GUEST BLOG: Finn Flynn – Careful what you wish for
It’s only a few days before the ballot box closes and our future is sealed for another three years. Polls indicate that National will beat Labour, but it will require an alliance with ACT (and possibly the Peters Party) to get into power. ACT’s leader, David Seymour, has said repeatedly that he will force National to do a handbrake turn to the right.
He was only two years old when Roger Douglas first unleashed his cut-throats from Labour’s Trojan horse, so he is too young to remember the damage done in the name of fiscal rectitude, and he certainly never felt the effects himself.
Seymour, Luxon and Peters bluster about “taking our country back” and getting “our country back on track” without answering the implicit questions; “From whom?” and “To what?”
If we look at the last neoliberal scourge, from 1984 through the ‘90s, the answer is devastating. Let’s have a look at some stats:
Between 1978 and 1984 before Roger Douglas got the knife out, the average growth rate in New Zealand was 2.7 percent, not much different to Australia’s at 2.9 percent. But between 1984 and 1992, while Australia’s growth held at about 3.0 percent rate, New Zealand’s dropped to 0.4 percent before recovering in the 1990s with an average annual growth rate of 3.3 percent until 1998. Meanwhile Australia’s rate rose to 4.24 a year over the same time. According to historian David Grant, New Zealand’s economy in 1998 was nearly 25 percent smaller than it would have been if it had grown at the same rate as the Australian economy after 1984.
Douglas claimed again and again that selling public assets would repay state debt and stimulate the economy, but in fact overall economic growth slowed. The level of overseas debt trebled between 1984 and 1991 from $16 million to nearly $55 billion.
Government debt started falling from 1987 but that was offset by private sector offshore borrowings which rose by $57 billion. New Zealand’s total overseas debt grew from $46 billion to $102 billion between 1987 and 1999.
When privatisation started in 1988, the government owed about $39 million, but by June 1990, it owed $44.3 billion – $5.3 billion more.
Between 1985 and 1990 New Zealand’s GDP fell by 0.7 percent, the worst of any industrialised country, while unemployment more than doubled. So had reported cases of child abuse, and New Zealand’s youth suicide rate was the highest in the OECD.
Unemployment shot up. In September 1993, there were 254,700 registered as out of work, around 11 percent of the working population, of which 57,600 were classified as long-term unemployed. Incarceration rates exploded from seven per 100,000 in 1985 to 13 per 100,000 in 1993, a rise of nearly 100 percent.
Between 1984 and 1998, there were 53 hospital closures around New Zealand, another 10 closing in 1990. In 1984 there were 14,733 medical and surgical beds available in public hospitals but by 1999 there were only 8,955. In 1993, there were 64,717 citizens waiting for a public hospital bed, but by 1999, there were 181,383. In 1990, 57 percent of the state health budget went to public hospitals but by 1998, only 46 percent.
All this flogging off of state assets was supposed to boost overseas investment, but by 1990, investment had dropped to a sixth of that in 1984, when the New Zealand economy was supposed to be a basket case, going from $2,430 million dollars to just $46 million dollars in six years.
Despite the economic chaos that left most New Zealanders shell-shocked, gross domestic product shot up, which successive right wing governments crowed about. But the benefits went only to the wealthy. Between 1984 and 1990, real disposable income of the top quintile rose 6.4 percent while the bottom quintile fell 0.3 percent. Grant notes that New Zealand got the prize for the fastest rate of increasing wealth disparity of any other OECD country.
Financial institutions made like robbers’ dogs. The five overseas owned banks in New Zealand – ANZ, ASB, National Bank, Westpac and BNZ – controlled 98 percent of the country’s banking assets and were making an enormous profit. A KPMG survey in May 1999 showed these banks profiting by $1.6 billion, up from $1.2 billion in 1998. More than $1.3 billion dollars, or 80 percent of the profits had gone to Australian owners and shareholders. That was an increase of 33 percent on the previous year. ANZ announced in May 1999 an after-profit annual operating profit of $139 million, an increase of 20 percent. At the same time, customers were being gouged; income from customer fees rose 15 percent from $135 million to $156 million.
So let’s return to those questions. Luxon wants to “put our country back on track” to austerity for the benefit of his rich patrons, Peters wants to “take our country back” from New Zealanders he doesn’t like, and Seymour wants to return to the good old days of ignoring Maori, throwing more people in prison, creating more homelessness, and gutting government to effectively run the country. All out of the Trump playbook. Yay!
It’s time to reflect on the irreducible fact that there is nowhere in the world where modern neoliberal economics has improved any economy in any country for any citizenry except for the already rich and powerful.
