Why Jacinda will win 2023 despite housing, poverty, inequality & mental health crisis
Jacinda and Grant are heroic when it comes to big calls in the midst of crisis, but when it comes to actual progressive reform, they are as Bernard Hickey points out, still peddling tinkering rather than transformative change…
The global response to Covid-19 has turbo-charged this doom loop with over US$26tn of fresh government spending and central bank money printing, most of which went directly to corporates and asset owners in the form of grants, much higher asset prices and lower borrowing costs.
The numbers are just as obvious here. The Reserve Bank has printed just over $52bn to lower mortgage rates, which has lifted the value of property assets by more than $400bn. The government handed over $16.6bn to businesses during Covid to convince them not to sack staff. It worked, but it also meant businesses have banked an extra $20bn over the last year. Many businesses were backed by government guarantees, policy changes and subsidies, including for aviation, freight, selected tourism businesses and banks.
But repeated calls to increase welfare spending in line with the Welfare Experts Advisory Group’s recommendation for a permanent $5.2bn per year increase in benefits has been brushed away by Ardern and Robertson, who argue the nation can’t afford it. The same could be said for new infrastructure and state housing spending, which is set to be less than 5% of GDP and well short of what America and other developed countries are talking about.
Ardern and Robertson have prioritised debt reduction and are now at the fiscally conservative end of the advanced economy spectrum. New Zealand’s public net debt is barely 32% of GDP, less than a third of the average of developed economies with similar credit ratings. That’s despite interest costs falling at the same time as rising debt, which is the exact opposite of the pre-GFC orthodoxy that believed lower government debt would be good for economies and avoid higher interest rates.
…(where I disagree with Comrade Bernard Hickey is in allowing our debt to blow out. With the looming hyper inflation tsunami, an ocean of debt will end up swamping us. I think we should grow revenue through taxes that hurt the richest most like a Transaction tax rather than racking up more debt in this current ominous economic climate.)
But Bernard makes the point that Grant and Jacinda are too timid to make the real changes necessary.
I have argued that Labour won by accident in 2017 and Covid overshadowed 2020 so none of them have any real reform platform for the Public Service which allows the neoliberal public service to call the shots.
The great Unionist Robert Reid said it best…
…our Public Services are supposed to be the bastions of egalitarianism which are essential for a progressive liberal democracy progressing. Instead, spiteful zealots mutate it into the cruelest of torture devices used by the State to keep the poor too terrified to fight back.
Just like Oranga Tamariki stealing babies, Housing NZ evicting tenants, Motels housing the homeless, Corrections miscalculating Prisoner sentences and sparking prison riots– all of them don’t care about the actual welfare of the people they are supposed to care about and the neoliberal Wellington Bureaucratic elites have no intention of allowing a Party elected by the people to interfere with them running the country.
Housing, inequality, poverty and mental health are not getting better because the neoliberal Wellington Bureaucratic elites want it that way!
Labour have spent so much time saving NZ from Covid they have had no transformative vision as to what to do next, luckily this isn’t the first time a Labour leader was forced to be transformative.
The left love Michael Joseph Savage. Every Labour MP who wishes to push their left wing credentials have photos of him hanging in every electorate office and Minister’s room.
Savage is lauded as the creator of the welfare state in the wake of the Great Depression.
He was swamped when he went into public as NZers gushed over how he had saved them all.
The most hilarious reality, provided by insights from John A Lee who served in Savage’s Cabinet and was the anti-Phil Twyford of his day, (in that he actually built Houses) paints a very different picture from the mythology the left have given Savage .
The truth is that Savage was incredibly centrist and not a radical at all. Backed up by the neoliberal Walter Nash and conservative manipulator Peter Fraser, Savage did all he could to stop transformative change, it was actually Savage’s Caucus who forced his hand repeatedly to be transformative.
The exact same dynamics are at play inside Jacinda’s Labour Government.
When there is a crisis, the Prime Minister shines, but when it comes to domestic policy, she is super cautious to the point of being timid and she is stymied by a Wellington Bureaucratic elite who are more interested in protecting their fiefdoms than serving th people.
Luckily for Jacinda, the Right are in meltdown.
