The Journey: A Political Memoir - Posting No. 7

And So It Begins ... : Roger Douglas announces radical tax reform in his first Budget, November 1984. The regressive Goods & Services Tax prompted considerable opposition, both within the Labour Party organisation and from the broader labour movement. President Margaret Wilson, responding to rank-and-file alarm, announced a full-scale internal economic debate to coincide with the party's next round of regional remit conferences, scheduled for April-May 1985.

It was supposed to be a book about the birth of the NewLabour Party, but somewhere along the way it became the story of what led me into, and out of, the old Labour Party. In hopes of providing future political studies students with a glimpse of what it was like to be a left-wing Labour activist in the days of David Lange and Roger Douglas, I am publishing The Journey on Bowalley Road as a series of occasional postings. L.P. Hartley wrote: “The past is a foreign country, they do things differently there.” May these memoirs, written in 1989, serve, however poorly, as my personal passport.

Sunday, 21 April 1985 

WE ARE GATHERED in the back room of the University of Otago’s Adam’s House. Russell Taylor, an organiser for the Otago Clerical Workers’ Union, has dubbed us the Sunday Morning Club (a reference to the Sunday Club, whose rallies for the deposed leader of the National Party, Sir Robert Muldoon, have seriously weakened an already dispirited opposition). The title is apt: already a number of Parliamentary Press Gallery journalists are calling the Left Wing of the Labour Party “the real opposition”.

Our official title is the Economic Policy Group; ostensibly we are here to discuss alternative economic strategies to those of the Government we all slaved to elect barely twelve months earlier. Our true purpose, though unstated, is clear to everyone present: we must defeat GST.

The new president of the Labour Party, Margaret Wilson, has proclaimed a full-scale economic debate – to be held in conjunction with the 1985 round of regional remit conferences. It is an exercise in damage control. Roger Douglas’s first budget has shocked the party. Central to the Government’s monetary and fiscal policies is a dramatic shift from direct to indirect taxation. A ten percent Goods & Services Tax (GST) will be levied on all consumer items without exception.

The trade unions are aghast. A progressive income tax has always been the cornerstone of New Zealand's welfare state. PSA economist, Peter Harris, and FOL national executive member, Rob Campbell, will lead the fight at the regional remit conferences. As Secretary of the Otago Trades Council, I am determined to build an organised resistance to the GST proposal. Sean Fleigner, Youth Representative on the New Zealand Council of the party; Mike Hanifin, former regional organiser for the party in Southland and now a trade union official based in Dunedin; Louise Rosson, an economics teacher at Moreau College; Russell, the Convenor, and myself constitute the core of the fight-back in the southern region.

Mike is the most accomplished tactician among us. He has had the foresight to acquire a full list of the delegations to the Otago-Southland regional remit conference. One by one we go through the names, ticking off our likely supporters, crossing out our opponents. When we add in the block votes of the trade union affiliates it is clear – we have the numbers.

Thursday, 25 April 1985  

THE SEMINAR ROOM is filling up with members of the Castle Street Branch of the Labour Party. Widely regarded as a branch for the University of Otago staff, Castle Street has a surprising number of working class members. Many of them are here tonight: lured by the prospect of hearing Rob Campbell address them on the GST issue. It is my sorry duty to tell them he isn’t coming.

Campbell has sent me a copy of Peter Harris’s speech to the Northern South Island regional remit conference. I don’t like the omens: it’s the evening of Anzac Day – commemorating New Zealand’s most appalling military defeat – and I am supposed to “carry the ball” with speech notes that failed to convince the delegates at Westport.

All over the country Margaret Wilson’s economic debate is proving to be an extraordinary catalyst for organisation and participation. The Northern-South Island regional remit conference, held in the Labour stronghold of Westport a few days earlier, attracts hundreds of delegates. The GST Debate is ferocious. On the speaking order Peter Harris is sandwiched between Associate Finance Ministers David Caygill and Richard Prebble. Personal attacks proliferate. Outside the hall the Communist Party mounts a picket. Anderton – an increasingly vocal critic of the Government’s policies – declares himself and his supporters to be “the only opposition the Government’s got”. The vote, when taken, is very close. The Government is saved by the 17 card-votes of the Canterbury Hotel and Hospital Workers – all of them cast by Graham Harding who, shortly afterwards, is appointed national secretary of the Police Association.

The debate at Castle Street is brief and brutal. The Left has the numbers here and the objections of the good ladies of the university are swept away by an alliance of socialist academics and ordinary workers. We take the precaution of binding our delegates to vote against GST at the remit conference on Saturday. The air after the meeting is full of snide references to “cloth caps” – the Labour Right’s sneering epithet for the union-dominated Left.

Saturday, 27 April 1985

‘THIS IS A SET UP!” Margaret Wilson hisses to Terry Scott, chairperson of the Otago-Southland regional council of the Labour Party. “Get me on the next flight out!”

Wilson’s agitation is understandable. Like some large, pre-programmed machine, the regional conference is rubber-stamping the remits of the left-wing/trade union  alliance. There is no debate. Nikki Larson, the delegate reporting back the decisions of the workshop on economic policy, is reading out the resolutions and the conference is endorsing them without discussion. I am finding it hard to believe myself. Could it be that we are actually going to win?

The GST debate begins. Roger Douglas and Rob Campbell present the arguments for and against. Campbell, a former lecturer in economics at Victoria University, sets out the sums on a blackboard. His presentation is cool and professional – almost detached. The audience listens intently, struggling to absorb the numbers and the jargon. The applause is polite.

Douglas is messianic. He scrawls figures on the blackboard with violent energy, barking out his arguments like a parade sergeant. There is an aura of absolute conviction about the man that is taking its toll on the waverers. Will they hold?

With the opening salvoes still echoing through the packed auditorium of Taieri High School, David Caygill rises to second the Finance Minister. His rhetoric is polished but strangely unmoving. Nevertheless, his argument that a failure by the Party to endorse GST can only be seen as a “No confidence motion in the Government” strikes home.

It is left to Michael Cullen, MP for St Kilda and the Government whip, to clinch the argument for the parliamentary wing. He moves an amendment to our resolution opposing the introduction of GST. The delegates must now decide whether they should make their support for the new tax conditional upon a clear demonstration that the incomes of low paid workers will be fully protected.

It is all the delegates need. Our majority melts away as the Government’s appeal to loyalty over-rides the arguments of equity. Campbell’s figures clearly show that there is simply not enough revenue to fully guarantee the incomes of the poor. But reason isn’t sufficient. Helplessly, I watch our Sunday Morning Club comrades raise their cards in support of the Government. Outraged, I see our Castle Street delegate vote against the instructions of her branch. Cullen’s amendment is carried: 75 votes in favour, 54 against.

Out in the foyer, Roger Douglas and David Caygill catch each other’s eye. Caygill sweeps his hand down from his shoulder, snapping his fingers in a triumphant gesture of domination.

They expected to lose in Dunedin: they have won again.

This posting is exclusive to the Bowalley Road blogsite.