New Zealand Inc.

United in a common cause: If ever there was a need to adopt a NZ Inc. approach to governing the nation it was over the vexed question of climate change. The only equitable way to address the need to dramatically reduce New Zealand’s CO2 emissions was by declaring the issue to be the moral equivalent of war – and demanding commensurate sacrifices from every sector of the economy.

NEW ZEALAND INCORPORATED: it’s one of the Right’s most effective rhetorical devices, proclaiming as it does the speaker’s belief that the entire nation should be treated as a single economic unit: one vast corporation, run along business lines.

From a left-wing perspective, however, the phrase "NZ Inc." has some extremely worrying connotations. It was, after all, Benito Mussolini who said: "Fascism should rightly be called corporatism, as it is the merger of corporate and government power."

These origins notwithstanding, the corporatist ideology still commands a surprising amount of support among right-wing Labourites and ambitious trade union bureaucrats (all-too-often the same people). It’s their view that a corporate state can only function effectively if the trade unions are also seated at the top table – alongside the employers and the state.

Unsurprisingly, the neoliberal Right takes a radically different view. In their eyes, neither trade unionists, nor civil servants, have any useful role to play in the process of constructing NZ Inc. In fact, the whole point of running the country as a business, is to eliminate the disruptive influence of unions, bureaucrats – and politicians.

As President Ronald Reagan put it: "In this present crisis, government is not the solution to our problem – government is the problem."

It is this radical variant of neoliberalism that drives so many Auckland business-people to loudly lament the probability that the first mayor of the new "supercity" will be drawn from the world of politics – rather than business. Their goal is to create an "Auckland Incorporated" – entirely impervious to the demands of democratic busybodies.

　
IDEOLOGICAL MUSINGS ASIDE, the concept of NZ Inc. is certain to feature prominently in the second year of John Key’s government. The deepening fiscal crisis gripping the country makes an appeal to national unity and self-sacrifice practically obligatory.

From the National Party’s perspective, it is essential that the necessary reduction in government expenditure be presented not as a calculated act of class violence, but as a full-scale, nationally co-ordinated effort to bring the ballooning government deficit under control.

This won’t be an easy sell for a government politically beholden to the corporate sector. The latter is not about to assume its fair share of the national economic burden voluntarily. But, unless the electorate can be convinced that the corporate sector is willing to suck up as much economic pain as the rest of the community, the idea of NZ Inc. is likely to prove unsaleable.

One solution to this problem might be to raise the rate at which GST is levied, while simultaneously imposing some form of Capital Gains or Land Tax on the wealthy. The increased contribution from the nation’s richest citizens could then be used to offset the disproportionate impact of any increase in indirect taxation on the poorest.

Another gesture toward NZ Inc. might be to replace the current KiwiSaver scheme with a system of compulsory universal superannuation modelled on the scheme controlled by the Government of Singapore.

Similarly, any attempt to freeze the wages of public servants should be accompanied by a compulsory moratorium on executive bonuses and/or the imposition of a special surtax on personal incomes in excess of $250,000 per anum.

Cuts in Vote Health could be imposed alongside a massive nationwide campaign to improve New Zealander’s fitness and diet. Measures limiting the numbers in tertiary education could be timed to coincide with the restoration of heavily subsidised night classes.

Young unemployed people could be mobilised into "Climate Change Combat Corps" and sent to plant native, Carbon Credit-earning forests on Crown-owned marginal land all over the country.
However it is structured, any attempt to create New Zealand Incorporated can only succeed if it is seen to incorporate all New Zealanders.

　
DOES JOHN KEY possess the political skills necessary to persuade the electorate to buy into this sort of full-on corporatism? Would his own caucus stand behind him if he did? Would Rodney Hide and Act support policies requiring so much state intervention in the economy? Would Peter Dunne? Would the Maori Party?

The answer to these questions is the same as the answer the Irish farmer gave to the lost American tourist who asked him how to get to Dublin: "Ah Sir, if I wanted to be going there, I’d never be starting from here."

The time to start constructing NZ Inc. was in the first few weeks of his administration. And, to be fair to John Key, the Jobs Summit did give every appearance of corporatist intent. True to form, the Council of Trade Unions pitched-in to help. Business NZ, too, made conciliatory noises. It all looked very promising.

Unfortunately, the follow-through just wasn’t there. As the months went by it became increasingly clear that, judging by its deeds, if not by its words, Key’s was just another National Party Government. Tax cuts which overwhelmingly benefited the wealthy; slash and burn tactics in the public service; the imposition of de facto wage freezes; reductions in spending, attacks on welfare-state icons like ACC and subsidised adult education: none of these decisions looked very much like a fair suck of the saveloy.

And then there was the ETS.

If ever there was a need to adopt a NZ Inc. approach to governing the nation it was over the vexed question of climate change. The only equitable way to address the need to dramatically reduce New Zealand’s CO2 emissions was by declaring the issue to be the moral equivalent of war – and demanding commensurate sacrifices from every sector of the economy.

This is not what happened.

The sordid spectacle of the past few weeks: the unconscionable transfer of the cost of fighting climate change from the polluter to the taxpayer; the disgusting horse-trading and pork-barrelling with the now irretrievably compromised Maori Party; the refusal to be guided by the professional opinion of scientists, economists, lawyers and civil servants; and the reckless disregard for intergenerational equity. All have contrived to brand Key’s Government as just another corporate-bailer-outer: just one more neoliberal regime committed to placing the interests of National’s friends ahead of the national interest.

Mussolini’s judgement of classical liberalism could hardly be more apt: "The liberal state is a mask, behind which there is no face; it is a scaffolding, behind which there is no building."

Incorporating all New Zealanders in New Zealand Incorporated is now Labour’s political service – by default.

This essay was originally published in The Independent of 3 December 2009.