How Labour make the monetary announcement a game changer


I read Chris Trotter’s review on this site of Labour’s monetary policy announcement last week, and completely agree with the content and sentiment. If you haven’t seen it, it’s well worth a look.

I also believe that the vision and supporting policies put forward by Finance Spokesperson Parker is the type of innovative approach needed to deal with the issues of the day. The problem is that the vast majority of those who decide elections have no idea what a ‘fiscal deficit’ is or what ‘monetary policy’ does.

I canvassed work colleagues (all educated with mortgages) and asked them to define both of these terms: none could, however, when I asked if they were concerned about their mortgage rates or pissed off with the amount of money the big Australian banks made out of Kiwi’s paying over-the-top interest, they absolutely knew where I was coming from.

This is where Labour needs to be clever in order to deliver the sucker punch. It’s great to come out with innovative policies that will genuinely make a difference to a large number of good hard working kiwi families, however, if the messages are not delivered on a number of levels, then great ideas are potentially doomed to mediocrity at best or history at worst.

Labour’s forestry policy, for example, was extremely good and could make a big difference to the economic landscape of certain regions across NZ, however, the forestry policy wasn’t about forestry per se, but rather about regional jobs through increasing manufacturing capacity and adding value to a raw commodity.

It cut to the heart of what is wrong with the ‘market knows best’ approach that this government has pursued. The market has failed the regions to a large extent, and Labour has a plan to bring back sustainable, well-paid jobs with companies in industries that should find NZ an attractive place to invest but, for a number of reasons, haven’t.

Talking about ‘forestry’ immediately shuts out the vast majority who perceive this to have no relevance to their particular situation. Talking about creating jobs in the regions, of which forestry has an important role to play, however, captures the eye. It’s the same with monetary policy.

If smart, Labour can take advantage of the opportunity it now has to own the narrative about having a plan for the future where lower interest rates, saving for our retirement, limiting the profit of the big Australian banks and looking after good hard working Kiwis are important themes. But it needs to get the messaging right.

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My work colleagues knew that Labour had made an announcement, and they had the impression that it was well received. But they didn’t really know what it was. Most interesting.

So now, the announcement wasn’t about monetary policy or reducing the fiscal deficit; nor was it really about NZ ‘paying its way’ (‘what does that mean?’ I hear a number ask). On the doorstep, in the pubs and clubs around the regions and at the coal face of electoral politics, Parker’s announcement has to be about:

-reducing the interest you pay on your mortgage
-creating jobs by making sure our companies are profitable on the world stage
-ensuring that the big Aussie-owned banks don’t continue to rip the guts out of the pay packet of those who are struggling with rising interest rates.
-Making sure that all kiwis have enough money to retire with dignity and enjoy their twilight years.

For the vast majority of those who will decide this year’s election; that’s what Parker’s policy announcement needs to be about.


  1. ” The problem is that the vast majority of those who decide elections have no idea what a ‘fiscal deficit’ is or what ‘monetary policy’ does. ”

    Thats not the problem.

    The ACTUAL problem is that both the people and their governments, all around the world, have allowed monetary and economic issues to dominate over social issues. Governments are supposed to exist for the people – the ENTIRE population of a country. However the role of government – to look after the interests of ALL its people – has been usurped by the rich who have made monetary and economic issues the SOLE dimension of government that matters in an election.

    Time to get back to basics – Government of the people by the people FOR the people.

    • Murray, while I agree wholeheartedly with your identification of the actual problem, I believe the associated problem is considering government of the people, by the people, for the people to be ‘back to basics’ when it is anything but.

      ‘Back to basics’ would be a return to abominations like ‘might is right’ and monarchy; democracy is altogether a far more abstract, nuanced, and complex system the benefits of which it appears large swathes of our society are alarmingly unaware of. Or worse, they don’t give a damn. Yet.

      Promoting awareness of the improvements to the living conditions of ordinary people made possible by progressive polity seems to be the project we should all actively engage in if we want to steer this country away from oligarchy and back to the principles of fairness and equality.

      It is also probably worth noting that NZ is not a constitutional democracy and that parliament, therefore, is supreme. Given the thin line between our historical convention of democracy and the ability of the powers that be to subvert it totally, it truly behoves the electorate to consider its options carefully and well.

      Sadly, the previous two elections cycles have validated Theodore Roosevelt’s observation that “a vote is like a rifle: its usefulness depends upon the character of the user,” although in a grander spirit of generosity I’d like to think it depends more on the user’s awareness.

    • Hi Murray,
      First of all, I disagree with your third line because it actually is the problem. The reason I say this is because without a strong economy – and the revenue that flows from such a state – a government simply hasn’t the money to deliver the type of social policies needed to ensure that communities thrive and succeed.

      I have always said that in a country as potentially wealthy as NZ, we shouldn’t have to choose between fiscal responsibility and social accountability: we should be able to have both, but this government’s approach to economic policy (let the market decide) hasn’t worked.

      I am sorry, but without a strong, proactive fiscal (and monetary) strategy a government will never be able to deliver a first rate social programme. The proof of this is the Key government.

      • Hi Stuart

        Yes, money makes the world go (a)round but if the making of money isn’t informed by a progressive doctrine the it’ll just spin out of control.

        It isn’t good enough to claim some sort of variation of “It’s the economy, stupid”, particularly when we all know how, in that instance, the darling of the American left stupidly sold out working class and middle America, and poor producers in Haiti and other jurisdictions, through NAFTA, an action Slick Willie himself later admitted was both wrong and ill-informed.

        In the egg and chicken dilemma over primacy between society and the economy, I’d like to believe that we are able to choose a path that won’t cover us all in ovum splatter and there’s abundant evidence from recent history and contemporary experience to validate the concerns of those of us who are wary of putting the chicken ahead of the egg.

      • The reason I say this is because without a strong economy – and the revenue that flows from such a state – a government simply hasn’t the money to deliver the type of social policies needed to ensure that communities thrive and succeed.

        Government doesn’t, specifically, need the revenue first – as you well know. The government can create money and they can do it so that it doesn’t carry interest. This is important as, if the government created the money that it needed to do everything, then it gets rid of the several billion dollars a year that’s wasted in interest payments. But the most important thing about money creation is that it needs to be removed from the private banks. As long as the private banks can create our money and charge interest on it then NZ will never be able to afford anything.

  2. It cut to the heart of what is wrong with the ‘market knows best’ approach that this government has pursued.

    That’s true but you shouldn’t try to hide from the fact that it was a Labour government that brought that policy setting in and has followed it as well. Labour need to own that and say, clearly, that they’re no longer going to be leaving it to the market. Oh, and then they need to raise taxes back up to where Muldoon had them – 66% or more on the richest on the richest. Learn from that rather large piece of work that Piketty just wrote that shows that we need to tax more out of the rich.

    Also learn from what that NASA study showed – that it is the rich that destroy civilisation and start listening more to the people and less to the rich. And, yes, Labour were just as guilty of that as National are. I recall a meeting called by Cullen for stakeholders about industry in a particular location. Stakeholders included possible investors but not the local community.

  3. So it’s gone from a ‘policy’ to an ‘announcement’. One that Labour isn’t even committed to, and that Trevor Mallard is having to do ‘back of the envelope’ calculations to explain.

    As Audrey Young said “That isn’t a policy, it is slogan and about as deep as a bumper sticker.” Brilliant.

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