Running Us Off The Rails.

Crossing Cancelled: The decision to pull the plug on the IRex project was one of the earliest – and stupidest – decisions New Zealand’s new conservative coalition government would make in the first year of its parliamentary term. And that stupidity was only compounded as the year wore on.

LET’S BEGIN WITH THE FERRIES. The decision to pull the plug on the IRex project was one of the earliest – and stupidest – decisions New Zealand’s new conservative coalition government would make in the first year of its parliamentary term. And that stupidity was only compounded as the year wore on.

What began as a pour encourager les autres moment – driven by National’s determination to show the country it was serious about cutting public spending – has turned into an administrative and fiscal calamity. The Finance Minister has exposed herself as an economic cretin. The Coalition partners have proved themselves incapable of agreeing on anything even vaguely resembling a coherent response to the consequences of their own folly. While the long-suffering taxpayer, whose relief from a succession of infrastructure budget blow-outs served as the pretext for Willis’s ill-fated intervention, is beginning to understand that the ultimate cost of canning the iRex Project is likely to exceed, by some margin, the cost of allowing it to proceed.

Largely unexplored (or should that be downplayed?) by those covering the ferries debacle is the not inconsiderable problem of New Zealand’s commercial reputation. This country signed a half-billion-dollar contract with Hyundai Mipo Dockyard (HMD) the South Korean shipbuilders, for two state-of-the-art rail-enabled ferries. This was a bargain-basement price, for which KiwiRail’s negotiators should have been congratulated, not condemned.

In her fatuous accusation that KiwiRail had irresponsibly opted for a Ferrari instead of a Toyota, Willis got it precisely back-to-front. What New Zealand had actually secured were a couple of Ferrari-standard ferries – at a Toyota price.

In unilaterally tearing-up KiwiRail’s money-saving contract, Finance Minister Willis has signalled to the world that New Zealand’s signature on an agreement means nothing. No one living in the world’s grown-up countries will accept the excuse that this was not a government deal. KiwiRail is a state-owned enterprise: the clue to who stands behind it is in the name. That the government of this country can no longer be trusted to keep its word should be a cause for much greater public concern than has been demonstrated to date.

New Zealand will pay a high price for pulling out of this deal – just as it did 64 years ago when the Second National Government tore up the contract its Labour predecessor had signed with British and American interests to establish a large cotton mill outside Nelson. The current estimate for HMD’s break-fee is around half-a-billion dollars, meaning that, by the time this sorry saga ends, New Zealand will likely be left dangling on the hook for something close to a billion dollars – with nothing whatsoever to show for it. And it still has to replace KiwiRail’s aging fleet of ferries and upgrade the portside infrastructure required to support their replacements.

It is worth pausing here to contemplate the fact that pollsters repeatedly report New Zealanders reposing much more faith in National’s ability to manage the economy than they do in Labour’s. But when was the last time Labour tore up a commercial contract with New Zealand’s name on it? When was the last time Labour arrogated to itself the extraordinary powers of the Coalition Government’s “fast-track” legislation?

These are not the actions of serious people. Indeed, the last time economic decisions were fast-tracked in the manner favoured by Associate Minister of Finance Chris Bishop, was back in 1982, and the fast-tracker involved was Robert Muldoon.

This was the very same Robert Muldoon who, as one of a group of freshmen back-benchers calling themselves the “Young Turks”, was principally responsible for inducing Keith Holyoake’s government to tear-up the contract for the aforementioned Nelson cotton mill back in 1961. Though it’s hard to believe, Muldoon’s need for fast-track legislation in 1982 was born out of the exigencies of his government’s “Think Big” projects – an industrial development strategy stolen directly from the second Labour Government’s import substitution programme of 1957-60. A programme which had included – you guessed it! – a cotton mill situated outside Nelson.

When it comes to economic management, National should not be taken seriously.

Serious economic managers do not expose themselves to the accusation that in making critical economic decisions – like safeguarding and future-proofing New Zealand’s inter-island maritime transport services – they allowed themselves to be swayed by the arguments of the road transport lobby.

The trucking companies are in direct competition with KiwiRail and will welcome the demise of a rail-enabled inter-island ferry service. For the road transport lobby, the canning of the iRex Project thus represents a significant commercial and political victory. Unfortunately, it comes with potentially devastating consequences for New Zealand’s rail transportation system in general, and KiwiRail in particular.

Not that the National Party needs very much persuading to place the interests of road users above rail users. Arising out of an unedifying blend of ideological and psychological impulses, National’s hatred of rail has driven its transport policies for the best part of a century.

By its very nature, rail transport confers benefits that are primarily public, rather than private. Trains are vastly more efficient at moving large quantities of goods than trucks. That this fact is so often obscured by the road transport lobby is because the latter are so very good at hiding what economists call “externalities”.

To be even remotely as efficient as trains, trucks need to be huge. This forces them to use vast quantities of fossil fuel and causes them to chew up the nation’s road surfaces. Their size and weight also makes them extremely challenging for other road users. The trucking companies argue that the cost of these adverse externalities are met by road user charges. While partly accurate, the larger truth remains that road user charges would not be necessary if the nation’s principal freight burden was carried by its much cheaper, safer, and more climate-friendly rail network.

To offer themselves as the more efficient freight option, road transport operators need the rail network to present a public face that is anything but. From the moment the road transport industry began to be deregulated in the 1970s, its promoters have made it their business to persuade the National Party to starve the railway network of investment, and connive in its decay to the point where people dismiss it as a “nineteenth century technology” – irrelevant to the twenty-first.

They were pushing on an open door. From an ideological perspective, the automobile is the quintessential capitalist artifact. It further freed the individual from the limitations of the horse, and continues to liberate him from the enforced collectivism of public transportation. Indeed, it is difficult to imagine capitalism developing in the way it has without the automobile. As the world attempts to mitigate and adapt to global warming, the central role played by the industries that keep our cars on the roads acquires an ever-sharper focus. Curbing the automobile means curbing capitalism.

Cue New Zealand’s Transport Minister, Simeon Brown. His love affair with cars, cars, cars, and the roads, roads, roads they run on, borders on the monomaniacal. Like a little boy varoom, varoom, varooming on the carpet with his toy cars and trucks, Brown demonstrates with particular force the automobile’s symbiotic relationship with the human male’s hunger for power and control.

