State housing data for Spinoff piece

I’ve had a piece published today on the Spinoff about state housing numbers throughout New Zealand history. The underlying data are available here.

The Spinoff: Did National really just simply sell off state houses?

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It has become a truth universally acknowledged, at least on the left, that the last time National was in power, its only interest in state houses lay in selling them off. But did it really?

For a long time, the actual facts were obscured by a fog of data uncertainty. You’d think public housing numbers would be a simple matter: either the state owns a specific home or it doesn’t. But dwellings can be tenanted or empty, rented at subsidised or market rates, transferred to charities to run or kept firmly within the state. They can be sold, bought, demolished or leased.

Voyager-award-winning reporter Kirsty Johnston once spent weeks trying to untangle the data, a process she describes as “somewhere between a merry-go-round and a nightmare”. Now, in response to Spinoff enquiries, the Ministry of Housing and Urban Development (HUD) has produced official data that allows the question to be resolved.

First, though, some history. State homes came into being in the 1930s under the inaugural Labour government, as it attempted to not just accommodate the most vulnerable but also, in the words of historian Ben Schrader, “provide an alternative to private housing”. State housing was to be built at such a scale that it could influence market rents and have “a social status equivalent to home ownership”. And, briefly, the vision worked. “When I interviewed [the first generation of] state house tenants, they said it was great to have a state house and they had sort of ‘made it’,” Schrader recounts. “It was a step up in the social hierarchy.”

Working at scale and pace, Labour built nearly 29,000 state houses in the decade to 1949. Technically, of course, it lost power in 1948, but its building pipeline (and that of any other government) can reasonably be regarded as extending a year after its time in office: an incoming administration can hardly cancel signed contracts or halt work underway.

Adjusted for population, Labour built the equivalent of 10,000 homes a year today. But construction slowed under subsequent National governments, and although Sid Holland and Keith Holyoake built around 1,000 a year across most of the 1950s and 60s, the dream of competing with private homes died. State housing, Schrader says, became more and more a “residual” service for the poor. And although the fourth Labour government erected around 13,000 houses in six years, a hammer blow landed soon after.

Jim Bolger’s National government was, by 1991, managing around 70,000 state homes, roughly 5.4% of the total housing stock. This was not, by global standards, an enormous percentage, either then or now. In countries like the Netherlands, nearly one-third of all housing is provided outside the market, often constructed by the state and handed over to charities to run. In Vienna, 50% of all residences – many of them in architecturally stunning apartment blocks – are owned by the city council or co-operatives.

Nonetheless, Bolger and his successor Jenny Shipley took New Zealand’s small state housing stock, and made it even smaller. Influenced by anti-government ideology, they sold off one in every seven homes, leaving the incoming Helen Clark and colleagues with just 59,000. Clark then restored numbers to around 67,000 in 2009 – the year in which John Key’s housing policies took effect, and the historical Te Ara data on state housing stops.

What happened then is revealed in the previously unpublished HUD data covering 2009 to 2016. (The post-2017 ‘Housing Dashboard’ then picks up the story.) It confirms that National did indeed sell thousands of state homes. Of the 67,627 it inherited in 2009, just 61,426 – some 6,000 fewer – were left in Kāinga Ora ownership by 2017.

Many of the sales, though, were to the community housing providers – charities like Tauranga’s Accessible Properties – that National believed were superior to state agency Kāinga Ora. The charities were, crucially, given access to Income-Related Rent Subsidies (IRRS), which set rents at 25% of income. This effectively put some charities’ tenants on the same financial footing as Kāinga Ora’s, and brought them into the “state” or “public” housing sector.

Whether or not charities are indeed superior housing providers remains a vexed question, though their representative, Community Housing Aotearoa chief executive Paul Gilberd, takes a diplomatic stance: “We need them [Kāinga Ora] to be going really, really well, as well as our sector.” Either way, as the data shows, IRRS-covered charity places rose to over 4,700 by 2017, leaving National with a net loss of around 1,500 state houses. (A similar story is told in the data Johnston assembled.)

Case closed, then: National did sell state houses. But wait: if, as above, a government should be attributed a one-year post-election pipeline, National gets to claim the year to June 2018 – a 12 month period in which over 1,000 state houses were added, as the party finally twigged to the need to build. That would leave National with a net loss, from 2009 to 2018, of just 340 homes.

Not so bad, then. But the amount of state housing matters less than the proportion it represents of all dwellings. A state-housing stock that stays static while the population grows is accommodating less of the public, and providing a reduced service.

We can calculate how many extra government dwellings would have been needed to maintain the 1991 level of provision, when state houses made up 5.35% of all homes. The destruction of the Bolger years comes into sharper focus: National left, on this measure, 20,000 fewer places than it inherited. Clark did no more than halt the losses, which – in the final analysis – mounted again under Key and English, worsening the shortfall by another 14,000 homes.

It is no surprise, then, that senior National figures like Nicola Willis have admitted the party sold too many state houses. Her colleague Chris Bishop even told RNZ that National would “build enough state and social housing” to clear the state-house waiting list – a startling claim given that the list currently sits at 24,717, but one to which he will no doubt be held if his party wins power. That waiting list has ballooned under Labour, but the government can at least point to having added 13,000 places to the state housing stock, of which roughly half are newly built. (The broader construction boom has, however, seen the share of state housing fall further.)

The wider picture here is what Gilberd calls “30 years of profound neglect” from 1991 onwards. And even before that, state housing’s status had been dented. In Schrader’s words: “It had been a step up, but it became a step down.” To change that dynamic now would require not just higher building quality from Kāinga Ora but also the immediate addition of – at least – 43,000 homes, to restore the (not overly generous) 1991 level of provision. That, though, seems a distant prospect.

The Post: The election’s great beneficiary-vanishing act

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Like a strange and awful conjuring trick, this year’s election has made disappear over 350,000 people: the New Zealanders whose incomes rely largely on benefits.