As National have floundered, ACT have looked stronger.
The problem is ACT are so right wing…
- Cut and freeze the Minimum wage
- Interest back on all student loans
- No Kiwsaver subsidy
- Cancel winter energy payment
- Dump all climate crisis legislation
- no more best start payments for families with new borns
- cut welfare payments
- no tax credits for research and development
- cuts to working for families
- $7b a year cut in public services
- Abolish Maori seats
- Abolish Human Rights Commission
…that the idea of a far right ACT+National Government will spook all those new found 45+ woman voters Jacinda picked up to sticking with her.
Labour will hold the middle classes in 2023, but the Greens have an opportunity to take the desperate voters Labour have betrayed from Labour and snooker Jacinda into being reliant on the Greens for a majority.
It will be a Labour+Green Government in 2023 with ACT cannibalising National vote. The real ideological battle will be 2026.
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Voting in NZ is a very barren landscape.
Vote Labour 2023 and get….crickets.
You will know what you get with our PM. Polite, means well, master of announcements that rarely if ever materialise but about as pointless as the driver in charge of a miniature car outside a dairy.
The rest of her ministers seem as stunted and as uninspiring.
As I read this morning of Gisborne residents forced to live on the streets because savvy investors living anywhere else but have forced the price of housing up, I am think of Labour and how utterly useless a government they are.
As for the Greens. What does that brand, that name mean to a bunch of identity politics idiots. They don’t deserve a look in.
Nor of course does National or ACT!
Comrade Bradbury it is good that you mention John.A.Lee and the success he made of providing housing but something that everyone seems to walk past without noticing is that Jack Lee was a ‘credit reformer’ ( as were other members of the Labour Party).
To get to the point:
WHAT ABOUT IF WE DID NOT BORROW MONEY AT ALL? WHAT ABOUT IF WE JUST CREATED CREDIT?
In fact, this is what New Zealand did during the Second World War. We did not borrow any money to pay for the war.
It is how my parents got a low interest state advances loan to build the sturdy, comfortable house. Low income earners like themselves became property owners.
Lee succeeded in building all those state houses because he was a socialist and the Labour Party’s left wing forced Savage and Nash into socialism.
Socialism means you take control of the banking system and force it to serve the needs of ‘ the many, not the few’.
Bankers and investors do not like it but most ordinary people are quite happy with it.
Spot on
Absolutely correct.
A win by default is not good for the country. The next 2 years will be very trying for this country as it will be for the World We are hit with restarting the economy at the same time being aware of the effect on the climate . I do not see any saviour in any of the present government both left and right . It is a depressing thought and we can only hope a true leader comes to the fore as has happened before.
Modern Monetary Theory suggests that the only problem of debt created internally by printing money is the danger of inflation. That inflation can be controlled by withdrawing money from circulation by taxation. Looking at it that way, Hickey and Bradbury are both right.
Now, the inflation is in housing, because that is where the Government and Reserve Bank are throwing all the money they are printing.
If, instead, the Government printed money, or created debt, to build 100,000 state houses for lifetime income-related rent by all who want them, along with all the infrastructure needed for those houses, the debt would be meaningless: the Government would be creating a huge asset for the state, and the only inflation element would be in the wages going into the pockets of the workers needed to do it.
People, don’t worry with global warming and housing, councils and government are consenting more marinas for the rich. Whether you are evicting people or animals https://www.nzherald.co.nz/nz/penguin-habitat-on-waiheke-island-could-be-destroyed-for-marina-plans/LN7JOMVQ6TBBWFZOS4LZ2ZRPXA/ from their homes, there is always more housing options, like living on your yacht when sea levels rise or cruise ship holidays around the world, with Covid visa exemptions. https://www.tvnz.co.nz/one-news/new-zealand/look-aboard-first-cruise-ship-start-sailing-again-in-nz-after-covid-19
13% increase in people joining gangs in NZ, maybe drugs smuggling could be a new careers for the enterprising, https://www.theguardian.com/world/commentisfree/2019/jun/26/the-pacific-is-in-danger-of-becoming-a-semi-narco-region https://www.latimes.com/world-nation/story/2020-04-24/wuhan-china-coronavirus-fentanyl-global-drug-trade After all drugs smuggling appear to have helped Sroubek and his family gain NZ residency and a multi million dollar Remuera mansion and compassion from government. Likewise discharged without conviction, it’s easy money to be a money launderer in NZ as a student turned Mother. https://www.stuff.co.nz/business/115157974/woman-discharged-without-conviction-for-laundering-money-for-international-drug-ring
This hotline looks well funded and fully able to protect our borders, sarcasm.