There is no doubt the transition from 1984 to 1991 was sharp. That was because we had an extraordinarily controlled economy, much more so than Australia.
Just some examples. Import licensing, which meant no new cars or TV’s imported in NZ, unless there was a licence. Reserve Bank approval was required to buy anything overseas. Around 50% of the economy was state owned. Hundreds of thousands employed by the Post Office and NZ Rail. Subsidies for sheep!
The Cost. In 1984 NZ was about to call in the IMF to avoid running out of money. Yes, we had growth prior to 1984. But it was entirely fuelled by borrowing. And by 1984 we had run out of the money.
The changes, mostly by Roger Douglas, were sharp, equivalent to castor oil medicine. But necessary.
In any event it is now 40 years ago. There is no going back. And no, Act won’t run the economy. As with all MMP governments, the major party gets the major say.
Actually Wayne, the P&T workforce peaked at around 40k and Rail was similar, hardly 100s of thousands, all Douglas did was move thousands of them onto the dole.
Perhaps rather than generalities in rebuttal of Finns article let’s have specifics instead.
Muldoon was the problem in 1984, as you say changes needed to happen but gifting the state’s best assets to overseas buyers for almost nothing was not the solution. I seem to remember that the phone system was making profits larger than its sale price within a few years (yes the new owners obviously invested more into the business) & subsequent Telecom share prices reflected the financial gift that the sale was.
Wayne, you may think the major partner gets the most say but you forget about the collective cabinet responsibility.
Nothing can get done if all cabinet do not agree.
This is why the first part of Jacindas government was completely hamstrung by the buffoons from NZ First.
They are even known to tell lies about some of the things they said and signed up for while in cabinet.
The classic is the Te Hupuapua saga. Winston signed up for this discussion document but now says he knew nothing about it.
So don’t expect that Nats will have everything they want just because they may have a majority of Cabinet. They certainly won’t because Seymour and Peters won’t sign off on that which they disagree with.
Selling public assets disheartens the population. Why have we built a good country up just so lazy blues can hand it over to foreigners cheaply? Once.
They can’t be bothered thinking of better ways or making haste slowly. They and their friends and donors want to clip the ticket fast and make a lot of money from everyone else’s work.
Short term thinkers and thieves.
No wonder productivity is low when people see their efforts benefitting foreigners and the very few at the top only.
How did punishing the poor ever help us to prosperity. The writer quite clearly shows it didn’t. It suffocated us.
Everyone needs to feel they have a stake in the future, not being side-lined by Nact’s friends.
Luxon and Willis lead that nasty band of ex-Key misfits. How will they make things better for average NZders? They cannot and voters need to realize they have no intention of trying. That is not their aim.
We were lied to then, we’re being lied to now\
No Kyle, it’s alternative truths!
Bugger!
Labour can’t find any credible leaders to replace Chris Hipkins?
It is in the crucible of class struggle that great Left wing leaders are made.
To rebuild, Labour needs to return to its trade union roots.
They say, “Cut Back!”
“We say, “Fight Back!”
Agreed. This is why Labour as a brand is no longer fit for purpose.
If they want to pursue the woke identity politics agenda fine, just don’t pretend you represent working people and the values that Labour once stood for.
We got scammed by the likes of Roger the Rat, Dick Prebble and Mickey Basset.
Not to mention Darth Caygill
A Left Wing fight back is essential.
In my experience it starts in the Union Movement.
As the saying goes, “Working People who Strike Left, Vote Left!”.
Without strong militant grass roots Trade Union organisation, Left Wing parties and politics will always struggle to make progress against the power of vested capital.
No pressure Guys!
Working people who strike left, end up unemployed and on the streets.
And yet Labour embraces and encourages modern neoliberal economics.
This is the problem. No one looks at actual numbers, but they listen to deluded wankers like Mike Hosking, and think they are informed.
Agree ..that’s why I read TDB.
Good post. But think – be even more careful not to wish for anything – to slump, and sit around passing judgment like wiseacres as USA put it – that’s what old alcoholics do. After wishing for something the next step must be to work out how to move closer to where you would wish to be in a legal and organised manner. Great statistics you have included –
I have put the link aside for reference.
Things we all ought to know and would if we were responsible, informed, thinking citizens. We would be thinking about having a good cohesive society where some citizens don’t wiggle their way to places of wealth and beat everyone else down from the top of the sandcastle.
