Dr Liz Gordon: A moral and practical budget

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Well that was interesting, wasn’t it? And, no, I haven’t yet delved through the individual appropriations, so my thoughts come out of listening to Grant Robertson’s speech. And, yes, I am aware that there are gaps.  It was not a perfect budget.  But, by goodness, it was a Labour budget, and we haven’t seen many of those in 30 years.

And I say 30 years because that was Grant Robertson’s timeframe. The mother of all budgets, which relentlessly aimed to reduce the income of those at the bottom in order to drive wages down, was at the heart of his speech.

That budget was highly successful in grinding benefit rates down to poverty levels.  Wages followed. The earning gap between Australia and New Zealand yawned widely. Under neo-liberal settings, this should have meant that Australian companies would flock over the ditch and set up here, boosting our economy.

And while the wage falls did occur, the promised boost in investment never took place.  More than that, despite ongoing large pay gaps, number of large manufacturers took their business to Australia. Arnotts made millions of dollars for New Zealand.  Cadburys. Biccies and choc are good money makers. Building materials… so many areas.  We not only reduced the wages of our workers but we also de-skilled them.  It was the opposite of what needed to be done.

So how fantastic to hear a Labour Minister of Finance note that raising benefits will stimulate the economy, as beneficiaries spend the extra they are given.  This has always been true but has not been highlighted in the neolib playbook.

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The focus on health and new house building also sounded like Labour is finally back in charge.  Not enough, for sure, but better than before.  And here again Grant had little digs at the neolib past in the health sector. He was quite restrained, actually.

Then it came to manufacturing. And there it was, the Labour gold standard – building railway carriages at the Hillside works in Dunedin.  Training and qualifying new staff.  A firm commitment to rail into the future. Oh the bliss of it!

Education and training were quite big winners in the budget too.  Apprenticeships etc, but also a commitment to supporting pathways into work for women and Maori, who have lost ground during the pandemic.  We will need to keep an eye on this space.

Thirty years ago the Mother of all Budgets made 90% of New Zealanders poorer and massively increased economic and social inequality.  The promised gains never came.  We have been a poor country since.

Whatever its shortcoming, this budget moves beyond this.  It gives permission to ramp up spending, support our people, stimulate the economy, create jobs, raise wages and take thousands of children out of material poverty. It is a proper Labour government budget, as close I can remember because there hasn’t been one since 1975, delivered with glee and gusto by a minister on his high moral horse, and committed to a fairer New Zealand.

 

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.

24 COMMENTS

  1. Let’s not get carried away though @ Liz. Yes, credit where credit is due and all that stuff.
    The best description I’ve heard about the budget is that “It’s a good start”. Probably a bloody good start

    Now, if we can keep all the ticket clippers and bullshit artists (both in the senior ranks of our PS, and within elected parliamentary members of the party itself), things might start to happen, Deliverology or no deliverology
    Might not be a bad idea either if we started to question why certain basic things that might be needed to progress a few things cost so much.
    Might also be a good idea to question why ‘things’ take so long.

    • I spit rhymes to. I tell it how it is and how it will be done. If you know you know, they already know. Free smoke will put em in there place. Try and put it out.

  3. “Under neo-liberal settings, this should have meant that Australian companies would flock over the ditch and set up here, boosting our economy”.

    Oh how I recall that lying assurance. We were sacrificing an awful lot but Aussie would have to do the same sooner or later so we were repeatedly told. We were competitive and a great place to do business. Apparently! But Aussie didn’t follow us and we have been the poorer for it ever since.

    The lesson I learnt was disciples of academic theory not tested and who put it into practice are idiots. The likes of the Bolger government back then or Prebble and others who thought they were the smartest people in the room, well how wrong they were.

    I recall highlights like the near 12% unemployment rate, recession verging on depression and former industrial zones like Penrose all but abandonded in the early to mid 90’s. The experiment was complete madness, as was the self mutilation of our country’s economy which is still impossible to fathom. I mean how much has the taxpayer had to pay to revive our railway system ever since these morons privatised it and made Faye Richwhite even more fabulously wealthy than they already were?

    And like them the select few got richer.

    May we never return to blind zealotry in government ever again.

  4. Excellent and uplifting article, Dr Liz Gordon. Thank you for that. 🙂

    First came the business about compulsory unionism , then the reversal of the rampart neo liberal immigration policy’s of Key/English to attain a large pool of labour to drive wages even further down… and now Robertson’s budget.

    More work to be done, as Robertson says,… but this is a magnificent, much needed, and long overdue start. If Labour keeps on this tangent, we will get our country back in the full sense of the word.

    Well done, Labour !!!

  6. Nothing real for the environment in this budget.

    Government has done nothing to stop wealthy, global, companies, operating that pay virtually zero taxes.

    Bizarely Biden, has had some extremely good ideas.

    Biden’s global corporation tax plan is hugely popular, so why isn’t Britain backing it?
    https://www.theguardian.com/commentisfree/2021/may/21/biden-global-corporation-tax-popular-boris-johnson

    Biden’s $2.25 trillion infrastructure plan to focus on green energy and decarbonization
    https://www.worldoil.com/news/2021/3/31/biden-s-225-trillion-infrastructure-plan-to-focus-on-green-energy-and-decarbonization

    NZ is more a neokindness budget, rather than looking at the threats of this planet and people.

    Disappointing that after the ‘clap for carers’ approach to thanking the medical profession, the medical and other staff gets no financial recognition for their Covid work and NZ is happy to see them leave to OZ where wages are 50% higher apparently for nurses. That’s not exactly pay parity! Not looking forward to the next Covid outbreak where our hospitals are filled with the cheapest staff the government can find. That’s the neoliberal way!

  7. However this budget is still better than the Natz would have done… just was hoping with a Green, Labour government would get off their soap boxes for the small stuff (war on “Mum n Dad” landlords to help global landlord businesses like Compass and emergency housing/motels paying less taxes at double the rents for 1/4 of the quality) and actually concentrate on the big stuff, aka some individuals now earn and own more than governments and the planet is under threat.

    Instead Labeens are trying to entice rich individuals to NZ with free citizenship and more corporate welfare…. People who work hard should get ahead and have some luxuries but not special tax payer tax breaks for billionaire corporations…. even if those in charge of these gigantic businesses are decent people, often what is done in their name, is not.

  8. “Under neo-liberal settings, this should have meant that Australian companies would flock over the ditch and set up here, boosting our economy”

    This so much this.

    This is a great response to the budget

    Weirdly I came here to procrastinate from writing a research paper on neoliberalism where I’ve just cited you about the capacity of the state

    Small world.

    Absolutely, I’m so happy that you mentioned businesses closing down and moving to australia, this trend was obvious in the 90s and it shows that our politicians had a religious adherence to neoliberalism by not reversing it, not a pragmatic evidence based approach we’re constantly told at uni that our politicians always advocate, if it was pragmatic they’d have seen the results and changed course. This was dogmatic

    Why would businesses close up shop in the fourth most deregulated market, with cheap labour and cheap taxes and start up in a high wage, highly regulated, higher taxed and higher unionized nation??

    Could it be that low paid workers with few rights are unproductive which ends up costing more in the long run.

    As for benefits stimulating the economy….this has been proven time and time again ….the so called economic realists were deluded fundamentalists who thought their theories had all the answers, crazy how everyone brought in to thier delusions while the country collapsed around them

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