After Four Years In Office …

They Did This: On March 27th 1939, Michael Joseph Savage opened the new Social Security building. Built in just 7 weeks, the new structure replaced the half-completed Social Security headquarters destroyed in an arson attack on 2 February 1939. In his book The Quest For Security, W. B. Sutch recalled the ceremony taking place “in the presence of thousands of people, in time to mark, five days later, the end of poverty.”

IT’S 30 APRIL 1939, and the New Zealand Labour Party has been in office for nearly four years. On the 15 October 1938, the government of Michael Joseph Savage had been re-elected with 55 percent of the popular vote – a still unsurpassed level of support.

April 1939 began with the coming into force of the Social Security Act. Described by the National Party as “applied lunacy”, and by the Labour leader as “applied Christianity”, the Act represented one of the most far-reaching social reforms ever undertaken by a New Zealand government.

Just how popular Labour’s social reforms were among the overwhelming majority of New Zealanders was revealed when, on the morning of 2 February 1939, the half-completed Social Welfare departmental headquarters situated in Aitken Street, not far from Parliament Buildings, was burned to the ground in a deliberate arson attack. Savage refused to be daunted by this overt act of far-right defiance. “We have got to get the Social Security Act working on April 1st and it’s going to work”, Savage told the country.

The Labour prime minister was as good as his word. “We are not going to weep,” Savage’s irrepressible Minister of Public Works, Bob Semple, bellowed. “It is a question of getting our backs into it, and getting the job done.”

While firefighters were still dampening down the smoking ruins on Aitken Street, Semple promised the construction of a replacement building within six weeks. The Public Works Department, Fletcher Construction, and the building firm of R.C. Love began work immediately on a site in Aotea Quay.

This breakneck schedule would “necessitate the working of two 10-hour shifts”, James Fletcher admitted, “and it is anticipated that approximately 150 men will be required for each shift”. The normally obstreperous building trades unions agreed to work the site around the clock. Fletcher and Love agreed to take no profit.

Thirty years later, the eminent public servant and historian W. B. Sutch, recalled the almost festive atmosphere that permeated the construction site: “Wellington citizens daily visited the job to share, to encourage, and to offer, at breaks, refreshment for weary workers.” Astonishingly, the construction was completed in seven weeks – just 7 days shy of Semple’s wildly optimistic target. Even the normally hostile journalists of the daily press were forced to acknowledge “an achievement never approached in New Zealand before.” On March 27th 1939, Savage opened the new building. In his book The Quest For Security, Sutch recalled the ceremony taking place “in the presence of thousands of people, in time to mark, five days later, the end of poverty.”

When the First Labour Government said “Let’s do this!” – it meant it.

Because, of course, the Social Security Act (1939) and the herculean rebuilding of the new department’s headquarters, were not the only things Labour was able to show after nearly four years in power. Between 1935 and 1939 Savage’s housing czar, the charismatic John A. Lee, had overseen the construction of thousands of so-called “state houses”. According to Sutch: “[D]uring 1937 there were three times the number of houses built compared with 1932 or 1933; by 1938 this had risen to five times”. By 1940-41 fully 40 percent of all houses built in New Zealand were state houses.

It is important to remember that the Members of Parliament who served in the First Labour Government were overwhelmingly drawn from the same working-class that made up the solid core of the Labour Party’s electoral base. Hardly any of them had much in the way of formal education. University graduates were few and far between. Trade unionists, on the other hand, were sufficiently plentiful to secure the passage of a bill making union membership universal across most of the New Zealand workforce. For good measure, they also reduced the working-week to 40 hours.

Like the Sixth Labour Government of Jacinda Ardern, Mickey Savage’s ministry was fond of harking back to the darkest days of the Great Depression, when New Zealanders were subject to the tender mercies of the right-wing coalition of George Forbes and Gordon Coates. Unlike Jacinda’s government, however, Savage’s never resorted to highlighting the Tories’ failures as a way of justifying its own.

Michael Joseph Savage made a promise to transform New Zealand, and nothing – not even a right-wing arsonist in Aitken Street – was going to prevent him from keeping it.

This essay was originally published in The Otago Daily Times and The Greymouth Star of Friday, 30 April 2021.

Is "Social Investment" Bill English's "Think Big"?

Think Big Data: In many ways Muldoon’s Think Big and Bill English’s Social Investment policies are alike. Both feature ideas more associated with the left than the right, and both, if sensibly implemented, could be of immense benefit to New Zealand. Unfortunately for Muldoon and, almost certainly, for English, the essentially left-wing character of the programmes they are advocating makes it practically impossible for the National Party to implement them in a sensible fashion.

