he summarised his ideals:

I’ll support Labour 100% and Andrew Little 100% if he:

1) States that it is time to turn NZ away from free market neoliberalism and apologises for the role the 4th Labour Government played in wrecking the country.

2) Says that there will be a total clear out of the no-hopers out of caucus, Labour Parliamentary staff and consultants who have led Labour to electoral losses over and over and over again.

3) Commits to transitioning the nation to a livable UBI and/or living minimum wage within Labour’s first term in government.

Give me a call when it happens.

It is actually common to see those ideals expressed by current and ex Labour supporters, although not usually together like this.

This is a similar sort of leaning to Jeremy Corbyn’s UK Labour, and to Bernie Sanders’ preferred style for US Democrats.

I see one big problem with this in New Zealand. If Andrew Little and Labour took this path they would only be representing a part of Labour, and that would struggle to be a half of the party.

The CV type Labourites want to ditch their centre and focus to the left. Another comment at The Standard yesterday, swordfish on ex Labour member Nick Leggett’s possible move to National:

Yep, absolutely a Blairite. Along with his good chum, Phil Quin, Leggett’s a core member of the extra-Parliamentary wing of the old ABC brigade, very close to Shearer, Goff and Shane Jones, has written for the on-line presence of the lavishly-funded Blairite ginger group, Progress, and so on. Utterly opposed to anything resembling true Social Democracy.

Some in Labour have been happy to see Jones, Goff and Leggett  leave the party, and want Shearer out too. They try to drive away any suggestion of centrism from their discussions.

But it’s more complicated than this. Colonial Viper has been labelled a Right Wing Nut Job because he has been challenging the Labour establishment.

Some in Labour seem to want to paper over the cracks, or chasms, and pretend they are a united major party.

Andrew Little seems to be caught in no person’s land. He has managed to dampen down public dissent in the Labour caucus, but not at The Standard – Little supporter Te Reo Putake was recently banned from The Standard in what looks like an uncivil war.

Little’s uncertainty and lack of confidence is hurting Labour, but so is the fractious bickering amongst the troops.

Can Labour continue as a single party? If they do and ditch their centre they are likely to continue to shrink.

A philosophy and a political ideology which will take us into the 21st century

Tony Veitch posted “I want to pose a problem for a Sunday to commentators on the Standard.”

We need a philosophy and a political ideology which will take us into the 21st century and hopefully cope with the enormous problems facing mankind.

George Monboit hinted in a lecture that some sort of idea was being formulated and will be broadcast next year. Until that happens – some thoughts:

Neoliberalism is discredited and dead.

Socialism may be able to take its place, but we cannot have infinite growth in a finite world.

So any ideology will have to aim at equality without growth, economic justice without any skewering of the rewards. Such a philosophy must allow for human initiative and endeavour without the financial payment.

Such a philosophy must motivate people to make the potentially enormous sacrifices which will be required if we are to combat climate change; must eliminate greed at a motivating force, yet encourage entrepreneurship!

I can’t get my head round all the parameters of such a philosophy, except to be convinced that we are in desperate need of something political to believe in!

Your thoughts?

My thoughts are that we don’t need a philosophy or a political ideology to govern in the 21st century. There has been a big change away from being driven by ideology, and instead to address each issue pragmatically in the context of the current situation and needs.

Some political discussion, for example at The Standard or Kiwiblog, is driven by “how does this fit with my ideology and therefore what should my position be on it”.

But it’s far more sensible to simply use the approach “what’s the best way to deal with this”.

And that’s what has been happening to a large extent this century in New Zealand, first under Helen Clark’s leadership and now under John Key.

We have moved from governing by ideology to governing pragmatically.

There are a few remnant political dinosaurs who yearn for a set of rules by which they must think and act but that’s an extinct way of governing, in New Zealand at least.

Wayne Mapp on New Zealand neo-liberalism

Wayne Mapp has responded to Mandy Hager’s A calculated feeding of the beasts within.

I appreciate it is an article of faith for the author of this item, as well as most the commenters, that New Zealand is in the grip of a neo-liberal hell hole, and that anyone who contests this is deluded.