No real man lets another human-being drive him anywhere, or allows himself to be restrained by petty rules and ridiculous speed-limits. That socialists and their Green doppelgangers prefer trains, trams, busses, ferries and, God help us, bicycles, comes as no surprise to Simeon. Defending capitalism, and allowing citizens to drive really-really-fast, are pretty much the same thing to him.

The ferries debacle, like so many others, arises out of the forty-year worldwide failure of governments to spend the large sums of money needed to keep the capitalist economy they prize so highly functioning smoothly. This failure is driven by the sheer cost of modern infrastructure and the all-too-evident inability of private companies to make the supply of collective goods return a reliable profit. This is a particularly irksome failing, not least because it turns infrastructure maintenance and supply into a core public responsibility, to be paid for out of the public purse and, given the cost of modern infrastructure, higher taxes.

Which brings us back to where this discussion began. A year ago, Nicola Willis, fresh from the hustings, was determined to deliver her party’s promised tax cuts. But, the cost of the infrastructure needed to ensure an effective and efficient inter-island passenger and freight service for the next 50 years made those tax-cuts an economic and fiscal non-starter. Unlike her conservative predecessors, however, Willis refused to acknowledge the reality that not only is taxation the price that we pay for civilisation, but also for an economy that works.

What did Willis do? Unwilling to abandon her fiscally reckless promises, Nicola chose instead to do what the Nats have always done – run the country off the rails

This essay was originally posted on The Democracy Project/From The Left of Friday, 13 December 2024.

In Search Of Unity.

Kotahitanga: New Zealand’s future belongs to those who do not fear a nation carved out of unity and solidarity, and are willing to trust the carvers. Some New Zealanders will be required to step up, and others, perhaps for the first time in their lives, will be expected to step back.

BUDGET WEEK has thrown up two very different examples of political representation. In the House of Representatives what we have witnessed is the intentionally divisive squaring-off of Government and Opposition. Unity is not a realistic possibility under our system of representative democracy.

On the streets, however, New Zealanders have witnessed something very different. On the streets, the call from one of the largest indigenous minorities on earth (approximately 20 percent of the population) has been for “Kotahitanga” – unity. What’s more, among those for whom indigeneity constitutes the core of their identity, that unity is not only possible – it is likely.

What is it that causes peoples raised in the traditions of representative democracy to accept disunity? The most optimistic answer is that what many critics condemn as disunity isn’t disunity at all. The debates in Parliament, according to the optimists, are intended to improve the legislative process by requiring the governing majority to test its policies against the objections and/or proposed alternatives of the minority. What some perceive as petty squabbles are, by this reckoning, vital contributors to a much broader and more important unity – that of the citizenry’s faith and trust in the democratic system.

That’s the theory, anyway. But it is by no means certain that a majority of citizens are disposed to accept it. Many people find representative democracy’s angry parliamentary exchanges unedifying – to the point of being disgraceful. Many blame the party system for fostering and perpetuating socio-political divisions. They find it difficult to believe that ordinary, decent, citizens would not, given half-a-chance, coalesce naturally around a programme dedicated to the public good. Their instincts tell them that a political system which deliberately divides the nation is a liability, not an asset.

In the context of New Zealand’s democratic traditions, a cynic might point to the fact that between the mid-1850s and the mid-1870s – the period when the spirit of party and faction was suppressed by a franchise limited to Pakeha male property-owners (joined, after 1867, by four Māori Members of Parliament) – the spirit of unity was much more in evidence. Property-owners do, after all, share a unifying inclination to protect what they own from any political movement disposed to redistribute it among those who own next-to-nothing.

By the 1870s, the gravest threat posed to the “private” property of Pakeha New Zealanders was from dispossessed hapu and iwi. Indeed, nothing is more likely to create unity among Pakeha than the prospect of Māori coming together, under the aegis of the Treaty of Waitangi, to reclaim the collective property which the Pakeha, largely by virtue of controlling the Legislature, had empowered themselves to seize. It is no accident that the class antagonisms that would shape New Zealand for the next 100 years did not emerge as a significant historical driver until the Māori had been stripped of the power to defend their resources.

So, if our political system is, fundamentally, a process driven by the see-sawing struggle between those who own a disproportionate amount of property, and those who seek an equitable portion of the life-chances such ownership confers, then is the realisation of social and political unity a goal restricted to soft-headed idealists and hard-hearted revolutionaries?

As is her wont, the Goddess of History offers no easy or comforting answers. She will tell you that social and political unity is possible, but only when a nation is threatened with subjugation and/or annihilation. When an enemy threatens to destroy all that a people holds dear, then all other quarrels are momentarily, at least, set aside.

To the crowd assembled outside his royal palace on 1 August 1914, as war loomed over Europe, the German Kaiser, Wilhelm II, declared:

“I thank you from the bottom of my heart for the expression of your loyalty and your esteem. When it comes to war, all parties cease and we are all brothers.”

In New Zealand, too, the unity generated by the outbreak of the First World War brought Government and Opposition together in a coalition that would last until 1919. Something very similar happened at the outbreak of the Second World War in 1939. And, although the global Covid-19 Pandemic did not inspire a coalition government, it certainly produced a high level of political co-operation between all the political parties. Economic measures that would normally have engendered bitter opposition were introduced quickly, and largely without rancour.

How far away that crisis-induced unity seemed on Thursday, 30 May 2024 when Nicola Willis delivered her first budget to the House of Representatives. Those controlling a disproportionate amount of the nation’s wealth would have been well-satisfied with the economic and social policies of the conservative coalition government. Those whose life-chances were being limited by those same policies looked to the opposition parties for succour. Very soon, all the ideological binaries were on display.

When it came to solving New Zealand’s problems, division and rancour were more in evidence on the floor of the House than unity and solidarity.

Not so on the streets, or in Parliament Grounds. There it was all unity and solidarity. Under the aegis of Te Tiriti, Māori from all over Aotearoa had gathered in defence of everything they hold dear: their language, their mana, and the rights guaranteed to them 184 years ago at Waitangi. In the eyes of those thousands of marchers, the Pakeha colonisers are, once again, making war on their people, and, once again, the spirit of Kotahitanga is breathing upon the flames in the flax-roots.

On display across New Zealand on Thursday, 30 May 2024 was an indigenous people that still has faith in itself, and continues to believe that its hopes are not vain.

