By Chris Trotter*
What's wrong with National?
New Zealand’s “natural party of government” (since its formation in 1936 the National Party has won 17 out of 28 general elections) has long been recognised as a moderate and pragmatic political force. Not only that, but when hardline individuals and factions have taken control of the party, it has demonstrated an admirable willingness to step away from its extremists and re-engage with the political mainstream. From Sid Holland to Keith Holyoake, Ruth Richardson to Bill English, Don Brash to John Key, National has never been slow to recognise an ideological losing streak – and do something about it.
What happened?
Given the party’s mainstream status, it should come as no surprise that what happened to National bears close comparison to what happened to Labour. By embracing the essentially anti-political objectives of the “more market” reforms of the late-1980s and early-1990s, both major parties gave away most of the New Zealand state’s hitherto extensive powers of economic intervention. In doing so they reduced significantly the role and purpose of New Zealand’s elected leadership. National and Labour politicians are still working out what that means, not only for themselves, but also for the parties they represent.
New Zealand has always suffered from the disadvantages associated with a small population and the large distances separating the country from its principal markets. To offset these disadvantages, the New Zealand state was forced to play a central role in funding the sort of infrastructure which, in other countries, was paid for by the private sector. It’s not that New Zealand lacked capitalists, it’s just that the repeated failure of their undercapitalised private enterprises very swiftly reconciled them to the inescapable fact of their economic lives. That, when it came to laying down the building blocks of a working national economy: banks, insurance companies, railways, roads and bridges, schools and hospitals; the state was the only player with anything like deep enough pockets.
The economic necessity of state intervention catapulted New Zealand’s politicians into what can only be described as an heroic role. Where Great Britain had its Isambard Kingdom Brunel, New Zealand had Julius Vogel. Against the Empire’s Cecil Rhodes, New Zealand set its own Richard ‘King Dick’ Seddon.
The burgeoning wealth of the United States may have been created by its capitalist ‘bobber barons’, but the generally comfortable condition of most New Zealanders at the turn of the Nineteenth Century was the legacy of their hero politicians and their activist state. Not for nothing was this tiny country hailed as “the social laboratory of the world”.
As the Great Depression of the 1930s sent New Zealanders reeling economically, their political response was entirely consistent with the history of “God’s own country”. Almost instinctively, the victims of the worldwide economic catastrophe turned to the state – not only for short-term relief, but also for reassurance that, in the long term, they and their children would have a future worth living in. The First Labour Government’s success in meeting both of these expectations transformed its leader, Michael Joseph Savage, into something considerably more than a hero. It made him a saint.
A tough act to follow. Forced to watch the Left’s steady expansion of state power, and alarmed by the growing power of the compulsorily unionised working-class which, for 13 long years, had kept Labour in government and National cooling its heels on the Opposition Benches, Sid Holland became National’s first prime minister with one over-riding purpose: to make New Zealand safe for farmers and businessmen, and their wives, by turfing out the trade unionists and public servants who had somehow contrived to park their impertinent posteriors in the big leather chairs. Smashing the bolshie wharfies’ union and its allies certainly hastened this restoration of the ‘right people’, and their interests. National would never lose its aura as the country’s prime defender of law and order.
The 1951 Waterfront Dispute was not, however, the first step towards breaking the New Zealand state’s grip on the New Zealand economy. Subsidies and import licences survived the angry eight year reign of Sid Holland and his cronies. His successor, Keith Holyoake, tended the “stabilised”, state-guided, New Zealand economy with the same care that he tended his beloved roses. Unconvinced of the need for major change, “Kiwi Keith” stretched National’s political dominance over the entire 1960s with all the smug propriety of a pampered family cat.
This was the achievement that Rob Muldoon spent the whole nine years of his prime ministership attempting to replicate. Though presented to young New Zealanders as a cross between Darth Vader and Voldemort, National’s fourth prime minister’s boast that he was the last finance minister to truly understand the New Zealand economy was by no means a vain one.
One has only to survey his “Think Big” programme of state-sponsored growth, to see how thoroughly he had absorbed the central truth of New Zealand’s economic history. That, stripped of the state’s resources, the nation’s economy would, in short order, be hollowed out and taken over. More importantly, so would its democracy. New Zealand’s politicians would cease to be heroes, and become villains.
