By Grant Duncan*
If the recent flood of sleep-inducing pre-budget speeches and commentary is any indication, New Zealand voters can expect largely unimaginative leadership that fails to prepare the country for an uncertain future, regardless of who wins October’s election.
Even so, when finance minister Grant Robertson reads his “no frills” budget speech on Thursday, he’ll implicitly be making the case for why he and his colleagues should be returned to office. Going by the most recent opinion poll, that’s far from a sure thing.
So while this week’s budget has plenty riding on it, Labour appears to be betting voters don’t want anything bold. As Prime Minister Chris Hipkins puts it, the government is merely “doing the basics” to fix flood-damaged infrastructure – not rebuilding to a standard fit for the future.
The sense of persistent social and environmental problems being managed by press release, rather than resolved, is undiminished. In thrall to credit rating agencies, bank economists and Treasury officials, political leaders have decided “basics” and “no frills” must represent our highest ambitions.
From Ecostore to Kmart
Last year saw the Labour government’s fourth “Wellbeing Budget”, a concept begun in 2019 with mental health as its headline. In 2020, COVID-19 became the big issue. This year, however, Robertson is downplaying wellbeing, instead taking a “balanced” approach involving careful cost-cutting, saving and reprioritisation.
Not everyone is happy about the turning away from wellbeing. But it was always questionable whether the word represented anything more than a trendy sticker on “government as usual”.
It’s doubtful any government would say it wasn’t concerned with people’s wellbeing. At the same time, every budget must do the boring job of planning public revenue, expenditure and borrowing with a view to the economic consequences.
By setting out the state’s aims and priorities, it’s an inherently political document. But there’s nothing in it that will necessarily make a voter feel better or more satisfied with their lot – unless perhaps they’re the direct beneficiary of a public lolly scramble.
This being election year, of course, budget largesse is something one might anticipate. But Thursday’s “orthodox no-frills budget” sounds like Labour is switching from Ecostore to Kmart: never mind your wellbeing, this is about Labour’s political survival.
Not all about the economy
Late last year, the Reserve Bank governor apologised for “trying to engineer a recession to bring down high inflation”. He might also have apologised to the government for making it that much harder to retain office.
It hasn’t quite gone that way, though. The December 2022 quarter registered negative 0.6% economic growth, but Massey University’s GDP tracker is showing this hasn’t turned into a recession and the economy is actually growing again.
Robertson can boast that unemployment is low, jobs are being created and wages are rising. Yes, inflation and interest rates are high, which causes real stress, but inflation may have passed its peak. As a whole, New Zealand is full steam ahead.
To labour the metaphor, then, what’s the iceberg?
Surveys show confidence in the government has been declining since the highs of mid-2020. Last month, 55% said New Zealand was “heading in the wrong direction”, compared to 35% who said the opposite. Negative sentiment also outweighed positive in consumer confidence surveys.
A “no frills” budget may allay some fears about excessive spending and new taxes. But on its own that doesn’t win back disaffected voters. There has been more than discontent about the high price of avocados – non-material issues such as co-governance and even recognition of gender diversity have become culture wars.
As a simple political strategy, National and ACT now need only to scare those who are most likely to vote (middle class people over 45) with images of a Labour-Green coalition supported by the Māori Party taking the country further down a path that’s too radical for their liking.
Budget 2023: $1 billion package for cyclone and flood recoveryhttps://t.co/M33HXin23D pic.twitter.com/aguuWsqINP
— 1News (@1NewsNZ) May 13, 2023
An absence of vision
The government’s priorities are skills, science and technology, and infrastructure. The last involves massive projects and capital investment, estimated to cost NZ$210 billion over the next 30 years – just to address the existing infrastructure deficit.
Given the tax burden of all this, we might expect taxation to be an issue. Especially so, considering the recent Inland Revenue report showing “the effective tax rate paid by middle income New Zealanders is at least double that paid by our wealthiest citizens”.
But this budget will propose neither a wealth tax nor a capital gains tax (notwithstanding a group of wealthy New Zealanders openly agreeing they should pay more tax). And there’ll be no cyclone recovery levy, either.
So Robertson will also have one eye on the National and Act parties’ pledges to cut taxes, paid for by eliminating “wasteful” spending. Robertson calls this the “fiscal Bermuda Triangle” and rejects the idea of “unfunded inflationary tax cuts”.
We can see the outlines of a fairly conventional pre-election policy debate. National will call Labour profligate and ineffectual, Labour will be able to point to “doing the basics” with a “no frills” approach.
But neither major party appears willing to deal with the full extent of social and infrastructural investment necessary to bring the country up to speed with other developed nations. And neither now talks honestly about the tax revenues needed to do that.
