Saturday 17 May 2014

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.


Guerilla Surgeon said...

I'm still pretty well convinced that governments lose elections rather than oppositions win them. And I'm still inclined to the opinion that these things are cyclical. Still, give me some actual evidence and I might change my mind :-).

Scouser said...

On a slight skew from this article but I think related - this is how I believe proportional representation should work - it should prevent excesses and lead to mixed policies from an ideological perspective. That's true democracy. We aren't one 'flavour'. The large swings in behaviour under FPP are quite damaging in the long run no matter whose ideology you believe in.

In this case it comes from the pragmatism of National, which, in contrast to the increasingly ideological face Labour is presenting to the electorate, fits well with the Kiwi pragmatic psyche.

Labour, under Clark, displayed similar pragmatic qualities and then slowly pushed the environment towards one Labour believed was appropriate over 9 years. Key is using a similar approach.

Kat said...

Key is merrily dangling carrots before the greedy middle class 10% that can be counted on to swing in behind.

Those carrots are designed to produce the rabbit from the hat, adorned with the National party ribbon, on September 20th.

The NZ electorate is now akin to an audience at a game show. The MSM provide the usherettes and the refreshments.

jh said...

I think this piece by Dr Greg Clydesdale explains what is happening, after all national is now vulnerable on housing and immigration but Labour (and more so the Greens) are ham struck in arguing for immigration controls:
"While immigration played a key role in house inflation in the three years after 2001 (Reserve
Bank 2007), it is unknown to what extent on-going immigration continued to drive price rises.
The housing boom has meant good profits for many New Zealand companies supplying
materials and building services, but it implies investors would rather invest in their country’s
homes rather than its businesses (Bollard 2005). The high returns for property has attracted
finance and reduced the capital available for productive investment (Moody, 2006). The
consequence is investment is going in to industries with limited capacity to increase per capita
incomes. For example, real estate and building are domestically bound and do not have the
market potential of export industries. They also have less opportunity to increase productivity
through new processes and products. The irony is, as these sectors grow, they have incurred
skills shortages which in turn has increased demand for skilled immigrants. The Department
of Statistics ‘Long Term Skill Shortage List’ of 28/3/2006 includes carpenter/joiner, plumber,
electricians, fitter and turners, fitter welders; all indicative of a nation building its
construction/property sector.
There is a danger that a sector of the economy is being augmented that is totally reliant on a
small domestic economy. Not only do these industries have limited potential for per-capita
growth but ‘deriving growth via factor inputs such as labour places pressure on infrastructure
such as transport and land supply, and ultimately have a further negative impact on growth
(ARC 2005). Finally, as the sector gets larger, it gains in lobbying/political strength and can
lobby for immigration regardless if it is the best interests of the economy as a whole. This
could be seen in Canada where the development industry has lobbied hard for high sustained
immigration levels (Ley and Tutchener 2001). "
Dr Greg Clydesdale
Growing Pains
Someone on Kiwiblog commented that John Key would be a fantastic poker player.

Bogusnews said...

I don't think the evidence shows National is vulnerable on the housing issue. After all, why would you go with Labour when house price went up 96% on their watch and interest rates were 10.9% ?

And the picture painted in the article of National's mates being in the warm room and everyone else out in the cold is also inaccurate. Haven't we read the figures showing how Maori and polynesian's were hurtling into bankruptcy under Labour?

Kat said...


Key "is" a poker player and has been “on a roll”.

As with many poker players who just start playing by their instincts, Key has done well.

However, once poker players suffer some bad results and start trying to rethink their game they go into a slump.

The six kid budget seems to suggest a rethink, albeit cynical, of Keys game plan.

Davo Stevens said...

Billy's budget was a non-event really. Plenty of carrots for the future to buy votes.

Cunliffe is moving Labour in a different direction than Helen's bunch but it remains to be seen if the new course in a different direction or just a parallel.

Guerilla Surgeon said...

My previous comment seems to have disappeared into the ether, so I'll try again. I'm still of the opinion that there is some sort of electoral cycle – or rather an election cycle, and that governments tend to outlive their popularity after maybe 3 terms. Perhaps personalities have an effect, particularly today, but I would still like to see some evidence that for instance - it took big Norman Kirk to overthrow the national government of the time. I mean I'm not even sure Helen Clark had a public personality, except perhaps a school ma'am type of thing, yet she was one of the most successful prime ministers with ever had, and started out with a very low popularity rating just before she became Prime Minister. So let's see what you got :-).

jh said...

“‘As diversity increases, democracy weakens. Faith in democracy declines when people see they cannot make a difference., and mass immigration, a policy clearly and consistently opposed by most people and yet which no mainstream politician will speak against, has shaken the public’s trust in politics. Since politicians will not listen to people’s concerns, they come to the conclusion that politics is pointless’.”

Davo Stevens said...

Yep Surgeon. After three terms a Govt. starts to look a bit jaded. People look for a change no matter how successful their policies may be.

Jigsaw said...

When was there ever a budget that wasn't political?