To prevent that we need to be aware of what happens when you take your eyes off the specifications for a good society with equity so all have some input, and follow reasonable rules for good outcomes, and all share and carry the weight. And all are learning something new all the time.
This from the Hollies – He Ain’t Heavy That’s My Brother
https://www.youtube.com/watch?v=fBI9i3HlFVE
(This little caption goes with the vid which has lyrics with it that were appropriate during the
Vietnam war. I’m a Vietnam vet (USMC) and this song brings tears to my eyes every time I hear it. It reminds me of times long ago when men were …
We were playing this on our country’s radios when we went through a period of caring. Was it just a passing fashion – we thought we were on a road to becoming civilised, prosperous and wise to sagacious – make it so!)
Something new for today, a word that sends its echoes here from past centuries but is still meaningful: … in fact, wiseacre came to English by a different route: it is derived from the Middle Dutch wijssegger, meaning “soothsayer.” Wiseacre first appeared in English way back in the 16th century, while the “insolent” sense of wise and the words formed from it are products of the 19th century.
Wiseacre Definition & Meaning – Merriam-Webster
Merriam-Webster https://www.merriam-webster.com › dictionary › wiseacre
Here is an echo of how we interact in NZ today. The Front Lawn had a good ear.
Well – ‘How You Doing?’ https://www.youtube.com/watch?v=EfLiHhuZMtg
They sort of remember each other, serendipity acquaintances who can’t remember names or places, and aren’t really interested. We need to find good people with humanity, goodness, creativity, skills, morals and practicality and commit to friendship and esprit de corps. Whoever wins this election event we will need to start learning and make changes and form extended families, good whanau to belong with and work with and defend our livings with. As for the rest – There be Dragons. I’ll throw in some Barbara Sher who was a great motivator. ‘You Don’t Know What’s Possible’ 11m.
These two paras from RadioNZ write-up on Michael Palin’s book about WW1 relative who came to NZ and later died at the Somme.
I think his summary of what his relative was about is good for thinking now:
“It wasn’t about strategy, it wasn’t about politics, it wasn’t about what sort of ammunition they were given, he wasn’t someone who analysed anythig too much, he was just there with his friends trying to do the best for them.
“And I think that might be the attitude that gets you through… and he kept going, his diaries showed that he was continually moving behind enemy lines, bringing back bodies, bringing wounded down to the ships on the shore, carrying ammunition up to the artillery positions, he’s always on the go. And I think that’s because he feels he’s with mates that he likes and respects.
https://www.rnz.co.nz/national/programmes/sunday/audio/2018910171/michael-palin-s-new-zealand-connection-my-great-uncle-harry-s-life-and-death-in-wwi
Interesting perspective and echo’s my belief that Westminster style democracy has and continues to fail us.
Yep, good post.
The system serves itself, not the people. We’re only voting in those who are given responsibility of controlling us, not serving us. We’re being crushed by top down, now global governance; and the blue lot will throw the PPP elephant of global capital on top of it.
All so the <1% that the system serves, and their wannabes, can live their accustomed lifestyles while we are made decarbonised waste.
Can someone kindly provide the title of the David Grant research referred to and preferably a link to it? Thank you
According to historian David Grant, New Zealand’s economy in 1998 was nearly 25 percent smaller than it would have been if it had grown at the same rate as the Australian economy after 1984.
Dunno myself but this could be the guy.
David Grant
Penguin Books New Zealand
https://www.penguin.co.nz › authors › david-grant
David Grant is a Wellington historian and author with a background in journalism and teaching. In 1999 he was awarded Victoria University’s JD Stout Research …
David Grant is a Wellington historian and author with a background in journalism and teaching. In 1999 he was awarded Victoria University’s JD Stout Research Fellowship in New Zealand cultural studies. He reviews for New Zealand Books, and is a guest lecturer in history at Victoria University. As well as contributing to a wide range of anthologies, dictionaries, encyclopaedias, journals and magazines, he did background research for the TV series One People: Our Century.
His books include: Man For All Seasons: The life and times of Ken Douglas; The Big Blue: Snapshots of the 1951 waterfront lockout (as editor); Those Who Can Teach: A History of Secondary Education in New Zealand from the Union Perspective; Two Over Three on Goodtime Sugar: The New Zealand TAB turns 50; Jagged Seas: The New Zealand Seamen’s Union 1879–2003; Field punishment No. 1: Archibald Baxter, Mark Briggs and New Zealand’s anti-militarist tradition.
He has also researched prime minister of the Third Labour Government, Norman Kirk, and a history of the Christian Pacifist Society, New Zealand’s first major pacifist group.