The Spinoff: Labour’s next big task is finding its policy again

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“In politics the middle way is none at all.” John Adams, the second president of the United States, made this argument all the way back in 1776, and the New Zealand Labour Party has recently given it proof. Having, at the election, shorn its platform of most of its distinctively progressive elements, the party was left with a middle-of-the-road manifesto that convinced neither core supporters nor swing voters.

Labour’s woes are, though, just one example of a wider malaise facing political parties the world over, especially on the left. It is almost a cliché in some circles to talk of the “interregnum”, but that is where political parties find themselves: in a world where neoliberalism, however defined, is near-dead, but no coherent political platform has emerged to replace it. 

Nor is there a new intellectual figurehead. The Marxists, famously, had Marx, the Keynesians had Keynes, and the post-1960s “New Right” had Milton Friedman and Friedrich von Hayek. Today there is no one thinker to whom politicians can turn for easy answers or a pre-packaged manifesto. Not that this is necessarily a bad thing: a single source of inspiration can very easily become a single point of failure, an intellectual monoculture. But its absence makes the task of political manifesto-building even harder.

But ideas aren’t all that matter in politics. Just as athletes overvalue strength, and economists over-emphasise financial incentives, political commentators probably exaggerate ideology’s impact. Plenty of good deeds can be driven by basic motives such as a desire to help the vulnerable. But without a clear compass, political parties struggle to understand the exact difficulties a nation faces, select the most promising solutions and, above all, communicate to the public a coherent vision of the path ahead.

Past Labour administrations have generally done just that. Even Helen Clark’s fifth Labour government, modest in its ambitions compared to some of its predecessors, was clear about its plans. Indeed it printed those plans on a piece of paper – 1999’s famous “pledge card” – and distributed them to every household in the land.

Behind those detailed pledges was a concrete programme of political change. Following the “Third Way”, as it was internationally known, Clark pledged to retain a largely “free market” approach but soften its edges. Working for Family tax credits, for instance, would smooth out some income disparities – but the economic power of businesses would not really be challenged.

Clark’s National successors – John Key, Bill English and now Christopher Luxon – have taken a similar line, arguing with remorseless clarity that we first need to grow the economy and then we can all enjoy the health and education services we desire. Discerning an Ardernist or Hipkinite credo would, however, be hard work. The much-touted “kindness” was a worthwhile value but hardly a political programme. Laudable but scattered initiatives like extending sick leave similarly failed to add up to anything coherent. The latest pledge card was overly long, unmemorable, and little-noticed by the public.

The size of Labour’s 2020 victory has almost erased from our collective memory the fact that, in the last poll before Covid arrived, National was ahead and, in conjunction with Act, set to win the election. There was never a strong majority for Labour’s programme – even assuming one could make it out.

Economists like to talk about revealed preferences: the things that, by our actions and purchases, we show we value, as opposed to the things that, in conversations and surveys, we say we value. The last Labour government was very much a revealed-preference government. Ahead of time, its priorities were hard to discern, and it was only when it really dug in on something, such as Three Waters, that people could say, “Oh, so that is a priority. Who knew?”

Speaking of preferences: for the last three years, the left has constantly bewailed Labour’s failure to make use of its extraordinary and absolute majority, claiming that the party squandered a “mandate” for sweeping change. But for what, precisely, did Labour have a mandate? Its 2020 manifesto, presumably – but that document is notably banal. Thrown together amid the Covid chaos, its contents were – I was once told by someone at the heart of that process – essentially just the policies that were so uncontentious within the party that they could be put down on the page without fuss.

Some commentators have claimed that, following the triumph of the initial pandemic response, Labour had a mandate for a kind of activist government not seen since the 1970s. I once argued something of the sort; even National’s pollster, David Farrar, felt New Zealanders had rediscovered their love of the active state. I now wonder if Labour had a mandate for something rather different: competence. 

The initial pandemic response was nothing if not impressively competent: comparatively few people died, and the post-lockdown economy rebounded at pace. The public liked that, and wanted more competent delivery of policies, whatever they might be. (This, as I have noted, is sometimes called valence voting.) The less successful sequel to those events, as is now well-hashed out, saw Labour’s reputation for competence erode rapidly, owing some to the much-discussed slowness of the vaccine rollout and, of course, its failure to deliver on key promises, especially anything complex and infrastructure-related like Auckland light rail.