How different is the picture inside the Pakeha nation. There, the National Party, Act, and NZ First have thrown up a defensive palisade around the interests that elected them. Labour, the Greens and Te Pati Māori, far from walking forth gladly to find, in the words of James K. Baxter, “the angry poor who are my nation”, keep faith only with the thin social strata that long ago reconciled itself to the administration of a system it does not control, and will never own.

New Zealand’s future belongs to those who do not fear a nation carved out of unity and solidarity, and are willing to trust the carvers. Some New Zealanders will be required to step up, and others, perhaps for the first time in their lives, will be expected to step back.

This essay was originally posted on the Interest.co.nz website on Monday, 3 June 2024.

This Unreasonable Government.

Losing The Room: One can only speculate about what has persuaded the Coalition Government that it will pay no electoral price for unreasonably pushing ahead with policies that are so clearly against the national interest. They seem quite oblivious to the risk that by doing so they will convince an increasing number of voters that they are extremists.

ONE OF THE MOST PERPLEXING ASPECTS of the National-Act-NZ First coalition government is its perverse unreasonableness. Perverse, because in almost every instance the unreasonable nature of the Coalition’s policies generate reactions that can only be politically counterproductive to its chances of re-election.

Politicians can be radical, or reactionary, it matters little, just so long as they can a make a reasonable case for their intended course of action. A reasonable policy not only stands a good chance of being implemented, it is also likely to be well received by the electorate. If, over the course of its three year term, a government’s actions strike most voters as consistently unreasonable, then its chances of being re-elected will lessen considerably.

What makes a policy reasonable in the eyes of the ordinary voter? Principally, it is the quality of the evidence presented in its favour. If a policy is endorsed by persons with a reasonable claim to being experts, or, at the very least, by people with a long history of being right about the subject under discussion, then its chances of being accepted are high. The more questionable the credentials of those making the government’s case, however, the less faith the public is likely to place in its policies.

Public faith in government policy will dissipate even more rapidly if the only people or organisations to speak up in its favour are those with a clear vested interest in seeing it implemented. The moment the “evidence” of any given policy’s supporters provokes the ordinary voter to respond “Well, they would say that, wouldn’t they?”, then the policy is in serious trouble.

But being in trouble is not the same as being rejected. A government absolutely determined to forge ahead has the power to implement policies that are unsupported by scientific evidence, expert opinion, common sense, or even a majority of the electorate. By doing so, however, the parties responsible not only expose themselves as being unreasonable, but they may also come across as potentially dangerous.

They remind voters of the intoxicated individual who, in the face of abundant evidence to the contrary, insists that s/he is sober enough to drive home. It’s not just the drunk people worry about, but the possibility that, if s/he gets behind the wheel, then a perfectly innocent person, or persons, may be seriously injured or killed. Unfortunately it’s not as easy to take the keys away from a government as it is to take the keys away from a drunk. Voters may be forced to wait three years, or more, before they can get a government intoxicated by its own unchallengeable authority off the road.

On the subject of roads: car-lovers and the Coalition would appear to be locked in what more and more New Zealanders perceive to be a particularly worrying example of political folie à deux. The Transport Minister, Simeon Brown, unmoved by scientific evidence, expert opinion, common sense, and what is fast approaching a majority of the electorate, is prioritising the construction of more and more “highways of national significance”. His decisions, by favouring road users (and the road haulage lobby) at the expense of New Zealand’s rail network, can only further impede New Zealand’s efforts to meet its Climate Change commitments.

One can only speculate about what it is that persuades the three coalition parties that they will pay no electoral price for unreasonably pushing ahead with policies that are so clearly against the national interest. They seem quite oblivious to the risk that by doing so they will convince an increasing number of voters that they are extremists.

Only extremists are so convinced of the rightness of their cause that no argument, no matter how rational and well-supported by evidence, is permitted to prevail against it.

Only extremists would consider passing a law that allows one of three Ministers of the Crown to over-rule the previous judgements of the courts, the recommendations of expert witnesses, the advice of his/her own carefully chosen advisory panel, and the clearly expressed wishes of affected locals, if they run counter to the Ministers’ preferred solutions.

The last time a right-wing government passed such a law, the author and some comrades, under cover of darkness, chained together and padlocked the doors of the Dunedin Law Courts, on the grounds that Rob Muldoon’s “Clutha Development (Clyde Dam) Empowerment Act” (1982) had just made them irrelevant to the conduct of public affairs.

That same Rob Muldoon would spend the next two years over-ruling virtually every institution dedicated to advising the government of the day on the state of the New Zealand economy, and how best it might be served by the decisions of its ministers. By mid-1984, unable to bring together a budget that added-up, Muldoon called a snap-election. New Zealand would never be the same.

Forty years later, another Finance Minister, against the advice of just about every reputable economist and responsible interest-group in the country, is proceeding with the Coalition’s promise to cut personal income tax. The consequences of this Muldoonesque intransigence are already apparent in public sector lay-offs, health sector cut-backs, and social-welfare sanctions. Not even the latest report from the OECD, which not only recommends against tax-cuts, but actually advocates for a Capital Gains Tax, carries sufficient weight to persuade Finance Minister Nicola Willis to see sense and act reasonably.

An unwillingness to be advised. Turning a deaf ear to ideas that challenge one’s prejudices. Insisting upon following a course of action that is more likely than not to result in unnecessary and avoidable harm to people, animals, and/or the natural environment. Starting down a road that seems to be leading to disaster, but refusing to turn back. These are not the actions of reasonable human-beings. On the contrary, they are the actions of the individuals, parties, and even the nation states, that have dragged humanity into it worst catastrophes.

Barely six months into its three-year term, the Coalition Government of Christopher Luxon cannot avoid the charge that it is manifesting all the self-destructive behaviour listed above. In circumstances where good ideas, no matter their provenance, should be given a fair hearing. Where concessions and compromises aimed at achieving consensus are more than ever necessary to steer the New Zealand ship-of-state through what Leonard Cohen called “the reefs of greed”, and “the squalls of hate”, we are given only the jutting chins of men and women who will not be told.

This essay was originally posted on The Democracy Project Substack site on Monday, 13 May 2024.

The Greater Of Two Evils.

Not Labour: If you’re out to punish the government you once loved, then the last thing you need is to be shown evidence that the opposition parties are much, much worse.