So for mhagar her approach to anyone who might disagree with her is to state;
“ok, lets deal straight away with the first obvious distracting argument that might erupt that New Zealand under the current government cannot be labelled as neo-liberal.”

To begin with not, it is not a distracting argument, her whole thesis is built on the assumption that the government is neo-liberal, she cannot wish away those who might contest that.

She cites the British Dictionary definition that neo-liberalism is “a modern politico-economic theory favoring free trade, privatization, minimal government intervention in business, reducing government expenditure on social services, etc.” and broadly speaking I would agree. But it is important to note that the whole package is required.

After all the GATT, since 1947, has favored free trade, as has the EU for all its members. So one element is not enough.

I think it is probably fair to characterize the Roger Douglas reforms and also those of Ruth Richardson as meeting the test of neo-liberalism.

But is it true of Helen Clark and John Key? Because it is really necessary to label Helen Clark as neo-lberal in order to stick the same label on John Key

The last Labour govt rolled back the ECA, it introduced Working for Families, interest free student loans, income related rents for Housing New Zealand houses, Kiwisaver, created KiwiBank, did a buy back of KiwiRail and air New Zealand. She increased the top tax rate from 33% to 39%.

However, she did not bring back compulsory unionism, or restore all benefits to pre 1991 levels. And she did not try and turn back New Zealand to its pre 1984 condition with massive government ownership of much of the economy, exchange controls, high tariffs and import controls. And for many commenters on this site because she did not do that she is neo-liberal. And they want Labour to apologies for her. Mind you if Labour did the majority of New Zealander s would think Labour had gone mad. To some extent David Cunliffe did apologize, but Labour got the expected electoral verdict.

For Helen Clark to unwind pretty much everything since 1984 would have meant opting out of much of the worlds economy. The closest analogies are Argentina and Venezuela, not notably successful economies.

In my view John Key has been an incrementalist. He has reversed very little of the Helen Clark reforms, though he has modified them. So there has been the 90 day bill (pretty much modeled on Germany and Scandinavia), some limited partial privitisation, and more direct intervention for welfare beneficiaries, a reduction of the top tax rate from 39% to 33%. He has restrained the growth of government expenditure so that it hovers around 33% rather than 35 or 36% of GDP. Even so large scale borrowing was required yo sustain government expenditure during the GFC, in the order of $35 billion. In contrast the tax cut was $4 billion, so the bulk of the borrowing was to maintain government expenditure generally.

There is a reason why most commentators, including Brian Easton (hardly a right wing economist) do not see John Key as neo-liberal. He has just not been radical enough to earn the label.

Mhagars critique of the current state is rather different. It is more about the modern style of life. In her view “we are encouraged to live shallowly, selfishly, devoid of compassion for our neighbors and suspicious of everyone.” In addition she sees modern New Zealand as having no place for arts and intellectuals. At least on the last point that is hardly any more true of New Zealand than it has ever been. Surely the 1940’s and 1950’s was far more conformist and resistant to intellectual life than the modern era.

Her view is a bit of a caricature of modern life in New Zealand. Certainly where I live in Bayswater/Devonport there is a strong sense of community. But at least I can understand why someone might have that view.

There is a plethora of consumerist advertising, with the internet and mobile communications encouraging a more personal life. Traditional sporting clubs and community activities are on the wane (not that many on the intellectual Left actually like the style of Clubs such as RSA, Lions, Rotary, Rugby clubs, Schools PTA’s, Workingman’s and Cosmopolitan Clubs).

I would also note that many of the regions do not provide the job rich communities that once existed. Farming, forestry and fishing are more large scale. Public works projects such as roading, etc are much more capital intensive with far fewer manual jobs.

But coming back to Hhagars core point about the nature of modern life. Is that a function of neo-liberalism, or is it a function of technological and social change the world over?

Mapp ends up making a simlar point to me in “The social democracy of my youth has so radically collapsed”.

Neo-liberalism has been a small part of complex social evolution. And even if it could be attributed to isolated polotocal politices neo-liberalism can’t be undone.