Peters’ push to make NZ great again finds its moment
Trumpish calls to bring industries home for Kiwi workers timely — and stoke interest in Budget and election
Winston Peters could easily have been channelling Donald Trump as he punted up policies that would make New Zealand “great again”.
It’s no secret that Peters admires Trump’s basic economic determination to onshore American industry, tackle China over various trade inequities and engage US business to back him.
It was Peters’ first real play in Parliament since New Zealand went into lockdown on March 25 and the veteran politician headed up to his Whananaki retreat to work from there for the sojourn.
The rhetoric was familiar. But this time round the New Zealand First leader’s political sallies — particularly over the downside risks globalisation presents to nations and his plea to onshore more of NZ’s industries — were on more timely ground.
He prefaced his policy suggestions by saying the global industrial system was in massive shock; the fragility and vulnerability of the networked global economy was exposed and the downside of globalisation was apparent.
His speech was by far the most interesting of the five political leaders who made statements in Parliament yesterday, even including Prime Minister Jacinda Ardern who later appeared to hint that neither new taxes or tax hikes were part of the Coalition’s agenda. National’s Simon Bridges leveraged the appearance of small businesses at Parliament’s Epidemic Committee earlier in the day; Greens co-leader Marama Davidson was competent and Act’s David Seymour was robust.
Essentially, Peters wants New Zealand to use import substitution where it can — that is to manufacture more here. New Zealand once had a strong manufacturing sector. But it was protected. In the 1980s economic revolution, competition from offshore was allowed. But now the NZ First leader and Deputy Prime Minister reckons if a job is here and can be done by a New Zealander then it should be.
Problem is that many jobs — low-waged-level tourism jobs and basic farm work — have in the past been lapped up for foreigners because New Zealanders felt they were below them. The massive increase in unemployment due to the Covid-19 crisis will create more local demand.
Inevitably there will have to be retraining — something that he and Finance Minister Grant Robertson are on song with as it will draw on the Future of Work commission that
Peters joins fellow Cabinet minister David Parker, in particular, in wanting to see more New Zealand control of the economy.
Robertson headed in opposition.
As a former NZ Treasurer in the Bolger Government (1996-1998) the Deputy Prime Minister is well aware that any major policy shift — when the Budget is due to be delivered in just a fortnight — is too much of an ask. But while Peters’ speech was strong on rhetoric it did contain several strands which are not too dissimilar from where Robertson is moving. Particularly when it comes to the role of the state. Robertson has asked Treasury to examine just what that role should be.
A Ministry of Works has been floated — and Robertson has joined other Cabinet ministers like Phil Twyford and Shane Jones in suggesting it has merit.
The NZ governments of the 1980s and 1990s embarked on a wave of privatisation floating Air New Zealand, the Bank of New Zealand, Contact Energy and more. Renationalising such industries is neither feasible nor affordable. But Peters joins fellow Cabinet minister David Parker, in particular, in wanting to see more New Zealand control of the economy. Parker is studying the Australian move to temporarily tighten its rules on foreign takeovers on concerns that strategic assets could be sold off cheaply as a result of the coronavirus crisis. Although Peters and Parker are unlikely to say so outright, there is concern that some NZ companies which are export-facing could become vulnerable to Chinese buyers, in particular.
Putting up the shutters on more offshore ownership of the economy at this time — particularly if it is to buy existing assets — is a subject in front of Government.
What should business be worried about? It is inevitable that there will be huge increases in Budget deficits and debt around the world as governments grapple with the cost of bringing Covid-19 under control and keeping the virus quiescent among their populations until the point where they can relax efforts.
That won’t happen until a vaccine is developed.
Peters’ comment that all the rules of fiscal prudence are now obsolete will raise eyebrows.
But mounting a 90-degree turn on New Zealand’s “free-market” thrust — even with the benefit of having a post-Covid-19 scorched earth platform to launch from — requires the engagement of Labour, the Coalition’s senior partner.
It makes for a very interesting Budget. And an even more interesting election.