Occasional article for the Otago Daily Times 24 April 2018
Jacinda Ardern’s Speech from the Throne in November promised a “government of transformation”. After six months in power, it looks more like a government of transition — to the post-baby-boom generations. But is that all?
The last transformational government was Labour’s in 1984-90: an independent foreign policy, a start towards biculturalism, renovated environmental and constitutional law and a market economy open to an economically globalising world — and, abruptly, a much more unequal society, a tax system favouring the well-off and an electorate so angry it changed the electoral system, for the better.
Ardern insists her transformation will avert the 1980s damage and insecurities. Also, she said in Berlin last week, it is not just a transition to younger generations but a “just transition” to the 2020s when technology will kill many jobs.
Is she on course?
First, substandard political management: ministers’ slips and skids (Clare Curran, Shane Jones, Eugenie Sage), and off-script support parties (Russia, Air New Zealand) plus a broken promise on fuel tax. Too much of this will in time leach public goodwill.
Second: support parties’ travails. Polls put New Zealand First well below the 5% cutoff point. The Greens’ score is steady but Marama Davidson’s big win in the co-leader vote deepens their green-red schism and leaves James Shaw as minority co-leader. It also leaves space for a blue-green alternative if National’s BlueGreens ginger group, meeting this Saturday, can push National there.
But, third, Ardern is still in superstar territory, close to Sir John Key’s peak, and cutting it last week with foreign leaders and media (Time, Le Figaro). Very wide majorities say the country is on the right track. (Ignore business grumping. That is usual under Labour rule even when profits are strong, as they are.)
So Ardern and Grant Robertson have time and space to build the authority that some think they do not yet project.
Next month’s budget provides a platform. It will restate the fiscal parameters and will devote large sums to begin to address funding gaps after Bill English’s “more with less” turned to “less” last term, particularly for health, housing and infrastructure.
Critics say Robertson is exaggerating, echoing all new cabinets’ “discovery” of a “fiscal crisis”. Actually, Robertson talked up the “crisis” pre-election.
But fixing shortfalls is not transformation — or even transition.
Neither, so far, are the dozens — or scores, depending what you count — of reviews, working groups, strategies and so on. They open issues up rather than open up “bold” (another Ardern word) new vistas. For example, the education review reads more like adjustments to the 2010s than anticipation of the 2020s “gig”, “sharing”, robotised and artificial-intelligence economy.
So, too, for the tax working group. Its terms of reference — and Sir Michael Cullen’s 2000s “third way” background — rule out some big matters, including a real land tax and fixing the mess of tax, rebates, allowances and phase-outs at the bottom end.
They skirt around wealth, the core factor in embedded inequalities through the privilege it confers via untaxed inheritances. Likewise, the distortions that drive people to invest savings in houses and the attack on disposable income a high GST imposes on those at the bottom.
So, fixit, not transformation.
But what if Sir Michael’s report next year lists those gaps and suggests a “phase 2” deeper rework of our 1980s tax system to gear it to the 2020s?
A tax “phase 2” could point to a transformational second term, if Ardern, Robertson and Co really mean it.
Also transformational would be real policies that step on to the path to net-zero-carbon emissions by 2050. The ban on new offshore oil and gas exploration (Ardern calls it a step along her “just transition”) is gesture, not transformation, since pumping could go on for decades.
Climate Minister Shaw has started slowly. Only now does he have an interim committee foreshadowing his Climate Change Commission.
But the commission’s work plus other climate initiatives (throw in also a possible first-principles rewrite of the ailing, 28-year-old Resource Management Act) might later this term start to look like pointers towards transformation in a second term — matching younger generations’ ideals.
Still bigger is Robertson’s ambition to make “wellbeing” the core of economic policy. The Treasury, which welcomed him on to this track, is a long way from producing firm numbers. But if it can be made to work, wellbeing economics would amount to a “government of transformation” in future framing and assessment of the outcomes of policies and programmes.
Not least, it would focus on children’s very early acquisition of non-cognitive skills with which to navigate the 2020s and beyond and contribute to the economy and society.
So it may be too early to rule out transformation. Radicalism these days, as English said, can be incremental.