 

“SOCIAL INVESTMENT”, as promoted by Prime Minister, Bill English, is one of those policies that can make or break political parties. “Social Security”, for example, was the policy principally responsible for lifting the Labour Party’s share of the popular vote from 46.1 percent in 1935 to 55.8 percent in 1938. The “Cradle to Grave” welfare state it established kept Labour in office until 1949 and remained the foundation of New Zealand social policy for the next 50 years.

 

By contrast, National’s “Think Big” economic development programme of the late-1970s and early-1980s, very rapidly turned into an albatross around the neck of Rob Muldoon’s government. By the mid-1980s, the very expression, “Think Big”, had become political shorthand for the unwisdom of large-scale state intervention.

 

It was in the context of Muldoon’s increasingly costly and strike-plagued Think Big projects that the Leader of the Labour Opposition, David Lange, delivered his devastating put-down: “You can’t run a country like a Polish shipyard!”

 

With the benefit of hindsight, however, Muldoon’s alleged political folly looks more and more like economic and environmental prescience. Conceived as a means of escaping New Zealand’s dependence on foreign oil (which had skyrocketed in price during the 1970s) and of substituting domestically produced agricultural and industrial inputs (such as electricity, fertiliser and steel) to improve New Zealand’s precarious balance of payments, Think Big bore a startling resemblance to the industrial development programme pitched to Walter Nash’s Labour Party in the late-1950s by the left-wing New Zealand economist, W.B. Sutch.

 

The electrification of the North Island main trunk railway line, for example, was one of Muldoon’s Think Big projects. Had it been completed we would not now be witnessing the environmentally retrograde replacement of KiwiRail’s fleet of electric locomotives with carbon-dioxide-belching diesels. Indeed, a mischievous commentator might predict that if the Greens ever come up with a comprehensive industrial development programme, it will look more than a little like Think Big!

 

In many ways Muldoon’s Think Big and Bill English’s Social Investment policies are alike. Both feature ideas more associated with the left than the right, and both, if sensibly implemented, could be of immense benefit to New Zealand. Unfortunately for Muldoon and, almost certainly, for English, the essentially left-wing character of the programmes they are advocating makes it practically impossible for the National Party to implement them in a sensible fashion.

 

One of the reasons Think Big became such a gift to National’s opponents was the Economic Development Minister, Bill Birch’s, unwillingness to assign the job of building the energy and industrial projects solely to the New Zealand State. Rather than expand the public sector’s capacity, Birch entered into a succession of largely secret contract negotiations with an assortment of multinational construction firms. Not only did this substantially increase the projects’ costs, but it supplied the Government’s opponents with a smorgasbord of extremely tasty political meals.

 

English’s Social Investment policy will very likely suffer the same fate as Think Big.

 

On its face, the idea of using the government’s dramatically improved capacity to gather and cross-match critical data streams from the Social Development, Vulnerable Children, Justice, Corrections, Health and Education ministries, in order to improve the targeting of public services to those individuals and families most in need, is a good one. If additional resources and assistance can be channelled to these vulnerable citizens before they become the state’s permanent, eye-wateringly expensive and essentially intractable “clients”, then Bill English’s claim that Social Investment, introduced now, will save the taxpayers billions of dollars, later, is entirely justified.

 

English’s problem is that the implementation of Social Investment policies will require a substantial increase in spending on the people National most loves to hate: the poor, the brown, and the “welfare-dependent” working-class. The only way English will be able to “sell” his Social Investment policy to the National caucus, therefore, is by showering resources on the tiny number of people fingered by the State’s data-crunching algorithms, while simultaneously reducing assistance to all the other beneficiaries on its books.

 

English’s problem is Labour’s problem, too. Ever since David Shearer waxed eloquent about his (apparently apocryphal) “beneficiary on the roof”, it’s been clear that most Labour MPs are extremely wary of identifying their party too closely with the despised “underclass”. So, rather than embracing the principles of Social Investment, Andrew Little and his colleagues, like the Lange-led Labour Party, will focus public attention on the inevitable stuff-ups associated with the application of the prime minister’s pet project.

 

Social Investment: a policy offering potentially huge improvements in the delivery and effectiveness of social services; will thus go the way of Think Big. A good idea undermined by the ideological hostility of those responsible for its implementation and politically demonised by a Labour Opposition much more interested in breaking the right than in making its policies work.

 

This essay was originally published in The Press of Tuesday, 17 January 2017.