Political contests are almost always won and lost on the centre ground, but never more so than in 2023. Everything in the Chris and Christopher show is aimed at the “squeezed middle”, the working families whose grocery and petrol bills dominate all debate.

But here’s an irony: no-one is squeezed more by the cost-of-living crisis than the very poor. Work published last year by Statistics New Zealand showed that, over the last decade or so, inflation had risen around 25% for average households but 35% for poor ones.

Yet who is campaigning to advance the latter’s interests?

Labour, admittedly, can claim stored-up credit, having poured $16.5 billion extra into welfare and raised the unemployment benefit from $215 to $340 a week. This makes a marked difference: the number of children in households where food runs short, for instance, has fallen from 20% in 2019 to 13% today.

Labour’s approach is a compassionate one. No-one sensible wants people to remain on benefits longer than necessary, but while they’re there – caring for kids, coping with illness, looking for paid work – they should enjoy lives of dignity.

Most remarkably, Labour’s reforms have happened without anyone protesting much, or indeed really noticing. The ugly beneficiary-bashing of the Paula Bennett years has melted away.

The secret of Labour’s strategy has been to lift benefits bit by bit – a rare triumph for its largely inept “radical incrementalism”.

But victory-by-stealth is a flawed strategy: it leaves even a party’s keenest supporters in the dark, dispirited and unable to rally the troops.

And reform remains unfinished. Official calculations show many beneficiaries are still somewhere between $36 and $136 a week short of being able to meet basic costs, let alone participate fully in society.

Only the Greens have a plan to fix this. Their guaranteed minimum income, funded by a wealth tax, would ensure every beneficiary had a base income of $385 a week ($770 for a couple), plus $355 a week in a child’s first few years. Beneficiaries would also get more support to (re)join the paid workforce.

Good luck, though, to anyone trying to get such a plan past a Labour Party that should really rename itself the Sensible Centristing Trust, such is its dedication to swing voters.

Its election campaign largely ignores beneficiaries, or offers them little. The signature pledge of taking GST off fruit and vegetables may not even make those items cheaper, official advice suggests.

Another key Labour promise is to increase the in-work tax credit – a payment from which beneficiary families are specifically barred. National would match that increase, equally keen to surgically remove the “undeserving” poor from the state’s renewed largesse.

National’s clampdown on beneficiaries would go further still. One of Labour’s big moves was to link benefit increases to wage rises not inflation, since the former greatly outpace the latter long-term.

National would reverse that decision, leaving people on – for instance – the disability benefit $19 a week worse off in 2026 than they’d be on the current trajectory. And in a move both baffling and unkind, Christopher Luxon would eliminate half-price public transport for beneficiaries.

Worse still is ACT, which would remove benefits from people struggling with drug addiction if they didn’t turn up for counselling sessions. National would likewise use more sanctions, alongside tailored support and “job coaches” for the under-25s.

All this is based on a flawed model of how beneficiaries live. They are not, by and large, lazy and incapable. In my experience most are, metaphorically, battling up a steep slope with a backpack full of rocks, weighed down by addictions, poor physical and mental health, low self-esteem and a lack of qualifications.

Chaos is brought to their lives by exploitative employers, discrimination and bad housing: some move constantly in search of adequate accommodation. They have few reserves to draw on when disaster strikes. So if they don’t turn up for a doctor’s appointment or a job interview, it’s not – generally speaking – from lack of motivation but because of a sudden life shock.

No surprise, then, that the evidence is clear: sanctions don’t work. Multiple British studies have shown they don’t get people into paid employment more quickly. If anything, they slow down that process.

Adding chaos to already chaotic lives, sanctions force people to suddenly cope with even less income than usual, and to focus on meeting often-arbitrary government targets rather than their own stability and wellbeing, both prerequisites for employment.

Sanctions, in short, increase the misery of their recipients – and in turn their children, a form of collateral damage that leaves conservatives seemingly unmoved.

Beneficiaries have largely been forgotten in this election. But if National and ACT win, they may wish they’d been even more forgotten.

The Post: Extra spending doesn’t always mean wasteful spending

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Losing a debate is often a chastening experience, and so it was for me on Monday night. Alongside the writer Danyl McLauchlan, I was arguing, at a Free Speech Union event, that the tax system is unfair and the wealthy should pay more.

We made, I think, solid arguments: homeowners generally avoid tax on the capital gains they make selling properties, and the wealthiest families pay just 9.4% of their income in tax, compared to 10.5% for supermarket cashiers and 22% for the typical Kiwi.

In response, our opponents – the Taxpayers’ Union’s Jordan Williams and the New Zealand Initiative’s Eric Crampton – casually conceded that, yes, the system was unfair. But if wealth taxes were to be justified, that money would have to be well spent – and just look at all the government waste.

For the admittedly conservative crowd, this argument carried the day. And so it goes in the country at large.

Every shiny new Labour pledge is met by scepticism about its ability to spend well. National leader Christopher Luxon’s favourite stat is that government expenses are $1b a week higher than in 2017. And indeed state spending has risen from $76.3b to $128.2b, an increase of 68% or $51.9b.

But if one adjusts those figures for inflation and population growth, spending has risen a more modest 26%, or around $4000 a head.

Broadly speaking, New Zealand governments spend about 30% of GDP, or national income, each year. Spending has gone from a below-normal 27.8% in 2017 to 32.5% this year, and is projected to fall back to 31.5% by 2027. It has risen, but not to a staggering degree.

Very little of it, moreover, has gone on pet projects. Two-thirds of the increase has come in the core areas of health, education and social security.

And we are the better for this spending. State pensions may have added billions of dollars to the tab – but they keep our elder poverty rates among the world’s lowest.

Higher benefits have helped cut the proportion of children in families where food frequently runs out, down from 20% in 2019 to 13% now. The Healthy Homes Initiative, which provides curtains, heating and insulation for poorer families, reduces hospital admissions by one-fifth.

