Tuesday 20 December 2011

Tony Blair No Guide For Shearer's Labour

First and Second of the Third Way: Tony Blair and Peter Mandelson felt obliged to destroy the British Labour Party in order to save it. This is precisely NOT what David Shearer and his team should do.

TONY BLAIR transformed the British Labour Party by means of root-and-branch reform. His priorities were as clear as they were ruthless. Disable the party. Re-write its rule-book. And, most importantly, make sure Labour’s MPs were accountable to nobody but themselves.

Blair’s reforms were driven by the strategic thinking of his chief henchman, Peter Mandelson. In essence, Mandelson’s strategy boiled down to just three, fundamental, political insights:

One. Since the British working-class has no serious political alternative to Labour, the party can safely ignore its interests.

Two. Since no party can be elected without the support of the British middle-classes, and since these have multiple electoral options, Labour must not, under any circumstances, advance policies that might upset middle-class voters.

Three. To retain the support of middle-class voters, Labour must never allow its political rivals to out-bid it on matters relating to “sound” economic and social policy.

Blair’s and Mandelson’s strategy made a brutal kind of sense in the light of the British Labour Party’s recent history, and within the wider context of British electoral politics.

The party had endured years of bitter factional strife, with those who regarded Labour as the last bastion of working-class resistance to Thatcherism fighting a desperate rear-guard action against the bleak electoral logic of the “modernisers” analysis.

That logic was, of course, underpinned by the First-Past-the-Post electoral system, which allowed the Conservative Party to win large parliamentary majorities in spite of attracting considerably less than half of the popular vote.

Labour’s “modernisers” also had to factor-in the impact of globalisation on the size of Britain’s industrial working-class (the core of both the traditional Labour vote and the more militant trade unions) and the more recent ideological triumph of capitalism over its Soviet rival.

IN 2011, the strategic choices confronting the New Zealand Labour Party’s new leader, David Shearer, are very different to those which taxed Tony Blair in the mid-1990s.

Rather than a fractious, activist and openly antagonistic party organisation, Mr Shearer inherits a party in which rank-and-file members have sunk to the level of what one wit describes as “MP fan clubs”. At its upper levels, the party is caught in the grip of a sclerotic, self-selecting oligarchy based in Labour’s insular and largely unaccountable sector-groups. In effect, Mr Shearer’s Labour Party is rapidly disabling itself. His first and most urgent priority is to kick it back into life.

To do this he must, like Blair, re-write Labour’s rule-book. Not to marginalise the party and insulate the caucus from its influence, but to do exactly the opposite. Mr Shearer needs to grow his party. At 6,000 members, Labour is only slightly bigger than the Greens. If it is to re-claim the Treasury Benches it must once again become a mass party, with a membership measured in the tens-of-thousands. And that cannot happen unless those members are equipped with real powers. These include the power to determine (and not merely “contribute” to the making of) party policy. The power to choose and rank the people on Labour’s Party List – as the Green Party members do. And, lastly, the power to choose their party’s leader. (Either directly, by a postal ballot of the whole membership, or, as the British do, through an electoral college composed of the rank-and-file, affiliated organisations, and the Parliamentary Caucus.)

Unless Mr Shearer moves swiftly to force rule-changes along these lines, all of his rhetoric about wanting to “listen” to New Zealanders will ring hollow. The most effective way to “hear” what ordinary Kiwis have to say about their country’s future, is to encourage them to join your political party by promising to translate their ideas into policy. Mr Shearer needs to convince the tens-of-thousands of Labour members who have walked away from the party that he’s committed to a future in which rank-and-file votes not only shape what Labour stands for, but who stands for Labour.

The fate of Damien O’Connor points the way. Rejecting the influence of Labour’s oligarchs over the content and ranking of the Party List, Mr O’Connor staked his future on an all-or-nothing bid for the West Coast-Tasman seat. The Coasters were only too happy to reward his courage. On 26 November, alone of all Labour’s candidates, it was Mr O’Connor who took a seat off the National Party – and by a handsome majority.