Mastering the complicated alchemy of turning villains into heroes pretty much describes the politics of the last 40 years. After burning down Labour’s inclusive economy with the ‘Rogernomics’ flame-thrower; after promising voters the ‘Decent Society’, and delivering the ‘Mother of All Budgets’; where were the politicians charged with protecting Neoliberalism’s low-tax, deregulated and privatised economy supposed to go? How can a party convince voters that it will do something, when it knows full well that, since 1984, New Zealand governments aren’t allowed to do anything?
The answer devised by Labour’s Helen Clark and Michael Cullen, and perfected by National’s John Key and Bill English, was to smile and wave and hope that their political careers came to an end before the nation’s infrastructure collapsed. Between them, National and Labour kept up this charade for 18 years. The obvious weakness of the strategy, that it would only work for as long as the infrastructure remained upright, left the next generation of Labour and National leaders facing something bearing a frightening resemblance to the Gotterdammerung.
Small wonder, then, that having been returned to the Opposition benches, first Labour’s and then National’s caucuses, went bonkers. Electing and/or ejecting a leader every other year becomes inevitable when the people are crying out for effective policy, and all the major political parties are able to offer them are ineffective personalities.
Jacinda Ardern’s and Grant Robertson’s accidental 2017 victory, plagued by indecision and ineptitude, received, unaccountably, the dubious benediction of the Covid pandemic which, at least temporarily, allowed the state to resume its old role of New Zealand’s prime defender. How devastating it must have been for Labour to once again be required to surrender the state’s interventionist powers to their Treasury and Reserve Bank jailers.
With nothing useful left to offer New Zealand economically, Labour’s lurch towards cultural revolution was entirely predictable. Where else do left-wing middle-class Gen-Xers go when all other roads are blocked – except the road leading them back to the student union?
By the same token, where does the National Party go when the nation’s infrastructure is visibly crumbling, and the cost of fixing it cannot be met (without incurring the wrath of the neoliberal priesthood) by raising taxes, or taking advantage of the state’s ability to borrow capital more cheaply than the private sector? The answer would appear to be that it either starts venturing down the dark alleys of crony capitalism, or hanging-out with the counter-revolutionary culture-warriors of the Weirdo Right. Or both.
*Chris Trotter has been writing and commenting professionally about New Zealand politics for more than 30 years. He writes a weekly column for interest.co.nz. His work may also be found at http://bowalleyroad.blogspot.com.
75 Comments
Our political life is a reflection of the nature of our society: self-interested, reflexively adversarial and obsessed with strong leadership.
It doesn't help that the membership of the political parties is just a shadow of what it was, so is made up of those motivated by the strongest opinions - which equates to the least flexibility and extremes of position. It also makes it hard for moderate voices, and likely even evidence, to get heard.
We're not going to make progress until we learn to collaborate and steer clear of the ever more extreme and entrenched opinions that now seem the norm. But how do we find grown ups to steer the bus?
Contract governance out to somewhere like Sweden? Take lessons from something like German industry where the unions have a seat at the boardroom table becasue they have a collective interest in making an enterprise work well?
Do you ever get the feeling that the required changes are only going to be made under urgency: where a lot of things get sacrificed to meet a limited range of vital goals - essentially a war footing.
Humanity only ever seems to respond well - or at all! - to sudden crises. I'm just curious to see how bad it has to get.
Compounded by the fact that the only people who can be politicians these days are the most insipid, bland, unworldly people who have lived a sheltered and unblemished life since childhood. No arguments with a flatmate, no foolish convictions, no domestic disputes, no extra marital affairs, no drunken groping of someone you fancy at a party, no criticising a corporate underling, never made an off colour joke, or said anything negative about someone who belongs to a protected class ....
As the corporate world shows, most effective CEOs have psychopathic traits. Sadly, that type of strong change leadership is now confined to the corporate world. And even there, people are losing senior jobs for the most minor of infractions (like having a consensual relationship with a colleague).
"Where does the National Party go when the nation’s infrastructure is visibly crumbling, and the cost of fixing it cannot be met."
To the 'Bank!' Again. $36b+ has already been committed to fixing potholes and shit. So I guess another $64B+ of borrowings is on the cards. Bazooka MKII because there are no unicorn global investors on the horizon.
'The 1951 Waterfront Dispute was not, however, the first step towards breaking the New Zealand state’s grip on the New Zealand economy.'