Labour has also had to repair holes left behind by National. Some $500m of the health budget was spent wiping the old DHBs’ deficits; billions of dollars more were needed for pay equity and wage increases. And Covid, of course, has hampered everything.

Still: instances of waste abound. Merging every polytechnic into one mega-entity was a bizarre decision, as was the call to rip up the health service amidst a pandemic and start again.

Lacking strategic vision, Labour has spent $51m on an abandoned Auckland harbour bridge project, and incalculable consultancy fees on projects going nowhere. Lavish $40,000 farewells for state CEOs stick in the public mind.

Instead of denying this waste existed, Labour should have gone on the front foot long ago, acknowledging the problems and publishing a plan to tackle them. It didn’t. Now, not only is the perception of waste understandably widespread, there is no counter-narrative.

That battle has been lost for this election: any reform pledges now would look hollow. But in future, either in or out of power, Labour will need to answer a question it has almost always ducked: how do we make government work better?

Cutting consultancy spending would be a good start. But since consultants have mushroomed in a hollowed-out public sector, Labour will have to grapple with tough questions about how to attract and retain talented officials.

More importantly, though, the progressive solution to waste would be to put public-service workers and users in charge of tackling it.

In a little-known union-led trial a decade ago at Tauranga Hospital, frontline staff were asked to identify and fix inefficiencies. So they changed the way patients were contacted, allowed them to choose their appointment times, and didn’t book them in until the appointment was confirmed.

The time taken to schedule acute appointments fell from 5 hours to 1.5 hours. Imagine how much money these changes – and others equally simple – could save if extended to every hospital.

Another suggestion: beneficiaries could be asked to redesign every Work and Income form, process and office, so that welfare recipients could get the information they need, navigate the system with greater ease and, where possible, leave it more rapidly. Public service users could be surveyed on ‘process’ issues – whether, for instance, they were treated with respect – and that data used in agencies’ performance evaluations.

Ministers could expand joined-up, family-centric programmes like Whānau Ora and set public-sector targets that frontline staff find meaningful. And they could, finally, set aside funds to evaluate every new programme over a certain size. Absent initiatives like this, Labour’s pleas to be entrusted with more taxpayer money will be met with silence.

The Post: There’s a long way to go on poverty. How will we get there?

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“Look, I was a mum on the DPB; it’s not a great life. And I don’t wish that on anyone. It’s incredibly challenging while you’re on it, and incredibly challenging to get off it.”

For Louise Upston, National’s welfare and work spokesperson, this story forms part of her credentials for fighting poverty, should her party win power in October. But then one of her predecessors, Paula Bennett, had also been a welfare recipient, and her time in office was marked by beneficiary-bashing and harsh financial sanctions.

Back-stories, in short, aren’t enough. But Upston’s intentions are positive. Interviewed in her Parliamentary office this week, she essentially promises to retain Jacinda Ardern’s Child Poverty Reduction Act. “We don’t have any plans to change the legislation,” she says, “and we don’t have any intention to change the [related] targets.”

How, though, would National meet them? Under successive governments, this country has reduced the proportion of children in poverty, on two key measures, from around 15-20% a decade ago to 10-12% now. But the 2028 targets set by Ardern would require us to slash those numbers still further, to just 5-6%, in line with the world’s best performers – and New Zealand’s record pre-Rogernomics.

Upston’s plan is twofold. First, reduce the costs poorer families face. “Deal with the cost-of-living crisis; that deals with inflation and housing costs.” Central here is the $75-a-week Family Boost childcare subsidy: “After housing costs, childcare is your biggest cost.”

Second, get people off benefits. “The current Government’s efforts have been around lifting benefit incomes; our focus will be on supporting people into work.”

She returns to this theme over and over: “We know that the life outcomes from long-term welfare dependency, for children from benefit-dependent homes, are worse, and all the evidence tells us this.”

But does it? If benefits were high enough that recipients enjoyed a decent life, could afford all the basics, and lived in warm, dry homes, would that “evidence” hold? What if the problem is the inadequate payments, not the beneficiary status? “Well, that’s a different philosophical argument,” Upston says, not quite answering the question.

Even after recent benefit increases, some recipients remain $50-200 a week below the poverty line. Under a National-led government, they would remain poor unless they found jobs. “Which is why our focus is getting people off welfare and into work. Unapologetically.”

National would, moreover, increase benefits in line with inflation rather than wages, even though the living standards of beneficiaries would then fall further and further behind those of working people.

This would treat working-age benefits differently to pensions, which are set at two-thirds of the average wage. “Yes, but one’s a benefit, and one’s an entitlement,” Upston says – a stance some would dispute.

Another problem: four out of 10 poor children have a parent in full-time work. What would Upston do about poverty wages? Nothing, directly, though – again – she’d aim to reduce the costs those families face.

Upston would, on this evidence, struggle to hit the 2028 targets. Still, she’d want National to be judged on how it treated the most vulnerable. “I think every government does... No New Zealander wants to see children in hardship.”

It’s curious, though, that having once been a beneficiary, her instinct is not to make that life easier for others but to help them escape it.

This reflects, perhaps, a tension between liberals and conservatives. The former believe benefits should be generous, and social support extensive, so recipients can hold their lives together and then rebound. And indeed, in countries with higher benefits, people often spend shorter spells on welfare than they do in harsher regimes.

Conservatives, by contrast, emphasise immediate job-hunting, and sanctions. Beneficiaries quickly get their payments cut, or have the state manage their money, if they don’t meet their work-search obligations.

Now, any welfare system, unless it is completely unconditional, will deploy some sanctions. But there is growing evidence that widespread sanctions don’t get people off benefits more quickly. Indeed they actually slow that process down, according to the latest research, by adding stress and chaos to already stressful and chaotic lives. They can cause immense damage.

It’s unfortunate, then, that Upston would give them a greater role. But she would also deploy carrots alongside sticks. Beneficiaries under 25, for instance, would get a detailed needs assessment, a job coach and a job plan.