Mr Shearer has another great advantage over Tony Blair. He’s assumed Labour’s leadership in a world embittered and angry at neoliberalism’s botched ideological recipes. In 1998 Peter Mandelson infamously remarked that Labour was “intensely relaxed about people getting filthy rich”. In 2011, far too many people are drowning in the rich’s filth for any sensible Labour leader to utter such dangerous apostasy.

To win in 2014, David Shearer need only steer Labour in precisely the opposite direction to that of Tony Blair.

This essay was originally published in The Press of Tuesday, 20 December 2011.


Anonymous said...

These are very good suggestions for Labour Party modernisation. But I would suggest that unless Shearer had made commitments to them as a candidate, it is now very unlikely such changes will be made.

A couple of other comments. I recall a previous British election where Mandelson was returning to the fold, after an apparent scandal. He was standing in Hartlepool I think, and there was some doubt over the result, Arthur Scargill was standing on a socialist party ticket. The result was an easy victory for Mandelson and Scargill only got around a 1000votes. So the traditional Labour voters will usually stay loyal, at least under FPP,even if challenged from the left. Under MMP there is a possibility that Labour will not regain a significant party vote, and the electorate MPs will dominate.

A brief point on the Australian Labor Party conference, which was recently screened on Sky News. They were engaged in discussing policy remits in the old fashioned way. But the main topic was gay marriage, and that was why the media were so interested. If the NZ Labour Party focus on this kind of issue for grass roots involvement, they should at least be commended for courage, given the wider popular prejudices. But it won't play in the provinces, where some ground needs to be regained.

Anonymous said...

Only 6,000? Does that include unions?

Even if it does it's not a major party any more.

Brendan McNeill said...

"Mr Shearer needs to convince the tens-of-thousands of Labour members who have walked away from the party that he’s committed to a future in which rank-and-file votes not only shape what Labour stands for, but who stands for Labour."

Who joins political parties these days? In reality, just a handful of ideologues who could hardly be considered representative of Kiwis' in general or their neighbors in particular.

Having them form Labour party policy, and choosing candidates would immediately relegate Labour to political oblivion.

Hmm... I'd advocate for that myself, except that they would be instantly replaced by the greens, which would be an even worse outcome.

The best Labour (or any party) can hope for is to give the appearance of listening to the rank and file membership, but ultimately shaping policy that is acceptable to a significant minority of New Zealanders.

Anything else would ensure they occupy the opposition benches, and few of them at that, for the next thirty years.

David said...

An interesting theory especially when considered in light of the fact that the Labour Party was formed out of the Labour Movement and was the vehicle to promote the philosophy. How can the party now ditch the philosophy in order to gain the popular vote?

Surely the answer is that neither the party nor the philosophy are relevant in the current environment and so it is time for a new popular party to become born out of a new philosophy.

The implication is that Labour is effectively dead, it just has yet to be buried before it stinks the place up.

jazzyjive said...

So Chris, reading between the lines you seem to be making a parallel between Shearer and Blair, therefore, from an ideological point of view, where do you place instinctively the 'Shearer regime' ideologically?

guerilla surgeon said...

If he gets genuine working class members good on him, but the M/C and aspirationals will hate him. He really needso make sure that working class people vote. But to do that he needs policies that jibe with their needs. They havn't had those since 1981.

Robert Winter said...

My sugestion for an electoral colleg model: http://robertwinter.blogspot.com/2011/12/abandoning-oligarchy-reform-in-labour.html

Nick said...

There are goinng to be a lot of former "middle class" over the next few years as the financial crisis deepens and oil scarcity chnages the basic structure of the economy.

Where Chris do you think the tradesman with too little work and hugely leveraged "assets" will look to politically? Will the former middle classes change the voting identity or will the still vote with "aspiration"?

Chris Trotter said...

That is an excellent question, Nick.

If history is any guide, the self-employed person and the small business owner - the people sometimes referred to as the petit-bourgeoisie - are susceptable to influence from both the radical Left and the radical Right.

In late-19th Century France the radical and anti-clerical republicans were able to recruit a great many petit-bourgeois citizens to their cause. In 1920s Germany, however, the petit-bourgeoisie formed the backbone of the Nazi Party.

Too often, socialist and social-democratic parties have dismissed the petit-bourgeoisie as a hopelessly reactionary social strata, and concentrated their organisational effort upon the industrial working-class and the bourgeois intelligentsia.

