It is not that we did not know overturning thirty years of neo-liberalism would be a huge job. But last week’s budget began to bring into focus how big the gap is between a decent society and the rampant inequalities, shortcomings, failures to provide and so on that we currently have.
The amount extra to be spent is good, but it is many billions of dollars short of what is needed. How big is the gap? Well, it is hard to estimate, but must be in the region of $20 billion a year in additional government operating expenditure needed at least, rather than the $4 billion provided.
The budget reminds me of the Starlings that nest in our roof each year, with the parents desperately working to feed the chicks until they stop squawking (i.e. have had enough). It is a thankless task for the birds, and for the parents. The government is facing many, many unfed chicks who want, at last, their share of the worms.
If I could spare a word for the teachers. Teachers only ever get decent pay increases under Labour-led governments, so they are forced into a strongly militant position against the only party that supports them. This is a fine line, of course. It is also a bit sickening, when you have the National party making a big thing of paying teachers more. Are teachers the saviour of the waged classes, aiming to ratchet up pay (and God knows this is needed), or in a time of too few resources, wanting more then their fair share? I don’t know, but do get this mess settled (and it is good to have the teachers’ unions working together on this – I have long been an advocate for one teachers union for everyone, as it was until the secondary breakaway in the 1960s).
The budget does not unpick neo-liberalism but it does make a start in transferring more state resources into vulnerable areas. Unpicking will require tax increases for the well-off and income transfers to those in need. The ‘social contract’ of provision of universal health care, education, housing for low income people, support for children and universal old age pensions is still a very long way off. Really only pensions have survived unscathed and that has been at a cost to end-of-life health services.
The indexation of benefits to wages is a great initiative, except that where is the extra $200 per week needed to bring benefits back up to 1991 levels? And the rise needed to provide a fair wage for all?
Now the chicks are getting restive, because after 30 years of the wealthy sucking up all the resources in New Zealand, there is hope for the rest of us. Remember that Max Rashbrooke’s work demonstrates that 90% of us are worse off than pre-neo-liberalism. In order to imbue us with wellbeing there is such a lot to be done. In ruling out tax increases in this term (and we can see why Labour did this and it probably got them over the line) the government has shackled itself tremendously, meaning that many needs will remain unmet.
Many families have vulnerable people who will be helped by this budget, in particular in the mental health field. One in five of us, and all that. But I do feel this is not a budget that will re-elect a Labour-led government. Too many chicks are still hungry. While not entirely Labour’s fault (partially, though, because of the actions, or inactions, of the Clark and Lange/Palmer governments), the buck stops with them.
All eyes will now be on having a better year, and having a great budget in 2020 that reaches in to the bleeding heart of neo-liberalism and kills that movement stone dead.
I like this government. I have vaguely contemplated voting for it next year. It would be my first vote for Labour since 1987 – 33 years. The Greens seem to have lost direction, whereas Labour is just finding itself. But at some point down the line there needs to be bold action to match the bold words. I look forward to it.
Dr Liz Gordon is a researcher and a barrister, with interests in destroying neo-liberalism in all its forms and moving towards a socially just society. She usually blogs on justice, social welfare and education topics.
I am so tired of every one banging on about neo liberalism, especially when half of them type away with a glass of wine beside them, their degree paid for by the state and pink batts in the ceiling keeping them toasty.
Where is the 20 billion going to come from unless you throttle the life out of the sector that produces wealth and provides employment.
There are two problems facing the world
Over population and excessive consumption.
Tinkering with the neo liberal systems will not solve those problems
Where do you think the money came from to create the welfare system in the first place? Do you really think enough money to embark on a massive state housing system alongside free health care and benefits was just sitting around waiting to be used?
A government has the right to create it’s own money – and before anyone asks, no it doesn’t automatically lead to inflation, not if it’s spent on something contructive.
The first Labour government did a variety of things to create the money needed to transform New Zealand and it was a huge success leading to the expansion of the middleclass and the end of a lot of misery.
Ruth Richardson did the reverse. She cut welfare payments by a billion dollars in 1992 and it put the economy into a depression.
An alternative approach is to do what they did with the New Deal in the US and take the money from the super-rich who, just like today, were obscenely wealthy. There is no need to take money from small business people to fund the welfare state but small business people need to understand the flipside that the welfare system is a source of income for them in the economy and attempts to rein in government spending invariably lead to less money in the economy and a more precarious business environment
Actually our government probably doesn’t have the right to create money. If we tried to do do we would be slammed down by the world financial authorities. Also the idea of taking money from the so called super rich doesn’t float at all. On the one hand it is the same concept as selling off state assets you can only do it once then some other usually overseas based entity gets the future profits. Also the super rich don’t actually have a lot of taxable money for you to take
Aaron is right and PeterH is wrong. If a thing has been done successfully in the past, it is pointless to claim that it cannot be done again. The first Labour Government borrowed money interest free from the Reserve Bank and built thousands of houses (thereby meeting Aarons criterion that the spending must be constructive) without the “world financial authorities” raising a peep. I guess they had their own problems at the time.
And then there is the furphy that it will cause inflation. In 2008 the USA Fed created $trillions to save the banks. It didn’t cause inflation then or since.
gullible somnambulist was muttering about starlings
https://www.youtube.com/watch?v=Wr3peDqtoHg
“neoliberalism”
And the alternative is to a third-way free market economy is what, exactly?
The world has tried socialist systems – Venezuela being the latest example in a long line of perfect failures – they don’t work. They result in more people in poverty, not less.
The 2019 budget is terrible, mainly because it assumes more revenue than we are likely to achieve, so will result in deficit. New Zealand will have more to spend on welfare when it becomes a lot more productive.
What is their answer to this problem? They do not have one.
Child poverty is caused by the poor having children they cannot afford they then go on to be poorly educated and angry at the world because there is so much that they miss out on.Over population is one of the causes of the worlds problems so why not pay a benefit to not have children and break the cycle. In turn this could mean that those that truly need and deserve help over a bad patch could be paid a far high benefit . It needs to be remembered that welfare was conceived as a hand up not a hand out.
That’s just wishful thinking. The poor are poor because doing something would be marxist communist socialist nazism. That’s bad am I correct?
More seriously, the GOP does not view any of this as a problem. That’s the problem.
Years ago in Singapore Trevor, Chinese friends with two children said that certain govt benefits reduced after more than two. They were comfortable with that.
I guess that difficulties can emerge when church teaching or religious beliefs carry a heavy weight. Or fear.
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