Dr Liz Gordon – Oh the happy joys of Government!

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Former MPs get given the keys to the kingdom when they leave.  Well, not exactly, but they get an ID card on a lanyard that can be used to open a wide range of doors inside the complex. The philosophy is that parliament is a ‘home for life’ for MPs who have served.  One wouldn’t want to test it too far and bring one’s sleeping bag, however.

It is a testament to the high trust nature of our institutions that I can escort, on my own cognisance, any number of people into the building. It is easier for an ex-MP to get their friends into parliament than to get through the doors of Work and Income.  Such is the world today.

On Tuesday I was meeting a friend there and going to visit a Minister, in this case Kelvin Davies, to discuss with him the possibilities in developing models of family-friendly prisons, an approach supported by the Charity Pillars.  Thanks, yes, the meeting went well and he engaged with us on some of the issues.

I ran into a Minister I know at Copperfields (the coffee bar on the first floor).  She was on a bit of a high and asked me whether I agreed with her that this was “the best job in the world”. I thought about it for a bit, and replied that yes, I thought it was, while one had a fair wind following.

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Which is the nub for this government.  These are exciting times, with the smell of much-needed social and economic reforms in the air across many areas of life. At the same time, there are many crocodiles snapping at the heels of the government, and these can be ignored for only so long.   The two biggest of these are the 30% government spending threshold that has been self-imposed, and the decision to ruffle powerful business interests with labour sector reform.

The 30% threshold is the shadow of neo-liberalism and goes back to the debates over what should be private and what should be public. Radical neo-libs believe that only the police, army, justice and land registration systems should be paid for by the collective. Everything else, including roads, infrastructure, education, health and so on (everything else) should be funded by individuals or small groups formed to promote their own interests.  So taxation might be 5% under this model.

Rogernomics wanted about 20% of income to be tax, and used privatisation, marketisation and competition as mechanisms to reduce public spending.  At the beginning of the Rogernomics era, over 40% of national spending was public and, in 2017, Steven Joyce announced that government share of GDP was now under 30% and her was aiming for 25%.

But the trouble – the crocodile – is that the 30% figure is too low to meet the spending goals of the current government.  You can’t have an expansive welfare state on 30%. I think the current aim should be for 35%, and then see how that works. But the government is terrified of scaring the neo-liberal horses, who are munching away happily (in most cases except Fletcher Building) on the golden oats of large profits, and are well used to such a diet.

Which brings us to crocodile two.  The Employment Contracts Act and its successor led to weaker unions and weaker workers, and therefore the labour market has not shared equitably in the wealth of the nation in recent years. The business sector is getting very upset that it may have to share some of its profits with the workers, including full page ads in newspapers and lots of other pressures.

The upshot is that the government will not be getting the resources it needs but anyway may mobilise powerful interests against it. A lose/lose scenario.

National’s performance in opposition has been abysmal. Simon Bridges has something about him that, despite his pretty face, is not attractive.  He whines a lot. He has a lot to learn about opposition. It should not be about launching daily diatribes at the government but developing constructive alternatives.  National has essentially run on three tracks since the election: it was stolen from us; we didn’t know about [whatever they ignored that Labour now highlights] and the government is wrong, wrong, wrong.

I think he may make it through to the next election, though, because there is little sign of an emerging alternative leadership. Amy Adams is still there in the wind, but the endless population of the National caucus with youngish pākeha men who look like vacuum cleaner salesmen means that, whatever her talents, she is facing an uphill battle. While the party has made big strides in improving diversity in recent years, men still outnumber women in the caucus by 2:1.

The worry for the government is that the fair winds, which already have the odd squall in them, may turn foul.  My friend in cabinet will find things are less pleasant then. The expectation of people like me, and you, will not be met.  Things will turn to custard.

I keep saying, and will say again, that the government must face the crocodiles and beat them.  They will find that if they side with the people of Aotearoa for education, health, good services, fair wages, poverty reduction and so on, they can gain the kind of popularity they need to govern in a post-neolib world. But has Labour forever forgotten how to do this?  We will see, I guess.

 

Dr Liz Gordon began her working life as a university lecturer at Massey and the Canterbury universities. She spent six years as an Alliance MP, before starting her own research company, Pukeko Research.  Her work is in the fields of justice, law, education and sociology (poverty and inequality). She is the president of Pillars, a charity that works for the children of prisoners, a prison volunteer, and is on the board of several other organisations. Her mission is to see New Zealand freed from the shackles of neo-liberalism before she dies (hopefully well before!).

9 COMMENTS

  1. The current government needs to invest in NZers so they can work and contribute to the communities they live in and so they can feel better about themselves instead of languishing like too many are. I’m not a big supporter of NZ first but I’m very happy with Uncle Winnies performance and how he has handled the nasty opposition and himself so far. They need to come up with some new ideas on how to get some of our whanau of the couch and some might need a bit of a nudge/push as some people don’t know what is good for them until they try it. And some people lack confidence and just need a chance and to be around the right people.

    • Best idea would be to reinstate a 21st Century MoW. That should sort the “whanau of the couch” for the long term.

      Its a very simple tried and true idea before it was thrown on the tory bonfire.

  2. Well written article. Glad I read it.

    Wittily truthful observations wrapped around the hypocrisy of neo liberalism like the skin on a hot dog.

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    [ ” But the trouble – the crocodile – is that the 30% figure is too low to meet the spending goals of the current government. You can’t have an expansive welfare state on 30%. I think the current aim should be for 35%, and then see how that works. But the government is terrified of scaring the neo-liberal horses, who are munching away happily (in most cases except Fletcher Building) on the golden oats of large profits, and are well used to such a diet ”].

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    Oh they are , are they?

