There’s Never A Right Time For Left-Wing Policies.

Raising The Bar: Would that the Prime Minister and her colleagues would listen as intently to what the people – as opposed to the power elites – are saying as the Greens. Were they so disposed, the popular clamour for a transformational post-Covid reset would be loud in their ears. Listening intently, they would also hear the fear in the voices of those who have already lost, or are about to lose, their jobs. The argument for a level of income support that allows them to live with dignity is compelling.

JACINDA ARDERN dismissed them. Winston Peters savaged them. Todd Muller attributed them to Labour. The Taxpayers’ Union turned them into a fundraising opportunity. The Parliamentary Press Gallery filed them under ‘N’ for “Not Going To Happen”. The wealthy castigated them. Economists panned them. The rest of us, however, thought they sounded pretty good.

What could possibly fire-up so many competing interests? Who has the power to unite Peters and the Press Gallery? Labour and the Taxpayers’ Union? The answer, of course, is – The Greens. More specifically, the Greens’ welfare and tax policies.

To the delight of their supporters (many of whom were teetering on the brink of abandoning the party as insufferably “woke” and out-of-touch) the Greens have rediscovered their left-wing mojo. Offering policies radical enough to set virtually the entire power elite against them.

To paraphrase the late, great Murray Ball: “If you want a good reason for supporting the Greens’ tax and welfare policies, just take a look at the people opposing them.”

Sadly – very sadly – that appears to include Jacinda Ardern. When asked to comment on the Greens’ plans to boost the incomes of the poor by increasing the taxes of the rich, the Prime Minister, rather snootily, informed Morning Report’s Corin Dann that they were based on “some pretty heroic assumptions”. And, no, Labour has no plans to introduce a Wealth Tax.

Not that the Leader of the Opposition is at all disposed to accept Labour’s denials – not even when they come straight from the horse’s mouth. According to Muller, Labour’s just waiting for the voters to return a Labour-Green parliamentary majority, so that they can then remind the country that “this is MMP”, and that although Labour had no plans for two extra steps at the top of the Income Tax scales, and had repeatedly ruled out a Wealth Tax, they’d been required to accept them all as the price of remaining in office.

This “Labour and the Greens have a hidden agenda” claim will be repeated endlessly by the National Party as the General Election draws near. Last weekend the Opposition unveiled its first election hoarding. It features Muller and his deputy, Nikki Kaye, standing proudly beside the words: “Strong Team. More Jobs. Better Economy.” The hoardings promising “No New Taxes” are clearly being held in reserve. As the campaign intensifies, however, you can bet they’ll start popping up everywhere.

Those of us with grey beards but still-functioning memories have seen this strategy rolled out time and time again by the Tories. It prompts us, equally regularly, to pose the question: “Why doesn’t Labour decide that it might as well be hung for a sheep as a lamb?” If the National Party has both the intention and the resources to convince the electorate that they are facing the grim spectre of socialism, then why doesn’t the Labour Party, instead of denying the charge, respond by reassuring the voters that the sort of socialism they’re proposing isn’t grim at all – it’s great!

A big part of the explanation for why they won’t make a virtue of National’s imposed necessity lies in the crucial contribution Labour’s cautious fiscal management has made to this country’s ability to cope with the Covid-19-induced economic crisis. It has reinforced the natural caution of Finance Minister Grant Robertson, and it has reaffirmed the Prime Minister’s faith in her closest friend and ally in Labour’s caucus. If Grant reckons the Greens have made all kinds of heroic assumptions about how the wealthy will react to the Left’s best efforts to make them contribute their fair share, then that’s the message Jacinda will relay to the public.

Would that the Prime Minister and her colleagues would listen as intently to what the people – as opposed to the power elites – are saying. Were they so disposed, the popular clamour for a transformational post-Covid reset would be loud in their ears. Listening intently, they would also hear the fear in the voices of those who have already lost, or are about to lose, their jobs. The argument for a level of income support that allows them to live with dignity is compelling.

With National painting Labour’s caution as a lie, why not throw it to the wind? If there is never a right time for Labour-Green left-wing policies, then there’s never a wrong time, either.

This essay was originally published in The Otago Daily Times and The Greymouth Star of Friday, 3 July 2020.

Warning Signs: The Briefings To Incoming Ministers Reveal A Country Gripped By Multiple Crises.

