Tuesday 2 February 2016

"Show Me The Money!" Filling The Hole In Labour's Policy Framework.

Killer Line: In the last two elections the "Show me the money!" taunt has fatally derailed Labour's campaign. Releasing fiscal policy should never be the last thing a social-democratic party does in an election cycle - it should be the first. Convince people of the need for a more just distribution of wealth and resources, and all the rest of its programme will fall into place.
THERE’S A HOLE in Labour’s emerging policy framework – through which too little light is getting in. The party’s latest big announcement: three years of free post-school education; is a case in point. As a headline, it’s fantastic. But, Labour supporters’ euphoria is unlikely to survive the policy’s fine print. Nearly a decade will pass before the plan is fully implemented – but only if  Labour wins the 2017, 2020 and 2023 elections on the trot. It’s not quite a case of  giving something with one hand, only to snatch it back with the other – but it’s close.
And why is Labour unwilling to offer three years of free tertiary level education in its first budget? Because it’s not yet ready to adopt a social-democratic fiscal policy to pay for its social-democratic education policy. That’s the hole – and it’s a bloody dangerous one!
Does Labour really believe that it can make it to the next election without anyone noticing that it has failed to come up with a way of paying for its promises? Because if that’s the plan, then its chances of success are pretty slim. The essence of social-democracy is the redistribution of wealth. And the best way to redistribute wealth is through a comprehensive system of progressive taxation. A Labour Party unwilling to acknowledge that it intends to raise the taxes of the wealthy isn’t worthy of the name.
Labour’s reluctance to talk about fiscal policy is a strategic error. Little is to be gained, electorally, by offering the voters all manner of generous policies – like three years of free post-school education – if its opponents are left free to insinuate that Labour’s generosity is predicated on massive fiscal delinquency. The electorate will either come to believe that Labour has given no serious thought to how its promises are to be paid for – which makes it fiscally incompetent. Or, that Labour knows very well how its promises will be paid for, but is unwilling to say so before it has been safely elected – which makes it politically dishonest.
This is why it is strategically vital for Labour to set out its fiscal policies openly and honestly before releasing its key policies relating to education, health and housing. The party first needs to settle upon a revenue target, and then upon the fiscal instruments it will use to achieve it. These may include Income Tax, Land Tax, Inheritance Tax, Financial Transactions Tax, Carbon Tax, as well as a much stricter regime for extracting an appropriate level of taxation from New Zealand’s largest businesses.
Unquestionably, making the case for progressive taxation is the most challenging task faced by any left-wing political party. But unless it is done, everything else that it seeks to achieve becomes moot. “Show me the money!” was the taunt which sank Labour’s chances in the last two election campaigns. Had Labour’s leaders been able to respond, with a wicked grin: “Well, John, as a man with $55 million in the bank, you’ll be among the first to show us the money!” Key’s taunt could have been turned against him.
Of course Labour’s enemies will accuse the party of practicing the politics of envy – but this old taunt can also be turned back upon its authors.
“If you’re talking about the poor envying the security of the rich: the certainty that bills can be paid; food afforded; a roof put over their children’s heads; then, yes, of course they envy them. And if Labour’s determination to extend that basic security to everyone is what you mean by the politics of envy – then we plead guilty-as-charged. But if you’re accusing Labour voters of envying those who lack any semblance of empathy, solidarity and generosity towards their fellow citizens, and who see in money and material possessions the be-all and end-all of human existence, then you are dead wrong. For Labour voters do not envy such New Zealanders – they pity them.”
The power of social-democratic politics lies in its refusal to allow the parties of the Right to escape the question that is so often put to the parties of the Left. “Where’s the money coming from?” The Right wagers everything on the ordinary voter not understanding the causal relationship between his or her own straightened circumstances and the ease and comfort of the rich. That’s why it is Labour’s political duty to point out the gaping hole in the Right’s policy framework. Namely, that the wealth accumulated by the rich comes from the people, whose hard work created it, and to whom it is only right and proper that a fair share be returned.
This essay was originally posted on The Daily Blog of Monday, 1 February 2016.


Hi Vis. said...

The disloyalty shown by Clark and Goff to their Party and to the mandate given to them might be the type of behaviour that leads to their demise in their quest for " top jobs ". The Rt.Hon Andrew Little should be wielding the sword at " the Gordian Knot " which is tied to the ' rotten barge '. He should be and may well yet be the man for the " working families ". Goff should have been sacked from the Labour Caucus in my opinion.

Anonymous said...

I am a labourite but not with the "king and country" idealism to them that labour seems to expect from their supporters.
Labour have made serious and deep errors in their initial responses to the TPPA, their "some parts accept to some parts reject" confused most people who have taken an interest on this matter.
Now they say reject, without proviso, but getting them to that position has taken weeks of obfuscation and just plain silliness from Andrew Little and his pals in caucus.
John Minto and yourself have pointed out that for the 'free tertiary' to be implemented Labour must win three election cycles, it could happen but the chances are against it happening.
I believe all supporters of Labour and the people of New Zealand are being sold a 'deception' in place of a real achievable policy so that Labour may get some rise in polling.
Most people have not and will not forget Labours initial dogs breakfast of policy on the TPPA.
They may go up in the polls but they do not deserve to: "three election cycles" ?????. Don't they have respect for New Zealander's. Charlatans!!!!!!.

