Tuesday 14 March 2017

Why is the Neoliberal Establishment so Pissed-Off with Bill English?

Off Message? Listening to the business journalist, Fran O’Sullivan, last Friday morning [10/3/17] on RNZ, the fury and frustration of the neoliberal establishment was evident in every bitter syllable of her commentary. Her rage at the now solid phalanx of NZ Super political defenders which English’s blundering has brought into formation (Labour, the Greens and NZ First) was palpable.
IT’S DIFFICULT TO AVOID THE IMPRESSION that the neoliberal establishment is very pissed-off with Bill English. His handling of the NZ Superannuation issue has been an unmitigated disaster from beginning to end. The media wasn’t briefed. National’s surrogates in academia and the business community weren’t primed. The public was not prepared.
Unfortunately, for any proposal to reform an institution as popular as NZ Super to have the slightest chance of success, all three of the above groups must be ready to hear it. One can only imagine the frustration of the Retirement Commissioner, Diane Maxwell, as she watched all her patient public diplomacy reduced to ashes in English’s ill-considered political bonfire.
English’s actions take on an even more absurd aspect when one recalls that there is a time-honoured and well-tested process for slaughtering a cow as sacred as NZ Super in relative political safety.
For a start, it is ill-advised to announce such plans in the early months of an election year.
Ill-advised, but not automatically fatal. Instigating an extensive and entirely independent review of any given set of current public policy settings is eminently survivable – if that is the sum total of your announcement. Indeed, it generally prompts hearty praise from all those “experts” agitating for change. It also allows the instigator to refuse the media anything further in the way of specificity until the review is complete.
Had English adhered to this process with NZ Super he could also have increased the political pressure on his principal electoral foes. Labour, in particular, would have found it extremely difficult to oppose any government call for a cross-party commitment to a comprehensive review of NZ Super. After all, in both the 2011 and 2014 general elections, reforming NZ Super had been Labour’s policy. The Greens, likewise, could hardly refuse to join in a sober, without prejudice, quest to arrive at the broadest possible political consensus on this highly contentious issue.
NZ First could not, however, credibly lend its name to such an effort without, at least implicitly, being bound by the review’s eventual recommendations. But such a dog-in-the-manger stance would put Winston Peters in an extremely difficult position.
Refusing to endorse a review of NZ Super would, presumably, leave NZ First no choice but to refuse to enter into any confidence and supply agreement that did not include its cancellation. Assuming both Labour and the Greens had joined National in supporting the proposed review, NZ First would have nowhere to go but the cross-benches – a position of acute and ever-increasing political precariousness.
The beauty of establishing any sort of official inquiry is, of course, that the people doing the establishing get to appoint the people doing the inquiring, and to draft their terms of reference. In almost every case this more-or-less guarantees that the inquiry will produce recommendations which correspond remarkably closely to the wishes of those who set it up.
In other words, English had the chance to appoint a Royal Commission of Inquiry into NZ Superannuation which, after weeks of hearings, and months of deliberation, solemnly recommended to his government that not only would the age of eligibility have to be advanced – and quickly – but also that the means of calculating the quantum of NZ super would have to be altered, and a means-testing regime established.
Because Labour and the Greens would already have signed up to the inquiry, their endorsement of its recommendations would be automatic. Any ensuing legislation would thus be guaranteed an overwhelming parliamentary majority.
Imagine the celebrations at Treasury, the NZ initiative and across the financial sector. Not only would the whole issue have been depoliticised for the foreseeable future, but also (and best of all!) no neoliberal fingerprints would ever be found on the gun that killed the last great universal entitlement of the social-democratic era.
All of these highly-sought-after right-wing objectives have now been put at risk by English’s ineptitude. Listening to the business journalist, Fran O’Sullivan, last Friday morning [10/3/17] on RNZ, the fury and frustration of the neoliberal establishment was evident in every bitter syllable of her commentary. Not only that, but in her rage at the now solid phalanx of NZ Super political defenders which English’s blundering has brought into formation (Labour, the Greens and NZ First) she blurted out the Right’s true intentions.
In the event of a National victory in September, Act (acting on behalf of the neoliberal establishment) will insist that means-testing and a reduction in NZ Super’s purchasing power be added to the legislation sanctioning the (immediate?) extension of the age of eligibility to 67.
No confusion now about the Right’s murderous intentions towards NZ Superannuation – and not the slightest doubt as to whose fingerprints will be found on the gun.
This essay was originally posted on The Daily Blog of Sunday, 12 March 2017.


greywarbler said...