 Ominous Warnings: The Briefings to Incoming Ministers, released this week, paint a bleak picture of the previous government's consistent under-funding of public services. 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.”

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.

“Let’s Tax This?” – “Hell, Yeah!”

"Hell, Yeah!" - Labour must not retreat before National’s “Let’s Tax This!” counter-attack. Not when a majority of New Zealanders are ready to rescue their ailing public services from further deterioration. When National hurls the “tax and spend” accusation at Labour candidates they should respond instantly with a hearty “Hell, yeah!”

 

‘LET’S TAX THIS!’ Looks like being the National Party’s strategic rejoinder to Jacinda Ardern’s “Let’s Do This!” campaign slogan. If it is, then it deserves to be as ineffective as it is unoriginal. National’s campaign manager, Steven Joyce, is experienced enough to know that making the Left’s alleged propensity to “tax and spend” the central feature of a National Party election campaign only works when Labour is in power.

 

The reason for this is obvious. One of the main reasons National governments fall is because they are ideologically allergic to both taxing and spending. As the years pass, and the necessary investments in health, education, housing and infrastructure are withheld, the public starts to notice a worrying decline in the quality and quantity of essential social services.

 

Urgent surgical operations are routinely deferred, or, worse still, declined. School classrooms become overcrowded. The recruitment and retention of qualified teachers becomes impossible. Demand for affordable housing outstrips supply. Homelessness reaches crisis levels. Rivers and streams become unswimmable. To all but the greedy and the cruel, the moral case for increased taxation, to enable long-deferred public expenditure, is irrefutable.

 

Where New Zealand now stands, the need of a “tax and spend” government is palpable. Voters convinced of this need are, therefore, unlikely to run screaming for the hills at the prospect of a Labour government taking office. That National is defaulting to such a tired old attack-line is a sign not of strategic confidence – it actually signals something pretty close to despair.

 

Why then is Mr Joyce rolling the dice so recklessly?

 

The most likely answer is that he believes Labour’s leaders – most particularly its finance spokesperson, Grant Robertson – are incorrigibly risk averse, and that they will recoil from National’s “Let’s Tax This!” counter-attack in confusion and dismay.

 

On the strength of Labour’s performance under Andrew Little, Mr Joyce’s gamble is not unreasonable. It was, after all, Mr Little who nixed Labour’s 2011-2014 policy of introducing a capital gains tax. Nor was he willing to countenance a sharp rise in the progressivity of the Income Tax. His preference for a “working group” of “experts” to write his party’s tax policies – but only after Labour has been safely elected – betrayed the Opposition’s extraordinary sensitivity towards these issues.

 

Mr Joyce is hoping that the more pressure the National Party is able to heap upon Labour in relation to tax, the more confused and equivocal its spokespeople will become. This would be of enormous assistance to National; not least because it would spike the Opposition’s rhetorical guns on at least two issues where the Government is acutely vulnerable: Auckland’s escalating traffic woes; and the appalling condition of New Zealand’s waterways.

 

Ms Ardern’s bold policy announcements on both of these issues have included unabashed references to such fiscal instruments as regional fuel taxes, resource-use royalties and irrigation levies. Had she not included these references, National’s charge would have been that Labour has no idea how its promises will be paid for. By anticipating this criticism, however, and countering it, Ms Ardern handed Mr Joyce the “Let’s Tax This!” attack-line he was looking for.

 

For a day or two, Mr Joyce’s strategy appeared to be working. Interviewed by Lisa Owen on the Three network’s current affairs programme, “The Nation”, Mr Robertson’s confidence visibly faded when asked whether or not Labour would be putting a capital gains tax back on the agenda. As his opponent floundered, the wolfish grin on Finance Minister Joyce’s face told the viewers everything they needed to know!

 

By the following day, however, Labour had developed an attack-line of its own. Interviewed on TVNZ’s “Q+A”, Labour’s environment spokesperson, David Parker, hit back against criticism of his party’s water policies by turning the disparagement back on its originators. Mr Parker simply demanded to know whether or not the Government, Federated Farmers, horticulturalists and vintners were suggesting that the biggest contributors to New Zealand’s water problems should be exempted entirely from making a reasonable contribution to their solution?