When times are hard, however, such a strategy is likely to bear bitter fruit. Perceiving themselves to be positioned further up the social hierarchy than mere proletarians, the petit-bourgeoisie has repeatedly demonstrated an historical willingness to defend its social status "by any means necessary" - including the overthrow of democracy and the elimination of civil and political rights.

They are not a social class that can be overlooked or forgotten with impunity.

Victor said...

The Sentinel

I suspect that Labour would triumph over any other brand in Hartlepool, even with Mandelson as candidate.

Much of industrial northern England is tribally Labour in a way that probably has no true parallel in New Zealand, even on the west coast of the South Island.

Moreover, there's a huge range of positions on the British left and centre that fall somewhere between those of the crypto-Whig Mandelson and the Marxist Scargill.

The Blair-Mandelson project hijacked a long-overdue process of reform and modernization and drove it in a direction totally alien to the principles not just of Labour's socialist left but of its social democratic right as well.

As a result, even as mild a social democrat as Roy Hattersley found himself a bit of a stranger in the party he had long served.

By the way, do you know the story of how Mandelson, when campaigning in Hartlepool, was treated to fish, chips and mushy peas by local party workers?

He obviously liked the mushy peas and apparently asked his hosts whether he could have more of the 'guacamole'. It speaks volumes!

Victor said...

Nick & Chris

The political preferences of small businesses and the self employed is, indeed, a topic of interest and importance.

By and large, the small business sector has been one of the worst hit parts of the economy over the last few dismal years.

Many of my friends are small business people or self employed, as am I. And many, whom I always imagined as relatively affluent, are now anything but.

Although I can't point to a common political identity for this huge quartile, I'm aware of a broadly-based conviction that politicians of all stripes just aren't interested in them.

Personally, I regret the departure from parliament of Jim Anderton, who, stalwart workers' champion though he was, had a far better understanding of the needs of small business than seems to be the norm in the corporate-colonised parties of the right.

And, yet, it's not rocket science to work out a few means of getting the small business sector onside.

Firstly, reduce tax compliance costs and,particularly, costs of time.

Secondly,don't impose the cost of admirable and necessary social policies(e.g. extended paid parental leave)on employers. The burden of social responsibility should be borne by the tax base as a whole.

Thirdly, provide better support for r&d and for technical innovation.

Fourthly, allow those whose businesses have failed to have access to unemployment and other benefits on similar terms to those enjoyed by former wage or salary earners.

And that's just for starters. As I say, none of it rocket science.

Anonymous said...

Labour loss is partly due to loosing touch with the middle and working lower class. Labour identifies itself with the beneficiaries. His policies are going to damage the middle and lower classes which are his core constituents. These voters shifted to the Greens or National. To prove it, one has to check where labour was strong- South and partially West Auckland.

Anonymous said...

Chris, right after 9/11 you wrote in your column that the only person talking sense about all this stuff was Tony Blair.

Anything there you would like to airbrush before republication?

Brendan McNeill said...


I like and respect Jim Anderton because he is a conviction politician, albeit I'm quite some distance from his policy platform.

The question of small business and the self employed when it comes to politics is a very interesting one.

Being a small business person myself, and having many customers who are in the same sector, there are a few defining characteristics which are worth noting.

1) Business people are overwhelmingly positive people.

No one goes into business without believing they can do better than working for a 'boss' and being prepared to risk to achieve financial independence. These are people who genuinely believe that they can influence tomorrow such that it can be better than today.

This makes them a relatively rate commodity.

2) They are aspirational.

They don't sit at their desks and whine about how life is not fair. They don't camp out in public squares to complain about how life is not fair.

They work, they engage, they do deals, they serve customers, they create wealth and employment, and pay taxes, and for the most part they are successful.

3) They tolerate the State and taxation, recognizing the good, but lamenting the waste, the inevitable bureaucracy, the career politicians, and those who abuse the system as a 'necessary evil'.

4) How do they vote?

For the most part they vote National or ACT, even my Maori business friends vote National.

Those involved in tourism may vote Green, but I don't know any that admit to voting Labour.

