Thursday, 11 June 2009

Johnny & Billy - Zombie Slayers?

Night of the Living Dead: This 1968 horror classic features creatures that refuse to die. Is the National Government battling a neo-liberal establishment which similarly refuses to accept its own mortality?

IS THIS GOVERNMENT really the free-market horror film its left-wing critics make it out to be? Or, are John Key’s and Bill English’s most daunting political challengers now coming at them from the Right?

Not if you subscribe to the Left’s political narrative.

According to Labour and its left-wing allies, John Key is a hard-line free-marketeer who had to be "sold" to the New Zealand electorate (principally by the Australian political consultancy, Crosby-Textor) as a benign centrist. Had Key not adopted this persona, the Left insists, he would never have been elected. Which means National’s election-winning formula: Labour-lite + tax-cuts; cannot be abandoned before 2011 without putting its re-election at risk. Consequently, Key must wait until he wins a second term before unleashing his "secret" agenda: radical welfare reform + wholesale deregulation and privatisation.

But what if we are actually watching a very different movie? What if, far from being a sort of antipodean werewolf, impatiently waiting for the next electoral full moon so he can tear to shreds what remains of the egalitarian New Zealand dream, Key really is a moderate? What if the horror-movie we’re watching isn’t The Howling, but a political version of Night of the Living Dead, in which Key and his Finance Minister desperately battle the reanimated corpses of economic and social policies everyone believed dead and buried in the 1990s?

Now, that would be a real horror-show.

So, has the Budget really got the zombies pounding on the Beehive door? Well, National’s far-Right allies were certainly vocally unimpressed by Bill English’s "Road to Recovery". Act Leader, Rodney Hide, (as befits his ministerial status) has remained silent, but the keeper of the party’s ideological flame, Sir Roger Douglas, has unleashed volley after volley of verbal scorn upon English’s economic programme.

"This is the budget of deficits", thundered the former Finance Minister on Budget Day. "A deficit of spending, a deficit of the current account, a deficit of courage, but most importantly, a deficit of imagination."

But what would a budget which passed Sir Roger’s imagination test look like? What do the unreconstructed disciples of Milton Friedman and Friedrich von Hayek actually want from John Key and Bill English? And could Key’s government possibly deliver it?

Fortunately, former Act MP, and proprietor of the NZ Centre for Political Research website, Muriel Newman, also wanted answers to these questions, and asked the Executive Director of the NZ Business Roundtable, Roger Kerr, to supply them.

In his guest commentary to the NZCPR Weekly newsletter, Kerr is careful not to be too specific in his recommendations, but the overall direction of his proposed programme of "reform" is reasonably clear.

He applauds what he claims is Bill English’s emphasis on "structural adjustment" – meaning a "shift of resources from the domestic economy to internationally competing industries". This "basic change in economic direction", says Kerr, is one of the (all-too-few?) "positive features" of the Budget.

What that ominous term "structural adjustment" means in plain English, is that Kerr very badly wants this Government to slash public spending on the goods and services New Zealanders consume, and redirect the state’s resources towards private businesses producing goods and services that foreigners consume.

In reality, there’s very little in this Budget that redirects resources in the way Kerr suggests. Indeed, English has been criticised by many commentators for maintaining the level of state spending in health, education and social welfare at the expense of the export sector. He did, after all, cut back on state support for research and development and skills training – both of which are crucial to lifting productivity.

To be blunt, I think Kerr is confusing what English has actually done, with what the Business Roundtable would like him to do. It’s a frequent mistake among left-wing ideologues, especially those dealing with conservative social-democratic governments – so it’s comforting to discover that right-wing ideologues suffer from the same wishful thinking.

The key passage in Kerr’s commentary, however, is this one:

"If we are to [catch up with Australian income levels by 2025] the government (and the community at large) have to recognise the need for policy settings much more like those of more successful countries. We can’t continue avoiding ‘third rail’ issues such as the superannuation eligibility age, privatisation of commercial businesses, a freer labour market and welfare reform."

In unpacking that heavily loaded sentence, we catch a glimpse of the sort of New Zealand the Business Roundtable is hoping to create.