    Well , maybe its time they realized there’s going to be a few ‘changes’ around here and that in the not too far distant future they are going to be forced to concede whether they like it or not when the global financial system takes another big hit…

    Several million starving New Zealanders just ‘ might’… help them to see the light very smartly and not try to rise above their station as they have been doing over the last 34 years. People do not like being hungry and nor do they like to see their children going hungry, either.

    Or sleeping in the streets because the banks foreclosed on the mortgage.

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    [ ” Which brings us to crocodile two. The Employment Contracts Act and its successor led to weaker unions and weaker workers, and therefore the labour market has not shared equitably in the wealth of the nation in recent years. The business sector is getting very upset that it may have to share some of its profits with the workers, including full page ads in newspapers and lots of other pressures ” ]

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    Well , well bloody well well.

    Fancy that ?

    Well waddya’ bloody think of that???

    The good old Business Roundtable inspired Employment Contracts Act 1991 , with its overseer, the far right wing Ruth Richardson. Following hot on the heels of her equally vicious and infamous ‘ Mother of all Budgets’…

    Second only to Roger Douglas in the destruction of our former prosperous way of life and as some might say… guilty of not only treason but re-appropriating wealth from the commons to the already wealthy… commonly known in some circles as a rort or even theft…

    Here’s a lovely site I advocate as a beginners guide to the duplicity and ulterior motives of neo liberalism and also explains how we got to where we are now.

    New Right Fight – Who are the New Right?
    http://www.newrightfight.co.nz/pageA.html

    I would advise the New Zealand Initiative ( formerly called the Business Roundtable ) to be very , very careful on the dubious reports they offer up to this and any future governments and to consider carefully thier ways.

    I would also, like the OP , advise this government to not be quite so enthralled by the operators who have lined their pockets with our wealth in future,… they as well as the former might just come a cropper…

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    [ ”I keep saying, and will say again, that the government must face the crocodiles and beat them. They will find that if they side with the people of Aotearoa for education, health, good services, fair wages, poverty reduction and so on, they can gain the kind of popularity they need to govern in a post-neolib world. But has Labour forever forgotten how to do this? We will see, I guess”. ]

    ——————————-

  3. Perhaps the Government needs to invite Bill Mitchell (or Stephany Kelton, or Warren Mosler or, or…..) to enlighten them about fiscal opportunities in the light of the realities indicated by Modern Monetary Theory – not really a theory but in fact the reality of the proper relationship of a sovereign currency to a nations money-go-round. Any self-imposed (or externally attempted imposition) arbitrary limit is total bilge.

    That said, given the wide level of ignorance of this reality, one can perhaps understand (as is also the case with UK Labour) a distinct reticence on the part of NZ Labour to follow a rational course – always presuming that the ignorance does not also lie within NZ Labour! But, whatever the case, surely education of the general public in the reality has to start sometime, otherwise we will be stuck with ths nonsense forever.

  4. What the left still fails to understand is that the wealthy and their money are both mobile.

    Higher state interference in the economy equates to higher taxes and wealthy people don’t like that. So they put their money somewhere else. They vote with their wallet.

    As someone who is middle class, I’d rather have the wealthy keep their money and invest or spend it as they wish, because the alternative of a government bureaucrat spending it is far worse.

    • Codswallop.

      So many who own assets in NZ don’t even live here. Even around 95% of our banks are Australian owned, – making huge profits and the lions share DOES NOT stay in this country.

      This country has been bled dry by these types.

      And if you are alluding to the ludicrous and discredited ‘trickle down’
      theory aka neo liberalism ,- even the IMF has come out and said its a failed model.

      And while capital is now very mobile due to the electronic communications era, it was also made that way by mass deregulation of the financial and banking markets during the mid 1980’s Ronnie and Margie Chicago School of Economics brigade. And here in NZ we were conned by Roger Douglas and his mates .

      Formerly those corporate raiders were forced to pay their fair share of the tax burden and no one had a problem with it in NZ before that. In fact , – those same corporate welfare bludgers even benefited from it with a world first health and education system that Douglas and co ripped from us.

      I have a simple solution to see if they really are willing to up stakes and move operations – call their bluff. And they know that if they had a hissy fit collectively they would all stand to lose billions. Thus it is almost guaranteed they would concede and back down smartly.

      Starting with the Aussie banks.

      But if you want to live like a whipped dog living off scraps then so be it.

      Most of us don’t. And most of us have had a sheer bloody gutsful of all the apologists, all the nay sayer’s and doom merchants muddying the waters and getting in the way of having honest dialogue and getting things changed for the benefit of the majority.

      And much of that sort of deceitful lobbying and veiled threats of ‘pulling the plug’ and all the other mealy mouthed economic reports they produce in keeping things as they are now comes straight from vested interest weasel groups like the NZ Initiative.

      Hardly the working ( or even the middle classes ) persons friend.

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      [ ” We don’t like extremists, – we believe in laws and policy’s that support the mass majority of New Zealanders , and not just a small elite ,… who may have gotten control of the political system and the financial funding of political party’s , … shows that in this campaign”. ]

      – Winston Peters.

      23/9/2017.

      [ Peters said ” The sell off of New Zealand interests to overseas buyers was the “continuing story of this country’s decline since the 14th of July, 1984” ].

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    • Andrew your ideological point of view is dated and you show yourself as a pure Neo Liberal supporter through and through…

  5. The Australian owned banks in NZ all pay tax in this country. That issue went through the courts a few years ago.

    As an investor I can (and have) bought shares in these banks so they are owned internationally.

    You might not like what I said about the mobility of money, but it is hard reality. If NZ under Labour became even more anti-business we would all suffer. Ask any Venezuelan…

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