They are seen, as someone has commented, as the party of beneficiaries, and State dependents, along with identity groups, gays, transgenders, unionists, pacifica, feminists etc.

They may have once represented the 'workers' but they have long since abandoned them.

They appear to despise business people and are quick to stereotype them as those who 'ride to success on the backs of their employees', and as fair game for punitive taxation.

We are after all, in the words of Michael Cullen, the 'rich pricks'.

It's true that some very wealthy business people have supported Labour for reasons that are lost on me. Perhaps they enjoy being insulted.

But for the average business person who is concerned daily with business survival, serving customers, generating employment and wealth creation, I doubt that Labour's message has resonated with them for a very long time.

What is their message to small and medium sized business?

Chris Trotter said...

No, Anonymous@8:22, nothing at all.

If Tony Blair had actually lived up to the ideals he expressed in his extraordinary speech to the British Labour Party Conference in 2001, the world would be a much better place than it is today.

Sadly, he opted to drink Dubbya's Kool-Aid - thereby ensuring that his participation in the illegal invasion of Iraq would be the act with which he will always be most closely associated and for which he will always, quite rightly, be condemned.

What's more, Labour's acquiescence in the face of Blair's criminal folly effectively destroyed it as a moral force in British politics.

Anonymous said...

Well there we have it, Shearer spent 20 minutes delivering the speech which will define his leadership of the Labour Party and John Key utterly tore him to pieces with consummate ease.

Shearer talked about "aspiration" and he talked about "growing the pie" while in full view of the camera were all the same old faces of Labour cronyism.

And New Zealand dismissed Shearer as yet another inveterate Labour liar. Seriously: aspirations? growing the pie? Seriously? From the same people who deliberately stagnated the economy by taxing the *fuck* out of anything productive and flushed the tax-take down the welfare toilet.

One has the sneaking suspicion that Labour are one teenage boy running naked and terrified from the home of a Labour MP away from electoral oblivion.

Dingbat said...

In the past (1970's) I was a Labour activist and, for a time a party fund raiser. I was intimately involved, including a stint as Hastings campaign manager, and participated in the recovery of the party post the disaster of 1975. For nearly all my 40+ working years I have been a small business owner enjoying varying levels of success and the odd failure.

Society and politics today are both very different to what they were 30 - 40 yrars ago. Political parties themselves have also changed a great deal but, it seems some principles are likely as relevant as they were 30 or even 130 years ago. I want to mention just two for now.

One - low turnout favours the right in politics. Why? Most simply because those with, or those that aspire to, property and privilege have vested interest in the status quo and will turn up to vote to maimtain their real or aspired to self(ish) shallow intetest.

Two - those disaffected with politics and those that feel powerless in society don't vote. To these people, be they young, old, brown or white employed or unemployed voting is just not on their agenda.

Why do I raise these two points of the very many I could in relation to the story and comments above? Because, as I see it the 2011 election outcome was the result of the application of these two principles more than any other and Labour needs to address these. It should stop representing the status quo and competing for the votes of those with or aspiring to property and privilege. Instead it needs to reconnect with its dual constituency of voters aspiring to a better quality of life for all in society (not just themselves) and those who are disaffected snd not in agreement with the direction of society.

How many votes are there in this? Judging by the roughly 10% of the population not enrolled and the near 25% who were enrolled and did not vote there are more of these people out there than the number voting Labour in 2011.

Gerrit said...

What Brendan said +1

100% spot on.

Would add that Labour has put more barriers to small business survival (4 weeks holiday, patental leave, etc.) then any other party.

Worse is that National has done zero to foster growth in the SME employers (and hence employees) sector.

Mind you the state does very little for the NZL workers by sourcing major (and probably minor) purchases overseas instead of fostering local manufacturing.

Olwyn said...

Well said Dingbat. I would add that you cannot keep moving to the centre from the centre you already occupy and suppose that this will give anyone a compelling reason to vote for you.

To repeat part of a recent post I made on the Standard: Where National holds its right wing position and makes concessions to the centre, Labour tends move to the centre and make concessions from there to its natural constituents, which is how the centre gets winched slowly rightwards. It is why I favoured Cunliffe as a leader – I thought him more likely to re-claim some left wing ground and reach from there toward the centre. You can’t really abandon class politics so the neo-libs accept you, and then abandon identity politics so the Waitakere Man accepts you, & then abandon the Waitakere man so that business in general accepts you,and expect others to take your talk of "core values" seriously.