Invited to blame individuals for their situation, Upston instead strikes a sympathetic note. “People, for a whole range of circumstances, have very challenging times, very challenging circumstances… so what we have to do, when those life interruptions happen, is help people up faster.”

She also mentions having met Northland families “who had the most complex and challenging lives that I think most New Zealanders would not even contemplate that Kiwis live. I know we’ve got a long way to go.”

Indeed we do. But how we get there, and whether everyone makes it, may depend greatly on which of its two faces, liberal and conservative, the National Party wants to favour most.

Newsroom: Labour’s lost blue-collar dogs

Read the original review of Graham Kelly’s ‘Keeping the Party in Tune’ on Newsroom

Prime Minister Chris Hipkins makes much of his Everyman image as “a boy from the Hutt”, but his mother was the lead researcher at the New Zealand Council for Educational Research and his career has arced smoothly from student politician to political staffer to Labour MP at 30. He's pretty much the the apotheosis of the PMC: the professional-managerial class, a term coined by American writers Barbara and John Ehrenreich to describe private- and public-sector managers, lawyers, accountants, doctors, teachers – exactly the kind of “salaried mental workers” who now dominate New Zealand Parliament, and the Labour Party, even though PMCs comprise just four in 10 people in the wider population.

The new self-published memoir by former Labour MP Graham Kelly, Keeping the Party in Tune, invites us to reflect on what these changes have done to the Labour Party, and whether it can still effectively represent the interests of blue-collar workers or indeed those even more marginalised by society.

Right now, virtually no government MP can be said to be blue-collar, even if some, like Labour’s Willie Jackson, had held such jobs earlier in their lives. Research by Victoria University’s Simon Chapple and Peter McKenzie has shown that, in 1972, one MP in five had done blue-collar work – in clerical, service-sector or labouring jobs – immediately before they entered Parliament. The House as a whole was still from a different social stratum than the country at large, 71 percent of whom did such work, but blue-collar workers, and their trade-union representatives, were at least present in politics. The decline in the trade-union movement, Chapple and McKenzie concluded, has been responsible for much of this change in Parliament’s make-up.

This comes through clearly when Kelly writes of his campaign to become Labour’s candidate for the Porirua seat in the 1987 election. An outsider to the electorate, he was derided by a local newspaper, Te Awa Iti, as “the Poodle from Khandallah”. This same newspaper backed another candidate in a style that is sadly lacking in modern politics: “Porirua Dogs Are Real Dogs. They bark, chase cars, growl and bury bones. Poodles from Khandallah do not. They look pretty, sleep comfortably, and eat expensive doggie food. Porirua needs a Real Dog. DANIEL WINSTON. A real dog for real people.”

The dispute has ironic overtones now because Kelly would, by the standards of the modern Labour Party, seem about as real a dog as they come. As he recounts in Keeping the Party in Tune, he got his first job at 17, at the wholesalers AS Patterson and Co on Wellington’s Lower Cuba Street, and was immediately embroiled in a labour dispute. This was 1958; by the next year he was standing for election to the committee of the Clerical Workers’ Union.

In the process, he got an early taste of the rough-and-tumble of left-wing politics. The notorious trade-union operative Fintan Patrick Walsh, president of the Clerical Workers’ Union, had a cunning strategy for making sure members couldn’t vote at meetings: his staff would collect only part of their subscriptions, ensuring they were constantly in arrears and thus ineligible to take part. Walsh also attempted to fix votes by blatantly ‘stacking’ meetings with members of another organisation, the Seamen’s Union, of which he was also president.

Kelly fought his way through these and other underhand tactics to become a key figure in the trade union movement in its 1960s and 70s heyday, a process he recounts in some detail. (There are, it must be said, rather more anecdotes about trade-union administration than is strictly necessary.) And it was on the strength of this work that he stood for the Labour candidacy in Porirua, won selection, and was elected its MP later in 1987.

The memoir is also a reminder of the long shadow cast by the 1980s. For when Kelly enters Parliament, he is immediately thrust into one of the most controversial periods in New Zealand political history. An ostensibly left-wing Labour government is privatising and deregulating the economy at warp speed, in a manner that finance minister Roger Douglas later admits is expressly antidemocratic, deluging opponents with reforms so that they cannot keep up.

Kelly and a small band of fellow left-wingers – the legendary Sonja Davies among them – fight a doomed rearguard action against their own colleagues, in what he labels a “Caucus Civil War”. And they do so at some cost to their own health. One gets stress-induced “boils under his arm and nose”, while another develops permanent flu symptoms. For his own part, Kelly recounts, “My blood pressure went so high that I woke in the night with violent headaches.” Hearing his constituents’ despairing stories later leaves him so upset that his stomach churns and he can hardly eat.

Kelly’s left-wing grouping are quite rightly, and presciently, concerned about the damage Douglas is doing to the country’s social fabric. Tens of thousands of New Zealanders are made redundant with little or no state support to find another job; poverty and inequality start soaring. Corporate raiders make massive profits buying state-owned enterprises for relatively low sums, asset-stripping them and selling them on. Deregulation sets the stage for a laissez-faire health and safety culture that endangers lives and a hands-off style of building regulation that leads straight to leaky homes.

Kelly and colleagues can do little against this onslaught. “I often felt like a leaf in a flooded river being swept downstream,” he writes, “with little or no control about how fast we were moving”. His resistance, however, pays greater dividends once Labour is in opposition post-1990. He leads a civil disobedience campaign of non-payment of National’s user-pays hospital charges, forcing ministers into an embarrassing u-turn. Another telling anecdote concerns Jim Bolger’s brutal policy of requiring impoverished state-housing tenants to pay market rents. After a state-housing family in Kelly’s electorate, no longer able to pay the power bill, switch to using candles and a resultant fire kills two of their children, Kelly is ejected from the parliamentary chamber for demanding that housing minister Murray McCully be charged with manslaughter. Later, during his time in government between 1999 and 2003, he has the satisfaction of partially reversing some of the worst of these reforms.