I wonder if this should read:
'The 1951 Waterfront Dispute was, however, but the first step towards breaking the New Zealand state’s grip on the New Zealand economy.'
Or do I misread?
Plenty of other OECD countries run higher tax to gdp ratios than NZ.
We can build the infrastructure as long as:
a) it’s funded by very long term bonds to spread the cost intergenerationally.
b) the infrastructure pipeline is kept apolitical. Govts have a bad habit of stepping into infrastructure decisions especially transport.
Neoliberalism gas screwed NZ over. We have massive social and environmental deficits and the economic side is full of rentiers extracting monopoly, duopoly and oligopoly profits.
Furthermore its left a tax structure that has wasted $500bn bidding up land prices.
Regards the infrastructure deficit - I think it would be beneficial if we categorize that infrastructure in two distinct types: Reticulated services infrastructure and Other infrastructure.
Take Auckland for example. I think people there would rather be able to go to the beaches and swim in the sea; as opposed to have an alternate bridge over the harbour.
But who knows - someone should ask them. We do not seem to have a democratic mechanism where the people at large get to choose their infrastructure spending priorities. And how easy would this be? Online polls are just so easy, but how many local authorities have one running on their website front page?
We need to get into a triage mentality. The time of abundance is over.
Given simple to access technology like random IP addresses, free emails and mail bot automation, a small group of activists can give the appearance of a huge crowd.
Unfortunately that means that unless there is some assurance of identity on-line polling is valueless at best, and dangerous at worst, as it offers the opportunity for mis- and dis-information being taken as accurate - and is acted upon.
And given that you are right that the idea of endless abundance is obsolete, that could be catastrophic for both cost, and the exhaustion of the social licence required for change, as sloppy and inaccurate ways of reading the public's mood get hijacked by zealots.
Perhaps a logical requirement would be to make RealMe or some other government ID service mandatory for submitting on a poll.
The other information people should be polled on is , are they willing to pay for it?
Probably a majority think a 4 lane motorway to Whangerei Is a good idea, until they are told it would require a $54 toll to pay for it. Even the new Manawatu - Tararua highway is facing opposition to a minimal toll. Yet actual breakeven toll is 4 to 5 times higher.
We do not seem to have a democratic mechanism where the people at large get to choose their infrastructure spending priorities. - Its the Council's Long Terms Plans and Annual Plans, supposedly the democratic mechanism you're looking for. In reality Council's do what they want and pay lip service to public submissions.
Yes but they only concern council investment. I think Kate was making the point that it would be good for the citizenry to be involved in decision making across both central and local government projects in a single city, in a coordinated manner. Some have talked about spatial planning as the means to do that. Yet both the brains and intent is missing in action to make that happen. Or at least happen *effectively* (another key problem being that people struggle to define the scope of spatial planning - and it’s certainly fraught)
Yes, by city and region - depending on the infrastructure in question.
And yes, much as there were some things that needed more work on the earlier RMA proposals - the one good thing was the requirement for a Spatial Planning Act. To my mind, ideally you write a spatial plan and then write the rules for district plans flowing out from that.
BTW, have you seen the full list of proposed amendments to the RMA from this government? This one in particular;
Alongside the second bill, the Government says seven new National Direction instruments – referred to as national policy statements (NPS) and national environmental standards (NES) – will be developed and 14 existing instruments will be amended.
https://environment.govt.nz/news/rm-reform-update-september-2024/
And that's just for starters.
Yeah. Frankly I am sick of all the chopping and changing!!! No one knows where they stand, from year to year
Apparently Bishop was going to reveal more detail on the RMA reform later this week at the RMLA conference. Not sure if it’s still happening with the passing of his father
Very good question. The prioritising or targeting of projects is far too often thoughtless and astray. For instance in Christchurch $20 mill spent on a 180 metre walk/cycle way when on the other side of the estuary, the vital bridge linking Brighton over the Avon river, earthquake damaged & suspect, is ignored. Or even worse, the last Labour government’s inexplicable commitment to a farcical cycle bridge over the Auckland Harbour when at the same time,the Ashburton SI highway one, vital bridge was washed out and has long been needing replacement.
"inexplicable commitment to a farcical cycle bridge over the Auckland Harbour" - we live in a weird country where it is deemed inexplicable to have walking and cycling connectivity between two close and highly populated areas. You must drive, anything else would be inexplicable and farcical.