Anonymous said...

"They are seen, as someone has commented, as the party of beneficiaries, and State dependents, along with identity groups, gays, transgenders, unionists, pacifica, feminists etc."

Delusional again, Brendan. Small business owners tend to be some of the biggest welfare bludgers in the country. It's just that they've deluded themselves into believing that the breaks they get are somehow not a form of social welfare.

I wish I, as an ordinary working stiff, could make the tax deductions that businesses make, and that small business owners take advantage of to reduce their tax bill relative to the rest of us. But I can't.

I wish I could avoid losing my house if I lost my job the way that business owners can do with limited liability. I'm also, like most working people, statistically far less likely than a small business owner to end up bankrupt and make other people pay the costs of my debts (that's what bankruptcy does).

These are just some of the welfare programs that are run for the benefit of business owners. That we don't customarily call them welfare programs is just a way for people to hide that they are. After all, someone else pays. In the case of bankruptcy, everyone else pays a slightly higher interest rate to allow bankruptcy laws to work.

Is this bad? No. We need these welfare programs for one reason or another (usually that they lower the risk for certain kinds of socially beneficial behaviour), just as we need other forms of social welfare. However, pretending that other people aren't in the end footing the bill for it is nonsense.

You, like most of the other conservatives in New Zealand, need an education in basic economics to learn that you, like almost all of us, are a welfare beneficiary of one sort or another. Until you realise this, you have little to contribute to debates like this.

I mean, it's just absolutely shameful how little you understand how our society and economy actually works.

Chris Trotter said...

To: Anonymous@3:27

Beautifully put!

Thank you.

Gerrit said...

Anon speaks rubbish,

SME's do not receive welfare so cannot bludge it.

Except for GST beneficiaries pay no taxes so contribute nothing extra to the tax base and as such are tax recipients (not bludgers - bad word).

SME pay taxes, even acting as unpaid IRD tax collectors (GST).

What you really ralley against is the tax OFFSETS small to medium business can collect.

Those are not welfare benefits.

You would argue your case better if you labelled the tax OFFSETS as offensive.

I some cases you may have a point though having the IRD constantly change the rules is not easy.

Latest confusion from the IRD is the SME home office tax deduction.

And if as a PAYE (hopefully you are earning and contributing tax) you feel business should not get the tax OFFSETS on the tax they pay vote for a party that will (or join the growing ranks of business owners who fronmted with ideas and capital to create work and jobs).

Labour wont change the rules but Mana might.

Victor said...


There are undoubtedly tax advantages to being self-employed or to running an SME.

However, the most significant of these (tax sharing within a household) is easily extendable
to the population at large.

I don't normally have much time for Peter Dunne but I give him credit for raising this issue during the recent election campaign.

Meanwhile, small businesses and the self-employed are also saddled with a range of imposts that fall entirely outside the experience of those employed by someone else.

Firstly, there's Provisional Tax. Get your forecast wrong and you're penalised. Yet how many of us are clairvoyants?

Then there's GST. A large wedge of any independent operator's time is spent doing the government's work for it.

And then there's no unemployment pay, if a business fails, as all too many have done in recent years.

Nor, in effect, can a self- employed person claim a sickness benefit, as he or she will be judged on what they made during the same period of the previous year, before illness impacted on their earning capacity.

And then there's ACC levies, paid parental leave, 'Working for Families' contributions etc.

These are all admirable policies. But I fail to see why they should be a cost on business as opposed to drawings on revenue derived from progressive taxation.

So now, let's look at why people become self-employed.

Many older self-employed people would actually be unemployed had they not had the courage to strike out on their own, in the economic wasteland caused by Rogernomics and Ruthenasia. In some cases I know of, it was the courage born of utter desperation.

I have nothing but admiration for friends of mine who have gone on to create opportunities for themselves and others at a time of life when they should be putting their feet up and playing with their grandchildren.

My own motives were slightly different but not,I think, untypical.