THE GREATEST VIRTUE of being the Opposition is not being the Government. Only very rarely is an opposition party elected on the strength of its manifesto. In the usual course of events, most voters don’t pay all that much attention to what the opposition parties are offering. Providing they present policies which convey at least the appearance of coherence, the electorate generally refrains from asking too many questions. After all, what they’re seeking is the defeat and humiliation of the party/parties which have so recklessly squandered their trust – and their faith. If you’re out to punish the government you once loved, then the last thing you need is to be shown evidence that the opposition parties are much, much worse.

One of the odd aspects of the 2023 General Election campaign is how little real effort the governing Labour Party has put into convincing voters that the National and Act parties are actually planning to hurt them. Labour knows this because it is also planning to hurt the voters. Not as much, admittedly, as the Right, but pretty badly nonetheless.

The Finance Minister, Grant Robertson, alerted by his Treasury advisers, has already announced a multi-billion-dollar reduction in state spending over the next three years. In this he has little choice – not after his leader unilaterally ruled-out any new or significantly increased taxes. Robertson is, thus, acutely aware that even minimal reductions in taxes must be answered by savage cuts in spending. He knows that National’s promised tax-cuts can only be paid for by imposing an austerity programme even more ruthless than his own.

That being the case, Labour’s supporters are entirely justified in expecting both Robertson, and the Prime Minister, Chris Hipkins, to go for National’s jugular – and rip it right out.

In the first Leaders’ Debate, for example, as Luxon was trotting out his usual platitudes and slogans extolling – but not verifying with even the most rudimentary computations – National’s tax-cuts, why didn’t Hipkins just interrupt him, in a voice of cold command:

“Stop lying to the New Zealand people, Mr Luxon! If there was even a shred of truth attached to these nonsensical figures, you wouldn’t hesitate to prove it by releasing the evidential basis for your claims. Your refusal to do so proves that you are lying about the affordability of your tax-cuts. New Zealanders deserve better than a liar for their prime minister, Mr Luxon!”

Luxon would have expostulated that he was not lying, and demanded a retraction and an apology. At which point, Hipkins could have responded by saying:

“You say you are not lying, Mr Luxon, and you demand an apology. Well, you shall have it, Mr Luxon, and gladly, if, by the time of the next Leaders’ Debate, you have released your party’s computations for the nation’s economists to peruse, and if, having perused them, the consensus view of the experts is that your tax policy is both sound and affordable. Let us have the numbers, Mr Luxon. Let us have the proof. And if your claims are vindicated, then, most certainly, I will withdraw and apologise. And yet, something tells me that you won’t be presenting us with the truth, and I will not be apologising.”

Can you imagine how utterly confounded poor Jessica Much McKay would have been by such an answer? How effortlessly, it would have handed the advantage to Hipkins? How humiliated Luxon would have felt – and how impossible it would have been for him to hide his humiliation? It would have been Hipkins’ “Show me the money!” moment, and with it he would have won the debate – and, quite possibly, the election.

Except, of course, that is not what we saw, was it? What we saw was two politicians who seemed to agree, more than they disagreed, with each other, and who called each other by their first names, like old mates. What we saw was living proof of the old saying: “Why bother voting? Politicians always win.”

Effective rebuttal of the Opposition isn’t limited to the set-piece debates. Every day of the campaign, the Opposition is releasing material with which Hipkins and Robertson could have a field day.

The release of the GDP figures, for example, offered Labour the opportunity to spring a trap for the National Party’s finance spokeswoman, Nicola Willis.

The better-than-expected numbers were rightfully trumpeted by Robertson as evidence of the soundness of the Labour Government’s economic management. Predictably, Willis responded with a scathing media release:

“Labour has mismanaged and vandalised the economy on a scale unlike anything we have seen in recent history.” Thundered Willis. “Government spending is up 80 per cent - $1 billion a day more than 2017. The current account deficit is the largest in the OECD. The economy has been anything but well-managed by Labour.”

Knowing he would later be facing the cameras, Robertson could have prepared a reply for the woman who would be Finance Minister:

“Nicola Willis clearly regards the Labour Government’s management of the Covid-19 Pandemic as an economic disaster. That can only mean that she would not have taken the measures adopted by our own, and practically every other government in the Western World, to keep New Zealanders safe; to keep their jobs and businesses safe; to keep their children safe.

“If Nicola Willis had been in charge, New Zealand would not now be experiencing an inflationary surge, because she would not have authorised the Reserve Bank to create the credit needed to keep our economy from crashing in the face of the worst global pandemic for a hundred years. So, no cost-of-living crisis.

“We would, however, now be in the grip of a much greater crisis: a devastating recession, with unemployment levels not seen since the 1930s. And that wouldn’t be all. No, that wouldn’t even be half. In addition to economic devastation, New Zealanders would be facing the moral and emotional devastation of 10,000 to 15,000 Covid fatalities – a death toll greater than New Zealand’s losses in the Second World War.

“Still, New Zealand would not now be facing a record current account deficit – just a deficit of human potential, talent and wisdom. Just the aching absence of beloved family members at ten thousand Kiwi Christmas tables.

“Am I being too harsh? Are you telling me that Nicola and National would, in all probability, have done exactly what we did? Then, perhaps, you should ask her what she means, precisely, when she accuses us of mismanaging and vandalising the New Zealand economy. Is she accusing us of saving more lives than was reasonable? Is she saying that National would have allowed more people to die – for the sake of the economy?

“Perhaps you should ask Ms Willis how she can leave something as huge as the Covid-19 Pandemic out of her economic narrative? Because, frankly, the people of New Zealand have a right to know how many people saved were too many people saved?

Sadly, Labour doesn’t talk like that anymore. Somewhere, back along the track, the party lost its sense of responsibility for the people who were bound to suffer if its MPs and candidates lost interest in the contest and gave up. Somehow, they forgot that winning and holding political power is not a game of bloody beach cricket! For true democratic socialists, it is never time to give the other team a turn. Not if the other team is itching to employ body-line bowling against the weak and vulnerable in their own.

Labour’s job is to win – and keep on winning. And if, every once in a while, it loses, then its right-wing opponents should damn well know they’ve been in a fight.

POSTSCRIPT: It seems that I wasn't the only person decrying the lack of aggression in Labour's election campaign. In the second leaders' debate, broadcast on TV3 on Wednesday, 27 September 2023, Hipkins came out swinging and landed several heavy blows on a stunned Christopher Luxon. Took you long enough, Chippy! - C.T.