A favourite saying of Warren Buffett, one of the world’s richest men, is this: “Only when the tide goes out do you learn who has been swimming naked.” Labour’s 2020 Covid-inspired victory was like an immense tide running in, and as it has swept out, the bare backside of the party’s intellectual platform has been cruelly exposed.

In fairness to Labour, leftwing parties all around the world are – as above – struggling in the vacuum of the interregnum. Its British counterpart, for instance, is soaring in the polls, but hews ever-closer to the centre. Its “small target” strategy speaks to a desire to neutralise Conservative attacks rather than any great confidence in a bold new political vision. 

Across the Atlantic, “Bidenomics” is reinvigorating industrial policy, lifting working-class incomes and driving action on climate change – but could well be unseated by a second Trump presidency and has not shifted the dial on ingrained issues like shortfalls in healthcare coverage, police brutality and child poverty. In Australia, Anthony Albanese won power for Labor by explicitly running on a less ambitious programme than his predecessor, Bill Shorten. In Europe, many (though not all) left-wing political parties face similar struggles. (The left is, admittedly, triumphant in much of Latin America, but in situations and political set-ups very different to those which operate in New Zealand.)

None of which is to say that Labour’s time in office has been fruitless. The Zero Carbon Act, albeit largely the work of Greens co-leader James Shaw, has shifted the climate debate forever. But many successes have been achieved sotto voce. Labour put $16bn extra into the welfare system, sharply reducing the number of children going hungry and restoring dignity to beneficiaries’ lives. But it hardly trumpeted this policy, perhaps fearing what would happen if the middle classes found out how much extra money the poor were getting. (In contrast, Bill English raised benefits exactly once, in 2015, and you never heard the end of it.) And although the strategy of incremental, under-the-radar change worked well enough in the benefits system, it abruptly hit a brick wall when it came to co-governance, another policy that Labour didn’t particularly want to defend.

On election night I stopped by the Labour function in Lower Hutt – “party” would be entirely the wrong word, given the generally graveyard-like mood – to hear the immediate postmortems. Perhaps the most perspicacious comment was that although the “policy bonfire” had been a smart move, a sloughing-off of controversial policies often tangential to the party’s mission, the subsequent problem was the failure to replace the torched plans with something better, or indeed anything much at all.

Figuring out what fills the void is the task now facing Labour. As the philosopher G. A. Cohen once said, the job of political parties is to constantly return to their eternal values, and apply them to the present moment. Deceptively simple in theory, but hard in practice. For Labour, those values must surely include old standbys of economic security, solidarity, egalitarianism, and positive liberty – that is, the freedom to achieve one’s goals with the support of others – as well as the newer commitment to respecting the environment.

The nature and value of work will likely be central, too, given that it is literally in the party’s name. That might imply meaningful policy on the colossal modern issue of insecure work, and a greater emphasis on just transitions, as a way to ensure that climate-change-induced economic restructuring does not harm the most vulnerable. But whatever happens, any inquest into Labour’s failure will need to go further than National’s own post-2020 equivalent, which improved matters tactically but also produced “Labour Lite” as far as policy is concerned.

The political analyst Colin James likes to point out that big change in New Zealand comes every 40-50 years: the Liberals creating a skeleton welfare state in the 1890s, the first Labour government fleshing that out in the 1930s and 40s, and the fourth Labour government undoing much of that in the 1980s. On that view, 2017 might have been too soon for radical change; the seismic policy shifts may lie ahead. But if Labour is to lead that charge, it will need, like any successful party, to re-establish its core programme – and stick to it. And that is no small task.

The Post: After the defeat a reckoning must follow

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People of all stripes should feel at least some compassion for the Labour caucus right now: whatever one’s political views, it is not hard to see that such a stinging rejection from the electorate, and the loss of so many colleagues, will hurt people who are, after all, humans like the rest of us.

But Labour must also work to earn that sympathy. That, in turn, requires an honest account of its mistakes in government and how to avoid them next time.

