Marlborough Express - Weekend Express
Truss failed to act on Act pathway
OPINION: The brief term of Liz Truss as Britain’s prime minister is now receding in the rear-view mirror. How on earth could Truss have been undone by the same markets she had set out to serve so faithfully?
With less than a year until New Zealand’s next election, can we draw any lessons from her demise?
Not many parallels exist, some have argued. Certainly, the Truss package of tax cuts, spending cutbacks and energy subsidies was bigger than anything being contemplated here – and the fact it would have required massive lashings of additional debt did play a key role in spooking the markets.
Here, by contrast, the National Party is claiming that its tax package will be fully funded, and relatively nonideological in nature.
Thankfully, the thrifty stewardship of current and previous governments has put this country in a much healthier debt position than Britain. Our ratio of government debt to GDP happens to be one of the lowest in the developed world.
The main similarity with the Conservatives in Britain is that the tax cuts National has in mind will deliver its biggest rewards to those on higher incomes. Next year, no doubt, we will be hearing a lot more about the extent – and the fairness – of what the major parties have in store on taxation.
In the meantime, concerns continue to be expressed about how divided we have become, as a society. Here, the Truss precedent offers a cautionary tale for any politician.
Normally, as the economist Paul Krugman recently said, we tend to think of politics as being two-dimensional in nature.
‘‘One dimension is the leftright divide in economic policy, between those who favour high taxes on the rich and large social benefits, and those who want low taxes and small government. The other dimension is the divide over social issues between those who favour policies promoting racial equality and gay rights and those who bitterly oppose anything they consider ‘‘woke.’’
Until recently, New Zealanders tended to vote left of centre on the first plane, and right of centre on the second. Truss managed to position herself among the relatively small minority who are both economic liberals and social liberals. At the same time, though, public sentiment on immigration, indigenous issues, women’s rights and transgender rights has become highly polarised.
In New Zealand, when previous incarnations of the Act
Party were more like vintage Liz Truss – that is, economically and socially liberal – it languished for nearly a decade well below the 5% threshold in the opinion polls. Starting with the euthanasia issue though, Act began to reap the rewards of populism. Today, its stances on co-governance, Treaty issues and law and order used to be the sole province of New Zealand First.
This political skin graft has been so successful that in next year’s election, pundits are expecting that the socially conservative vote will be split between New Zealand First, the Vision NZ wing of Destiny Church and the Act Party.
Act, in other words, could have given Truss some useful advice: don’t paint yourself into an ideological corner that will alienate many of the people your success depends upon.