 

That Mr Parker rebuked his critics while wearing an expression that positively shouted: “You have got to be kidding me!”, made his challenge even more persuasive. Television is an ideal medium for this sort of non-verbal communication – As Mr Joyce had proved the day before.

 

Labour should not, therefore, retreat before National’s “Let’s Tax This!” counter-attack. Not when a majority of New Zealanders are ready to rescue their ailing public services from further deterioration. That “taxation is the price we pay for civilisation” has become increasingly clear over the nine years of Bill English’s undeclared, but unmistakeable, austerity campaign against the public sector. When National hurls the “tax and spend” accusation at Labour candidates they should respond instantly with a hearty “Hell, yeah!”

 

“Let’s Do This!” and “Let’s Tax This!” are simply different ways of saying the same thing.

 

This essay was originally published in The Press of Tuesday, 15 August 2017.

"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.

The Price We Pay For Civilisation

A Winning Team?: Phil Goff and David Cunliffe (with a great deal of help from David Parker) have seized the high moral ground on fiscal policy. The 2011 General Election has finally become a genuine contest.

LABOUR’S TAX POLICY is as much a moral declaration as it is an economic statement. It speaks to our notions of fairness and equal treatment every bit as directly as it addresses the investor’s love affair with real estate.

This re-focusing of the electorate’s attention on the revenue-gathering aspects of fiscal policy is as timely as it is necessary. For far too long politicians of conservative mien have pretended that the only good tax is a dead one. That governments can go on blithely emptying-out the revenue side of the public ledger, (or, as they prefer to characterise it: “putting money back in the tax-payer’s pocket”) with impunity.

Not that they believed a word of their own propaganda. Even the densest conservative politician must have been aware that drastic cuts in revenue would, eventually, have to be balanced by equally drastic cuts in expenditure.

Nor were the more conservative sorts of politicians ever truly averse to a fiscal policy of slash and burn. Indeed, there are many on the Right who regard slashing and burning as the whole point of the exercise.

 

“MY GOAL”, boasted the far-Right American lobbyist, Grover Norquist, “is to cut government in half in twenty-five years, to get it down to the size where we can drown it in the bathtub.”

Nor was this idle rhetoric on Norquist’s part.

As anyone who follows American politics knows only too well, Norquist and his corporate sponsors have been as good as their eliminationist word. All over the United States, federal and state expenditures are being slashed, and tens-of-thousands of public servants laid-off.

And, in America, these firings have moved way beyond “the back office”. The United States’ once proud system of public education is being systematically starved of funds while massive sums are being voted to the corporate providers of private education in so-called “charter schools”.

To undercut the inevitable resistance from aggrieved public-sector workers, Republican Party governors have stripped the public-sector unions of the right to organise, strike, or engage in any effective form of collective bargaining.

So crazed has the American Right become since the onset of the global financial crisis, that the Republican majority in the House of Representatives is threatening to pull the plug on the US Government’s ability to pay its bills. Unmoved by the warnings of Wall Street that such a move would cause the United States to default on its debt – plunging the world into a new and exponentially more serious global crisis – the far-right “Tea Party” faction of the Republican Party refuses to be swayed.

Unless President Obama agrees to reduce federal expenditures by more than a trillion dollars, congressional permission for his administration to exceed the “debt ceiling” – i.e. honour America’s debts – will be refused.

That expenditure cuts on this scale would effectively dismantle what remains of the United States’ anaemic social-welfare system, far from restraining the Tea Partiers, explains why they have so far rejected every one of the President’s attempts at reaching a compromise. As one American pundit put it: “The Republicans are refusing to take ‘Yes’ for an answer!” 

THIS, THEN, is the logical end-point of the tax-cutting, expenditure-slashing, “austerity” mania currently gripping the Right – not just in the US but also here in New Zealand.

That’s why Labour’s embrace of a Capital Gains Tax is so important. It signals that a line in the sand has been drawn by the Labour caucus.

On one side stand all the democratic achievements of the New Zealand people: the public provision of health, education and welfare services; the State’s active engagement in the provision and maintenance of New Zealand’s basic infrastructure; it’s guardianship of our natural environment; its stewardship of our culture.

On the other side stand all those commercial interests slavering to turn these collective achievements into opportunities for private gain. The ideologues who would drown our state – along with all that it stands for and protects – in Mr Norquist’s bathtub.

