Alright For Some: Bill English Delivers A Profoundly Political Budget.

Blue Cheese: Hot off the press, the Finance Minister, Bill English, holds a copy of what the NZ Herald's Business Editor, Liam Dann, dubbed "The Cheese-on-Toast Budget". Nothing fancy, but wholesome, tasty and a firm family favourite.

 

AS NEW ZEALAND CHOWS DOWN on Bill English’s “Cheese-on-Toast Budget” – relishing the sharp, melted-cheddar flavours of free doctors’ visits for the under-13s and an additional month of paid parental leave – Labour must be wondering just what they did to piss-off the political gods so badly. (As it happens, I can give them a hint or two on that score, but it’ll keep for another day.) Contrariwise, the near universal positivity pouring out of the “vox-pops” (those random interviews journalists conduct with people in the street) left little room for doubt that, when it comes to capturing the affections of the voting public, National and the political gods have still got a good thing going on.

 

And that’s the crazy thing about budgets, they’re all about the three or four hours immediately following their delivery. It is in this ridiculously short period of time that the character of the Government’s economic plan – for good or ill – will be decided.

 

There’s quite a troop of people who play a part in this. Obviously, the Finance Minister’s performance is important. A lack of confidence and clarity on the part of the document’s author is seldom considered helpful. Then there’s the Leader of the Opposition’s speech in reply. If it’s any good, the Budget will be passed on to the news media roasted, stuffed and with an apple in its mouth.

 

The media’s characterisation is, of course, crucial. If the Opposition’s on its game editors and journalists will already have been given the target or targets to attack. Economists and major league NGOs are then asked to pass judgement on the issues raised. Inevitably, one of these players will come up with the moniker by which the budget will forever after be known. (This year that honour went to the NZ Herald’s Business Editor, Liam Dann. He christened Bill English’s sixth “child” the “Cheese-on-Toast Budget”. Nothing fancy, but wholesome, tasty and always a firm family favourite.)

 

Sadly, David Cunliffe and his finance spokesperson, David Parker, failed to land a single solid blow on English’s creation. Cunliffe described it as the “Fudge-it Budget” (only to have the Prime Minister gleefully remind him that Rodney Hide had already given that name to Michael Cullen’s 2002 Budget). Parker’s response was typically wonkish: a perverse mixture of praise (for the $372 million “surplus”) and impenetrable – at least for the average punter – fiscal detail.

 

Not that we should be too hard on poor old Labour. What are they supposed to do when their enemies so shamelessly steal their policies? For the “true believers” at both ends of the political spectrum such behaviour is unconscionable. Whatever happened to principle!

 

But, like “Kiwi Keith” Holyoake before him, John Key is by no means averse to appropriating his opponent’s ideas – if that is what it takes to hold National’s vote together. That’s because Key remembers what the ideological hard-liners of his caucus (and Act) appear to have forgotten. That the purpose of the National Party is to bar the door to the House of Power and prevent the Labour Party from entering. Or, should Labour somehow manage to gain entry, to do whatever it takes to evict them. National’s first – and last – principle has always been: “Hold on to power at all costs, and don’t, under any circumstances, let Labour win!”

 

It’s what makes good National Party opposition leaders so ruthless and good National Party prime ministers so accommodating. It is also why it takes a special kind of Labour leader to summon the tremendous force required to make it through the door.

 

The House of Power cannot be entered without struggle. So, if there are still some in Labour’s caucus who secretly subscribe to the theory that all they have to do is wait until it is their “turn” to be in government, then they should abandon it immediately. They need to understand that, as far as National (and the interests it represents) is concerned it will never be Labour’s turn.

 

Think about it. It took the full weight of “Big Norm” Kirk and the unstoppable momentum of the 1960s social revolution to oust the National Party from office in 1972. And it was only Rob Muldoon’s refusal to be guided by his party’s “New Right” backers – plus the extraordinary subversion of the parliamentary Labour Party itself – that brought about the change of government in 1984. Labour takes power only in extraordinary circumstances, and it seldom makes those by itself.

 

A Labour leader more attuned to the animal spirits of the New Zealand electorate would have described English’s effort as the “Looking Through The Window Budget”.

 

He would have described National’s world in terms of a comfortable home with its lights blazing and the dining table loaded with good things to eat. The inhabitants can be seen through the window raising their glasses in a toast to their own good fortune. Things had been tough, but they have come through. They were back in the black!

 

Then he would have described the scene outside the house. The people standing there in the late Autumn darkness. The ones who haven’t made it through. The ones who are still doing it tough. Struggling to feed their families. Despairing of ever owning their own home. Overworked. Underpaid. Their unions under siege. Wanting a future. Angry that they’ve been denied one. Waiting, with growing impatience, for someone to break down the door to the House of Power – and lead them in.

 

This essay was originally posted on The Daily Blog of Friday, 16 May 2014.

Budget Alternatives And Alternative Budgets

Walking The Talk: The NLP's 1991 Alternative Budget. NewLabour's leader Jim Anderton understood the political and ethical rewards accruing from his party's willingness to show the voters not only what they wanted to do - but how they intended to pay for it. Act's new leader, Jamie Whyte, has just picked up the idea. What's stopping Labour from putting some numbers alongside its promises?

 

IT WAS ONE OF THE THINGS I admired most about the NewLabour Party (and later the Alliance) – it’s Alternative Budget. From its inception, in 1989, until its absorption into the Alliance, the NLP Leader, Jim Anderton, made a point of pre-empting the Government’s official Budget Statement with one of his own.