This essay (minus the postscript) was originally posted on The Daily Blog of Friday, 22 September 2023.

Not In It For Them.

In It For Your Votes: Political momentum comes from announcing policies (like removing GST from fruit and veges) that you already know “your people” want. Call that cynical if you want to, but it’s a helluva lot better than announcing policies your supporters don’t want (like pushing up the price of petrol).

OH DEAR, OH DEAR, OH DEAR, the political class is extremely displeased with the Labour Government. Against all responsible advice, the Prime Minister has announced the removal of GST from fresh and frozen fruit and vegetables. Who knew there were so many economists and tax lawyers in our unhappy little nation? Or that they could all become so very cross on cue? We shouldn’t be surprised, though. Not really. A state so bereft of sensible tax policy did not get that way by accident. How many economists and tax lawyers does it take to prevent a meaningful redistribution of wealth? Now we know.

And oh, what a giveaway. All these middle-class objections. All these silly, cavilling, nit-picking political journalists. None of them able to see what’s happening right in front of their upturned noses. All of them arrogantly unaware of their starring role in Chris Hipkins’ shrewd political drama. If they realised that what they are doing is exactly what Labour’s strategists want them to do, I wonder, would they go on doing it? Probably. These newshounds have heard Pavlov’s bell ring one too many times.

So, what is Chippy’s cunning plan? Why is the sound of the whole Press Gallery criticising his GST policy music to the Prime Minister’s ears? Simple really. When Labour’s electoral base hears the media pack howling down a policy aimed at helping the sort of people political journalists wouldn’t be seen dead with, then they are even more disposed to give “their” party the big thumbs up.

The same principle is at work in relation to the condemnatory commentary of the economists and tax lawyers. They’re experts, remember, extravagantly rewarded shills who think they know best. And who, these days, trusts extravagantly rewarded shills who claim to know more about your world than you do? The more the “experts” criticise Labour’s policies, the more credibility those policies acquire. To paraphrase the old pro-MMP poster: “If you want to know why you should back Labour’s GST policy, then just take a look at the people telling you not to.”

A cynical and manipulative misuse of the post-Covid zeitgeist by politicians who have lost even the memory of their moral compass? Well, duh! How else would Labour’s critics suggest it recovers the political momentum it has so clearly lost? (Thanks Stuart. Thanks Michael. Thanks Kiri.) And, no, the answer has nothing to do with releasing the sort of policy that makes old lefties like me jump to their feet and cheer. We are a wasting electoral asset – fewer of us to cheer with every passing year. No, political momentum comes from announcing policies that you already know “your people” want. Call that cynical if you want to, but it’s a helluva lot better than announcing policies your supporters don’t want.

And, sorry, but if the word from Labour’s strategists is to be trusted (a big “if” I’ll grant you!) then a wealth tax and a capital gains tax both fall into the category of policies the average Labour voter doesn’t want. Chippy and his inner circle, ably assisted no doubt by Talbot Mills, “focus-grouped” the “tax switch” put together by Grant Robertson and David Parker, and the assembled “ordinary voters” are said to have given it the big thumbs down. God knows why. But, God’s not answering his cellphone.

So, what’s a government to do? It gets sneaky, that’s what it does.

When Nicola Willis told the world that Labour was planning to take GST off fruit and vegetables, my first thought was that someone in Treasury or the IRD had leaked it. Some dyed-in-the-wool neoliberal for whom the very idea of messing with New Zealand’s “pure” goods and services tax was an abomination. Some bureaucrat who thought that by allowing National to release the information early, the Government would be warned-off the idea by the vociferously negative response. But, now, I’m not so sure. Now, I’m coming round to the idea that it was actually Labour’s campaign-team that leaked the GST policy to National.

Think about it. Robertson’s and Parker’s tax package allegedly tested badly with the punters, so Chippy issued his “Captain’s Call” and pulled the plug. But, the polling agencies reported solid support for the idea – raising the possibility that Captain Chippy had made the wrong call. With Labour still needing to make some announcement on tax, someone needed to come up with a cunning plan – and soon.

In retrospect, the plan was better than cunning – it was brilliant.

Labour leaks its GST policy to National. National denounces it. The media follows suit. The Old Left decries the initiative as too little, too late. The economists and tax lawyers join the debate. They are not impressed. It looks as if Labour is on a hiding to nothing with its GST policy.

Except, while all this is going on, Labour’s pollsters are hard at work measuring the reaction of Labour’s working-class supporters to the GST off fresh fruit and vegetables policy. No focus-groups this time, but honest-to-goodness scientific opinion sampling. And, guess what? The poll data showed Labour’s electoral base loving the policy. They were all for it. Chippy and his team were on to a winner.

More to the point, all that negativity from the Nats, Act, the news media and, of course, the “experts”, hadn’t dimmed the party’s enthusiasm. Labour voters weren’t responding with their heads, but with their hearts. As far as they were concerned, Labour was doing something to help people like themselves: people without fancy degrees and six-figure salaries; people without mortgage-free houses and tons of money in the bank; people with no reason to like or trust the pointy-heads putting the boot into Labour’s plans.

Chippy’s and Robertson’s speechwriters got it. From now on, like Donald Trump, they would “love the poorly-educated”. Now there was no need to justify Labour’s policies to the economists and the tax lawyers, no need to fear the woke media pack. So long as the Prime Minister and his Finance Minister kept reiterating that they weren’t introducing the policy to win the approval of the “purists”. So long as they insisted that they were changing the rules for the benefit of “all those people out there who are doing it hard”.

Cynical? You bet! Socialist? Don’t be silly! But, you know what? It works. The louder the political class howls its disapproval, the tighter Labour’s voters close ranks around “their” party.

Who would have thought it was so easy?

POSTSCRIPT: Easy it might have been, but, true to form, this Government refused to be guided by its own political insights. Any good that might have been done for Labour's election chances by removing GST from fruit and veges was undone completely by Hipkins' decision to add 12 cents to the price of a litre of petrol over the next three years. The consequences of this insane announcement were promptly captured by the 1News/Verian Poll released on Monday, 21 August 2023. Labour's popularity had fallen by 4 percentage points to 29 percent. That's pretty much "Game Over" for Chippy and his mates. Didn't have to be, but, as one of those Ancient Greeks put it: "Those whom the Gods seek to destroy they first make mad." And, right now, Labour is barking.  – C.T.