It will be a New Zealand without unions. What else can "freer" mean when, already, barely seven percent of the private sector workforce is unionised? To further "free" the labour market, the public sector unions covering teachers, nurses and civil servants would have to be targeted. But, eliminating these powerful democratic institutions will not be achieved without massive political upheaval.

The same, of course, might be said about imposing "welfare reform" – a code-word for radically restricting citizens’ access to transfer payments, usually by limiting the period of eligibility to 3 months, or less.

Limiting elderly New Zealanders’ access to superannuation, by lifting the age of entitlement to 67, or more, and privatising what remains of the publicly-owned airways, railways and electricity generators rounds out Kerr’s vision of the future. Clearly, the Business Roundtable’s "ideal" New Zealand is going be a much less generous – and a much more politically contentious – country in which to live.

Or will it? Given that Kerr holds up both Hong Kong and Singapore as models of "small, high income countries" (‘with authoritarian governments’, he should have, but unaccountably failed, to add) political dissent may not be all that welcome in the Business Roundtable’s brave new world.

Writing about the current global economic crisis in The London Review of Books, recently, the veteran British labour historian, Ross McKibbin observed:

"The present crisis has established beyond doubt that neoliberalism, even the British form, and democracy are incompatible. To try to make them compatible, governments have adopted ever more risky policies, which brought down the last Conservative government and will probably bring down Brown’s."

"Risky" is a most inadequate word to describe the prescription which Kerr is offering Key and English. Filling it would be political suicide.

Perhaps, the Left should reconsider its rather gruesome characterisation of National’s leaders. Compared to the undead ideological creatures pounding on their door, who do Key and English more resemble: villains – or heroes?

This commentary was originally published in The Independent of Thursday, 11 June 2009.


Unknown said...

Jeez Chris! People have suddenly realised John Key is a moderate centrist?! Anyone who believed Labour's foolish "secret right wing agenda" smear at the last election is a fool. Reading between Kerr's lines there it is obvious Key and English have thwarted him at every turn. The worst accusation you can level against Key is that he is Mr Steady-As-She-Goes as the country maintains much the same course in economic and social policy as it has done for the last couple of decades.

aj said...

I always felt Cullen and English would agree far more than disagree despite the rhetoric. I can't wait for the explosion from ACT between English's 2nd and 3rd budget.

Anonymous said...

In Michael Cullen's valedictory he made the point that many of the reforms we undertook in the eighties and nineties happened in Australia, but more gradually and without the same level of social trauma. His speech may become something of a touchstone for viewing this administration. The biggest promise of the last election was signalled in all the pre-election swallowing of dead rats and the banning of Roger Douglas from cabinet - no big traumatic changes visited on large swathes of the population. If they were going to break that promise this term then the current world economy would be the perfect excuse, it probably would have happened this budget. If they can make some progress in their favoured direction, and the economy recovers, the Nats will keep the same approach next election; they will want to bed in the reforms they make - and take the country with them, shuffling, en masse, slowly and relentlessly to the right...

Jordan Carter said...

Chris, isn't it actually a bit of both? National does have some parts that want the far right return - the neoclassical experiment writ large, regardless of the human tragedy that would (and did) result.

But they want more to win, and they will govern in prose that sends Kiwis to sleep. They will be modest, and moderate, and do not much. For they know that despite all the rhetoric, things are actually in many ways quite good in NZ from a conservative point of view, and that change isn't really what will deliver them long runs in power, which is their focus.

Anyone who believes they will lurch into Douglas-like frenzy is silly. The problem with our campaign last year in Labour was that we did not make a good enough forward offer, and people didn't believe that Key was what some of us said he was. I think that the biggest difference is timescales - if Key is PM for a long time, more and more of that "secret" right wing agenda will happen, for that is what the National Party exists to do.

Robin Johnson's Economics Web Page said...

What do you think Roger Kerr means when he uses the term 'third rail issue'?

Chris Trotter said...

A "third rail issue" is an issue of such sensitivity that, even to discuss it, a politician risks a catastrophic loss of public support.

The metaphor is American in origin. The "third rail" of the subway track is the rail that carries the massive electric charge which powers the passenger cars along the underground network.

To touch the third rail is to suffer instant death.