Labour-greens plans are sound, but not without risk

Has Labour’s anti-capitalist fever finally broken?

Several weeks ago, Andrew Little made an unambiguous commitment to not increase taxes. This is a significant shift for Labour. Less than a year ago, finance spokesman Grant Robertson was saying tax increases were on the agenda.

Then, last week, Labour and the Greens announced a set of ‘‘budget responsibility rules’’. These promised to maintain current levels of government debt. It also committed any new government to maintain overall spending rates at their present levels.

These developments have two very positive implications.

First, it shows the opposition sees itself as a serious alternative government. When parties think they have a sniff, they become conspicuously moderate. They run what are sometimes denigrated as ‘‘me too’’ platforms that stress continuity.

It also illustrates that Labour is still a party to the post-muldoon consensus. It would never use the word, but it remains committed to the basic precepts of neoliberalism. And, through the need to present a united front, they’ve dragged the Greens along with them for good measure.

I wrote a column forecasting this in January. At the time, former Green MP Sue Bradford accused me on Facebook of ‘‘sing[ing] the praises of neoliberalism’’. She conceded the essential accuracy of the prediction, though. Sure enough, she now criticises the Greens for their newfound financial restraint.

This is all very good news for fiscal conservatives, of course.

Moody’s, a rating agency, recently reaffirmed our AAA sovereign debt rating. This determination was due partly to our stable political environment. The agency also lauded the Government’s ‘‘focus on preserving strong public finances’’, which it predicts will ‘‘buffer the economy from any future economic shocks or natural disasters’’.

Labour and the Greens have now strengthened the steadiness underpinning this good reputation.

The principles behind the Labour-green declarations are sound and praiseworthy. They communicate a sense of responsibility. Yet they are not without risk either.

Expensive new and better funded programmes, no tax increases, a budget surplus.

Governments may, as a rule, choose any two of these. Unless they are working from a massive existing surplus, they cannot have all three.

To become prime minister, Andrew Little must master this ‘‘impossible trinity’’.

If he fails to do so, the promises of March could be his undoing.

Over the years, Labour and the Greens have promised many things to many people. There is nothing surprising about that, of course. Promises of more money is what oppositions do.

But meeting these promises will cost billions and billions of dollars. The Government surplus, meanwhile, will be ‘‘only’’ a few billion dollars.

Accordingly, there is no way to meet all those pledges without more taxes or borrowing.

Green co-leader Metiria Turei faced criticism for this on Twitter. She responded by claiming that ‘‘a shift in current wasteful spending’’ would enable better funding of social programmes.

There will be a complete explanation in the campaign, she promised.

If that accounting relies too much on trimming fat then voters will be rightly sceptical.

Funding new programmes by cutting waste, abuse and fraud is one of the worst cliches in politics.

Those things do exist, of course, and governments should try to reduce them. But in the grand scheme of things, they are little more than a rounding error in the Crown accounts.

Not appearing credible in these matters can be fatal. Phil Goff looked foolish when he stumbled in response to John Key’s ‘‘show me the money’’ line in 2011.

Labour would not have won the election anyway, but Key’s taunt was devastating.

Goff looked completely unready for government. Despite sounding a bit smarmy, Key betrayed no such uncertainty.

How is Andrew Little going to respond to his own ‘‘show me the money’’ moment? Will he have the numbers at his fingertips? Will he be able to boil complex budgetary nuances down to convincing soundbites?

He could pull it off. If Labour prepares the ground for its scaled back commitments first, it will be that much easier.

If he has to do it in the debate, it will be hard to project confidence in the matter.

National partisans will hope that he flubs it. Budgeting hawks, however, should hope the new Labour-green tact pays dividends.

It is no good having one fiscally restrained part of government.

Governments rotate in and out of power. Another Labour government is all but inevitable. It may not happen in 2017, but as the years go on, we will only get closer to the day it recaptures the Treasury benches.

I am nobody’s idea of a Labour supporter, but our democracy would suffer if it didn’t win elections from time to time.

Labour governments are an essential part of our political ecosystem.

And if they’re relatively conservative when in power, so much the better.