Following Labour's Lead.

Red And Proud: The only real question, after Thursday’s Budget, is: How long will it take National to realise how profoundly the political game has been – and is being – transformed by Covid and Climate Change? Socialism is no longer a dirty word.

YOU HAVE TO ADMIT, Judith Collins made a reasonable fist of responding to Grant Robertson’s 2021 Budget. It wasn’t enough, of course. It would have required a truly Churchillian performance to dispel the magic of Robertson’s speech. Labour has well-and-truly learned what National appears to have forgotten: that people feel long before they think. And Robertson had just made a goodly portion of the New Zealand electorate feel righteous. As performances go, his was a bloody hard act to follow.

Still, the leader of the Opposition has not forgotten how to use her sword. Her thrust against “Meccano lessons” at the Hillside Workshops was deadly. Unfortunately, she failed to follow it up with an equally devastating assault upon the whole import substitution policy to which Robertson’s proudly proletarian pitch paid homage. There was, after all, a reason why Labour, in the early 1980s, began casting around for something to replace the Sutchism that had dominated Labour’s policy-making since the late-1950s.

It is one of New Zealand political history’s greatest ironies that Rob Muldoon, the “Young Turk” who won his spurs attacking the massive import substitution programme unleashed by the Second Labour Government, should have ended his career amidst the wreckage of “Think Big” – as he called his own updating of the left-leaning economist, civil servant and historian, Bill Sutch’s, radical economic development policies.

Indeed, it is interesting to speculate on what might have happened if Muldoon had remained true to the instincts of his younger, private-enterprise self, by continuing to reject state-directed development in New Zealand. Had Muldoon embraced the same ideas as Margaret Thatcher and Ronald Reagan in the late-1970s and the early-1980s, it could easily have been Labour which ended up betting the farm on one last roll of Sutch’s dice.

As things turned out, it was Labour’s new leader, David Lange, who found himself proclaiming that New Zealand couldn’t go on being run “like a Polish shipyard”. Egged-on by his Treasury advisers, and the smarter elements of the Fourth Estate, he was persuaded to join his backers (Roger Douglas, Michael Basset, Mike Moore and Richard Prebble) in “thinking the unthinkable” about New Zealand’s economic future.

A strong case can be made that Labour’s willingness to “think the unthinkable” made it possible for National to give up thinking altogether. Initially confounded by Labour’s abrupt change of ideological direction – not to mention the near universal praise heaped upon its new “more market” policies by the mainstream news media – National floundered hopelessly. Its win in 1990, which the news media proclaimed a “landslide”, was, by MMP standards, a remarkably close contest. National may have received 47.82 percent of the popular vote, but the combined popular vote for Labour, New Labour and the Greens was 47.15 percent.

Thanks to the First-Past-the-Post electoral system, the new National prime minister, Jim Bolger, was spared the challenge of governing with a one-seat majority. He may have campaigned in the poetry of “The Decent Society”, but the prose he governed in was all written by the same neoliberal scribes who had authored Labour’s policies – albeit with considerably sharper pens. The National Party’s finance minister’s, Ruth Richardson’s, “Mother of All Budgets”, so loudly condemned by Grant Robertson in Thursday’s Budget Speech, was really only Roger Douglas – with bells on.

By the time Labour (with the Alliance in tow) was back in control of the Treasury Benches, its acceptance of the ground rules of Neoliberalism was, if not complete, then sufficiently substantial for the emergence of a style of governance that could be, as John Key went on to prove, as readily adopted by National as Labour. Conservative purists railed against Key’s “Labour-Lite” approach, but it proved more than equal to the challenge of a global financial crisis and a devastating earthquake. It was certainly enough to secure nine years of National Government, which might easily, in the absence of “Jacindamania”, have stretched into twelve.

Historically, this is par for the course with National. From the Opposition Benches, it railed against the Keynesianism of the First Labour Government, only to embrace it as the price of electoral victory.

Muldoon shot down radical Sutchism in 1961, only to see Holyoake and Marshall adopt a watered-down version of the same well into the 1970s. In 1979, beggared for options in the face of seemingly indefatigable “stagflation”, Muldoon became the last, and easily the most radical, of the Sutchists.

Bolger played the same game with Neoliberalism: railing against its brutalities from Opposition; then allowing Bill Birch to crush the trade unions, and Richardson to poleaxe what was left of the welfare state, from the safety of the Government benches.

In 2008, Key accepted a less-sharp-edged version of Neoliberalism from Helen Clark, and cruised effortlessly to three electoral victories in a row.

And now, thanks to Covid-19, Labour finds itself, once again, strategically placed to set a new course for economic and social policy in New Zealand. With the monetarist policies that have, for the past 40 years, constituted the core of Neoliberalism, discredited (by that inveterate foe of all theories – Reality) Prime Minister Ardern and Finance Minister Robertson find themselves at a turning-point very similar to the one their party encountered in the early-1980s.

Confronted with the immediate challenges of a global pandemic, and, behind them, the even more daunting challenges of climate change, governments all over the world are shrugging-off the dogma that there is no problem so great that it cannot be solved by giving the market its head. State action, on a massive scale, is once again being seen, by politicians with an eye to the future, as the indispensable agency of economic and social survival.

Ardern and Robertson have grasped this ideological shift a great deal faster than any of their rivals. Certainly, it has encouraged them to deploy the sort of rhetoric that would have made their predecessors cringe. Targeting Richardson’s Mother of All Budgets and raising benefits in a long-delayed one-fingered salute to this hated left-wing symbol of neoliberal cruelty, was only the beginning. As the Budget Debate wore on, Labour’s backbenchers could not forbear from getting in on the act. The new MP for Wairarapa, Kieran McAnulty, delivered the lines most likely to raise the National Party’s collective blood-pressure:

“Yes, I am a socialist and I’m proud of it. Yeah, there you go. Thank you very much. Bring it on. And I’m very proud to say to the good people of the Wairarapa that they elected a proud socialist as their MP.”

The only real questions, after Thursday’s Budget, is how long will it take National to realise how profoundly the political game has been – and is being – transformed by Covid and Climate Change? Will it be two, three, or four terms? And, how many leaders will the party have to elect, and discard, before it finally masters the new language of electoral victory?

This essay was originally posted on the Interest.co.nz website of Monday, 24 May 2021.