Around the time of my fiftieth birthday, I realised that I had spent long decades as a square peg in a round hole and needed to be free of it, however difficult the transition.

Do I regret it? No!

Was it a bed of roses? No!

Would I be better off now financially if I had stayed employed? Probably yes, had I lived so long!

As a social democrat, I hate to sound like those on the political right with whom I hardly ever agree (Hi Brendan).

But if self-employment or owning your own business is such a soft option, why don't you try it?

Victor said...


We probably move in slightly different business and self- employed circles. Even so, I would agree with you that those in self- employment tend, on the whole, to be optimistic and self-reliant.

But, whilst I can't always put my finger on how they vote, most of those I've spoken to down the years have evinced a broadly centrist view of the economy.

Most of them understand the "paradox of thrift" and recognise that you can't reduce economic policy to simply balancing the government's books.

And most of them also recognise the perilous rivulet that New Zealand has drifted down with its government-sanctioned property fetish and lack of serious commitment to research and development or to industrial training.

Meanwhile, those connected with exporting are only too aware of the absurdly high trading value of the New Zealand dollar and of the paucity of help for exporters, as compared to what's supplied by the governments of our trading rivals.

And, of course, they're the first to notice and, often, to be affected when something goes wrong with our tatty, under-funded national infrastructure.

In other words, the centre-left has quite a lot in policy terms to offer to the small business and self-employed quartiles.

However, the centre-left is ill-advised to treat the self- employed or small business as milch-cows or to load social costs onto them instead of onto the tax base as a whole.

Nor should it ignore the seemingly perpetual grievances of the self- employed individual turned into almost full-time tax gatherer by the IRD.

Labour's new leadership,whatever its defects, is therefore behaving sensibly in seeking to reach out to this valuable quartile.

However, a key question, as Olwyn suggests, is whether Labour can reach out in this direction without excessive compromise of principle.

Wooing the self-employed and SME owners would certainly involve a major change in Labours's approach to branding and 'mood music'.

And, personally, I remain very sceptical about Labour's ability to handle the mood music side of things. It has a recent history of tone-deafness and I see no reason to hope for better from its new leader.

But I'm equally concerned that Labour might lurch from tone deafness to naked opportunism, as did British Labour under Blair.

I hope these fears are unfounded, as we can't keep going down the neo-liberal path of societal impoverishment for much longer, without inflicting severe, and perhaps terminal, damage on our economy.

And, no, I don't expect you to agree with me.

Brendan McNeill said...

Dear Anonymous @ 3:27 PM

You have clearly never started, owned or run a business, so perhaps your ignorance in these matters can be excused on that basis.

1) What are these 'tax deductions' of which you speak that SME's take advantage of? I note you don't name one of them.

Not one. That's of course because they don't exist.

There are legitimate business expenses (costs) of running a business that are removed from consideration of 'net taxable income', like rent, wages, cost of goods, interest etc.

Do you consider those offsets as small business welfare?


2) Yes business have limited liability, but if you borrow money from the bank to start or fund or grow your business, as most business owners do, then the bank will want your house as collateral. If your business fails, you lose your house.

No welfare there.

The only ones at risk from our limited liability are other businesses who extend credit for goods and services they provide.

The 'joe average' consumer or customer is not at risk from business limited liability. (that's you I presume)

To consider business or business owners to be welfare beneficiaries is to be both ignorant of the facts and perverse in the extreme.

I note however that Chris agrees with you, so clearly you are not alone.

Your comments are frankly an example of what's wrong with this country. You have believed a lie, and are happy to base your life upon it, emerged in negativity anger and blame.

If you truly believe that business people have some kind of 'unfair advantage' then why not attempt to join them?

You won't of course because it's easier to sit on the sidelines and throw stones.

Unfortunately, I have met many like you, armchair experts who are rich in opinions but devoid of substance.

All the best for Christmas and the new year.

Chris Trotter said...

I have been the owner of a small business for nearly 20 years, Brendan, so don't try and kid a kidder.

The accountant's profession consists of little other than building up a comprehensive knowledge of all the perfectly legal ways to reduce the liabilities of his or her clients'

Small business owners complain long and loud about having to do the Government's work for it, but I've never heard anyone complain about the fact that the Government allows small business owners to derive considerable benefits (bank interest, enhanced cash-flow) from the money they collect (and are allowed to hold on to for up to two months) on its behalf.