New Zealanders urged to help protect borders from drug smugglers
https://www.nzherald.co.nz/nz/new-zealanders-urged-to-help-protect-borders-from-drug-smugglers/LZC52UZUFQQJOGVWTLBP5JOCVE/
A cash business is the way to get ahead for your kids education and a mortgage free home. https://www.nzherald.co.nz/nz/teenage-kiwi-fears-deportation-because-parents-are-overstayers/JV5ZNSD74TGTYTDNIIWVNBKYAA/
I guess the problem is that too many people in NZ are too lazy and law abiding or have too many morals, to get ahead like these other budding NZ entrepreneurs.
Back to the rise in building marinas in NZ. Lifeboats for the rich are on the way!
Polluted waterways – why are we subsidising environmental harm?
https://www.rnz.co.nz/news/on-the-inside/440120/polluted-waterways-why-are-we-subsidising-environmental-harm
“It isn’t like we haven’t been warned. I was one of tens of thousands of scientists who signed up to a series of ‘World Scientists’ Warnings to Humanity’. These are warnings about everything from the collapse of food-webs and micro-organisms to freshwater biodiversity declines. Their common conclusion is, “If human behaviour the world over doesn’t change soon there will be catastrophic biodiversity loss and untold amounts of human misery”.
Read that sentence again. When a scientist says “catastrophic biodiversity loss”, it doesn’t mean “we might lose a panda”. It means roughly “head for the lifeboats”, except that planets don’t have lifeboats. We can either make hard changes or we can go down with the ship.”
Oceania Dairy wants to discharge 10 million litres a day of treated wastewater into Pacific Ocean (note, they got this consent through).
https://www.stuff.co.nz/timaru-herald/news/117493826/oceania-dairy-wants-to-discharge-10-million-litres-a-day-of-treated-wastewater-into-pacific-ocean
And for the townies…. keen pushing the sewerage into the sea and allowing dams for golf courses and Marinas.
State of the Gulf: Auckland Council report finds estuaries choking in sediment, shellfish dying
https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12342221
NZ Government Secretly Funded Water Bottling Companies
https://www.scoop.co.nz/stories/PO1904/S00055/nz-government-secretly-funded-water-bottling-companies.htm
“A dam illegally constructed in an Auckland Council reserve is set to be lowered before Christmas, but not removed
The impact of an illegally-constructed dam has been described by the Environment Court as “critical” for New Zealand’s most endangered bird but its removal will be a slow process, with the company which built it unlawfully setting most of the terms.”
https://www.newsroom.co.nz/2019/12/19/953508/dam-delays-half-soon-half-later-maybe
Harbour of doubt: The tiny creek that drains Auckland of its waste
St Lukes mall, one of the single biggest contributors of sewage into Meola, and likely among the biggest overflow points in the country.”
https://www.stuff.co.nz/environment/117958444/harbour-of-doubt-the-tiny-creek-that-drains-auckland-of-its-waste
No plan to tackle environmental degradation by increased tourism – Commissioner
https://www.rnz.co.nz/news/national/405767/no-plan-to-tackle-environmental-degradation-by-increased-tourism-commissioner
Protesters are vowing direct action in southern waters after oil giant OMV was yesterday cleared to drill up to 10 exploration wells off the Otago coast beginning this summer.
https://www.odt.co.nz/news/dunedin/mayor-slams-drilling-approval-farce?fbclid=IwAR0pg_haSht_L8zIPWhj2D-ph2d6CJb5yMAqp6BMozpjpjlofFpZuYFfylc
And finally when NZ politicians love corporate welfare so much and our taxes are increasingly going towards the favoured few, it is had to stop and go back to thinking about society.