This matters not just ethically but politically, because impressions are quick to set. After Labour’s 2008 loss, National convinced voters that Michael Cullen and Helen Clark had “spent all the money”, even though the pair’s fiscal record was almost immaculate.

It is, admittedly, understandable that ex-ministers are in a foul mood and, in the case of Damien O’Connor, telling a reporter to “f... off”. But not only are such remarks wrong, they risk cementing a perception that Labour is angrier with the world at large than with itself.

The party is of course allowed to point to past victories. The Zero Carbon Act – albeit in large part the work of the Greens’ James Shaw – is an era-defining piece of legislation. Emissions, finally, are falling.

Meanwile some 77,000 children were lifted out of poverty, on one measure, and 13,000 places added to the social housing stock, after years of National neglect. The initial pandemic response was a triumph.

Moreover, and counter to the narrative National spreads, many economic fundamentals are sound. Debt is low (arguably too low), jobs are plentiful, and our GDP growth since Covid arrived has, at 9%, outpaced that of most countries.

Our remaining economic woes have been either, like inflation, largely beyond Labour’s control or, in the case of the trade deficit and poor productivity, problems that long predate its time in government.

Labour can – indeed must – spruik its successes. But it must also own its failures.

The temptation, on losing power, is always to insist that one’s record was spotless. But tread that path and Labour will not be allowed back in office any time soon.

The biggest rat to swallow, but a necessary one, will be to admit that, yes, there was wasteful spending. Consultancy fees spiralled out of control; millions were spent on projects that went nowhere; centralisation – of polytechs and health services, notably – was excessive.

This admission could help regain the trust of voters, who generally accept that mistakes get made and will forgive those who committed them, provided there is honesty – and a clear plan for how to do better next time round.

Labour will need to explain how government can work more efficiently and more effectively. That might involve being both bolder – by setting the “missions” that economist Marianna Mazzucato touts – and humbler, by working more closely with communities, and doing things with them, not to them.

Chris Hipkins and colleagues will also need to do more, and better, policy work in opposition. So much of the drift and vagueness of Labour in government stemmed from its failures out of government. Whence came the almost comical reliance on working groups, taskforces and reviews that marred its early days.

Personnel will be another issue. Does Labour, a party overly staffed with former student politicians and ministerial advisers, still have the connections with the working-class voters it is supposed to represent?

That, in turn, points to perhaps the greatest challenge. Beyond “kindness”, Labour never had much of a governing philosophy, and while the importance of ideology can be overstated in an era where few people follow policies closely, such a lack of clarity ends up costing parties politically.

National’s own message is clear, and has been for years: grow the economy, then you can have the health and education services you desire. John Key and Bill English repeated it like a mantra; so do Christopher Luxon and Nicola Willis.

Labour needs a message that unites the coalition that, at its best, it speaks to and persuades – the working and middle classes combined. It also needs a clear theory of how wealth is generated as well as distributed: what, in other words, a vibrant and flourishing economy looks like.

One part of the puzzle may lie in an idea that Labour has superficially endorsed but never made real: the Just Transition. While climate change renders economic disturbance – and the disappearance of some industries – inevitable, states must – in this worldview – ensure the transition to a new economy doesn’t harm the most vulnerable.

Combining middle-class environmental sensibilities with working-class employment concerns, the Just Transition points parties towards tough climate action but also massive investment in skills and retraining programmes for the newly unemployed. It charts a course towards high-skill, high-wage, climate-friendly incomes.

The phrase “good green jobs” is, of course, a Green Party coinage. But so what? Sometimes something borrowed can become something new

The Post: Action on water use is urgently needed, but what system is fairest?

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Water corrodes, as with rust: but what if putting a price on water is also corrosive? This question lies at the heart of a debate on metering and charging that has taken on renewed force as a hot, dry summer approaches.

Over half of New Zealand households have user-pays water systems: usage is tracked by meters and charged via volume-based bills. Proponents of such systems insist they’re the only viable way to reduce both leaks and excessive water usage. But many areas, including much of my native Wellington, hold out against this trend.

The objections to user-pays typically take two forms. The first concerns economic disparities: when some people have far less money than others, they may be locked out of anything that comes with a price tag.

The other objection centres on “the corrosive tendency of markets”, to quote the philosopher Michael Sandel’s superb book What Money Can’t Buy. “Putting a price on the good things in life,” he warns, “can corrupt them.”