They seem to have given up on building a better nation. Is this lack of vision and courage the kind of leadership voters are looking for? The fact that neither of the major parties is getting ahead in the polls may be all the answer we need.
* Grant Duncan, Associate Professor, School of People, Environment and Planning, Massey University. This article is republished from The Conversation under a Creative Commons license. Read the original article.
61 Comments
They seem to have given up on building a better nation. Is this lack of vision and courage the kind of leadership voters are looking for? The fact that neither of the major parties is getting ahead in the polls may be all the answer we need.
Complacency and mediocrity are the two biggest issues we have in leadership. And any kind of vision beyond cultural tinkering and virtue signaling. As a comparison, S'pore rose from being virtually a 3rd-world nation post-independence with long-term strategic planning and sacrifice. Sure, S'pore is not perfect, but Aotearoa NZ is far from perfect, despite our misdirected belief of exceptionalism.
Don't forget about the role played by their migrant workers;
https://newnaratif.com/myths-and-facts-migrant-workers-in-singapore/
Great article.
It is kind of depressing to live in a country tha has no aspiration: no desire to improve itself - and no idea where and what it wants to be in the future.
Worse still is that we seem to be doing less than is required to keep up and maintain our situation (public services and infrastructure).. and importing low skilled workers that are simply wearing things down faster and exporting our best home educated talent to Australia. So we are actually going backward in most areas.
One feels that it might be the major donors and lobbyists to the parties and their smaller a coalition partners that are the anchors and that are pulling their policies in wrong directions. examples would be the Maori Party (forcing cogovernance and parallel healthcare systems and costs on labour) or the landlord lobbyists (and MPs) pushing National to favor adjusting tax for already wealthy landlords over trying to favor investment in productive business.
The infrastructure issues is hardest of all. Voters are unlikely to trust parties that want to increase our debt to invest in the future - because historically both parties have failed to actually deliver any significant projects of value.
Your last comment is a very pertinent one.
If we are going to have to pay more (either now through increased taxes, or later through borrowing, or any combination of both) how can the average punter have any faith that the money will be spent on anything of value in terms of infrastructure or improving core public services? It honestly feels like if we doubled expenditure, we'd be lucky to see a fraction of that back as anything beneficial to society and the long-term health of the country.
All that Labour seems capable of doing is hiring more public service managers, comms staff etc (to do what exactly?) presumably on the basis that every three years they will vote to continue the gravy train, as well as scheming with certain groups to sell key democratic principles down the river. All National is capable of doing is lining the pockets of big business and landlords.
Every day I feel more and more like I'm on the Titanic after it has hit the iceberg. I may as well just vote for whoever is going to let me keep the most of my money for as long as we can stay afloat (or whoever will give me the most of somebody else's money) and then abandon ship ... considering most people are voting for this, maybe I'm in the insane one?
I agree with your first two paragraphs OldSkoolEconomics but the surely the reason for your despondency has to lie completely with the Labour Party and its abysmal performance whilst in government over the past six years.
Your reference to minor coalition parties having undue influence on policies holds zero credibility when you consider that Labour have had, for the first time in MMP electoral history, an absolute majority and so could do whatever they saw fit in government. That they have failed to provide anything other than a steady but spectacular decline in the most important facets of a modern society (those of health, law and order, education, transport infrastructure, climate change resilence, housing and living affordability, etc.) shows they have grossly under-performed despite their unique absolute parliamentary majority. As far as the potentially divisive policy of co-govenance is concerned, I suspect that it was Jacinda who was the principal driver of this rather than any minor party aligned with Labour.
In the almost seventy years I have lived in this country there has been, up until now, a pretty standard reaction by voters at all general elections where a government has performed so badly; that is to throw them out. However, times seem different now and aided and abetted by the strident left leaning media we have here the Labour government we have could well be given more time to destroy this country, with the help of the radical parties they are happy to sidle up to.
You suggest that neither main party can offer much in the way of aspiration but whenever National or ACT talk of lifting standards or doing things differently to achieve improvements, then it is our 'don't want to change this Labour government' media that are the ones too quick to say that it cannot be done.
If we do elect a Labour led coalition government in October then just watch the flight of skills from this country.
Maybe the biggest issue is that too many of us want everything without paying for it. More tax revenue will give us room for ambition, vision and getting up to speed with other developed countries. I can't believe that ACT wants to increase taxes for low earners and do away with the top three tax groups. No money to run the country and forget about vision and ambition.
Maybe the biggest issue is that too many of us want everything without paying for it. More tax revenue will give us room for ambition, vision and getting up to speed with other developed countries.
Some kind of economic base is necessary for people to be more comfortable. Industry and infrastructure go hand in hand in countries like Germany, Japan, China, and Korea.
Perhaps people don't buy into our agriculture, tourism and education sector as enough to warrant infrastructure development.