List: The 20 Kiwi companies that have claimed the most in Covid-19 wage subsidies
https://www.tvnz.co.nz/one-news/new-zealand/list-20-kiwi-companies-have-claimed-most-in-covid-19-wage-subsidies
As well as that, many of these corporates take most of the ratepayers money too.
The Super Rich and the Super City: The companies pocketing $10b of ratepayers’ money
https://www.nzherald.co.nz/nz/the-super-rich-and-the-super-city-the-companies-pocketing-10b-of-ratepayers-money/HLHL57VVYQKW5GNJTCXBCEKSQU/
“The figures, provided by the council group under the Official Information Act, show Auckland Transport accounts for about $7b of the $10b spend, Auckland Council $2b and Watercare $1b. About two thirds of the 20 firms are foreign-owned and one third locally owned.”
Efficiency plus???? sounds unlikely.
Government to build world’s most expensive road
https://www.newshub.co.nz/home/new-zealand/2017/09/government-to-build-most-expensive-road-in-world.html
Fletcher/Todd block at Stonefields, Auckland had defects: Six-year-old Altera Apartments under repair
https://www.nzherald.co.nz/business/fletchertodd-block-at-stonefields-auckland-had-defects-six-year-old-altera-apartments-under-repair/UUNJDTOXFQIM474TYWZMH7WE5Q/
‘Whacked’ with huge costs: $16.3m estimated to fix defective Auckland apartments
https://www.nzherald.co.nz/business/whacked-with-huge-costs-163m-estimated-to-fix-defective-auckland-apartments/IZPBJLVZDTFZU5ZQOEPIBP7BKY/
Now the engineers and staff working at council are also a problem. What a fuck up.
https://www.stuff.co.nz/business/113226624/new-engineer-spotted-alleged-defects-in-christchurch-highrise-from-the-street
The Reserve Bank has printed just over $52bn to lower mortgage rates, which has lifted the value of property assets by more than $400bn.
Well that was a very ‘good’ investment, wasn’t it? 400 minus 52 equals 348.
348 billion of increased ‘assets’, and created out of thin air!
Yippee!
Maybe we can keep doing it until the average price of a house is $2 million. Or even $3 million. Why stop there? The Reserve Bank can render all our money completely worthless if they try hard enough.
Some good analysis but the crystal ball on my table shows this: an increasingly tired and stressed Jacinda who might well step down prior to the next election. The glowing optimism in the photo shoot beside an equally up-beat Michael Joseph Savage is not looking quite the same these days. If so, who could blame her? A tough job I say. But to Jacinda’s credit she may well be a bit more tenacious and dedicated to the public office than some think. A third term? Not unprecedented of course.
The question is however would Labour be the people’s choice without her?
Democracies are always at the whim of the voter. Jacinda knows that to do anything progressive at all she needs to be at the helm and have the support of both her party and voters. She knows that anything considered too radical by the voters will have her removed from the helm and replaced by those advocating the opposite (who in turn have the same problem once they’re in power). It’s why Democracy creates a certain stability, not despite but because nothing much rocks the boat, while other systems ultimately fail – although as Hitler, Mao, Stalin and now Xi Ping have shown, if you’re Totalitarian enough in how you force your politics you can force any system work for a time.
I have an interesting article for you Martyn. It concerns the between wars hyperinflation in Germany. This may cure you of some of your exaggerated fears:
https://braveneweurope.com/philipp-heimberger-fiscal-austerity-and-the-rise-of-the-nazis
Of course many prominent, especially right wing, economists and politicians, just love to scare people about hyperinflation. Then they love to make ordinary, generally innocent, folk pay a heavy price in austerity.
If there is partisanship in NZ then it is the continuation of where Key left us such was the circle with which I moved in came to realise. But the trouble with Key is he had no handbrake, in fact no filter at all. He left us with the haves but mostly the have not. And yes covid will be Arderns legacy, even a muppet knows this.
By 2026, climate change (locally and internationally) may be throwing a few curve balls that upset the equilibrium.
ACT is staying well out of the limelight. Guessing this is to ensure they don’t come off extreme right, which of course they are.