How come Maori and Pacific islanders got to keep the “gaps” all to themselves? There are many huge gaps for the government to close.
Gap No 1 is between our lifestyle aspirations and the earning capacity and savings inclination of most of our population. For a long time we have lived on foreigners’ savings.
In its attempt to re-establish social democracy in a globalised world, the government’s Labour leadership has turned to the notion of partnership. If it succeeds, it could transform the political landscape in its favour – but that is in the distant future.
Partnership replaces old left collectivist notions, which, translated into government action, amounted to bureaucratic fiat. The government told you what to do and not do – in the name of the people as a collective.
How do you get a high-wage economy? Not by going along with employers paying low wages, says the government. We should take this seriously because that is the economic rationale for the Employment Relations Act (ERA).
The ERA is actually a piece of social policy. While parties of the right see workplace relations primarily as a business cost, that is, as economic policy, parties of the left see workplace relations as primarily a social equity issue of individual and household sustenance.
The Labour party swooped into office on the wings of anger at golden handshakes and public service profligacy. First it focused on values, ethics and standards. Now it is down the harder stuff.
Three big management issues face it:
how to get public servants out of their “silos” and cooperating across portfolios on priority programmes;
how to lift capability;
how to get more order into the higgledy-piggledy halfway-house agencies known as Crown entities.
The “silos” issue has bothered politicians since Jim Bolger in 1990 revived the web of interdepartmental officials committees that frayed during the revolutionary 1980s.
Successful governments use the megaphone, not the piccolo, to talk to the public. Put another way, it is the headlines, not the fine print, that count with voters.
Of course, the fine print is what the voters get. But they think they are or should be getting the headlines. In 1996 Winston Peters’ pre-election fine print was not to rule out coalition with Jim Bolger. But the headlines were all anti-National and that was the message most supporters took into the polling booth and the basis on which they punished him later.
Six months in and the government has had its first public spats, its first political stumbles, its first management failures. The icing, though still very thick, is beginning to melt here and there. A suitable time for the first budget.
Growth has given the government a little more leeway but Michael Cullen is determined not to spend the “growth dividend” from good times and leave himself short in the next downturn. In any case, having missed the fine print in the pre-election fiscal update, he has a lower baseline than he campaigned on and so fewer funds for new social programmes. That sets up a difficult start to the next budget round starting in October.
There are two essentials to staying in office a good long while, as Labour aims to do. One is to take ordinary folk with you. The other is to develop a strong policy capacity in the public service, to make sure you can ride out shocks and keep a strategic focus.
New governments, especially after a long spell out of office, reckon that policy is what they made in opposition. The Clark-Anderton government is particularly hot on this.
Politicians often strike difficulty at the point where politics meets economics. Policy that appeals to the average voter often doesn’t appeal to the people who generate the revenue that pays for it.
For the moment – and probably the next two years, because the economy is running above-trend – this is not an issue for the government. But going into the next election economic growth will be dropping below trend.
In 1941 New Zealand troops on Crete were minced up by German forces backed by air supremacy. Thereafter in the second world war Labour Prime Minister Peter Fraser insisted the army would not fight without air cover.
He woke up a bit late. Two decades earlier Labour’s hero of the left, John A Lee, who lost an arm in the first world war, had argued the same point. Cannon fodder in Lee’s war, our troops met the same fate initially in Fraser’s war after defence spending was heavily cut in the 1930s.
In November voters achieved a change of government, just like in the old first-past-the-post (FPP) days. But will that save MMP?
MMP has been on life support since Winston Peters, who had made a career of accusing other politicians of breaking promises, put back into office a man he had said was not fit to be Prime Minister. Big majorities of voters have consistently told pollsters they want back to FPP.