Economist Brian Easton looks at why this government will not be transformative and questions whether we want it to be

This is a re-post of an article originally published on pundit.co.nz. It is here with permission.

Half of the current cabinet could not vote in the 1990 election when the neoliberal government, among other things, attacked the foundations of the welfare state – an attack which has not been reversed. Only a quarter could have voted in the 1984 election when so many Labour voters felt betrayed by a party which promised consensus government and practised a blitzkrieg. A quarter of the cabinet has always voted in a general election based on MMP.

(This cabinet has an average age not very different from that of the Labour members in the 2017 cabinet – around 48 years. In totality, the 2017 cabinet was older because its New Zealand First members averaged 58.)

Time marches on but we may not always be aware of the battles of the past. Over half the cabinet have never voted when homosexual activity was criminal; only one voted before the liberalising of abortion in the 1970s. Neither legislation was perfect, nor as liberal as it is today, but the changes have been incremental since.

Or consider that in the 1970s, an economist talking to the older blue rinse set had to deal carefully with the issue of mothers returning to the paid workforce – ‘not their daughters’, they snorted. Forty years later, a National government was forcing mothers on benefits to go out to work. Ironically, the party which viciously attacked domestic purposes beneficiaries in the mid-1970s, has since had cabinet ministers – even a deputy leader – in whose careers the DPB played a critical positive role. ‘Normality’ had been reversed.

So what are normal and acceptable changes? The majority of today’s cabinet have lived all their adult life with high child poverty rates; doubled by National’s 1990 attack. They have lived with the marked increase in economic inequality which Rogernomics and Ruthanasia deliberately generated.

The issues of continuities are critical to understanding the development of New Zealand. When Jacinda Ardern said hers would be a transformative government, she must have been unaware that in the last hundred and more years there has been only one genuinely transformative government – on any careful meaning of the term.

That was the neoliberal government of the late 1980s and early 1990s. (Admittedly, it involved two phases with different parties in government.)

But what about, you may ask, the first (Savage-Fraser) Labour Government? It is true that they made some fundamental improvements to New Zealand but almost every one had earlier precursors. For instance, the Social Security Act has roots as far back as 1882 (when Colonial Treasurer Harry Atkinson, an acknowledged conservative, proposed an income support scheme not unlike the 1938 Act, and 1898 when the Old Age Pension Act implemented some key principles). Accelerating an underlying trend, especially after the stagnation arising from the Great Depression, is hardly transformative; Labour was (radically) progressive.

There are two groups of caveats. First, there had to be adaptation for change. For instance, Savage-Fraser introduced centrally funded hospital care, just as the scope of secondary healthcare increased markedly with new, more expensive treatments. (The previous Coalition Government – precursor of National – had similar, but more private, plans.)

The other out-of-trend was the intensive market intervention introduced to fight the Second World War. I know of no precursor (documented suggestions gratefully received) .

The market interventions hung on after the war long after they became obsolete and unnecessary. There was some market liberalisation from the 1950s, but it was the Lange-Douglas Labour government which undertook their final removal. In that sense they were a progressive government but they became transformative when they went on to introduce their extreme neoliberal economic regime. Few of its components had predecessors.

This is evident in the neoliberal ‘redesign’ of the welfare state of 1990 and 1991. Its roots are in the minimalism of the US approach, not in any earlier element of the New Zealand welfare state. (You could argue that New Zealand’s nineteenth-century welfare state was minimalist, but that was it starting up. Apply that to the neoliberal transformation and you conclude they were going back to the nineteenth century.)

There remain some components which belong to the great tradition. In principle we still have universal hospital care despite the attack in the early 1990s – although you may think wryly if you are on a waiting list or purchasing private hospital care to jump the queue. The 1998 neoliberal attempt to abandon universal earnings-indexed state retirement benefits was massively rejected by a popular referendum. However social security benefit rates and terms reek of a minimalism. Hence the high child poverty and income inequality. (The offset is low taxes on the rich.)

(There are many other policy areas which illustrate the same theme of neoliberal transformation which has not been reversed.)

Since the end of the intensive period of neoliberal change the policy response toward getting New Zealand back on its long-term track has hovered between incremental progressivism and incremental conservatism. The Clark-Cullen government started with the first approach and, running out of puff, wilted to the second. National governments since Ruthanasia have largely taken the conservative line, at best responding to crises (including those created by failed neoliberal policies).

The Ardern-Robertson Government (now free of the NZF sea-anchor) would probably like to get us back more towards the long-term track, but it (and here I include the public servant advisers) faces two major hurdles. The first is that the track has to be adapted for ongoing external, social and technological change and we are not very good at monitoring and analysing that. The second is, as the opening of the column set out, the leadership has little personal memory of what it was like earlier, nor is there a lot of historical memory.

So while, probably, all of the cabinet and many of their advisers detest the neoliberal framework they have little idea of a viable alternative.

That is the simplest explanation of why there is so much neoliberalism left in the discourse, policy and appointments. It is not adopted for ideological reasons, but because those in charge are unable to identify an alternative framework.

Do not expect a transformative government. You may hope for as progressive one, but the likelihood is that we shall only see incremental change. There will be some progress, much of which will be driven by crises and tensions. It will not be visionary.

Brian Easton, an independent scholar, is an economist, social statistician, public policy analyst and historian. He was the Listener economic columnist from 1978 to 2014. This is a re-post of an article originally published on pundit.co.nz. It is here with permission.