MUST READ: Budget 2018: Labour’s Pre-Emptive Capitulation To Kiwi Capitalism’s Discontent

By   /   May 22, 2018  /   15 Comments

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Grant Robertson’s dutiful and fiscally timid first budget has furnished New Zealand business leaders with all the proof they could possibly need that neoliberalism’s sharpest teeth are all perfectly safe.

THE WINTER OF DISCONTENT was an astonishingly successful bluff executed by the business community against Helen Clark’s government in May 2000. The bluff itself came in three parts. Part One was an all-out effort to undermine international confidence in the strength of the New Zealand dollar. Part Two called for the business community’s leading media allies to begin undermining middle-class confidence in the Clark-Anderton Government. Part Three required New Zealand’s leading businesses to issue Prime Minister Clark and her Finance Minister, Michael Cullen, with an “Investment Strike” notice. If the radical elements of the Labour-Alliance Government’s legislative programme weren’t shelved immediately, then business leaders would simply “put away their cheque-books” and the economy would stall.

Clark and Cullen, unwilling to call the business community’s bluff, capitulated almost immediately. Anderton was required to break the bad news to the Alliance caucus. Its plans to extract some of the neoliberal order’s sharpest teeth would have to be put on hold … indefinitely. Clark publicly declared that the paid parental leave provisions put forward by the Alliance’s Laila Harré would be enacted “over her dead body”. On 23 May 2000, Cullen told the Wellington Chamber of Commerce: “I am mindful that the previous government allowed itself to become disconnected from the electorate and out of touch with public opinion. It stopped listening and paid the political price for that at the last elections. I am determined that we shall not make the same mistake.”

The questions which Cullen either did not want (or never thought) to ask were: from which part of the electorate did Jenny Shipley’s turncoat government become disconnected; and whose opinions did they disregard?

The National-led government was not voted out of office in 1999 by New Zealand’s business elites. It lost power after nine years of vicious assaults upon trade unionists, beneficiaries, state house tenants, university students and just about every other sector group unlucky enough to be in a client relationship with the state. These were the New Zealanders who voted for Labour, the Alliance and the Greens in 1999. Tragically, they were also the Kiwis who Clark and Cullen abandoned just six months laterwhen confronted with the business community’s bold political bluff: its point-blank refusal to accept the policy consequences of the Right’s electoral defeat.

Eighteen years later, a Labour-led government filled with friends, admirers and proteges of the Clark-Cullen era have gone one better than their easily-overawed political mentors by capitulating pre-emptively to the business community. The Budget Responsibility Rules, formulated by Labour’s Grant Robertson and signed-up to by the Greens’ James Shaw in March 2017, sent a strong signal to New Zealand’s business elites that no matter how much stardust got thrown about during the general election campaign, no repeat of the Winter of Discontent would be necessary. Grant Robertson’s dutiful and fiscally timid first budget has furnished New Zealand business leaders with all the proof they could possibly need that neoliberalism’s sharpest teeth are all perfectly safe.

The most effective bluff in politics isn’t the one your opponents are too gutless to call, it’s the one you no longer even have to make.


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  1. CLEANGREEN says:

    Chris that was correctly said.

    We were conned by Jacinda’s “Lets do this” campaign sadly.

    “The most effective bluff in politics isn’t the one your opponents are too gutless to call, it’s the one you no longer even have to make.”

  2. The Masked Moa says:

    Oh how I long for the days when the Greens were an independent political party that could speak truth to power. The current Green MPs would never have got a look in under the old Greens. Me thinks its time for an actual environmental party beholden to neither left nor right as Rod Donald has said.

    • CLEANGREEN says:

      Agreed TMM;

      I was a Green Party member then, (not now) when Rod Donald and Jeannette Fitzsimmons came to Napier ‘to speak truth to power.’

      These were awesome greatness in our midst then, but this Green Party are really just a shell of the once greatness of the Green Party now.

  3. Theodore says:

    Let’s not be too harsh here.

    Neo-liberalism has impacted NZ for 30-plus years. It’s tentacles reach into every part of our nation’s economy, social services, and as well psyche.

    It’ll take more than 6 months to overturn the neo-liberal regime. Let’s give them some room before jumping over their heads.

  4. Castro says:

    The Wage Slave Labour Party, gifter of No Zealand sovereignty to the Chinese dictatorship, is a 100% bona fide right-wing party; why the surprise? Imagine what’s going to happen after Winston retires… despotism, populism, civil war… I say bring it on.

    • Wensleydale says:

      Anyone wishing for war is a fool. You know what happens during war, right? The very worst facets of human nature come to the fore. The rule of law goes out the window. Murder, arson, rape, looting… that’s what happens during a war. It’s chaos. There’s no such thing as a carefully orchestrated war whereby all the rules of engagement are dutifully obeyed, and the Geneva Convention is strictly adhered to. It’s horrible, and ugly and vicious, and as much as I loathe the National/Act Parties, I most definitely don’t wish for war. That way lies madness and death.

      Get some perspective, mate.

  5. Nobody says:

    They’re not called, “The Ruling Class” for nothing.