This essay (except for the postscript) was originally posted on The Daily Blog of Wednesday, 16 August 2023.

David Parker’s Tax Ammunition: Use It, Or Lose It.

For Pity’s Sake, Chris, Load Up! Chris Hipkins’ refusal to slip a few rounds of Parker’s ammunition into his prime-ministerial rifle and open fire on National, came as a deep disappointment to a great many of Labour’s members and supporters. Disappointment that was only compounded by his evident lack of enthusiasm for responding to the unfairness exposed in the IRD’s report with tangible tax reform.

NICOLA WILLIS, somehow managing to keep a straight face, claims to be the defender of working people. That the deputy-leader of the National Party, by no means a stupid woman, is prepared to offer up such a ludicrous proposition indicates just how deranged our politics have become. That there are working-class voters out there who will take Willis’s claim seriously should not, however, be received as proof that National has quietly embraced socialism. Rather, it should be taken as a measure of just how emphatically so many of Labour leaders have rejected it.

Not all of Labour’s leaders, however. Not while David Parker remains a member of Chris Hipkins’ Cabinet. Parker is a stern critic of economic inequality, most particularly of the way New Zealand’s tax system allows the über-rich to avoid paying their fair share of tax. For nearly two decades he has championed the introduction of a Capital Gains Tax (CGT) finding sufficient support among his own caucus colleagues and Labour’s rank-and-file to embed the policy in a succession of Labour election manifestos.

Not that this broad-based support within Labour was sufficient to propel a CGT across the line. At the summit of the party there has long been a junta of past and serving Labour leaders who invariably dismiss the whole idea of significant tax reform as electoral poison. Those members brave enough to defy this junta are subjected to the Labour eye-roll – a gesture signalling both political naivety and economic stupidity – from which its victim’s career seldom recovers.

It is worth teasing out both the causes and the consequences of the baleful Labour eye-roll. Above all else, it represents the idea that there are some policies which are simply unacceptable within the context of the neoliberal order introduced by the Fourth Labour Government and consolidated by its National Party successors.

New Zealand’s reasonably flat income tax, supplemented by its highly regressive Goods and Services Tax, is sufficient to keep the country’s no-frills welfare state coughing-and-spluttering along – but that’s all. More importantly, the filing of land, wealth, inheritance and (most especially) capital gains taxes in the “Under No Circumstances” file, makes damn sure the welfare state stays that way. More than that, New Zealand’s tax system presents no serious impediments to the steady accumulation of massive personal wealth. Nominally “progressive”, the tax system’s actual effect is to exacerbate inequality – not reduce it.

Those who position themselves as “centre-left’ on the political spectrum are supposed to know all this and, more importantly, to have come to terms with it. They are further supposed to understand that any attempt to change the arrangements that have now been in place for the best part of 40 years will, inevitably, be met with the most vicious resistance. Any politician, or political party, setting out with the intention of seriously addressing inequality – i.e. of dismantling the neoliberal status quo – are asking for the worst kind of personal and political trouble, and, most assuredly, they will find it.

All of which makes David Parker’s commissioning of the IRD’s and the Treasury’s reports into the “fairness” of New Zealand’s taxation system a decidedly subversive act. Not least because, for the first time, the New Zealand voter has been given the hard data on who gets what out of the system. The conclusions to be drawn are not exactly flattering to the very rich. If those advocating for a CGT and other redistributive tax measures may be compared to a revolutionary band hiding out in the mountains, then Parker’s reports are the equivalent of a bloody great ammunition dump!

The brute fact of these explosive reports on tax, like the brute fact of the controversial He Puapua Report, points to a Cabinet riven by powerful factions that must, somehow, be placated. Or, if placating them is not an option, bringing potentially dangerous moves to a sudden halt by issuing a “Captain’s Call”. Knowing that she could count on the support of Winston Peters, this is exactly what Prime Minister Jacinda Ardern did to prevent her own cabinet, caucus, and Green Party allies from introducing a CGT in her Government’s first term. She made it clear that a CGT would only be introduced over her dead political body.

Those who doubt this analysis should consider the recent statements of Foreign Minister Nanaia Mahuta. Questioned closely on New Zealand’s stance in relation to the AUKUS anti-China agreement linking Washington, London and Canberra, Mahuta stoutly stood by her assertion that the biggest threat facing her Pacific neighbours was Climate Change. Delivering a stinging blow to those public servants who have been briefing intensely on behalf of those who would have New Zealand become a sort of AUKUS auxiliary, Mahuta declared that her country’s foreign policy would be determined by “the Cabinet” – not unelected “government agencies”.

The only sensible reading of these comments is that serious disagreements exist within both Cabinet and the Labour Party caucus over the merits, or otherwise, of aligning New Zealand too closely with those powers seeking to “contain” China – still the country’s biggest trading partner. It is entirely possible that Mahuta, who (successfully) led the charge on Three Waters, has put herself at the head of the faction determined to confront the negative impact of colonialism in the South Pacific – not just in the past, but today.

All of which suggests that Labour’s ability to hold the neoliberal consensus together is nowhere near as strong as it was under Helen Clark and Michael Cullen, or the troika that emerged triumphant from the ideological conflicts that divided Labour between 2008 and 2017 – Jacinda Ardern, Grant Robertson and Chris Hipkins. Thanks to Peters, NZ First, and Covid-19, Ardern was (just) able to keep Labour’s lid from blowing-off during her first term. Paradoxically, by leading Labour to an absolute majority in 2020, Ardern only made it more difficult to say “No” to her cabinet and caucus.

The carefully planned “coup” which (with Ardern’s assistance) placed Hipkins in the Prime Ministership on 22 January 2023 may now be viewed – at least in part – as an attempt by the Troika to re-establish its control of the Sixth Labour Government’s overall direction – mostly by reining-in the factions’ more outré policies. Clearly, this attempt has met with only partial success. Pressure is building inside Labour for serious change, and Hipkins is struggling to contain it.

Certainly, his refusal to slip a few rounds of Parker’s ammunition into his prime-ministerial rifle and open fire on National, came as a deep disappointment to a great many of Labour’s members and supporters. Disappointment that was only compounded by his evident lack of enthusiasm for responding to the unfairness exposed in the IRD’s report with tangible tax reform.