Kate, this is an outstanding comment.
I’ve often thought about how much society could improve if the quality of our democracy was improved… if practical, online efforts were made to improve the conversation. A system where the people were regularly consulted on a wide range of issues that concern us all. Isn’t that what democracy is about? The conversation?
The right to vote every few years with the odd referendum thrown in every now and then seems primitive in comparison to what we could be really capable of, if we tried.
The quality of our democracy is constituted by the education and engagement of the average voter, and the understanding of politicians that they work for the people, not above them. I feel all are lacking, and we all have a responsibility to society to help improve that.
What is that education though, and who is giving it?
Our political class is disproportionately represented by academia, relative to the general population. If our public were educated at the same level, would our democracy function any better?
Potentially we'd be better served the other way round.
The political class, like most other sectors of society, would be very well served to maintain channels whereby people from ordinary and poor backgrounds can gain entry and have influence. The problem is that sadly these professions are becoming ringfenced with growing inequality.
You can read all the Clausewitz and Strauss you like but if you've never really interacted with and contended with the world then what use are you in government.
Our political class is disproportionately represented by academia
Yes I agree. The road to politics used to be whatever background one had, and the desire to stand for the community and country for the betterment of all, and although there would aways be financial incentive of sorts, the core was to benefit society. I feel teaching would be another area that has succumbed o the academia, where it would be better to have people who have world experience become teachers after, as they come with a broader view and often greater understanding of diverse backgrounds.
Maybe we need the Ministry of Works again. NZ has some amazing, yet old, infrastructure. Very little of which has been built in my lifetime despite the tools and technology making it easier than ever. Something else, or a combination of things are stopping us from making any progress.
I would suggest an overhaul of the tax system is the first thing that needs doing. Bring back land tax a la Georgism. Reduce GST and income taxes by the same amount that the land tax brings in. You want to incentivise trade and work, and disincentivise inefficient/unproductive landholdings. Then bring back the ministry of works. And build some more dams, or bring it into the future with other renewable energy projects. Run electric rail between all major cities. Design our housing and roading infrastructure to suit mid-rise housing built in community hubs around rail stations.
The land taxes don't work in cities where land supply restrictions and construction market inefficiencies means new land takes decades to get to market. You'll just end up with people owning tiny sections already being used extremely efficiently get slugged while people down country pay nothing, or less than nothing.
As for the MOW; what about the Light Rail debacle makes you think it's even possible? There's too many troughs and too many snouts and we've seen they're prepared to feather their own nests ahead of what an entire city like Auckland actually needs. Maybe we should see if we can start delivering some projects that look vaguely fit for purpose until we hand the keys to the kingdom to a Super Ministry.
You haven't thought this through. Of course land taxes change land use in cities. Not only brownfield redevelopments, but also increases pressure on landholders to make more optimal use of existing buildings. Instead of sitting on property waiting for cap gains that won't be coming due to the tax, they actually need to get revenue flowing. People will be more likely to rent out rooms in existing houses. And most definitely it would change the kinds of buildings that are being built in existing cities to increase density to use the economically important land more efficiently. Most buildings in NZ are only around about 50 years before being rebuilt. Land taxes would change half of the buildings in a city in 25 years.
There was no Ministry of Works during the recent light rail half assed attempt. Not that I agree with light rail at all. We need proper rail to the North Shore and East Auckland, and another station at the airport with a dedicated line from Papatoetoe train station to the airport. Especially now that we have personal e-mobility. We really only need main train stations.
I have indeed thought it through. If you can explain to me how we're going to see three bed townhouses on postage-stamp sized sections be somehow used more efficiently, then fire away. Unfortunately in Auckland, that can be 80% of a house's value on some 200sqm of land. They're already dense. So either you're going to tank the value of houses and send thousands of Aucklanders into negative equity, or you're going to slug them with a tax for using land so efficiently that there's no possible way to make even more productive use of it. Forgive me for not thinking this is the deal of the century.
And no, we don't need proper rail to the Shore. There's no heavy industry to justify it over regular light rail and the NAL already serves Northland and has been upgraded. The Shore will be fine with Light Rail, just like everyone else in Auckland, who haven't been lucky enough to to have a busway for a decade. The Shore does not need proper rail, especially while faster-growing parts of the city don't have anything close to what it has already.
Not many four storied buildings where I live, across the road from where air craft have a tendency to take-off and land.