We don’t allow trade in human beings, or body parts, or votes, because we don’t want to treat them as commodities, as instruments of profit and use. People should instead be treated as persons worthy of dignity and respect, voting as a civic responsibility.

So too, arguably, with water. A natural resource, and essential to life, it is something we want everyone to have, as a mark of their citizenship, their basic humanity. User-pays can cut against that.

Some argue everyone already pays for water: if not through user-pays, then through fixed charges. But that’s facile.

Fixed charges embody an entirely different value system. Like taxes, they ensure (or should ensure) that the provision of water is funded collectively, according to what each household can afford to contribute; and from that (literal) pool of collective resources, each takes what they need.

This system, alas, has practical flaws. Most troublingly, it seems unable to fix leaks or restrain water use.

Councils can, and do, send out staff with leak-sensing devices. But it is vastly quicker and more effective, experts say, to have meters placed by tobies, where they can instantly detect leaks both on private properties and in a council’s wider network.

This is an unignorable message in Wellington, where a staggering 40 out of every 100 litres is wasted. Wellington Water could, of course, do a better job of fixing the obvious, surface-level leaks, but many of the biggest are deep underground and – in the absence of meters – likely to remain undetected.

Meters, however, lead inevitably to volume-based charges. That move can be defended, though some of the arguments deployed are – again – of the facile kind.

People only value what they pay for, the reasoning goes. But that would be news to the millions of men who died for their countries in war, or to anyone who loves spending time with their family.

In truth we value all kinds of things that have no monetary charge attached. I know countless Wellingtonians who lovingly conserve water – taking quick showers, putting their washing machine on a short cycle, not running the tap while toothbrushing – even when no fees apply.

The problem, sadly, is that many of their fellow residents remain profligate water users, and seemingly unrepentant: exhortations on billboards don’t stop them washing their car with a hose, or constantly refilling their pool, or running their sprinklers 24/7.

User-pays, though, might well work. The proof? Metered residents of Auckland and Tauranga use an average of 160 and 174 litres per day, respectively; the figures for unmetered Dunedin, Hamilton and Wellington are 212, 224 and 229 litres.

In Kāpiti, usage fell by one-fifth when the council introduced metering; hundreds of leaks were located. Expensive investment in new infrastructure suddenly became unnecessary, and high-volume users paid a greater share of the remaining cost. Charges fell for three-quarters of residents.

I still feel uneasy about user-pays, though, for the reasons Sandel outlines. So I’d only support its extension under certain conditions.

First, there should be exemptions from charges on hardship grounds, no-one should ever have their water supply cut off for non-payment, and larger families – typical in both poorer and multigenerational households – should be eligible for discounts.

Second, I prefer the Christchurch system, where there is a free allocation of water and residents are charged only for use over that amount, to the Kāpiti one, where every drop of water has a dollar sign attached. A free allocation acknowledges the human right to water, the desire not to marketise certain things, while retaining the metering that detects leaks and the charging that catches the biggest users.

Some people would still lose out, perhaps. But there’s no perfect system. And as four-tenths of Wellington’s water continues to be wasted, summer restrictions loom, and even the prospect of long-term shortages hoves into view, the need for action becomes ever more urgent.

The Spinoff: Feeling fatigued and confused by this election? Here’s why

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“Everything must change, so that everything can stay the same.” This line, from Giuseppe Tomasi di Lampedusa’s celebrated novel The Leopard, concerns Italian aristocrats confronting nineteenth-century democracy, but could equally be applied to New Zealand politics in 2023. The stakes seem extra high, and the debates extra ugly, yet the space for meaningful political reform is as small as ever. Feeling confused? Then join us as we psychoanalyse the nation in an attempt to explain why this election feels even more bonkers than usual.

Voters are cross, right?

Yes. For many years, the New Zealand electorate was – in global terms – a sunny outlier, like the one picnicker who hasn’t seen the horde of wolves emerging from the wood. Across several governments since the turn of the century, two-thirds of Kiwis said the country was on the right track, even while such confidence measures collapsed overseas. Now, we have joined the pack. Just one-fifth of us think we’re heading in the right direction. Which makes for some very grumpy voters.

