THE BRIEFINGS TO INCOMING MINISTERS (BIMs) have laid bare
the accumulated failures of nine years of National Party Government. In sector
after sector senior civil servants paint a grim picture of incompetence and
neglect. The clear message which emerges from this sorry record is that New
Zealand has been the victim of a nine-year austerity programme that nobody –
other than the poor – seems to have noticed. Taken together, the BIMs offer
stark proof of just how deep the class divisions in this country now run.
The veteran political journalist, Richard Harman, puts it
like this: “What the Government is confronting is two separate pressures on its
spending – one deferred spending from the austerity imposed by the last
Government as a response to the GFC in 2008 and a new force in the form of a
rapidly growing, ethnically diverse population.”
One of the reasons the three parties making up the present
government were able to secure the votes necessary to win power was because the
National-led Government was no longer able to confine the effects of its
austerity programme to the poorest – and brownest – working-class communities.
The effects of prolonged underfunding were beginning to be felt in New
Zealand’s leafy suburbs as well as in its meanest streets. More and more people
shared in the common agreement that something must be done.
An understanding that a great deal more money would have to
be raised and spent, should have been at the heart of that agreement – and
Labour should have been the party that put it there, imbuing it with the moral
and intellectual force required to overcome the Right’s inevitable resistance.
This had been the strategy of the Labour Party in the early 1930s, and it
succeeded brilliantly. Labour took power in 1935 with a comprehensive and
progressive manifesto, backed by the irresistible weight of an informed and
impatient public.
Sadly, this was not the case in 2017.
Rather than build a broad consensus around the need for a
substantial increase in public expenditure, funded by an equally large increase
in taxation, Labour set out to convince voters of the exact opposite. No
increase in personal income tax contributions were necessary, they were told,
not even from the very wealthy. Corporate taxation, similarly, would not need
to rise. The rate of the Goods and Services Tax could remain fixed at 15
percent. There would be no Capital Gains Tax, Land Tax or Inheritance Tax.
Labour was at pains to let people know that it intended to cleave faithfully to
the broad fiscal and economic settings bequeathed to it by the outgoing
National Government. Gusts of rhetorical stardust notwithstanding, the new
Finance Minister, Grant Robertson, was determined to run a tight fiscal ship.
In essence, Robertson’s strategy was the same as Steven
Joyce’s, his predecessor: keep the middle-classes happy. National had done it
with rock-bottom interest-rates, and by allowing the value of their personal
assets to soar. Labour hoped to keep them happy with promises of free tertiary
education and affordable homes for their kids; decent pay raises for teachers,
nurses, hospital doctors and civil servants; and the gradual upgrading of New
Zealand’s ailing infrastructure as and when finances permitted. For the
working-class and beneficiaries there would be lots of smiles and hugs – and
bugger-all else.
But, as Harman puts it on Politik: “There is a subtle but
strong message running through the Briefings to Incoming Ministers […] which
comes near to putting a price that the Government is going to have to pay to
implement its promises.”
Unsurprisingly, given the neoliberal predilections of senior
Treasury officials, the price envisaged is a capitulation to the idea of
opening-up the renovation of New Zealand’s public services and infrastructure
to private investors. Robertson’s principal advisers are steering him, very
quietly, in the direction of Public-Private-Partnerships. In this they will be
greatly assisted by Robertson’s personal aversion to unorthodox economic ideas,
and by his determination to stay within the bounds of his “Budget
Responsibility Rules”.
No matter that New Zealand is short 75,000 houses, or that
700,000 Kiwis cannot be sure of the purity of their drinking water. Too bad
that there aren’t enough beds for the mentally ill, and that the prisons are
full-to-overflowing. Unfortunate that our courts are so under-resourced that
justice is being denied by trial delays of up to 18 months. Labour will
continue to resist the rising clamour for increased spending via the tax rises
essential to the maintenance of a civilised society.
The grim picture painted in the BIMs is the consequence of
National’s class-driven programme of austerity. Labour’s seeming helplessness
in the face of the multiple crises they reveal, is the direct consequence of
its refusal to accept that the wounds of austerity can only be healed by
applying the sovereign remedy of substantial increases in state spending –
facilitated by a radical expansion of the tax base.
This essay was
originally posted on The Daily Blog
and Bowalley Road of Saturday, 9
December 2017.