    The pedestrian Left gets taken in by the same old rouse from Labour every time, and then when they are inevitably betrayed, they weep and wail like it was the first time.

    I said it before this election and I’ll say it again, Labour doesn’t win elections because of disconnect in the electorate, they win them because the Ruling Class realise that their natural tool, the National Party has gone blunt and can no longer get the job done.

    The Hard Left fought the previous government to a stand still on the TPP so Labour was brought in to finish the job. Jacinda Ardern was plucked from obscurity for this very purpose. That is why Jacinda and Co *literally ran* to get the TPP signed, metaphorically leaping over god knows how many more pressing issues in the process – it is the ONLY thing this government has done with urgency. It tells you exactly who they’re trying to impress.

    After that was done, we discovered that after 9 years in opposition, they had no concrete plans at all. How can that be? Because they are crystal clear on their role and function if absolutely no one else is on the Left; they don’t need any plans, because they will be told what their plans are by the Ruling Class, on a bloody need-to-know basis. And in the absence of any orders to the contrary, carry on carrying on with the Neo Liberal Agenda and the Washington Concensus.

    The Permanent Public Service actually runs the government day to day, year to year and government to government, and they are hand in glove with Big Business. If you stand in front of the Bee Hive for any length of time on a work day, you can see the Business Lobbiests come and go. They generally come out smiling. You quickly realise that if they stop coming out smiling, they will stop coming at all, and when that happens, the government will fall.

    That’s how the government of NZ really works, in essence. All the rest is simply theatre.

    Case in point; we’ve needed a Banking Royal Commission for years. Everyone knows that, the government best of all. Occupy Auckland told us that much! But it’s only the sheer weight of dead trees coming out of the Australian Press that can’t be ignored that would force us to have one if ever, out of sheer embarrassment. If the Government actually governed, it would be New Zealand leading the charge. But the Government does not govern. The Ruling Class governs.

    After a while, after enough heartbreak, outrage and betrayal, the Hard Left will once again start protesting, and the Ruling Class will realise this government is finished too, and they will bring in a new one, and then a new government will push the Capitalist ball further down the field. It really doesn’t matter, chocolate or vanilla, blue or red, both teams are owned by the same Club.

    We’re deluded if we think this is Democracy, it’s nothing like it. The only way to change this is to make the majority Proletariat the new Ruling Class, but it seems no one here knows how to do that. Not even the Hard Left knows how to do that I have discovered, so round and round we go.

  6. Philg says:

    The left has left, gone and all but forgotten. The neolibs are steering the ship, again, albeit with a fresh coat of paint. Time , I hope, will prove me wrong.

  7. Marc says:

    Yes, Chris, you sum it up well in this post.

    I am NOT surprised, things are unfolding more or less as I had expected.

  8. David Stone says:

    As Nobody says there’s not much sign of government altering the way the country is run, why it is run,what it will produce, or for whom it will be run.
    “Why” “What” and “for Whom” being the fundamental questions of economics.
    To take back control though is a big ask. It requires that the international banks are either regulated as once upon a time they were, and now they are controlled nowhere in the western world. What Nobody says of who runs NZ is true of all Western “democracies” in 2018. The necessary changes would be resisted by the rest of the western world, not just the business lobby here.
    But in order to approach the issue government needs to thoroughly understand the system as it is. And since Russell Norman left there is no-one in there on either side with the possible exception of Winston, that has ever said anything to give any indication that they do. Frankly I don’t believe Grant Robinson has the intellectual capacity, and Jacinda has never had the necessary specialist interest to study and think about it enough.
    What they could do , and possibly get away with, would be to leave the existing banks alone, and let the business lobby get on with what it does best, but either using Kiwibank or starting another, Issue fiat money into it and use that to fund some parts of government expenditure. Perhaps leaving social expenditure to be covered by taxation, but funding infrastructure with new money. The business community might like that anyway, It would create opportunities’.
    D J S

  9. OCON says:

    I think it was Ardern who described this budget as “transformational”. Of course it was nothing of the sort. It was, as you have described Chris, ‘timid’ and as others have said ‘National Lite’.

    The result is to provide sustenance to existing economic structures and practices. The economic status quo is reinforced rather than dismantled, which is what a transformational budget would have done, or at least started. Transformation is essentially about ‘out with the old and in with the new”. This budget was more like ‘reinforce the old and resist the new’.

    No wonder the left are pissed off.

  10. Mjolnir says:

    Baby steps?

  11. mosa says:

    Anybody out there that was expecting salvation from the ” evil empire ” by electing this coalition is seriously deluded and all of Winstons comments on taking on the neo lib system and forcing meaningful change has come to nothing.
    The shift in 1984 was and is permanent no matter who forms the governing arrangement they are beholden to the rich and powerful forces that dictate how and what happens in this wee little group of islands at the bottom of the world.
    Kiwis collectively from 1987 have voted for this economic system handing power to the collective finance authority that never stands for election every three years but has all the influence on how this country is run.
    The ” revolution ” was undertaken without tanks the military or one bullet being fired or one drop of blood spilt.

    • Marc says:

      Yep, and as most humans are conformist cowards, there will be no true revolution here, they rather work like hamsters run in the hamster wheel, keeping their heads down.

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