The Norquists of this world see the welfare state as an unnecessary evil. But, in its place they would raise something even more malign: plutocracy. A state in which a citizen's worth is measured exclusively by their wealth, and where the only truly punishable crime is poverty.

It was the US Supreme Court Justice, Oliver Wendell Holmes, who said: “Taxes are the price we pay for civilisation.”

Labour agrees.

This essay was originally published in The Timaru Herald, The Taranaki Daily News, The Otago Daily Times and The Greymouth Star of Friday, 15 July 2011.

Reflections On The Christchurch Earthquake: Getting Through

Blood, Toil, Tears, and Sweat: Winston Churchill's words to the people of Britain during its "finest hour" in 1940 were so magnificently inspiring precisely because they were so utterly uncompromising. The political force-field created by the Christchurch earthquake can be harnessed by our politicians, but only if they display the unflinching honesty and unshakeable resolve of Britain's wartime leader.

THE CHRISTCHURCH TRAGEDY has generated its own political force-field. Events of such gravity always do. When something as big and brutal as Christchurch’s devastating earthquake shatters the ordered symmetry of our daily lives, we expect our political leaders to respond with measures of equal force.

These measures don’t always have to be practical – although it’s on the ground that the authorities’ performance will always, ultimately, be judged. Often, in moments of crisis, the words of our leaders can be just as important as their deeds.

Recall Winston Churchill’s words, upon assuming the mantle of wartime leadership in 1940. "I have nothing to offer", he told a hushed House of Commons, "but blood, toil, tears and sweat."

That steely realism: so bereft of sentiment; so empty of comfort; stiffened the sinews of the British people. At such critical moments, citizens aren’t looking for soft words of pity and consolation. What they want is speech of unflinching honesty and unshakeable resolve.

"You ask, what is our aim?", Churchill went on. "I can answer in one word: victory; victory at all costs, victory in spite of all terror, victory, no matter how long and hard the road may be; for without victory, there is no survival."

New Zealand is about to be tested in ways only marginally less gruelling than the ultimate audit of war. We are faced with the abrupt cessation of more than a tenth of our national economy – for how long we cannot tell. If the rebuilding of the earthquake-devastated Japanese city of Kobe is any guide, Christchurch may require as much as a decade to fully recover.

The leader who successfully harnesses the political force-field of the Christchurch earthquake will be the leader who tells New Zealanders clearly and without prevarication exactly what he or she expects of them. Because any politician who suggests that Christchurch can be rebuilt or that the New Zealand economy can successfully weather this crisis without a supreme and united national effort, is insulting the intelligence of the electorate.

Not only that, they are insulting the thousands of ordinary Kiwis: farmers, workers, businessmen, students, beneficiaries and retirees; who have added their skills and energy to the unstinting efforts of tens-of-thousands of dedicated public servants.

The men and women who have rushed to bring practical assistance to their fellow New Zealanders are showing the way forward to any political leader with the wit to see it. We are not going to get Cantabrians through this crisis except by means of a co-ordinated and collective effort. And New Zealand will only find the money to rebuild and restore Christchurch if every New Zealander pays their fair share of the cost.

That means the top ten-percent of income earners will have to give up the generous tax windfalls of last year’s Budget – as well as pay a special levy on incomes in excess of $100,000 p.a. It will require the rest of us to pay higher EQC levies. And all of us will have to invest in Earthquake Recovery Bonds with the same sort of patriotic enthusiasm that our parents and grandparents once invested in War Bonds.

Getting through will also require New Zealanders to dispense with many of the economic articles-of-faith that have been drummed into them this past quarter-century. The notion that "Government isn’t the solution to the problem. Government is the problem" (to quote Ronald Reagan’s infamous formulation) must go.

The other lesson which the heroic altruism of ordinary Cantabrians should be teaching our political class is that New Zealanders feel much more like themselves when they’re helping – not hurting – their neighbours. Any political party that believes a national reconstruction effort can be successfully undertaken while unemployed Kiwis and solo mums are being stigmatised, or while the sick and disabled are being harassed and harried into non-existent jobs, is criminally deluded.

Rebuilding Christchurch, and its crucial contribution to New Zealand’s national life, requires, above all else, the same unity of purpose that allowed the Allies to overcome fascism in World War II.