*

Kelly’s account of this history is, at times, refreshingly idiosyncratic. Most political memoirs are chronological, streamlined to focus on the politics, and faintly self-important. Kelly’s is more in the vein of a loosely connected series of anecdotes culled from a very full life. The title references one of his great passions, music, a subject that generates amusing stories about dancing nuns, unreliable bandmates and gigs gone wrong.

Keeping the Party in Tune is not an excessively polished text: the sentences tend to be plonked down flat on the page. The book also suffers from Kelly’s desire to painstakingly note, and pay tribute to, the minor supportive acts of various colleagues, friends and family members who are clearly valued by him but – alas – of no interest to the general reader.

The memoir does, though, come at an apposite moment. Despite the oceans of ink devoted to its analysis, neither Labour nor the country as a whole has ever quite come to terms with the 1980s revolution. The right tends to laud it uncritically as a necessary destruction of the “Fortress New Zealand” that prime minister Robert Muldoon built, a liberation of entrepreneurial and commercial energy whose resultant swelling of poverty was simply the price paid for this freedom. The left, meanwhile, too often sees it as an inexplicable calamity, a conspiracy foisted on an unsuspecting public and the moment in which “an egalitarian New Zealand” died.

As we approach the 40th anniversary of Douglas’ blitzkrieg, it would be healthy for the country to adopt a more balanced position, one that acknowledges the failures of Muldoon’s protectionist economy but also points out that, in making New Zealand more open to the world, it was not necessary to make it more unequal. The country could have become more like Denmark – flexible, dynamic, but with widely shared growth and world-class public services – rather than becoming a poor imitation of the United States, with all the attendant inequalities and social problems. Our account of this period must also find a way to acknowledge the progress made since 1984 – especially in the recognition of women’s rights and te ao Māori – that has run alongside the damaging rises in poverty and social dysfunction.

For his part, Kelly acknowledges that Muldoon left the country in a mess – “there was a need to make change”, he notes – but does little to sketch out a compelling alternative to Rogernomics. This is not a criticism: in the post-1984 era hardly anyone has. Contra the fevered imaginings of the right-wing commentariat, this Labour Government has not – bar a couple of landmark pieces of legislation like the Zero Carbon Act – really upturned Rogernomics’ political settlement. Taxes remain low by European standards, unions weak, state housing neglected.

A different vision is waiting to be sketched out, one in which the economy serves people and planet – Kate Raworth’s famous 'Doughnut' metaphor comes to mind – and a sense of collective endeavour suffuses politics, public services and the country as a whole. Revitalised industrial policy, the indigenous independence foreshadowed in Matike Mai, and a fairer tax system would all play their parts in this new intellectual world.

Keeping the Party in Tune does not really enter this territory. It stresses instead a home-spun concern for basic kindness and decency that, even in this more individualistic age, is familiar to most New Zealanders. Kelly writes: “Any government worth its salt, if it ignores or pays insufficient attention to the poor in our society and allows the gap to grow between them and those at the top, or does nothing to reduce it … does not deserve the privilege given to them to govern.” It is perhaps this explicit defence of the underdog that gives the book its main character, and reminds us of what politics has lost.

The Spinoff: Has Labour really been ‘the most transparent and open’ government ever?

Read the original article on the Spinoff

Some words and phrases weigh heavily on this government, like a concrete-block necklace. “Kiwibuild” is one such. Another is the promise made in November 2017 by MP Clare Curran, just a month after Labour had taken power, that hers would be “the most open and transparent” administration this country had ever seen.

Curran was soon after forced to resign from her role as minister for open government, but the ambition remained, at least notionally. And her words only reformulated, in striking language, sentiments uttered by her then prime minister, Jacinda Ardern. But open and transparent government has often eluded Labour, as it has faced all the usual temptations to limit the public’s role in decision-making and conceal information. So how well has it fulfilled Curran’s promise? 

One respected voice on these matters is Keitha Booth, who from 2008 to 2015 led New Zealand’s Open Government Information and Data Programme. “There has been progress,” she says of Labour’s efforts. Openness is partly about creating more opportunities for people to be involved in politics: Booth points to recent experiments with citizens’ assemblies, albeit largely at the local level, and – more contentiously for some – co-governance. Such innovations “seem to be becoming embedded”. However, she bemoans the lack of “public leadership on open government at the ministerial level”, noting that the responsible ministers, among them Chris Hipkins and Andrew Little, have generally been “far too busy” with other portfolios.

Opacity and privilege have also generated the usual parade of scandals, from the Ministry of Health removing unwelcome statistics from its reports to Stuart Nash disclosing confidential Cabinet information to donors. The government, however, bases its defence of Curran’s pledge on three pillars: the promised creation of a register of the true (“beneficial”) owners of New Zealand companies, the formalised publication of Cabinet papers (something that happened piecemeal under previous governments), and the release of ministers’ engagement diaries. All are potentially important reforms. But none has been perfectly delivered. 

The beneficial ownership register could, experts believe, represent real change, making it easier to determine who owns firms currently veiled in layers of shell companies and trusts, and to track down those responsible for corporate wrong-doing. But it is still a work in progress, and in any case represents openness from companies, not the government itself.

Meanwhile, on some measures, under half of all Cabinet papers are actually released. Promises of proactive publication are also, ironically, being used to refuse information requests, journalists say. As one puts it: “Too many papers are not released [at the time they would normally be], because the government promises to ‘proactively’ release them at some undetermined time in the future … when it is no longer of use to the media or the public.” (In passing, it should be noted that many countries are amazed we publish Cabinet papers at all.) The ministerial diaries, meanwhile, can be difficult to find online, are formatted as hard-to-use PDFs, and may not contain all the meetings of interest. 

