Friday 20 July 2012

Heading Backwards?

Missionary Zeal: Labour's finance spokesperson, David Parker, seems to be on a mission to reassure the New Zealand business community that a Labour Government will not deviate in any alarming way from the prevailing economic orthodoxy.

“I’M BECOMING INCREASINGLY CONCERNED at the Labour Caucus (and Leader) moving Labour to the Right,” observed a former Labour MP recently in an e-mail to a Labour friend and trade union stalwart of many decades standing. “As a long-time Labour Party member/activist, I find it disturbing to think the Labour Caucus is heading backwards to the Rogernomics era that was so damaging to NZ communities. Comments made by various MPs at the latest Labour Caucus Dinner at Waitangi last week did not reassure me.”

Alas, I have yet to learn what those “various MPs’” were talking about. What I do know, however, is that those who share this former MP’s concern at their party’s political direction don’t need to eavesdrop on the dinner conversations of Labour’s caucus to discover where it’s going. Labour leader, David Shearer, and his finance spokesperson, David Parker, have been telling New Zealand loud and clear, and in public, for weeks.

Speaking to a group of corporate head-hunters on 11 July, Mr Parker spelled out the details of Labour’s policy on foreign investment. Concerned to prevent “infrastructure assets with monopoly characteristics” from being sold to offshore buyers, Labour, in the run-up to last year’s election, drew up a “closed list” – to keep a “bright line” between “what is to be sold and what is not.” Among the infrastructure that was not to be sold was any: electricity line, water storage or irrigation networks; no seaports or airports; and no public hospitals, schools, railway lines or roads.

Not included in Labour’s “closed list” were telecommunications networks and – amazingly – “electricity generators”.

According to Labour’s policy:  “While the electricity market is on the cusp of becoming uncompetitive and exhibits monopoly-like characteristics, generation assets are diverse in nature, location and ownership.”

What this means is that although Labour went into the last general election on a policy of “No Asset Sales”; and in spite of the fact that its campaign advertising showed a vast banner, displaying that very message, being draped over a hydro-electricity generating dam; the party was unwilling to include electricity generators on the list of state-owned infrastructure that “ought to be run in the New Zealand interest” – and never be sold to foreigners.

Am I alone in thinking that Labour’s foreign investment policy fatally compromises its current campaign against asset sales? If the generation of electricity is an activity which properly belongs to the market, and if New Zealand’s electricity generation assets are “diverse in nature, location and ownership” and, therefore, able to be purchased by foreign interests, then I’m at a loss to know why the Labour Party is opposed to their partial privatisation.

Perhaps opposing the sale of state assets is just (if I may quote the former Labour cabinet minister, Steve Maharey) “One of those things you say in Opposition, but forget about in Government”. Certainly, the decision to keep state-owned energy generators off Labour’s “closed list” would explain why Mr Shearer keeps telling New Zealanders that: “Once they’re gone, they’re gone for good.”

I like David Shearer, he’s a good, down-to-earth Kiwi bloke. But, I also fear him. Why? Because he’s been so easily persuaded that what’s wrong with New Zealand can only be fixed by inflicting radical and wrenching change on ordinary working people. (As if ordinary working people have spent the last twenty-five years living with anything else!) He scares me because he and the people he listens to lack the courage to devise a manifesto that imposes the radical and wrenching change where it belongs – on the rich and powerful. And, like the former Labour MP quoted at the top of this column, I’m concerned that those voters too young to remember the devastation wrought by the ideas of Roger Douglas are about to let Labour’s present leader give them another go.

Mr Shearer’s convinced we’ve a “good chance” of becoming “a twenty-first century peasant economy” if he doesn’t. I’m concerned that’s exactly what we’ll become if he does.

This essay was originally published in The Dominion Post, The Otago Daily Times, The Waikato Times, The Taranaki Daily News, The Timaru Herald and The Greymouth Star of Friday, 20 July 2012.


Allan R said...

Please STOP apologising for the hard decisions the newly-elected 1984 Labour Government had little choice but take. Muldoon had left NZ bankrupt - hence the 20% devaluation the day after election day. The decision to sell off some assets, instead of going cap-in-hand to international banks (and we'd still be paying millions in interest) was hard but PRAGMATIC, and much as Kiwis didn't like it, don't forget the Lange government was returned with an INCREAS$ED majority in 1987.

Chris Trotter said...

Jeez! I hope you're not a member of the Labour Party, Allan. But, then again, it would explain a great deal if you are.

Kat said...

Its a hard road finding the perfect government Chris. Perhaps your comment about Shearers character should allow you to 'give him a go' so to speak and let him become the great Labour leader your pining for.

Chris Trotter said...

Fair enough, Kat, but the last time I was persuaded to give a Labour leader "a go" was 1987 - and that worked out really well, didn't it?

I just don't want to be fooled again - so I'm road-testing this mob as hard as I can.

Kat said...

Chris, I don't believe any Labour supporter wants to 'be fooled again' however even the lowest ranked Labour list candidates would be better for NZ than the current lot we have in government!

I don't particularly want to follow any leaders but understand sometimes we need a beacon to guide the way. Its an irony that is inescapable and I think Shearer is aware of that irony.

Lets face it, if he can unite all the factions within the Labour Party and become the next elected PM in a Labour led government that will surely be a fairly successful 'road test' wouldn't you agree?

Viv K said...

The power lines/ network are a crucial part of the electricity system and they will be useful when more distributed generation comes online and individuals, community groups etc generate their own power and sell excess back into the grid- so maybe Labour think that if you try and ring fence ‘electricity generators” per se there might be a problem working out where you draw the line? It would be reassuring, however, to know that major hydro schemes would not be up for sale.

Tim G. said...

Let me guess.. this stunning scoop was an e-mail from John Tamihere to Willie Jackson.

Nothing better to do than gossip, Chris?

Chris Trotter said...

Bad guess, Tim G. Neither Willie nor JT were MPs at the time of Rogernomics. Had the former Labour MP not been an eye witness to the dirty deeds of that era I would not have considered quoting the e-mail.