Close arie, but in actual fact, there is a subset of NZ taxpayers that do not contribute to the tax take at all, and another subset that contributes bugger all. And those two subsets jump on the "ambition and vision" bandwagon, because they will get it for near free. So when you say "too many of us want everything without paying for it", the issue is there are too few that actually DO pay for it.
Yes, same problem over in the US.
It seems unbelievable that so many there are "okay" with a President that paid no taxes - as that's just what "smart" business people do.
Every time I hear that excuse from my Trump-backing relatives - I want to say, "no, that's what crooks do".
NZ is not a sovereign country, technically speaking. It is almost entirely influenced by how the big guys (China, US, EU, and Russia) do. The best NZ can do is follow the right guy for the right inspiration.
The current political system will ensure NZ's accelerating speed on this downward trend.
I totally agree. They are the only party that seems to be talking sense and has fresh ideas that have a reasonable chance of making any difference.
When you consider the major parties, I have no trust in either their motives or competence. The rest are frankly are away with the fairies or alt right Trump light.
We need to get away from our present economy to one where people are paid a decent wage and not increasingly caught in a welfare dependency poverty trap while the other 1 or 2 % continue to get increasingly obscenely wealthy.
To this end we need a government that is prepared to smash the cartels, duopolies etc, immigration and bureaucracy that underpins our crazy economy.
Without out TOP, there is little hope or point in voting. (and I am sure that this sort of apathy in the masses is exactly what National would want)
I would like to see a National-Top or National-Act-Top coalition. I genuinely think this could be a good combination of parties that would balance each other out quite nicely in terms limiting the worst excesses of each party (National - Too beholden to property investors, Act - a little bit too naively free market and laissez-faire, Top - Too tolerant of co-governance).
I agree with you. I would take some of TOPs tax policy (land value tax + less income tax ) to encourage productive income and discourage career property inverstors. Nat/act can manage everything else.
have voted TOP last two elections. Don’t care if people think it’s a wasted vote- red/blue/status quo don’t provide me much in the way of confidence for our future.. More of the same will see me pop over the ditch (late twenties/ambitious/management role).
Government is the organisation of people to decide who gets power. A good government rewards good and punishes evil.
Here in New Zealand it seems the populace chant the mantra, "govern me harder daddy!" and want to be serfs.
Our political leaders are NOT visionless, they are just on perpetual standby mode, ready to implement the droppings of various globalist institutions. Our last PM use to be the head of a communist organisation - hardly visionless!
These Babel builders don't believe in absolutes so are free to turn on a dime to preserve their power and degenerative behaviours/philosophies. They're unmoored from reality.
They exchange propriety for gauche, avant-garde, shock jockery.. which has lead to the distraction of many of their countrymen.
As they don't believe in moral absolutes such destruction isn't a problem for them, in fact they can flip it and claim they're doing a splendid job. Labour are particularly bad.
Unfortunate for their voters and Kiwis in general, when you constantly slap away the hand of providence, you can't expect it to be there when you need it.
Good Luck.
Neither party is willing to upset the wealthy end of town by introducing a Capital Gains Tax or wealth tax. It seems an obvious choice to grab this pot of gold identified by IRD to pay the $210 billion bill for upgrading our run down infrastructure. The alternative being to saddle our mokopuna with this debt. Bite the bullet now Labour. This might be the saving of this election for you and honouring of your Labour forbears in one fell swoop.
How did you conclude from his comment that his moko both voted and chose labour? Surely you have better critical reasoning than this? His comment clearly refers to taxing wealthy today so his grandchildren, who may not even be born yet but almost certainly didn’t vote, are not saddled with the cost of fixing it in the future
In theory a CGT and a wealth tax work, in reality the super rich can game the system, and it hits the middle class again. What about they reverse face, and start cutting unproductive departments. Reduce middle management government spending, and keep the front line spending up. I think ACT are hinting of this.
I don't like ACT at all, bit crazy right wing libertarian for me.
However they are right about middle management of government departments. It's exploded and their wage bill is huge. In IT roles I have noticed are getting paid significantly less than these middle managers whose wages have gone up rapidly, but who deliver no added value to their departments except often being an extra cog in the wheel where everything has to be communicated through. It's pretty frustrating when hard technical skills are essentially being undervalued compared to soft skills, which are important, but deliver nothing.
I know of whole government departments restructured to introduce a new layer of management who essentially have slowed down delivery of lots of stuff for no perceptible benefit. These people mostly have useless roles and departments should restructure them out and operate on a much flatter basis. Most have zero reason to have more than about 4-5 levels, even the big ones, though know of some with 8-10 levels of management.
