We’re still frightened by the shadows of the 80s
It began with potatoes, as many of the best things do. Agriculture minister Duncan MacIntyre showed up at a National Party caucus meeting in 1979 with a wad of new draft regulations. There was nothing new in this. Ministers had been regulating and re-regulating their portfolio areas for the better part of 40 years.
One of the regulations was to prevent growers from selling rotten potatoes and those smaller than a
10-cent coin. Caucus wasn’t impressed: why shouldn’t people have the opportunity to buy scraps should they want them? Big Potato didn’t give in without a fight – they wanted the regulations, which would shut out smaller operators. As political historian Colin James recalled, the apparently innocuous ‘‘potato war’’ marked the start of a decade of violent reform.
It ended with sweeping changes touching every sector of the economy, which both unleashed our mighty agricultural sector and precipitated a deep recession, which sent unemployment over 10 per cent in 1992.
Let’s not bang on about neo-liberalism, as the painful reforms of the 1980s are known. The neoliberals may have slain the beast of double-digit inflation by the 1990s, but alas the inflation of halfcooked economic commentary has continued apace.
However much columnists may want to leave behind the 1980s and early 1990s, the decades cast a long shadow on our politics. Those reforms featured heavily in the maiden speeches of Jacinda Ardern and Grant Robertson – in fact, Ardern hadn’t even spoken 200 words in the House before launching into a speech about how the 1980s reforms devastated Murupara, where she grew up.
Ten years after that speech, when she was prime minister, she watched as outgoing Opposition leader Bill English made his valedictory speech, where he too reflected on the 1980s. Unlike Labour MPs, English didn’t reject the changes that were made. Instead he castigated governments for putting the country in a position where radical change was the only option.
This corpus of neo-liberal reckoning got a new entry last week when new National leader Todd Muller made his Te Puna speech. He talked about the ‘‘violent’’ restructuring of the Lange years, but said he supported the basic ‘‘macro-economic framework’’ of the 1980s.
The 1980s still matter in New Zealand – so much so that each leader has to take a position on them in the way they don’t on other decades. You’d never ask Ardern or Muller about the Holyoake years. Muller’s speech only briefly touched on Helen Clark, despite the fact she led a much more recent Government.
While plenty of ink has been spilled on the economic inheritance of that time, the eternal dance of politicians positioning and repositioning themselves is important too. We know neo-liberalism changed our economy, but what about our politics?
The move to MMP was just the start. MMP was designed to make change difficult – to ensure a caucus rump couldn’t hijack one of the major parties to ram through dramatic and unpopular change. And it didn’t just stop with the electoral system. Aversion to change is everywhere.
The current Government insists that it’s ‘‘transformational’’. To that end, it’s dredged up the big pieces of legislation from the 1980s for their own ‘‘transformation’’. The Reserve Bank Act got a facelift. No longer hawkishly charged with keeping a lid on inflation, the bank’s committee (itself a new feature) now has to keep an eye on maximum sustainable employment too – addressing a common criticism of the 1980s reforms.
Likewise, the Government is passing changes to the infamous Public Finance Act, which introduced modern accounting standards to state finances. The idea is to get the Treasury to report regularly on wellbeing measures, embedding future wellbeing Budgets. But with new spending allocations only a fraction of existing baselines, it will take decades to fundamentally change the way our Budgets look. The changes are marginal, but they’re meant to be. Change is happening, but it’s intended to be imperceptible.
Labour, a self-described party of change, is so awed by its own legacy of reform that it has forsworn future radical shakeups.
National’s problem with the 1980s is different – through the tumultuous leadership changes of Robert Muldoon, Jim McClay and finally Jim Bolger the party arranged itself as the political defender of the reforms, and critics only of the way they were rolled out. This puts the party in a difficult position when it comes to reforming the 1980s reforms themselves.
National has to defend reforms of the past, but not the act of reform itself. In a roundabout way, this is a rejection of the legacy of the 1980s, which was a rejection of the unsustainable status quo. Our political system would be incapable of that kind of reform now, however necessary it might seem.
There’s now a danger that our pathological fear of
80s-style rapid change dissolves into the sort of
70s-style political and economic stagnation that made radical reform inevitable.
The 1980s still matter in New Zealand – so much so that each leader has to take a position on them in the way they don’t on other decades.