It is this perception of Labour not being willing to take the bold steps necessary to improve the lot of working-class New Zealanders, that Nicola Willis is exploiting for all she is worth. Those disillusioned by Hipkins’ reticence are, however, unlikely to spot the contradiction in the National Finance Spokesperson’s position.

What is National defending working people from, if not Labour’s refusal to do anything meaningful about the inequities of the tax system? But, if Labour’s not going to do anything about tax, then why is she insisting (on the basis of at least two independent sources!) that redistributive tax reform is exactly what Hipkins, Robertson and Parker are plotting to announce just days out from the October election? Both of these claims cannot be true.

Leaving us with another, related, question: What is a massive pile of ammunition most likely to call into existence, if not the people, and the guns, to use it?

This essay was originally posted on the Interest.co.nz website of Monday, 1 May 2023.

Let’s Keep New Zealand A Boofhead-Free-Zone.

Class Act: Watching Jacinda Ardern’s performance on Stephen Colbert’s Late Show, it was striking just how extraordinarily good she can be when the wind is in her sails. While there’s no disputing that her confidence took a pummeling during the inevitable transition from lockdown to living with the Coronavirus, and that a downcast Jacinda Ardern is no bloody fun at all, there’s equally no disputing the fact that, as we have seen, prime ministers’ moods can change.

RICHARD PREBBLE reckons the Aussie election should be read as a harbinger of doom for this Labour Government. The next general election will be all about the cost of living, Prebble says, and that is only going to get worse between now and election day. So, its ‘Game Over’ for Jacinda Ardern, he reckons, just like it was for Scott Morrison a week ago.

Hmmm.

If Prebs’ analysis is correct, then the complexion of an incumbent government simply doesn’t matter anymore. Left or Right – it makes no difference. The highest rate of inflation in 40 years is bound to evict incumbents from office. They’re gone-burgers.

Which means, according to Prebble’s gospel, that Boris Johnson and his Tories must also be considered gone-burgers. After all, the UK inflation rate to April 2022 was a staggering 9 percent. That is actually a record for the Brits’ statistical series going all the way back to 1989. Given the sheer awfulness of their inflation performance, we should be rubbishing any prospect of the Conservatives being re-elected at the next UK general election in 2024.

Oh, really? Leaving aside the obvious point that a hell of a lot can happen in two years, and ignoring the Tories’ 80-seat majority (that’s right – 80 effing seats!), the state of the parties in the latest round of the UK opinion polls shows the Conservatives positioned an entirely competitive six percentage points behind the Labour Party.

If Boris Johnson can’t reclaim that ground from a constipated prat like Sir Keir Starmer, then he’s not the tousled Teflon toff the Brits seem determined to forgive over and over and over again.

No, the Aussie election result wasn’t driven by the cost-of-living stats, it was driven by the widespread assessment of Australian voters that Scott Morrison was a boofhead – and a pretty sorry specimen of boofhead at that. They certainly weren’t all that impressed by the Labor leader Anthony Albanese – who, by outward appearances, had also been manufactured by Stepford Industries Pty Ltd. It was just that the thought of another three years of Liberal-National boofheadism was just too much to bear. Painful though it may be for a Kiwi to admit, Australians just aren’t that dumb.

Which pretty much puts the skids under Prebs’ vulgar Marxist analysis that everything is driven by economics. Most Kiwis know that the inflationary pressures pushing up their living costs are practically all sourced offshore. That being the case, there’s bugger-all Jacinda Ardern and Grant Robertson can do about the price of oil; or the Russian blockade of Odesa, Ukraine’s wheat exporting port on the Black Sea; or the disruption of Chinese supply-chains due to Omicron; or the ever more serious effects of Climate Change. No. When it comes to deciding who to vote for, Kiwis’ preferences will be driven by factors that have very little to do with Prebble’s dialectical-materialism.

Watching Jacinda Ardern’s performance on Stephen Colbert’s Late Show, I was struck by just how extraordinarily good she can be when the wind is in her sails. While there’s no disputing that her confidence took a pummeling during the inevitable transition from lockdown to living with the Coronavirus, and that a downcast Jacinda Ardern is no bloody fun at all, there’s equally no disputing the fact that, as we have seen, prime ministers’ moods can change.

What may not be all that easy to change, however, is the growing perception that Christopher Luxon is just another tory boofhead, and that his National Party has long since crossed the line separating rational conservatism from the same sort of boofheadism that brought down the Liberal-National government of Scott Morrison and Barnaby Joyce. I mean Simeon Brown? Mark Mitchell? Are we really supposed to take these characters seriously?

And while we’re on the subject of ineptitude, who the hell was it who talked-up Nicola Willis as some sort of economic whizz-kid? Her recent performances as National’s shadow finance minister have been woeful. Pitted against Grant Robertson, she risks being exposed as just another empty National vessel.

Similarly, I have no doubt that when the election debates roll around next year, Jacinda Ardern will easily outclass Christopher Luxon. Providing she holds onto the poise and confidence of her Late Show performance, she has every chance of demonstrating to New Zealanders the foolishness of changing political horses in midstream.

She’ll need something to say, of course. Something over and above simply sounding like a credible and competent prime minister. It’s what made her time on the Late Show so productive. She had something positive and progressive – gun control – to hold up to an American audience horrified by yet another massacre of innocents. Something that the Republicans she didn’t name, but who were clearly in her mind, could never hope to match.

The most effective “over and above” policy constellation, IMHO, would be a bold and unapologetic pledge to reform the way the New Zealand state operates. If Jacinda Ardern and her ministers were to explain how ineffective the state has become under the administrative protocols of the past thirty-five years – offering up its pitiful outputs on health, education, housing, social-welfare, transport and Climate Change as evidence – her government’s collective failure to deliver would, at least, be explained. Blend into that narrative the need to improve the delivery of services to Māori and Pasifika, and then top it off with a promise to comprehensively rejig our electoral laws. That would give the PM plenty to talk about: plenty of opportunities to display her hallmark idealism and empathy.

Of course Prebs would dismiss all this with a derisory snort. Constitutional reform butters no parsnips, he’d say – especially with Anchor butter at $8.00 for 500 gms!

Except, a halfway competent Finance Minister would explain that if Anchor butter’s at that price it’s only because Fonterra and our dairy farmers are creaming it on the international market – and that’s a good thing, isn’t it?