A friend of mine recently returned from doing a PHD in the UK and working for the UK stats department during Covid and told me that at Stats NZ there is barely even anyone working there with a statistics background. Heaps of fairly lightweight BA's though and no real attempt at continuing education to upskill into the stats area.
This is a major problem in government, I feel for young people who have been given dud advice on what degrees to get and so have basically useless ones (my god, the number of law degrees....) but it is time to really highlight and PAY for better skills in the STEM area.
Neither party is willing to upset the wealthy end of town
How much longer though can the country sit idly by having their paycheck chewed up by inflation and listen to never-ending drivel excuses by the Labour government while the wealthy are largely unaffected?
I have said before, and I hope, that soon the ever-growing voting-age population will outnumber those of the largest generation and will vote for the betterment of themselves or ideally the country. Hopefully with the last few years of failure by government they will be more engaged in politics and actually make it to the voting booths.
TOP and ACT sounding like they will get more votes than people think anecdotally.
In hindsight, Labour squandered the 2020 landslide. Polls would have told them in advance they were safe, that was the time to introduce change.
Something simple to introduce more tax paid by the rich, introduce Gst on international flights, cruises, holidays etc. Carbon tax too. Set the example, then seek reciprocal agreement with other countries, Australia first.
Ardern, frankly, was not the brightest bulb.
She had fantastic PR skills and her heart was in the right place but she did not have the political acumen or even any real vision for what NZ should be and so was led around by the nose by other parts of the Labour party/coalition and trotted out for PR events.
This will make me sound like an asshole but the reality is that this is not the degree of a particularly sharp person:
> Ardern attended the University of Waikato, graduating in 2001 with a Bachelor of Communication Studies in politics and public relations, a specialist three-year degree.
One of the reasons I like Raf Manji and David Seymour is they are both quite clearly intelligent people with a set of beliefs and evidence to back them up. I don't agree with either completely and think they get some stuff wrong but I am at least confident that they have their wits about them.
David Seymour's Education:
> Seymour went to ...University of Auckland where he graduated with a Bachelor of Engineering (Electrical & Electronic) and a Bachelor of Arts (Philosophy).
Raf Manji's Education:
> Educated at the University of Manchester, graduating with a degree in economics and social studies and then a Graduate Diploma in Politics and a Masters in International Law and Politics from the University of Canterbury.[5] He worked as an investment banker, before migrating to New Zealand in 2002.
I'm a believer that plenty of very sharp people don't get or need degrees and they are by no means any sort of signifier of competency. However if you ARE going to get a degree and you get a very lightweight one like "Communications" it does tell you something. And to be fair to Ardern, she did have good PR skills which is what her degree was in. But I strongly suspect that is just natural charisma and likability not something she was taught. Whereas the engineering/philosophy and economics/finance background of the other two are much more intellectually challenging.
What a bizarre comment.
Are you implying that Manji or Seymour are autistic because they have a STEM background? What evidence do you have for this exactly?
And what evidence do you have that people who are good at STEM don't make good politicians in any case? I could see autistic people perhaps not being great politicians but the majority of STEM graduates and engineers aren't autistic and you judge that on an individual basis anyway not on some absurd stereotype.
Off the top of my head I know that Jimmy Carter/Angela Merkel/Margaret Thatcher/Deng Xiaoping all had STEM backgrounds and you don't get to lead any of those countries without being an astute politician regardless of whether you agree with their policies.....
Labour/Greens have wasted many many billions of dollars--for example, 11 billion just for the bureaucracy to establish a separate Maori health system, just one of many examples. This while the tax take was the highest ever, and so much of it wasted on expensive initiatives that went nowhere and produced no results. There is no need to talk of increased taxes as the Left is so fond of. Stop the excessive waste of public monies.
What a wonderfully worded article. It captures the mood very well I think. I simply don't trust Labour to spend money wisely and get a good return on that investment. There is so much that needs fixing, and I agree, taxes are needed to fund those initiatives. What is also needed though is clarity around triaging projects, a dogged pursuit of aggressive oversight and finally accountability. So right now I don't want to pay any more tax than I already do because it's simply not being spent well enough and our politicians quite frankly haven't earned the right.
Taxes are needed to fund those initiatives? How about we get results from the taxes we currently collect? Labour have collected more tax than any Government before them, and have made pretty much every portfolio worse - Health, Education, Law & Order, Military. Essentially they've turned up and collected salaries they are absolutely unqualified to receive.
Labour have had two & a half years with a majority in the house, an MMP first. Yet they have done absolutely nothing of any real benefit for anyone. Everything they touch makes life harder & more expensive for most.
The posts above highlighting their education, law & order, public housing & separatist [co-governance] failures amongst others, defies belief. Even with recent defections they still have an absolute majority in parliament & all they can think about are transgender issues. They are not useless, that's too good a word for them. They are an emphatically failed student government of the first order.
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