Lobby group tilting left, just a little
THE ‘‘fiscally conservative’’ Taxpayers’ Union, which rightly decries waste by local and national government, describes itself as nonaligned politically. But it espouses clearly rightwing, ‘‘small government’’ views on matters such as tax (‘‘Our vision is a lowtax New Zealand. New taxes should only be introduced when there are equal decreases in other taxes’’); describes Budget contributions to Kiwirail as ‘‘corporate welfare’’ which ‘‘slows down the boat’’ (the InterIslander, perhaps?); and dotes on ‘‘the market’’ — businesses should ‘‘compete on their own footing’’ to ‘‘inspire competition and innovation’’.
But on March 16 the TU published ‘‘Emergency Measures: Eight
Economic Responses to Covid19 in New Zealand’’. Its second paragraph began ‘‘A marketled approach in these times would be an extraordinary mistake’’, and referred to ‘‘market failure’’.
Its recommendations (some match recent Government actions) include a governmentfunded extra month of paid sick leave; government buyout of businesses of strategic importance; unlimited childcare for health and aged care workers, and police; boosting the income of low income households by including expanding winter energy payments and halving tax on the first $14,000 of income; as well as flexibility regarding employer tax payments.
It’s odd to see a rightwing lobby group promoting nationalisation of key industries (wasn’t that once a Labour Party policy?), and increased support for those at the bottom of the economic heap, but the leopard hasn’t really changed its spots.
It says that nationalised industries should be sold off again ‘‘once economic conditions allow’’, and ‘‘extra spending should not be permanent, but for the duration of this crisis. Any change to tax rates, benefit levels, or welfare assistance should be temporary’’.
That’s simplistic.
Roger Douglas and his successors preached that private management was more efficient than state ownership, but some will remember the mess that the privatised Air New Zealand got itself into in 2001, requiring government bailout, and the deterioration of New Zealand Railways under private ownership. Returning nationalised strategic assets to private ownership isn’t necessarily a good thing.
The idea that tax and benefits should return to previous levels once the crisis is over is naive. How will government debt be returned to its recent low levels even if nationalised industries are reprivatised, without, eventually, increasing the tax take? And, as the Welfare Expert Advisory Group pointed out, our benefit levels, unconscionably low since Ruth Richardson’s ‘‘Mother of all Budgets’’, should increase by 47%: much more than last week’s $25aweek increase.
Historically, major improvements in social services, funded by progressive taxation changes, have been made by governments taking bold action to address major crises. The 1930s Depression brought the 1935 Labour government’s reforms here and FD Roosvelt's New Deal in the United States; World War 2 the Beveridge Report and the welfare state in the United Kingdom.
The Imperial College modelling informing the government suggests the defeat of Covid19 may require ‘‘suppression’’ tactics until a vaccine is available (1218 months?), not just for four weeks. Sustaining all residents during and after that will take structural, almost revolutionary reform by the government, not reversion to past inequities.
A week ago, Simon Bridges and the National Party were sniping at Government measures to address the Covid19 pandemic. But on Monday Mr Bridges suspended National’s electioneering, and aligned the party with the Government.
He said that National supported the Government's decision to move New Zealand to Level 4 of the alert system and to extend the economic package.
‘‘We will work in a supportive and constructive way with the Government in the interests of bringing New Zealand through this crisis together. I have offered the Government the services of our MPs and staff to assist where we can.’’ Well done!
A special parliamentary select committee, which he will chair, will hold Government to account during Parliament’s shutdown. That will allow responsible criticism, unlike his earlier beneficiarybashing rhetoric.
A truly ‘‘supportive and constructive’’ approach should increase his mana, and, more importantly, help the nation.