One festering sore is the continued failure to overhaul the 1982 Official Information Act (OIA), which plays a vital role in mandating the release of public data and documents but is widely seen as needing renewal. In 2020, Little promised a full review, but it was “deferred” by his successor, Kris Faafoi, and never eventuated. In its absence, reporters have complained that abuse of the act has accelerated, just as it did under John Key and, before him, Helen Clark. Official statistics show more requests for information are being answered within deadlines, but that says little about the quality of the responses’ compliance with the law. 

Journalists report releases being heavily redacted, given to other, “friendlier” reporters, or simply withheld without good reason. Anna Fifield, when editor of the Dominion Post, castigated the government for its “obstructive and deliberately untransparent” culture – one that was worse even than in the other democracies she had covered.

To test how widely this view is shared, The Spinoff contacted half a dozen members of the Press Gallery, all of them journalists who have followed multiple administrations closely, asking them for impressions of this government’s performance and a ranking from 1 (much more open and transparent than its predecessors) to 5 (much less).

Their combined responses could be summarised in one word: meh. One experienced journalist said Labour had been “slightly more open and transparent, because my impression – and that’s all it is – is that the proactive release of officials’ and Cabinet papers has become an important source to allow deeper analysis of how decisions have been reached.” But they noted “significant ways in which the government as a whole has become less transparent”, especially now that departments’ press teams virtually bar reporters from speaking directly to officials. 

This practice was, another journalist added, “particularly problematic in a tiny country in New Zealand, where some of the best experts and voices on any subject are employed by the public sector”. But on the wider question, this journalist thought that the government “win[s] on a technicality. They are more open and transparent than other governments, but only because previous governments have been particularly opaque.” 

Some agencies were praised for proactively releasing material, notably the Treasury and ACC. There was a widespread sense that, among ministers, Hipkins had been one of the best, but had often failed to bring colleagues with him. “It’s a real mixed bag,” one journalist said of the overall record. “The intent has been good in many respects, but it’s the execution that has been the issue.” 

Others were even less enthusiastic. “I have noticed no obvious change in [official information] responses since the change of government,” one journalist wrote. “Still reliably up to the line on timing, sometimes over; still redactions and omissions which seem to me dubious. I have noticed an uptick in responses to straightforward inquiries that comms people chuck in the [much slower] OIA pipe, which is incredibly frustrating.”  

One journalist, even more scathing, said the failure to review the 40-year old OIA was “the clearest signal you need that [Labour] was never committed to open government”. They added: “A culture of secrecy and obfuscation has bled down from the Beehive into the public service … As a working journalist, I have found it increasingly difficult to get straight answers to questions. It also takes twice, three times as long because every paragraph is parsed until it is reduced to a statement that tells you absolutely nothing.” 

So how did the reporters rank Labour’s performance, overall? Their scores averaged out as a ‘3’ – suggesting there was nothing, on balance, to differentiate this government from any other.

This tepid response is supported by global comparisons such as the Open Budget Survey, which examines how readily the public can find information on the government’s finances. It does not make encouraging reading. From a high of 89 (out of 100) in 2017, New Zealand’s score fell to 87 in 2019 and then 85 in 2021. Partly this reflects the high-speed, pandemic-driven rewriting of the 2020 Budget; many countries experienced similar falls. Still: hardly a resounding endorsement of Curran’s ambition. 

On the plus side, Labour has paid more attention than National to the Open Government Partnership, an initiative in which 76 countries draw up regular action plans to improve participation and transparency. New Zealand’s first such plan, developed under National in 2014, was a derisory list of things that were already happening. Under Labour, the plans have – from this low bar – become more substantial. 

But they are still hardly ground-breaking. The independent audit of Labour’s latest plan suggests just three of its eight measures are “promising”, and even that assessment seems generous. One measure involves nothing more than “lay[ing] groundwork for online platforms to share public procurement information”. 

Worst of all, NGOs say, there is nothing in the plan to stop the introduction of the “secrecy” clauses increasingly being written into legislation to override the OIA. Labour alone has brought in over 30 – “a significant stain against its claims on open government”, says Andrew Ecclestone of the New Zealand Council of Civil Liberties, the NGO most active in this field. The proposal is instead to strengthen the scrutiny of more such clauses in future: the “open government” action plan, in other words, actively envisages greater secrecy.

So there it is. The government may claim that its three big changes – the promised beneficial ownership register, the regular release of Cabinet papers and the publication of ministerial diaries – are by themselves enough to lift it into “most open and transparent” territory. But the failings noted above, alongside the slight declines in global rankings, the usual parade of scandals and the ambivalent rankings of experienced journalists, argue the other way. And even some of those who deem the pledge technically fulfilled would concede that Curran’s language invoked a whole-of-government step-change: a transformative improvement, to use the adjective favoured by early-stage Ardern. And of that there is no evidence at all.

The Post: The trouble with PPPs ‒ problems, pitfalls and pain

Read the original article in the Post

In Northern Ireland, taxpayers have been spending millions of pounds maintaining the buildings of an empty school. Why? Because it was built through a public-private partnership (PPP), a complex form of financing already used on local projects like Transmission Gully and set to become even more prevalent here.

Having seen these financial structures fail first-hand, I hope they don’t spread. And the fact we’re even entertaining the idea reveals deep failings in how we think about government in New Zealand.

The core of it is this. If the state wants something built – a school, a road, a power station – it has several choices. In the old Ministry of Works days, it could do everything itself, from finding the funds to directly employing the tradies.

These days, typically, it pays a firm like Fletcher’s to do the construction, but nothing more. The private-sector involvement, though not insubstantial, is nonetheless limited, controlled.

In a PPP, though, all the government does upfront is specify that it wants a building – a hospital, say. It then contracts a private-sector consortium to do everything else: design the hospital, borrow the money for its construction, build it, and then operate the facilities – for a hefty fee – for 30 or so years.

These financing structures first flourished in Britain in the 1990s, and were in full swing a decade later when I worked there as an infrastructure reporter. But even then the flaws were apparent.