You have clearly bought into the mythology of the "little Kiwi battler" struggling to make a living against the depredations of "Big Government", "Big Corporations" and "Big Unions".

The much less heroic fact remains that 80 percent of small businesses fail within five years of being set up. For the very simple reason that most entrepreneurs' ambitions are ridiculously large, and their talents woefully small.

Victor said...

So, Chris, do I understand you correctly?

You were strongly in favour of David Shearer becoming Labour leader because he represented "change".

But the only change of focus he has yet enunciated is an interest in looking at ways of helping the self-employed and SME sectors.

But you think they neither need nor deserve help.

Or have I missed something?

Gerrit said...


The much less heroic fact remains that 80 percent of small businesses fail within five years of being set up.

Is that urban myth or have you a link to statistics that verifies the statement?

I would imagine it is a load of rubbish for most businesses are sold in five years (as opposed to going bust).

Other reasons, owners retiring, moving to another area, expanding so liqudating one business into another for adminastrational reasons, etc., etc.

4% return on retaining GST for two months does not even cover the admin costs if the business has a large buying and selling component.

Maybe to balance up PAYE and the Self Employed tax anomolies, the IRD could start asking PAYE tax payers for provisional tax.

I'm suprised that no one from labour has raised the issue of a capital gains tax for small business as yet.

Must be a monty to entice all the PAYE paying voters to ge the "rich pricks" to pay more tax.

Mind you they wont be happy when they find that the employers contribution to their KiwiSaver funds is a personal capital gain and will be subject to the tax as well.

Anonymous said...

" For the very simple reason that most entrepreneurs' ambitions are ridiculously large, and their talents woefully small."

Sounds like a number of 'political entrepreneurs'.

If it were that simple then it would be easy to succeed wouldn't it by taking in account these lessons.

I'd rather try and fail than capitulate and be accept having to become a teacher or some other state employee.

Self dignity has its costs and in the face of the alternative it seems a cost worth paying.

Chris Trotter said...

No, Victor, I'm not saying that at all. I'm merely attempting to refute some of Brendan's and Gerrit's small-business puffery.

Labour should, indeed, put a lot of effort into understanding the small businessperson and their needs, they are a crucial element in the NZ economy.

And they are also people of energy, imagination and grit - which is exactly what our country needs right now.

Anonymous said...

Labour should, indeed, put a lot of effort into understanding the small businessperson and their needs, they are a crucial element in the NZ economy.

Oh fuck off Chris. You know as well as the rest of us that Labour's central social engineering goal has been and always will be to attack the petit bourgeois and the haute bourgeoisie in their strict adherence to "socialist revolution 1-2-3."

Victor said...

Fair enough, Chris.

I'm just seeking to define the terms of the discussion.

Gerrit said...


Puffery = urban myth regarding how many small businesses go broke in the first five years.

No links to prove the 80% of business failures in the first five years meme?

Yes we will wait with anticipation what Labour will promise in the way of policy for SME's.

Olwyn said...

@ Victor: "...a key question...is whether Labour can reach out in this direction without excessive compromise of principle...Wooing the self-employed and SME owners would certainly involve a major change in Labours's approach to branding and 'mood music.'"

You yourself have said that Jim Anderton was a very good advocate for small business, and I think of him as a conservative socialist. Winston Peters, while to the right of Anderton, is essentially a conservative Keynesian, and was successful in his advocacy for the racing industry.

I do not fear Labour privileging SMEs over the workers and the impoverished - in a small country like NZ they are all deeply connected anyway. Hence I would hope that people from all of these groups would come into their considerations. But where you fear that centrist talk may be a guise for naked opportunism, I fear it just means business as usual in a red tie instead of a blue one, though perhaps in a sense we are concerned about the same thing.

Victor said...


Absolute agreement from me to all the points you have made.

And particularly when you write:

"I do not fear Labour privileging SMEs over the workers and the impoverished - in a small country like NZ they are all deeply connected anyway."

Very often, they even morph into each other.

Have a joyful Christmas!