Brendon Harre said...

What is it with utopians Chris? Why do you make an enemy out of the good because it is not perfect? Why do utopians keep trying to force NZ into this dichotomy where the only choice is the ideological extremes. It is either Jim Anderton or Roger Douglas? It is either somewhere to the Right of the USA or the left of Sweden?

What is wrong with taking a few well considered steps to the left? Trying it out for size before moving again? Why the need for a mad panic one direction or the other?

Chris you can see this blinkered extremist thinking on the right, with someone like Don Brash -who just yesterday was saying Auckland/NZ would regret wasting money on the City Rail Link. There is a huge amount of evidence gathered over a long time -http://transportblog.co.nz/2016/02/01/a-brief-crl-history-in-cartoons/ -that this sort of government intervention is needed -but in Don's mind because it is not his utopia of unregulated capitalism it is wrong.

Chris does the progressive left really want to get suckered into a public conversation of ideological extremes because the good is not perfect?

What if utopia doesn't exist (at least not on this world) but there are practical moves we can make to improve this world? Better trade deals than the TPPA, Affordable Housing reforms, The Future of Work reforms, meeting our Climate Change commitments.....

David Stone said...

Hi Chris
To be kind to Andrew Little he might be having a battle with the right wing of his party on all accounts, so making coherent policy statements difficult. To be unkind he might just be a straw in the wind.
Cheers D J S

peterlepaysan said...

"The money is there- the Government just has it earmarked for tax cuts. We will use that money instead to invest in New Zealand's future."

Did that bit escape your notice?

Cedric said...

"Chris you can see this blinkered extremist thinking on the right, with someone like Don Brash -who just yesterday was saying Auckland/NZ would regret wasting money on the City Rail Link."

Don Brash may be right.

Each motorway lane can carry 1800 cars per hour efficiently at peak times. On the North Shore the dedicated bus lanes would need to carry a bus per minute, each carrying 30 people, to match private cars carrying only one person. Ever see buses on those dedicated lanes?

Driverless cars are about to be tested in Auckland.
Small pod cars (smaller than "Smart" cars) but capable of carrying 4 people.
Would a fleet of these cost more than a train?
Could they deliver passengers efficiently at a fare cost comparable to a train? Or a bus? But at a time the passengers wish to go? Safely, and quickly? Door to door?
No more expensive infrastructure for narrow inflexible corridors?
Hailed, Uber-like, from your cellphone.
Reduced inner city (and suburbs) congestion.
Reduced number of car parks, especially the "park and ride" ones.

Maybe Don Brash can see an alternative to trains that the rest of us can't yet see.

Anonymous said...

Chris, while I want to buy into this column I think you have dealt with a straw man: if the politics of envy gets raised, it is but a minor arrow in the armoury. The main propaganda wheeled out will be dressed objectively as the destruction of incentives for wealth creators (that's what trust fund babies and rent seeking capitalists are - they're all actually the lone ranger entrepreneur everyone admires, none of them inherited a business, did a management buy out or any of the other paths to wealth that involve a good measure of luck). A greek chorus of independent sounding voices will be wheeled out - economists, bankers, business people, farmers, a guy who owns a shop and works long hours. They will all threaten to leave NZ, predict capital flight, and job loses such that the very people the policy seeks to help, will be hurt by it. And that message is pretty effective, even when any Labour government would be too timid, and too smart, to implement a programme extreme enough to genuinely cause such a thing (after all despite the threats, the only thing the 39 cent tax rate under the Clark years did ... was bring in more tax, notwithstanding a chunk of tax avoidance). If only it was as easy as the politics of envy retort, but the mass of messages like the one I've outlined do seem to work for the electorate - after all, not counting the Douglas years we only had 6 years of genuine Labour governments in the fifty years to 1999! So cut Little a bit more slack on this occasion, the policy timeframe has neutralised the Nats fiscal attack line and I think you're wrong here - even if we'd all like to see it sooner (something that could always happen in Government). If they succeed the same way with their other big policy moves, they will have great big left wing policies that the electorate wants, and the Nats, well, they will finally have a problem. They won't be able to scare the horses on costings. Most likely they will have to adopt the policies instead. If that was the worst outcome - Labour still out of power, but 80% of its policies implemented in recognisable form, average NZers would be a hell of a lot better off. So me, I'm a lot more positive in this case than you are on these signs of life from Labour, and I think you have sold them short here.

Anonymous said...

Labour's biggest problem in relation to taxation is this Chris.

