Labour: the new House of Lords

New Zealanders are being softened up to accept this country taking part in perhaps the most outrageous United States-led war since Vietnam. It is clear that Prime Minister Helen Clark and Foreign Minister Phil Goff would prefer the invasion did not happen and both have spoken sensibly about the good reasons for avoiding war.

But they are assuring the US that, if United Nations backing is secured, we will be there when the invasion comes. The softening up is happening in two ways. The first is the reassuring-sounding idea that we would contribute only non-military or humanitarian support.

This could sound very minor, even decent, compared to the gung-ho Australian and British attitude to joining a war. But in reality it would implicate us in the inevitable slaughter just as much as those two countries.

On November 22 Mr Goff detailed what non-military support would mean. After meeting US charge d’affairs Phil Wall, he said that if the UN mandated action against Iraq, New Zealand would consider humanitarian, medical or logistic support.

Now that three years of Labour Government have passed, it is becoming clear what we can expect during the next three or six years of this government.

The Government started enthusiastically in 1999. There was lots of talk of inclusiveness and rebuilding trust in democracy. Helen Clark is intelligent and understands and genuinely cares about issues. It was like fresh rain after a long drought. The rabid pace of free market reform had already slowed a bit with the MMP election in 1996 and Labour built on that, promising less extreme, more democratic government.

State house rents were reduced to humane levels and the privatisation of ACC was reversed. The hated Employment Contracts Act (ECA) was repealed and support for arts increased dramatically. Timberlands’ native forests were transferred to national parks and F-16s were cancelled and then Skyhawks scrapped. It’s not a bad list.

But from early on there were warning signs.

The first was Helen Clark’s insistence that the public was ‘tired of change’. This isn’t actually true. The public was just tired of those changes. The cut, slash and privatise rollercoaster. But the tired-of-change line became the excuse for inaction on all sorts of long neglected social problems. People who had assumed that Labour’s 1999 election promises (state house rents, ACC etc.) defined a broad new direction found, instead, that those few changes were just about as far as it went. Labour politicians made their lives even easier in the 2002 election, when they made almost no progressive election promises at all.

This unwillingness to tackle many problems was explained by the next warning sign. In a series of meetings with business leaders, Helen Clark gave assurances that Labour’s economic and social reforms would be ‘modest’ and that the ‘fundamentals’ of the free market policies introduced between 1984 and 1999 would stay. She and other Ministers had been seriously spooked by business opposition during their first year in office and seemed to lose their nerve. The easy option was simply to avoid policies that might get business off side.

A pattern has developed. Progressive changes became cautious and minimal. Efforts to reduce poverty, for instance, the most basic role for a Labour Government, have been feeble and passionless. And after the ECA was ‘scrapped’ we still have some of the weakest protections for vulnerable working people in the western world. But the Labour politicians kept their promise to be ‘business friendly’ and retained some of the most extreme free market policies in the world.

Wherever these sorts of free market policies are followed, they lead inevitably to an ever richer few at one end and an increasingly marginalised poor at the other. There’s nothing accidental about the rich getting richer and the poor getting poorer. In the market jungle, those with economic power of course have the advantage over those who don’t.

A classic example of this is the cost of people’s housing, probably the greatest source of poverty in New Zealand. Labour’s income-related state house rents, while worthwhile, affected less than 20% of people living on benefits, and an even smaller fraction of all low-income families. Housing costs continue to be a major reason why an estimated one third of all New Zealand children are – according to a November 2002 Ministry of Social Development report – living in hardship, meaning poverty.

New Zealand’s unregulated property market is one of the untouchable economic fundamentals, a political no-go zone, whose influence on poverty is rarely discussed. But the mechanisms are obvious. Rising house prices are good news for banks and people owning property, but mean higher mortgage payments for new home owners and ever higher rental costs for the growing number of people who can’t afford their own homes. The ‘good news’ is in effect a massive transfer of wealth from (usually) those with less to those with more.

For this reason many European countries have government policies designed to ensure good housing is affordable. Not so in New Zealand. While all other inflation is strictly controlled, house price inflation is treated as ‘good’ inflation and it’s basically encouraged. There are no capital gains taxes, no controls on rental prices and no controls on foreigners buying land and property (which further pushes up prices). This failure of housing policy, on its own, means the rich-poor gap will keep growing.