Private firms always pay steeper borrowing fees than governments do, so PPPs have higher upfront costs. They save money only if the consortium can find efficiencies elsewhere. And the rationale of PPPs is that if a firm has to run a facility for 30 years, they’ll build it beautifully, rather than cutting corners and hiding defects before handing over to the state.

This logic is, alas, undermined by our old friend complexity.

Negotiating a contract that covers everything that might happen over three decades is nigh-on impossible. So either the consortium agrees to take on large, amorphous risks, in which case it charges a packet for the privilege; or, when unanticipated problems arise – the hospital buildings need to be rejigged to meet new models of care, for instance – the consortium can refuse to make the changes unless it is again paid colossal sums.

This is precisely what happens in Britain, where stories of ridiculous charges – thousands of pounds for a new tap, for instance – abound. The worst thing in the world is a private monopoly – and that is exactly what you get, for 30 years, with PPP maintenance.

Hence the Northern Ireland fiasco. When the contract for the PPP school was signed, no-one anticipated rolls would fall so rapidly that it had to close. But the taxpayer must keep maintaining an empty school, because that’s what the contract says. Far from being efficient, PPPs are exceptionally inflexible.

The negotiations are also a consultants’ dream. Take, for instance, the notorious (and admittedly massive) early-2000s London Underground PPP contract, where the lawyers’ and accountants’ fees alone were £500m. That’s a billion dollars, just to negotiate a contract, before builders set foot onsite: resources squandered on an epic scale. National, supposedly the enemy of waste and consultants, should take note.

It’s hardly surprising that, drawing on decades of experience, Britain’s National Audit Office concluded a few years back that PPPs cost more than standard construction contracts and there was no evidence they delivered better services. New Zealand’s Transmission Gully fiasco, with its constant over-runs and poor-quality road seal, is no aberration.

So why would both Labour and National still contemplate PPPs for roads and other projects? Partly because of the myth that they solve the state’s financial problems by getting the private sector to pay for things upfront.

They don’t, of course: there’s no free lunch, and the state just has to pay back the (inflated) bill through 30 years of maintenance fees. There is, what’s more, no financial problem to solve, at least in New Zealand.

Our government borrowing, at roughly 20% of GDP, is low by global and historical standards. We could – and should – borrow more without running into any difficulties, in order to fund the infrastructure needed in coming decades.

How do we ensure these schools and hospitals are well-built? Restore the public sector’s construction expertise. We need a team of super-procurers, of expert engineers and architects, permanently based in government, designing beautiful and efficient buildings, driving tough deals with construction firms, and – crucially – retaining the knowledge and learning the lessons from each project, so as to be able to insist on lower costs, and higher quality, next time round.

The recent creation of the Infrastructure Commission, and the repurposing of Christchurch rebuild agency Ōtākaro into a wider project-delivery body, are already promising steps. Let’s build on them – and avoid embracing the failed, wasteful and hyper-complex world of PPPs.

The Post: Confronting old orthodoxies and hard truths

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In Britain for work recently, I asked everyone I met the same question: can their country be fixed? After months of reading headlines about “broken Britain”, of seeing stories of collapsed public services and soaring poverty, I didn’t necessarily expect a positive answer. But what I learnt was illuminating – for New Zealand as much as for the UK.

In London, it was impossible to miss the damage done in the twelve years in which the Conservatives have governed with a toxic mix of incompetence and cruelty. The average wage is essentially the same now as it was in 2010, embodying an extraordinary, and distressing, stagnation of living standards.

Brexit has permanently damaged the British economy, according to every reputable analyst. Trade is down, investment is down. This is what economic self-sabotage looks like. And it’s something to remember here whenever Christopher Luxon touts National’s fiscal credentials: conservatives don’t always make good economic managers.

More troubling still are the social impacts: in Britain last year, one charitable network alone delivered three million food parcels, a depressing record. Nearly eight million people are waiting to see a doctor. Owing to increased poverty and malnutrition, a by-product of Conservative austerity, new cohorts of British children are literally getting shorter.

For the mostly middle-class people I encountered, life was still tolerable. In the warm summer evenings they sat in public parks, picnicking in that picture-postcard way the British do, dog-walkers and young families mingling under the calmly lengthening shadows.

But even so, my acquaintances feared for their country’s future. They worried about others’ struggles, about long-term decline and the erosion of society. And they were sceptical about whether politics had any answers.

In few countries, indeed, is there a clearer sense of the tide running out on the political certainties that have dominated recent decades. And this leaves both major parties stranded.

Margaret Thatcher’s 1980s reforms, just like our own Rogernomics, were supposed to unleash entrepreneurialism. And in part they did. But hands-off, laissez-faire government also fostered what the French call rentiers – people who live passively off the income from their assets – and encouraged firms to extract super-profits.

In Britain, this is most noticeable among their privatised water companies: sold debt-free by Thatcher, they have since borrowed £53bn and paid out £72bn in dividends, enriching their shareholders while hiking water charges and pumping sewage into the Thames.

Rentiers can be found, too, among the older generation whose homes have soared in value as house-building has plummeted, and who maintain that state of affairs by blocking all development. They then help their kids buy a house, while others 30-somethings are left paying exorbitant rents; inequality replicates across generations.

And as the rentiers profit, others struggle. One leading Conservative thinker, Nick Timothy, argues that Britons have become “serfs to debt, trapped by low pay and bloated assets”. So loud are these recriminations that columnists like the FT’s Robert Shrimsley have begun asking: do Conservatives “still believe in capitalism?”

But UK Labour also faces a dilemma. Too timid to challenge economic orthodoxy, the party seems unwilling to significantly raise taxes if it wins the next election, expected sometime next year. It promises instead to repair public services using the proceeds from higher economic growth.

But, as the former Labour adviser James Meadway argues, turbo-charged growth may not be possible, as climate change sparks extreme weather events, crop failures, food and water shortages, “and the conflicts all these help produce”.