The voting public in general have a view that they prefer minimal taxation and more net pay for them to do with as they will rather than a Government that taxes and spends on ever increasing social programs.

It is a commonly held view (which I share) that Governments tend to be poor/inefficient spenders of tax dollars so why should they take more than is absolutely necessary?

Also they face two generations of kiwis who have grown up under the bitter medicine of 'userpays' and when faced with Labour's Santa Claus moments of 'free for everyone' they ask why shouldn't they pay - we had to.

Also around the time of the GFC in 2008 a sobering realization registered with many kiwis that a bloated Government is no answer and the end result of such is the likes of Greece/Spain etc.

Regardless of how frustrating it must be to the Politically Pure of the left (and the right too) it is a fact that if your policies do not appeal to a majority of voters you will never attain to Government.

If Labour has not learnt this most basic lesson after 8 years in the wilderness then they are very slow learners indeed.


Brendon Harre said...

Cedric -You should try your facts and figures on Transportblog. You would be laughed off the site. The reality is public transport -buses, trams, trains are much more space efficient than single occupant vehicles. If the North Shore did not have the Northern Bus Expressway carrying as many travelers as 3 or 4 motorway lanes then a new bridge and wider motorways would have been inevitable. At considerable expense to the taxpayer.

Don Brash is a minister's son and seems to favour stories which end in the utopia of the promised land. A big component of this utopian thinking is the disconnect with rational thought or even common sense. Driverless cars is just this generations' version of flying cars. Driverless cars face massive hurdles and if/when they overcome this, their effect on something as complicated as urban transport is hard to predict. Believing that driverless cars will solve our transport problems is currently an act of faith not science.

I will give you a bet Cedric that in 6 to 7 years time (Don Brash's act of faith timeframe) more people will be using the newly opened City Rail Link than use driverless cars.

Cedric and Chris give me small but achievable practical steps in the progressive direction rather than big but unachievable dreams.

Brendon Harre said...

Cedric there is an new article on driverless cars on Transportblog -Titled -"Transport Technologies part 2" -they are waiting for your wisdom. But be prepared -they use some big words like -economies of density and optimism bias. Also statements of faith don't go down well on the site -you need to prove your argument.

greywarbler said...

Brendon Harre at 13.45 -
Chris does the progressive left really want to get suckered into a public conversation of ideological extremes because the good is not perfect?

Exactly. Excellent, question and actually pivotal? Go for broke on something because that is the answer, and when it doesn't work out, lose any credibility that progressive ideas had. The public eschews them. That sounds like a word that a religious minister might use! And the public think what's that, what odd idea is being discussed?

Labour would get interest and approval if they came up with say six ideas they would concentrate on (Helen had a promise card with a number of policy areas didn't she?), and explain that they all needed urgent attention. Then outline each solution's actions to be aimed at immediate improvements but building a framework for ongoing action to build permanent better outcomes. Explain the objective and the methods, and why they were worth spending money on, as they would ensure the best outcomes.

Also invite people to comment on how Labour could improve delivery, what other matters were worrying people and have short chat forums closed after say seven days, that were moderated, no snide remarks allowed. Someone on TS was complaining about Labour web accessability, so even that's a primary step Labour would have to take to advance the model I have referred to here.

Brendon Harre said...

Cedric let google be your friend -don't just make numbers up from the top of your head. A quick check around the internet would have shown that dedicated bus lanes have a maximum carrying capacity well in excess of motorway lanes.


The space advantages of well designed public transport means that all over the world public transport systems have been expanding.

It is not clear if driverless cars will (if/when we get them) complement or substitute these well designed public transport infrastructures.

Anonymous said...

Chris, I think some of you commentators have got a tad off the point, non-the-less I have read and found all viewpoints interesting.
There is still goodwill towards Labour and they will probably get a boost in their polling. I applaud.
I guess the 'future of work' will be the next rabbit out of the hat, late November is far away, we need something in the interim.
What about trick cycling,a card trick, sawing someone in half, clowns or the alternative of pragmatic achievable policy presented without the dreaded 'bob each-way' adventurism.
Labour must choose, the show must go on, the polls are relentless.
It is early but I am starting to think we may have an election on our hands.

Anonymous said...

Where is the media attention on the TPPA Chris.

It is a frigging sell-0ut and a beytrayal of New Zealanders and what is best for us.
Where is the outrage? So much silence. Thank goodness there is a God. TPPA is utter madness and joe bloggs Kiwi just gets ignored and trampled on. It's certainly a kind of treason.

manfred said...

Driverless cars clog up roads too. And trains are way faster than buses. Greater capacity too.

Bushbaptist said...

Very apt with the conversations here:


greywarbler said...

Adding to Bushbaptists homage to transport woes, loss of services, humour and buses, I add the daring duo singing The Slow Train. They linger longingly over the old remembered station names. We too have lost many, but we still have Taumarunui don't we. Don't we?

And for pudding, There's a Hole in my Budget.