And if your tax's suggest behavioural change is to punish people already living in a medium density environment for not living in an even higher density environment then your tax probably just sucks.
If space was not my primary concern, I would not have bought in a medium density development.
The problem is the expensive component of the housing is the land. So a tax that applies specifically to it is still going to be far more burdensome even when that land is being used hugely more efficiently than in other areas around the country.
You can keep dismissing this point all you want, but if your tax isn't going to work in our biggest city, then it probably needs some degree of tweaking. Unless the intention is to just transfer a huge amount of cash out of Auckland and into places where there isn't much demand for land at all, in which case you are probably getting what you are after.
They're not being punished per se, a land tax increases as the value of their land increases. However it recognizes that there can be negative externalities caused by sitting on an undeveloped piece of land, you force people to develop less efficient/desirable sites often further from infrastructure services which increases the cost of providing said services.
Why?
Trotter has always had his articles published on this site.
The editor and most of the in house journos appear very centrist to me and pretty neutral. Dan seems a little left of centre.
However, Arguably there’s a place for a regular piece from a centre-right commentator, to balance out Trotter’s perspective.
It's just a feeling.
Yeah Trotter is hard left, everything he doesn't like is "neoliberalism".
Andrew Coleman also seems pretty left-wing. His latest articles are all about how NZ is different from most other OECD countries and how retirement payments should change. All in the leftwards direction from what I've read.
It's the spin on articles recently, how to headlines are phrased. Hard to put my finger on. Maybe I'm just reading the site more often lately?
I feel like I used to read more right-wing articles on here before. Seems like they've just disappeared.
Would love to see some pieces advocating lower taxes, decentralization, slashed regulation, more personal freedom.
Maybe your feelings need put away in a dark tunnel-like place, and forgotten about.
How about ascertaining the truth about things?
That would be better, surely?
Things like the physical limits of the planet, to support 'growth'.
But I suspect you 'feel' you don't want to go there....
If my feelings are for the things I listed at the end, you're saying you want to be taxed more, have more centralized top-own hierarchy, want to be regulated more, and have less personal freedom?
I also feel you're jumping to conclusions a bit, did I say anything about growth? I'm pro-market, not pro-business.
Interesting that you mention "ascertaining the truth about things", a lot of leftists proclaim there is no such thing as objective truth. Care to elaborate on this? I'm intrigued. "The truth is out there..."?
Truth #1 - this is a finite planet
Truth #2 - we are an overshot species, having achiecved that by levering a one-off planetary stock of stored solar energy (fossil fuels).
Truth #3 - The above will be reconciled. We are a tad late to do that comfortbly for 8+ billion, seem not to be able to do that voluntarily (although the non-reproductive choices of those of breeding age, maybe challenges that observation).
Truth #4 - science (energy/physics, ecology) is truth; money was always an inconvenience-avoiding human construct.
Truth #5 - Letting folk raid the finite planet in unfettered manner, gets us to where we are now; overshot. That benefits nobody, so your approach is invalid. History is of use here: some societies have based their cultures on sustainability, and continued for long periods of time. Others have raped the available resources, as fast as possible; all those have collapsed and gone.
It may just be that sapience is an ecological dead-end, in that evolving it doesn't happen fast enough to avoid overshoot/collapse.
I'd say views are changing. I've noticed a generational shift away from libertarian/neolib values. People have been told the same story about freedom/privatisation/tax/markets/govt/individualism for 40 years and it hasn't delivered as promised in their lives or their children's.
Could just be me.
It's the case in America at least...
It wouldn't be freed up for long, when the likely extra spending on police, courts, prisons, and national security negate it, in order to deal with a hypothetical 1981 Part 2. And that's just on the govt side. For individuals & companies, tax cuts will probably get eaten by security guards, mercs, and installers of razor wire, CCTV & bulletproof glass.
"New Zealand’s “natural party of government” (since its formation in 1936 the National Party has won 17 out of 28 general elections) ..."
Surely, given the mess we seem to be perpetually in, people would stop voting for them?
Or does this very obvious correlation escape them?
Both parties have peddled GROWTH.
So it didn't matter who was in power, except that one mob were a reducing amount of egalitarian (homelessness has gone up inexorably up, regardless, hasn't it?
left/right doesn't matter when the whole ship is sinking - seems it is hard to get that point across to some...
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