Majority Labour government: a mandate to be big and bold or moderately centrist?
Deputy Prime Minister Grant Robertson, Prime Minister Jacinda Ardern, and Hon Kelvin Davis.
Has the Labour government’s big election win given them a mandate to be a bold progressive government or a moderate and centrist one?
Progressive activists thought that with the shackles of NZ First removed Labour would finally be free to tick off the long left-wing wish list. After three years of being held back from making big reform Labour could boost benefits to pre 1991 levels and introduce a capital gains or wealth tax.
That hope quickly turned into a realisation that the new Socialist Republic of NZ wasn’t on the horizon. And without needing Green votes to pass legislation, Labour can govern however they choose.
So what kind of government will they choose to be?
If you want to influence change you have to understand the people you are trying to influence. So what story is the Jacinda Ardern Labour government telling itself?
First a quick segue.
The story the Labour government told itself in the 2000s
Prime Minister Rt. Hon Helen Clark and Deputy Prime Minister Hon Sir Michael Cullen.
Prime Minister Rt. Hon Helen Clark and Deputy Prime Minister Hon Sir Michael Cullen
The legacy of the Clark/Cullen era was to restore faith in the Labour Party. Labour lost the faith of many loyal supporters in the 1980s and Helen had to rebuild it. That is why the 1999 campaign was built around a specific set of (credit-card sized) promises. The mantra was to “under-promise and over-deliver” in order to restore trust in politicians and faith that Labour would be true to its word. The Labour party had a clear policy platform and one-by-one implemented each of its promises. Labour’s coalition government with the Alliance and Jim Anderton was part of the healing of the 1980s wounds.
The Labour-led governments from 1999 introduced a number of policies that survived the subsequent John Key National Government including:
Kiwibank (using the NZ Post infrastructure to create a Kiwi owned bank that was run by and for New Zealanders, and to stop profits heading to Australia)
Kiwsaver (a retirement saving scheme that was an opt-out scheme with financial incentives to join)
Kiwirail (buying back the disaster that was the privatization of rail)
Working for Families (bring back family and child benefits)
Cullen super fund (now a massive retirement scheme to prepare for the baby boomer retirement surge)
Interest-free student loans (first freezing interest while studying, then interest-free after study complete)
Plus: state house rentals and rebuilding, significant increases to the minimum wage, paid parental leave, not sending troops to war in Iraq, and much more.
Clark’s government was pragmatic and managerial. I remember Heather Simpson, Helen Clark’s Chief of Staff, warning a restless Young Labour that governing was a “marathon, not a sprint”. The government was focused on incremental change over time rather than big inspiring reform. There was also an ambition for Labour to become the “natural party of government” going into coalition with a party to its left or right, term after term. The idea was to retain power for long periods of time, gradually shifting New Zealand in a more progressive direction.
That was the story that Labour told itself during its time in government.
What is motivating the Ardern-led Labour government?
There are competing motivations.
First, they will want to ensure they‘re positioned to win a third term and hold as many provincial seats as possible.
This is the first time since 2002 that Labour has been a (small “n”) national party holding seats in the city and the provinces. Labour has exceptional MPs in those seats. They won’t want to lose the seats or those MPs. The provincial MPs in particularly are likely to advocate moderate policy positions that reflect the make-up of their electorates. Maintaining the support of “middle New Zealand” will be important to winning a third term.
Second, they will want to retain being seen by the public as the best party to manage the economy.
Public perception about Labour’s ability to manage the books has been an Achilles heel for Labour. As a Labour activist this has always been immensely frustrating because Labour’s economic management is far superior to National governments. But perception is important. That’s why Labour bent over backwards to produce fully-costed and flawless budgets in opposition. It went ever further in 2017 by introducing self-imposed “Budget Responsibility Rules” in order to appear economically credible.
Labour will want to retain this kind of polling on the economy:
The latest Newshub-Reid Research Poll asked New Zealanders which party they trust to run the economy from now on through and after COVID-19. A clear majority – 62.3 percent – trusts a Labour-led Government under Jacinda Ardern, while just over a quarter of the country – 26.5 percent – trusts a National-led Government under Judith Collins.
https://www.newshub.co.nz/home/politics/2020/07/newshub-reid-research-poll-kiwis-trust-labour-more-than-national-to-run-the-economy.html
Third, they will want to leave behind a legacy of transformation.
Jacinda Ardern and Grant Robertson, and many in the caucus, are conviction politicians. They want to leave a legacy of having made the country a better place, not simply by tinkering around the edges, but making significant change. Jacinda Ardern is not Helen Clark and Labour’s purpose from 2014 is different from Helen Clark’s in 1999.
The purpose of a three (or four) term Labour Government must be to tackle big entrenched problems and position New Zealand for rapid change in an increasingly complex world. While taking the country along with them and maintaining popular support (see the first and second points!).
Jacinda can be criticised for over-promising and under-delivering, the opposite of the Helen Clark mantra. But, Jacinda inspires. She is a charismatic and beloved leader. Jacinda has the complete and utter loyalty of her caucus colleagues and the confidence of the vast majority of New Zealanders. She is a brilliant communicator who can distill complex information and make it easily understood. Her COVID-19 communications were a master class in leadership. She is empathetic and exudes kindness and optimism.