So why don’t the Labour politicians do something about this and other problems?

The main reason seems to be a lack of vision, combined with a lack of nerve when faced with issues that are politically difficult. They wanted very badly to be in Government – especially for more than one term – but there were no Michael Joseph Savages or Norman Kirks there with inspiring plans for a better world. The policy vacuum has been willingly filled by business lobbies and bureaucrats steeped in free market orthodoxy, who together have pursuaded Labour to make ‘growth’ (which often just means the old free market agenda) its number one priority.

Thus the fundamentalist fundamentals, the blind pursuit of free trade deals and integration with Australia – with no debate tolerated on whether it’s a good idea – and the renewed (partial) privatisation programme (which is what PPP really means), opening public services like hospitals, roads and water supplies to foreign companies. Invariably, the impulse has been to manage issues by moving to the right.

But a lack of vision isn’t an excuse in all areas. In foreign policy Helen Clark had the potential to be inspiring and powerful, like David Lange on nuclear weapons. Yet she has been neither. In New York four weeks ago she was asked if New Zealand would support any US initiative to use nuclear weapons against a non-compliant Iraq. Helen Clark’s response? “We’re quite a long way from that and there are a lot of ‘ifs’ and ‘buts’ and ‘maybes’ and hypothetical questions in that.”


She had a moment on the world stage to do something important, but our Prime Minister was unable to say that incinerating Iraqi people with nuclear weapons would never be right. To her credit she has not backed the coming invasion of Iraq. But if the US manages to bulldoze the UN Security Council into approving the invasion, she will not say it’s wrong. She will join the war.

Compare this to Norman Kirk’s passionate belief in the importance of an independent small nation’s voice in world affairs. He sent a frigate to protest at Muroroa. Helen Clark has sent one to hassle date boats near Iraq.

But most disappointing is the style of government. The promise was to be open and inclusive. The reality has often been haughtiness and arrogance. Helen Clark exhibits an almost Muldoonian intolerance of people with different opinions. Among others, she has slapped down and even ridiculed critics of the ‘war on terror’, ‘Luddites’ concerned about GE and people questioning free trade – all serious issues needing debate. Yet business leaders regularly have their views and agreement sought before decisions, as if New Zealand is evolving a new, informal House of Lords.

I had hoped Labour might improve the freedom of information laws, but so far they’ve proven more secretive and PR-driven than National. It’s not promising, since governments rarely get more open and less arrogant as they go along.

So how will we judge this Government looking back ten years from now? I hope I’m wrong, but I think that in terms of building a better society, when the spin finally runs out, the results of nearly a decade in Government will be deeply disappointing. Helen Clark may be remembered as a clever political manager, but she will have turned out to be tragically reluctant to lead.

For every one of her Cabinet colleagues really trying to make a difference, there have been more doing little or worse. Quite a few should have left to ACT or National long ago but Labour didn’t have the courage to give them the push.

As happened with the 1980s Labour Government, when the ‘left’ party has been so right wing it becomes a licence for the succeeding ‘right’ government to be much worse – including sweeping away what positive progress there was. It may seem clever short-term strategy to steal your opponents’ policies and votes, but in the long run the country pays for having moved or maintained the centre so far to the right.

The sad thing is that the more thoughtful people in the Government must realise what’s happening. I suspect that they sometimes pause in their busy schedules and wonder what they are really achieving.

It’s still possible some of them will try to change the direction, like David Lange who, also three years into office, returned from the Christmas holidays in 1988 shocked about where his Government was going and determined to slow the new right juggernaut. But, failing that, it will be more of the same.

Some predictions. In this second term Labour will start worrying about its image and put more PR and some (but not nearly enough) effort into poverty. Then, sometime during the third term, there will be lots of urgent (but inconclusive) action on all the things they never did.

It could be different. They could, for instance, shift down a notch their (somewhat fanciful) goal of becoming one of the richest OECD countries and make it first priority to become one of the fairest. History would certainly remember that.

But the way things are going, that won’t be here or now. Just when New Zealand and the world urgently need new ideas and courage, it seems that we have a Government short of both.