Are they wrong to be grumpy? Everything seems rubbish right now.

When it feels like it costs as much to buy a cauliflower as a house deposit cost your parents in the 1970s, it’s no wonder people feel something is wrong with the world. Especially when large parts of that world are on fire.

We did quite well at Covid, though.

Though certainly not flawless, our Covid-19 response was indeed a global success story: we have had fewer people dying than was expected from pre-2020 mortality trends, and employment and economic growth have rebounded more quickly here than in most comparable countries. Inflation, meanwhile, is a global phenomenon. So it does seem an odd time for the national mood to sour.

The electorate, on the other hand, is notoriously fickle. People may keep voting Labour for decades just because of something Helen Clark once did for their family. Conversely, as one minister recently put it to The Spinoff, they sometimes just “bank” political achievements, as if any party would have handled Covid the same way and the government doesn’t deserve particular credit. See also: the dismal Covid aftermath of rising crime and falling school attendance.

OK, so voters are very cross. Presumably they also want very large change.

You’d think so. But there’s no discernible or consistent groundswell. (Except among farmers. Hah!) Some people obviously do want a shake-up: based on the average of the last seven polls, the two main parties’ vote share is just 64%. Over a quarter of the electorate are voting for Act, Te Pāti Māori or the Greens, all of whom offer visions of substantial change.

As far as the collective mood goes, though, these voting blocs cancel each other out. And Labour and National, far from being lured left or right by their minor allies’ success, are tightly hugging the centre line. Sure, there are sizeable differences between the two – on co-governance and renters’ rights, for instance – but when it comes to big-picture questions about the tax take, the role of government or the delivery of services like health and education, their pitches are pretty similar. Labour now spends $27.8bn more each year than it did in 2017, adjusted for inflation; National wants to pare that back by just $2bn.

Are the main parties missing something about the country’s mood?

Probably not. National, in particular, has a huge war chest (thanks, Rich List donors!), much of which it is spending on focus groups and polls. The big parties know pretty well exactly where median voters are, and that group has not – it seems – shifted decisively on the political spectrum.

So the public wants change … but not necessarily from the left or right. No wonder I find this election confusing.

One possible explanation is that many people are so-called valence voters: the questions that determine their political choices aren’t policy-based (whether, for instance, the private sector play a bigger role in delivering public services) but competence-based (whether, for instance, a politician delivers on their promises, whatever those promises may be). Such voters emphasise qualities like honesty, consistency and accountability over more classically ‘ideological’ values such as liberty or solidarity.

While local research on the subject is scarce, there is strong evidence that many Britons, for instance, are now valence voters. And given the received wisdom about this government’s failure to deliver, and the fact that post-Covid everything feels a bit broken, it would hardly be surprising if New Zealanders simply wanted someone who could – to paraphrase Wayne Brown – get things fixed. Hence the political obsession with either burnishing personal credentials or undermining them: recall Christopher Luxon’s endless references to his CEO background, or the CTU’s attacks on him as being “out of touch”.

There is a circularity to all this: the narrower politics gets ideologically, the more people are left with little other than valence votes. Of course, for those who still see politics as a titanic struggle to realise ideals like freedom and equality, the valence voter, relatively unmoved by such battles, is an unfamiliar beast. Nonetheless it exists. (A quick way to tell if you fit into this category: are you reading this on the policy-heavy, politically committed Spinoff? Then you’re not a valence voter.)

OK, fine. It’s a competence-based election.

Absolutely – at least, that is, until you consider that the person most likely to be holding the balance of power, Winston Peters, is not exactly synonymous with competent government, nor indeed the keeping of promises. His king-making ability is also somewhat baffling to the 94% of people who are not New Zealand First voters.

So we’re back at nothing making sense right now. Maybe it will in future, though.

Maybe. Except that if – as seems likely – National does win, Luxon will probably benefit from an upturn in sentiment based on things he did nothing to deserve. The construction pipeline for state houses is already in the thousands, carbon emissions will likely continue their slight falls of recent years, and the economy is – barring a major world meltdown – set to recover in coming months. All of which are achievements Luxon would happily claim. Fair? Not really. But that’s politics. Don’t you love it?

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

Read the original article on the Post

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.