The parallels with New Zealand politics, though not perfect, are clear. We have our anti-development rentiers. We have problematically privatised utilities: notably, the electricity ‘gentailers’. Most of all we have cartel-like behaviour in industries dominated by a few players who can hike prices at the consumer’s expense: supermarkets, banks, fuel retailers.

All this challenges our image of a New Zealand economy founded on plucky entrepreneurialism. It also suggests laissez-faire capitalism is working rather less well than intended – something that should concern National, the party of free markets, as much as anyone, though it seems largely indifferent to the problem.

Meanwhile, we face an ever-more intolerable situation in which the older generation’s healthcare and pension demands grow but we tax only the resources on which the young rely: incomes in the form of salaries and wages. Surely, the resources dominated by the over-60s – assets like rental properties and financial investments, in other words capital gains and wealth – cannot remain untaxed forever.

Yet Labour leader Chris Hipkins has ruled out such levies in his political lifetime. Admittedly that may last only three further months. But still there is a growing risk of political stasis: an unwillingness to confront old orthodoxies and hard truths.

Britain shows us what happens when, over the course of a decade, politics fails to engage with a new reality. We must not slip into that same slough of despond.

The Conversation: Tougher donation limits and funding fixes would make future NZ elections fairer for all

Co-written with Lisa Marriott. Read the original article on the Conversation

Less than three months out from New Zealand’s 2023 election, large political donations have been making headlines. Donations to both the ACT Party and the National Party have significantly outpaced large-scale contributions to other political groups.

Should this be a cause for concern? Studies from overseas indicate those who raise the most money tend to win. And, based on our recent “Doughnation” research, donors know that too. Wealthy New Zealanders admitted to gaining access to the levers of power through political donations.

So do our current campaign finance rules do enough to protect a basic principle of democracy – that we should all be equal in the ballot box?

Not according to an interim report from the Independent Electoral Review, which warns New Zealand’s current electoral laws are still “not as fair as they could be”.

Its final report will be delivered to the government in November – too late to have an impact on the 2023 election.

But if we want future elections to be fairer, here’s what the report found needs to change.

How can we make future elections fairer?

The Independent Electoral Review’s interim recommendations include

• replacing the current broadcasting allocation with a “fairer and more effective form of state funding” for registered parties

• per-vote and base funding for registered political parties

• tax credits for donations up to NZ$1,000

• introducing an expanded Election Access Fund and a new fund to facilitate engagement with Māori communities.

Those changes are additional to several changes to political party finance implemented at the beginning of 2023, ahead of this year’s election.

What changed ahead of this election?

Changes included lowering the reporting threshold for large donations from $30,000 to $20,000 and new requirements around reporting donations above $1,500.

In the first six months of 2023, the main political parties have already received more than $4 million in donations over $20,000.

The National Party benefited the most from political donations, receiving $1,255,587 in large political donations, closely followed by ACT, which received $1,255,000. New Zealand First received $567,304, the Green Party received $496,260 and the Labour Party received $428,844.

These figures reflect the large donations that have to be disclosed within 10 days of receipt. We won’t know the sum total of small donations until well after the election.

How much do large donations sway elections?

Research suggests donations can help political parties win more votes, but that typically this only applies to the more established parties. And, while money matters in New Zealand, it’s not necessarily a straightforward relationship.

Recent data from the United States showed better-than-average fundraising is a strong predictor of better-than-average electoral success, concluding that “money still matters”.

Australia’s Grattan Institute found that over the past five federal elections there, the party with the biggest war chest tended to form government. And an analysis of general elections in France and the United Kingdom between 1993 and 2017 showed increased spending per voter improved candidates’ share of votes.

Read more: 'They're nice to me, I'm nice to them': new research sheds light on what motivates political party donors in New Zealand

New Zealand’s 2017 election also illustrated a strong relationship between money and votes. National received 44.45% of the votes after a $4,579,086 fundraising haul. Labour received 36.9% of the votes and received $1,611,073 in political donations.

But the 2020 election result suggests there are limitations to the relationship between funding and votes, particularly for the two main parties. In 2020, other factors clearly contributed to the electoral outcome. For example, Labour’s handling of the COVID-19 pandemic appears to have outweighed National’s fundraising advantage.

Some voters’ voices are louder than others

Even if political donations don’t always decide elections, it is fairly well established that money buys access. Work from the Grattan Institute shows that highly regulated industries – such as mining, transport, energy and property construction – provided the highest level of donations to Australian political parties, made the greatest number of commercial lobbying contacts, and had the most meetings with senior ministers.

Access is not the same as influence, of course. It is typically difficult to make a causal connection between donations and influence, except when political scandals occur.

However, research out of the US by Martin Gilens showed that politicians’ decisions do not represent the preferences of poorer or middle-class citizens. Rather, these decisions fall in line with the interests of the wealthiest – a situation that Gilens attributed at least in part to the influence of wealthy donors.

In New Zealand, the Independent Electoral Review’s interim report acknowledged the

risks to public confidence in the electoral system if some people have more access to, or can unduly influence, parties and candidates through political financing.

In a recent opinion piece, former ACT board member Robin Grieve defended political donors as not always being motivated by self-interest, giving an example of a donor wanting to help children in the care of Oranga Tamariki.

While there may have been altruistic intent, the issue is still that the donation was made by a wealthy person to a political party with the stated objective of influencing legislation.

Is that fair? In our research exploring the motivations of wealthy donors, some agreed that it was unfair that they could donate while others could not, with one noting a

real problem with people who accumulate a lot of money supporting the systems that have allowed them to accumulate a lot of money.

Another commented that they did not think

that it is right that rich people can distort democracy.

Not everyone was concerned about this situation, with one donor telling us

the fact that some can promote their position more than others doesn’t worry me.

If acted on, the Independent Electoral Review’s recommendations for tighter donations controls and fairer funding for registered parties would help create significantly more transparency in New Zealand’s political donations system.

We believe a move away from a reliance on large individual donors would help increase public trust in the way political parties are funded. It also is likely to help level the playing field of access and potential influence in New Zealand politics.