The earthquake’s political force-field will simply annihilate any politician or party which, by unfairly distributing the burdens of recovery, sets New Zealander against New Zealander – in mutual ruin.

To paraphrase Churchill: At this time we are entitled to claim the aid of all, and say: "Come then, let us go forward together."

This essay was originally published in The Dominion Post, The Timaru Herald, The Taranaki Daily News, The Otago Daily Times and The Greymouth Star of Friday, 4 March 2011.

Making Haste Slowly

So many hands, so little time: John Key, unlike Bernard Hickey, understands that economics is not a science - it's politics - and our Prime Minister is getting very good at it.

BERNARD HICKEY is a very angry man. His bleak vision of New Zealand’s future doesn’t so much boil down to a "clash of civilisations" as a "clash of generations". He foresees a long and vicious political struggle in which the "young and poor" are pitted against the "old and rich". His advice to young New Zealanders? Book a ticket on the next flight to Australia – now.

Who’s responsible for Mr Hickey’s bad temper? Predictably, it’s the Prime Minister.

Mr Hickey was hoping against hope that Mr Key would use Tuesday’s much-hyped Prime-Ministerial Statement to Parliament to announce a series of decisive measures designed to shift New Zealand’s risk-averse investors out of the residential property market and into investments more productive of national wealth.

A Land Tax. A Capital Gains Tax. The closing-off of tax loopholes. Any or all of the recommendations of the Tax Working Group. Any measure that brings the cost of purchasing a home back to earth with a resounding thump. Any policy that offers Generations "X" and "Y" the slightest hope of owning their own home.

That’s what Mr Hickey was waiting to hear: something to prevent our best and brightest packing their bags; and when Mr Key failed to oblige, Mr Hickey saw red.

Well, no, that’s not quite right. Mr Hickey didn’t "see red". What he "saw" was a much deeper shade of blue than any Mr Key or his government are ready to wear.

Like so many ideologues of the Right, Mr Hickey has no patience for either politics or politicians. In Mr Hickey’s eyes economics is a "science" – like physics. And, just as we would laugh at the idea of passing a law against gravity, so we should deride any politician who raises political objections against self-evidently sensible economic measures – such as forcing investment out of unproductive sectors of the economy and into sectors more likely to boost productivity and competitiveness.

But economics is very far from being a science. At most it’s a useful set of tools. Originally known as "political economy" – a term which conveyed much more accurately the discipline’s true purpose – its prime objective is to identify the contributing causes and practical consequences of organised human activity.

If politicians don’t understand why things are organised the way they are, and what is likely to happen if they try to change them too drastically, then they’ll soon find themselves in a whole lot of trouble.

Unlike Mr Hickey, Mr Key’s most important objective is to secure both his own, and his party’s re-election at the next general election. Should he fail to be re-elected, all hopes of changing the way things are organised will be dashed. Even worse, electoral defeat may result in people with radically different ideas about the way things should be organised finding themselves in a position to do exactly that.

National’s aim is to reduce the tax burden of the nation’s wealthiest citizens. Mr Key would be rendering poor service to those citizens if he embarked upon a course of action which brought to power a party dedicated not to reducing, but increasing the tax burden of New Zealand’s "rich pricks".

Had Mr Key announced the introduction of the sort of property-investment-unfriendly measures demanded by Mr Hickey, the National Party’s chances of winning next year’s General Election would have plummeted. One hundred thousand rental property investors and their families, fearing huge financial losses, would have turned away from Mr Key and National in exactly the same way elderly New Zealanders turned away from Jim Bolger’s National Government when, in spite of his "no ifs, no buts, no maybes" promise to lift Labour’s hated Superannuation Surtax, it refused to do so.

Like Keith Holyoake, the National leader he most closely resembles, Mr Key seems determined to "make haste slowly" – keeping intact for as long as possible the coalition of socio-economic groups which carried him to power. He will lower the taxes of the wealthy – but only in conjunction with measures designed to preserve the living-standards of the rest of his electoral base.

That does not include the poor – but it does include the rich, the young and the old.

Mr Hickey may think that Generations X and Y versus the Baby-Boomers and their parents is the battle New Zealand has to have.

Mr Key (thank goodness) knows better.

This essay was originally published in The Timaru Herald, The Taranaki Daily News, The Otago Daily Times and The Greymouth Evening Star of Friday, 12 February 2010.