Labour’s first term provides a solid platform for transformation, in particular the introduction of “wellbeing budgets” and “wellbeing economics.”
Jacinda has the unique set of skills needed to communicate big complex reform and the smarts in her caucus to develop the detailed reform.
If Labour was to make a few big bold changes, what should they be?
Where should progressive activists push for reform? Change that will outlive the government.
1. Reduce the number of children living in poverty by lifting family incomes.
Poverty constrains the lives of many children and their families. Poverty limits opportunities and choices. It creates toxic stress and can make daily life extremely difficult. It undermines health and education, and can make it almost impossible to get out of survival mode.
In Jacinda Ardern’s maiden speech she talked about reducing the number of children living in poverty being one of her driving missions in politics. She reinforced that mission by creating a new portfolio for herself as Prime Minister: Child Poverty Reduction. When Jacinda gives her valedictory speech she will want to point to marked reductions in rates of child poverty and material deprivation.
This is a key insight for progressive activists. There are limited ways to significantly reduce child poverty. One of the best ways to reduce the number of children living in poverty is to raise family incomes by increasing benefits and making the minimum wage a living wage.
The second key to reducing the reducing high housing costs that contribute to many families living in poverty.
2. A major state house building programe.
The Victoria State Government in Australia (about the same population as NZ) just announced $5.3 billion to build 12,000 public housing homes over the next four years, while creating 43,000 jobs.
If Labour were to announce 10,000 public and social housing units it would be nationbuilding. It would create thousands of good jobs, while reducing the number of children and families living in poverty. It would be the biggest investment into public housing since the 1940s and would leave a legacy. There would be scepticism due to the Kiwibuild letdown, but if Victoria can do it, so too can New Zealand.
3. Tax and housing reform.
Tax and housing reform are the most difficult big-picture reforms. Over the past 40 years housing has changed into an investment market rather than a fundamental human right. New Zealand (and in many other countries) have moved away from home ownership as an aspiration for the many to multiple house investments as an aspiration for the few.
The problem with a capital gains tax (which Labour lost two elections advocating for) is that too many middle class New Zealanders have invested in housing as an additional source of income or for their retirement. Too many people were afraid they would lose out under such a policy, even if you create various exceptions such as the family home or create complex grandfather clauses where it only applies for houses purchased after the legislation is passed.
It’s not easy to undo 40 years of housing as property speculation and wealth generation. The downside is that fewer and fewer New Zealanders are owning their own home and two New Zealand’s have emerged – the property owning class and the renting class. The poorer renting class are paying for the retirements of the wealthier property owning class.
Some clever person in the Labour caucus has to come up with a simple reform of tax and housing that 1) benefits the overwhelming majority of people, 2) ensures the wealthy pay a fairer share of tax 3) doesn’t penalize the middle-class who purchased a second property as part of their savings and retirement plans and 4) is simple to explain and isn’t subject to scaremongering.
This one is probably a third term project – but the foundations could be put in place this term.
4. Big subsidies for electric vehicles and public transport infrastructure.
I agree with Jacinda Ardern that climate change is our generations nuclear free moment. When I stood for parliament in 2014 climate change was one of my top three issues. Many of my public speeches started by talking about the urgency of climate change. I’d mention the World Bank (that great bastion of the left!) report that said children born today might not have a planet they can survive on when they’re old. It’s a statement that should focus the minds of all political leaders.
Much of New Zealand’s emissions profile are complex and difficult to address (particularly agriculture). Transport emissions are one area New Zealand could make a significant progress. The government could introduce big subsidies for electric vehicles and make major investments into public transport. The government could accelerate existing public transport infrastructure projects and expand on them. A major expansion of rail and light rail could transform our cities and regions and help address housing cost issues. And it would generate thousands of good paying jobs.
5. Create a public broadcasting media network (Kiwimedia?).
The government should ditch the market NZ On Air model and instead combine Radio NZ, TVNZ and Maori TV into one kick-ass public broadcaster. Add a youth radio network and make it all commercial free. Basically, replicate the ABC model in Australia. A public broadcaster is critical to both democracy and national identity. Add Kiwimedia to Labour’s legacy projects that will have ongoing positive benefits long after Labour is turfed out of office.
They would be my big five big picture reforms although there are many other smaller reforms I’d like to see too. I’m sure others could think of other big reforms too.
My take
Activists and campaigners for progressive reform should assume it will be a transformational government. They should avoid nipping at the governments heels and instead build big coalitions for reform, get the public onside and win the public argument. Having a framework for understanding what is motivating the government is important for working out what reforms to push and how. A second term Ardern Labour Government can implement big and bold reform while maintaining the confidence of a majority of New Zealanders.
Because in 6 or 9 years time this will be a story of how Jacinda Ardern led New Zealand through crisis after crisis and then turned her heart and mind to problems that seemed to big to overcome. A story of how she reduced the number of children living in poverty by boosting family incomes; how she built 10,000 new public housing units and new rail lines which created tens of thousands of jobs; how she reformed our tax and housing systems to make them fairer, and a story of how she got hundreds of thousands of New Zealanders driving electric vehicles helping us to reduce our emissions and the pollution of our climate. It will be the story told on Kiwimedia of a Prime Minister who New Zealand and the world will never forget.
