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.