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One year on: Change worthy of its name?
On its first anniversary, Thomas Coughlan asks whether the current Government is truly a government of change.
Transformation is a word we hear a lot to describe this Government.
The Government’s speech from the throne promised a “government of transformation”, and followed that up in May with a Budget that Finance Minister Grant Robertson said was “the first steps in a plan for transformation”.
The second word we hear a lot is “transition”.
It’s been used by Energy Minister Megan Woods to describe the ban on new offshore oil and gas exploration and by Robertson in reference to his plan to move the economy towards a more “sustainable” and “inclusive” model.
What they mean to say is “government of change”, which was Ardern’s wording in what became known as her reset speech, which she made in September.
But is this change worthy of its name, or does it belong on a Tui billboard?
The Government has finished just 18 KiwiBuild homes (although it has started construction on more), the waitlist for social housing has grown, and the $2.8 billion investment in fees-free tertiary education hasn’t changed enrolment numbers, although the University of Auckland has tumbled down global league tables.
As for climate change, apparently our “nuclear-free moment”, under the current Government, big dairy can still dial up a a $600 million M. Bovis bailout for a self-inflicted crisis, while the much-lauded Green Investment Fund gets just $100 million.
Nuclear-free moment? Pardon me, but I think I can smell the methane on your breath ...
Change is best when you can’t change at all
The problem for this Government is that it knows what change looks like and it’s afraid.
It knows that true change is ugly and real people get hurt.
The spectre of the last change governments, which ruled from 1984-1999 haunts all sides of the House. Their free-market reforms provoked Winston Peters into breaking away from National to form New Zealand First. Peters has turned opposition to those reforms into his political raison d’être.
These governments don’t just haunt the governing side of the House, National too has its detractors.
In his valedictory speech earlier this year, former Prime Minister Bill English said that the 1980s taught him that “New Zealand should never get into that situation where the only choice … was massive, disruptive, and damaging restructuring”.
It’s a view shared by the Government. Ardern wants change, insofar as there is any, to be slow and just.
In an op-ed for the Taranaki Daily News, Ardern defended the Government’s oil and gas exploration ban with reference to the disruptive changes of the 1980s.
“I grew up at a time when this country was going through difficult economic change in a short period. People lost jobs, communities were torn apart and families were displaced,” she wrote.
“I don't want a repeat of that as we move to a cleaner energy future. We have a plan for weaning New Zealand off fossil fuels and it has a timeline that stretches out nearly 30 years into the future”.
The Government knows what radical change looks like and it doesn’t like it. The Government thinks it can change things slowly, almost imperceptibly.
But if nothing appears to be different then almost by definition, it’s unlikely to have changed.
This Government is making some massive changes to the underlying machinery of Government: the Zero Carbon Bill and the Child Poverty Reduction Bill, both of which have bipartisan support, have the potential to force real and lasting change.
But the question that hangs over this Government is whether its brand of change is enough, or whether its brand of change kicks the can down the road for future governments to deal with.
Real change means people getting hurt
People living under the big-change governments of the 1980s knew they were living in a time of massive change.
After just a year in power, the Fourth Labour Government repealed a scheme that guaranteed farmers a minimum price for their products. It gutted the rural economy. Without the Government topping up market prices, some farms were not financially viable.
Several farmers, having lost their livelihoods, killed themselves.
The Government devalued, then floated, the dollar and opened New Zealand markets up to the world. Money flooded in, inflating the value of the dollar, which made imports cheaper, but gutting New Zealand’s manufacturing industries, which were also being deregulated.
State-owned enterprises were either privatised or run to a market-driven style. Unemployment, which stood at 4.2 percent in 1984, climbed to over 10.7 percent by the end of the decade, well below a recent peak of 6.9 percent hit in 2012.
Interest rates skyrocketed. In 1987, banks offered interest rates on a first mortgage at 20 percent interest.
When voters finally went to the polls, they were living in a very different country.
The Labour Party, nominally the party of workers, came within 500 votes of taking out wealthy Remuera in the 1897 election, much to the bemusement of its leader David Lange.
Most MPs agree some change was necessary. Some, like English, believe the collective economic procrastination of previous governments made the cruel speed of change unavoidable. Nearly all MPs, however, are united in thinking that if the 1980s is what change looks like, they don’t want a bar of it.
And who would? Farmer suicides, out of control interest rates, and high unemployment aren’t headlines any prime minister wants to read.
…and if change is necessary?
One year on, we’ve seen this Government’s definition of change.
With the exception of KiwiBuild, its flagship change policies signal change in direction without enacting specific policy.
Supporters say this means the change will be more lasting – and they’re probably right. Both the Child Poverty Reduction Bill and the Zero Carbon Bill have bipartisan support, meaning they will likely survive into the future. Likewise, the Wellbeing Framework has the potential to change how we look at the economy, although proof of that is many years away.
But, especially on the issue of climate change, its slowly-softly policy platform absolves the current Government from making any of the tough decisions necessary when implementing change.
It’s an unpalatable truth that change means picking losers as much as picking winners. The Government has picked on the relatively small oil and gas sector as part of its climate policy instead of tackling the much more powerful farming lobby.
Unofficial Minister of Change Roger Douglas was not afraid of standing down those who vehemently disagreed with him, telling them their industries were headed for the doghouse — Ardern is no such politician.
No one’s going to like it, but as Margaret Thatcher - herself no stranger to change - once said: “The medicine is harsh, but the patient requires it in order to live."
A big question for this Government is whether this form of slow change is enough. Whether it can effect massive change without effecting massive destruction.
But some could easily question whether the Government actually wants real change.
Faced with a housing and infrastructure crisis, it has shown it prefers to commit to its completely arbitrary and (frankly) nonsensical Budget Responsibility Rules instead of using the exceedingly low cost of additional debt to borrow more and invest in the country’s future.
On this score, the Government could even be described as averse to change.
Fund managers are crawling over themselves to lend the Government money, and the Government acknowledges it has a massive infrastructure and housing deficit, yet in the face of these two immovable facts, Robertson refuses to move an inch. Self-imposed, nonsensical rules reign supreme over real need.
Crying out for change
The question hanging over the Government now is whether there is time to implement what it calls a “just transition”, to a halcyon economy of low unemployment, high productivity, and fair incomes.
"Just transition” is essentially the oil and gas exploration ban writ large — big change, but slowly. But a just transition doesn’t need to be slow and there’s nothing just about waiting 30 years for house prices to stabilise.
Just transitions could mean using the power of the welfare state to cushion the pain of change, like the governments of the 1980s should have done.
There’s little room to be complacent. The window of opportunity is closing. The cost of borrowing will not always be this low, nor will revenue from taxation always be so high. Agriculture will not always be the backbone our our economy. With our primary export earner on, how will we pay for the multitude of things we cannot afford to make ourselves?
Change is the sword of Damocles hanging over all our governments. And while this Government thinks the lesson from the 1980s is that slow change is best, it would be wise to pay attention to the other lesson from that decade: governments are not the only agents of change and those who fail to act in time will often find their hand forced by events.
If it refuses to act, it could be compared unfavourably with governments like Robert Muldoon’s, which resisted change at all costs, passing the buck to the next generation.