 

Along with Anderton, himself, the alternative document was put together by the NLP’s economic consultants, John Lepper and Petrus Simons, with invaluable input from the University of Otago’s Professor James R. Flynn. The irrepressible Flynn was the party’s unofficial conscience when it came to fiscal policy, insisting that it was politically unethical and tactically foolish to offer voters all manner of benefits without, at the same time, demonstrating how the party intended to pay for them.

 

It was Flynn’s stated intention to make not only his party comrades, but also the wider electorate, understand that democratic socialist outcomes could not be guaranteed in the absence of democratic socialist taxes. He knew that the fastest and most effective way of turning a party of idealists into a party of realists and pragmatists was by showing them how high income taxes would have to rise in order for them to cover the costs of what Bill English describes sneeringly as “nice to haves”.

 

It was very instructive to observe how the policy maximalists would wince when they saw how high the income taxes of not just the obscenely wealthy but ordinary middle-class professionals and skilled wage workers would have to rise if the Party’s pet projects were to go ahead. The wily old Flynn knew that the prospect of having to levy politically suicidal income tax rates would spur the membership into moderating their demands and searching for alternative methods of revenue-gathering. The result was the NLP/Alliance’s adoption of the Financial Transactions Tax – a measure which, very neatly, solved the problem of how to pay for paradise.

 

The preparation of an alternative budget is a highly educational (not to say therapeutic) exercise for any political party, but it is especially useful for radical parties like the NLP/Alliance and ACT.

 

That the ACT Party’s new leader, Jamie Whyte, not only recognises this but has actually gone ahead and released an alternative budget bodes very well for the party’s electoral future. At the very least it has forced ACT’s members into thinking seriously about where they want the country to go and how they propose to take it there.

 

Getting In On The Act: Jamie Whyte recently released his party's own Alternative Budget.

 

As neoliberals, not democratic socialists, the task confronting ACT’s members would have been pretty much the opposite of the one facing the NLP/Alliance. Rather than starting with all the things they’d like to have and then calculating how much tax would be needed to pay for them, ACT’s members began by asking themselves how far taxes should be lowered and then worked out how many government services and transfer payments would have to be eliminated to make that figure possible.

 

The answer, of course, turned out to be: “A helluva lot!”

 

Whether the scale of expenditure cuts required to produce a top income tax rate of 17 percent made ACT’s members wince I do not know, but, after reading their alternative budget, I’d wager that very few of them were in any doubt about the radicalism of their party.

 

Why 17 percent?

 

Well, I have a theory about this seemingly random number. Originally, I suspect, the desired top tax rate was deemed to be 10 percent. But, when ACT’s economic advisors told them that to bring the top rate down to that level would require them taking a very large and a very blunt axe to health, education and welfare spending, they reluctantly decided that, 10 percent being electorally suicidal, a higher figure was required. Hence 17 percent.

 

Set at this level, Whyte is able to reassure (the Epsom?) voters that taxes can be lowered dramatically without slaughtering the New Zealand electorate’s sacred cows.

 

It is interesting to note that immediately following the release of its alternative budget the value of ACT’s “stocks” on iPredict rose to 3.8 cents. In other words the political speculators now expect ACT to win nearly 4 percent of the Party Vote.

 

Why, then, does Labour not produce an Alternative Budget? Wouldn’t such an exercise be of enormous assistance in putting some credible flesh on the bones of Opposition policy? Would it not ensure that when John Key, channelling Tom Cruise, began shouting: “Show me the money!” the Leader of the Opposition was well equipped to do exactly that?

 

Because, when you think about it, there’s really no excuse for an opposition party not being able to cover its policy bones with detailed flesh of. Opposition politicians would, after all, like us to believe that they have what it takes to form an alternative government. So, surely, within its ranks there ought to be sufficient wit and experience to pull together an alternative budget?

 

Oh yes, I know, the political “strategists” will have none of it. “Why show the Government your hand?” They will ask. “Why risk Treasury ripping all your numbers to shreds? The resources just aren’t there for the Opposition to even contemplate producing a document to challenge the government’s budget statement.”

 

But no one’s asking for that sort of detail. All Labour’s supporters want to hear is the two Davids – Cunliffe and Parker – making confident replies to Government and news media questions about numbers. The policies of the alternative government have got to add up. If working people are going to be better-off – or worse-off – as a result of Labour’s policies, then surely they have a right to know by how much? If Phil Twyford wants to be believed when he says the next Labour Government will build 10,000 affordable homes every year, then he must be able to quantify “affordable” in a way that makes sense to a young couple bringing in $70,000 per year.

 

The so-called “cheese-on-toast” budget that National will deliver on 15 May is unlikely to be spectacular – but it doesn’t have to be. The Government will simply point to their handling of the Global Financial Crisis; to steadily expanding economic activity; to rising business confidence and falling unemployment and say: “See? It’s steady as she goes. The economy’s in safe hands.” The advantages of incumbency are numerous and usually decisive.

 

Unless.

 

Unless they are systematically undermined by an Opposition with a clear and compelling story to tell. Using broad brush strokes to outline their alternative narrative, but also supplying sufficient detail for ordinary people to be able to imagine themselves into the story.

 

If there really is an alternative – for God’s sake, let’s hear it!

 

This essay was originally posted on The Daily Blog of Wednesday, 14 May 2014.