I am only halfway through your essay on managing sensitive policy announcements for your Party's betterment and the Others' confusion.
I am being affected by that ridiculous counter response to attack on some politicians and feeling sorry for Blinglish and thinking his hasty announcement shows that he is more honest than his devious fellows and gel-ohs and assorted would-be felons.

So watch your step Chris, never underestimate the stupid in emotional humans. And I don't approve at all of upping the retirement age, but far more intelligent and useful measures, which are available to the highest bidder. If you can't beat 'em, join 'em! I have my principles, but if you don't like them, I have others. (Bursting into faux jocularity is me trying to stay sane, while I am kept running on the spot.)

Guerilla Surgeon said...

New Zealand's spending on old-age and survivors pensions is quite low. About 5% of GDP compared to Germany's and Japan's 10% – roughly. But then the German& Japanese governments tends to look after their people a lot better than the New Zealand government has done for some time. Even conservative governments.

Unknown said...

Low-wage workers in Queenstown face another year of crowded houses and shared beds after a major project to provide short-term cheap rentals failed.
Building was to start on the project next month but Mr Thompson said it was not viable because of the high building costs and the limit on how much tenants on low wages were able to pay in rent.

As predicted by Ian Harrison simplified model of the NZ economy

Jens Meder said...

While Bill English might have irritated free market libertarians, he did a service to the nation by unleashing a public debate on NZ Super which studiously had been evaded by the media so far, leaving the way open for the until recently one-sided recommendations by the Retirement Commission's "Fiscal Capability" team (having totally ignored the retirement wealth creative capability of the NZ Super Fund as if it did not already exist and function) - and to behind closed doors "conspiracies" that produced the one time political accord on the surtax and the unnecessarily complicated super savings scheme that was defeated by referendum in 1996.

Now Labour has the opportunity to win the election with a stronger economic policy than National's, seductive freely consumable tax reductions with it priority of super fund contributions before tax reductions.

And younger post-baby-boomers might be delighted with the prospect of national prosperity growth stability through their NZ contributions making NZ Super sustainable from age 65 also for them.

Anonymous said...

Bills trying to save the country money by not doing what this article rightly states would be the way to have a chance of winning the election
Now it would appear there is nearly a 100% chance we will have a new govt in when Sept or Nov
But on the super thing well who's fault is it that we are having to consider change to it
Muldoon Douglas Bolger Shipley Key
Everyone of them has either had a grudge about it or the fact it's there at all
The right would love it to die a slow death because it's socialist and have had a good go at starving it to death
Now it's a weapon to divide the generations for the next election which is why we need unions and expose the corruption in the get out of jail card
Limited liability which is as corrupt as you can get at 28% tax which is ridiculous and eventually we will all be paying into insurance retirement schemes as our govt won't be anything but a franking machine

Wayne Mapp said...

A party of one (maybe two) has virtually no negotiating power, especially when they are locked in already.

So David Seymour may want means testing. But he won't get it.

One lesson that Bill English has learnt about Super (especially from John Key, but also by bitter experience) is that whatever you promise, you are stuck with. Voters will hold you to it. So the age rise to 67 from 2037 onward is now the most he can now do. That is his commitment, just like no change was John Key's. The only flexibility he has is not to do it at all. Which Winston may well enforce upon him.

I know you are trying to brand Bill English as a neo-liberal purist intent on dramatically winding back the state. But you have got that wrong.

If you want an indication of his broad settings, look at the last eight years and his direction of travel. I imagine central govt at around 30% of GDP, maybe a bit less. Debt around 20% or less. Sustained surpluses of around 1%. With all the implications for the size and scope of govt. In my view that would encompass Bill's happy spot. He is after a fiscal conservative, but something of a social reformer with a strong emphasis on education. Govt has to have a certain minimum size to achieve those aspirations.

Victor said...


I accept that your counter-factual enquiry might have recommended means-testing. But I'm not sure that would have been a forgone conclusion.

Unknown said...

Have a read here about experiences in Queenstown

Unknown said...

Landlords in Queenstown have everyone against the wall.

Anonymous said...

Surely the issue isn't really about whether we can afford superannuation or not in the future; isn't it more about the successive failure of governments to grow GDP and hence the revenue required to sustain the level expected and wanted by the public in terms of public services, including super. When will the real debate begin? The current rationing of a limited size of pie mentality does nothing to provide a better future for Kiwis. It's time for all parties to unite around one common cause of growing the pie and the level of services in education, health and yes even super that most would agree is what they really want.