What voters want more than anything else is the sense that the incumbent government remains a work-in-progress: that it’s still got plenty of things it wants to do before its through – changes that promise to make their world a better place.

Voters want to know that their leaders aren’t just thinking about them: they want to know that they are thinking, full stop. In sharp contrast to American voters, the electors of Australia and New Zealand still possess fully operational crap detectors. They will not vote for boofheads – or, at least, not indefinitely.

This essay was originally posted on The Daily Blog of Friday, 27 May 2022.

Holding National Together.

Tough Crowd: Too few to win, too many to die: it is looking more and more as if the National Party’s conservative falcons can no longer hear the falconer.

I DON’T BLAME SIMON BRIDGES for quitting. Seeing the people who toppled him from National’s throne positioning themselves alongside the man now sitting on it didn’t leave much room for doubt. Time to go.

But if Bridges is now free to pursue new opportunities and spend more time with his young family, the National Party itself cannot feel so sanguine. Putting aside the fact that Bridges was one of the very few members of National’s front bench with senior cabinet experience, he was also the leader of the party’s conservative faction.

While Bridges held the Finance Spokesperson’s role, National’s conservatives could tell themselves they possessed a powerful friend at the court of King Christopher. It’s hard to engage in serious political planning without the money-spinner in attendance. The conservatives may have been down, but they weren’t out.

Well, they’re out now.

Clearly, Bridges had been coming out of National’s inner circle feeling less and less like a man who was being taken seriously. Yes, he was there at Luxon’s side, but the person whose ideas were really influencing National’s new leader was the same person who had steered John Key towards victory in the run-up to the 2008 General Election – Nicola Willis. Put that together with Luxon being Key’s protégé, and it’s not hard to see why Bridges might feel he’d become more Ludo token than chess piece.

And now Willis is both the Deputy-Leader of the National Party and its Finance Spokesperson. At No. 3 we find another fierce liberal, Chris Bishop. Notwithstanding his conservative Christian beliefs, Luxon should, henceforth, be seen as a liberal leader. National is coming for Auckland, and Auckland cannot be won by a scary social-conservative.

It’s the strategy Willis sold Key when she was his “Special Adviser” back in 2008, and it is the strategy she is selling Luxon now. It’s a good strategy. New Zealanders are not extremists. They actually like messing around with Mr In-Between.

Which just leaves the conservatives.

For a long time now, National’s biggest political problem has been the uneven speed at which New Zealand’s population has embraced the social changes of the past forty years. There are parts of New Zealand – the inner suburbs of Auckland and Wellington, for example – where social-liberalism is so deeply entrenched that an openly conservative candidate standing for either major party would have little chance of winning an electorate seat. In provincial and rural New Zealand, however, the “wokeism” of the latte-drinkers of Wellington and Auckland Central is despised.

It’s a circle which National is finding it increasingly difficult to square.

The scale of National’s problem is dramatically demonstrated by dividing the post-war period into roughly equal halves. The first half is distinguished by the enormous difficulties Labour experienced in winning elections. Between 1949, the year the First Labour Government fell, and 1984: a period of three-and-a-half decades; Labour held office for just six years.

The median New Zealand voter of that era tended to be materially comfortable and determinedly risk-averse. The country’s social values were conservative and not subject to serious challenge. Yes, there was a “Youth Revolt”, but it made little impression electorally. Older New Zealanders were unimpressed.

That first half was also the era of the Cold War. A time when even Labour’s “democratic socialists” struggled to shake off the suspicion that they were far too close to “communists” for the country’s comfort. (Is that why, after 1984, so many Labour MPs happily jettisoned democratic socialism for “Rogernomics”?)

Certainly, things changed radically for the National Party after 1984. Gone were the days when National could reasonably describe itself as “the natural party of government”. In the 38 years between 1984 and 2022, Labour has held office for twenty years, and the National Party for eighteen.

This roughly equal alternation is illustrative of just how dramatically New Zealand has been changed by the events of the latter half of the post-war period. The stolid, conservative New Zealand, with its widely shared values (and prejudices) has not disappeared entirely, but it is now too small – especially in the context of the MMP electoral system – to serve as the foundation of a successful mainstream party.

Following its disastrous 2002 defeat, National’s solution to this problem was to persuade its hardcore conservatives to hold their noses and stick with the only party capable of holding the line against the increasingly radical social policies of the Labour Party and the Greens. Critical to this task was the below-the-radar support of the conservative Christian churches and the Maxim Institute. They shepherded their flocks into National’s sale-yards: helpfully dissuading them from diluting the right-wing vote by wasting conservative support on parties unlikely to crest the 5 percent MMP threshold.

It is even possible that the quid-pro-quo for this unheralded support was a quiet undertaking to select conservative Christian candidates for safe National seats, thereby baking-in the Christian Right’s political agenda where it mattered most – National’s parliamentary caucus.

As solutions go, this one was obviously short-term. Too many conservative Christians in National’s caucus, especially Christians determined to give legislative effect to their beliefs, and the party would become unelectable. But not before it had torn itself to pieces internally.

Throw into this dangerous god-spell the global impact of Brexit and Trump – both made possible by the even more dangerous sorcery of the Internet and its social-media wizards. The resulting global surge towards right-wing populism called into serious question the despised centre’s ability to hold. For good measure, Mother Nature then conjured-up a global pandemic. Once that happened, it was just a matter of sitting back and waiting for things to fall apart – all over Parliament Grounds.

Last week a group of rural-provincial blokes – looking for all the world as if they’d just stepped off the set of Fear The Living Dead – took to social media with a heartfelt appeal for their fellow blokes to stand up and fight back (presumably electorally) against the horrors of “Jabcinda” and her tyrannical government. At the same time, the anarchist editor of The Daily Blog, Martyn Bradbury, venturing boldly into the wilder realms of speculation, was inviting his readers to ponder the consequences of a Winston Peters-Judith Collins-led NZ First. One can only imagine how Act would react to that!

Too few to win, too many to die: it is looking more and more as if the National Party’s conservative falcons can no longer hear the falconer.

Nicola Willis’s plan for containing National’s Christian conservatives worked like a charm for John Key in 2008, but can she and Christopher Luxon truly control the rough right-wing beasts that are already slouching towards the 2023 election to be born?

This essay was originally posted on the Interest.co.nz website of Monday, 21 March 2022.