Politicians have failed to confront policies of austerity

At a time when economists are telling us that Aotearoa has entered a period of economic recession, we should be asking why the Government is slashing and burning public services and investment.

New GDP data out today will tell us whether we are officially in a recession, but even on existing numbers we are already in a per-capita recession.

We need only look at the UK to see the devastating impact of cutting government spending during a recessionary period.

When they should have been investing in the economy, David Cameron and George Osborne oversaw a ruthless programme of austerity which multiple academic reports have shown caused more than 300,000 excess deaths between 2012 and 2019.

The additional deaths reflected an increase in people dying prematurely after experiencing reduced income, illhealth, poor nutrition and housing, and social isolation.

The seeds of this social deprivation are already being planted in our domestic context in the austerity programme that Nicola Willis is rolling out across the public service.

The Ministry of Disabled People this week announced new limits on what people can purchase with their support service funding, and more restrictions on equipment such as wheelchairs and home modifications.

This will have severe impacts on around 100,000 disabled people and their whānau.

These are effective frontline cuts and taken together with announced service delivery cuts at ACC and likely cuts to customs, firefighting and the courts, they prove that National is making a mockery of their commitment to ensure cuts are ringfenced to the back office.

Adding insult to injury for people who will suffer, these cuts are not even about reining in out-of-control spending or reducing debt levels, but funding billions of dollars of subsidies for landlords, and tax cuts for high income earners.

Despite this reality, Nicola Willis continues to assure us her austerity programme is about paying down debt, “driving greater value from spending”, and fiscal sustainability.

Opposition parties need to accept their share of responsibility for how these narratives largely go unchallenged, because while they were in government they didn’t do anything to shift the Overton Window and public attitudes on government spending, debt and the role of the state in economic growth and investment.

The Overton Window is a model for understanding how ideas in society change over time and influence politics. It refers to the range (or window) of policies that the public will accept.

Shifting the Overton Window involves politicians and policy advocates consistently pushing alternative narratives that persuade the public to accept different ideas and ways of looking at public policy.

Rather than working to shift this window of discourse and breaking with the neo-liberal economic consensus of the past 40 years, the central economic policy plank of Labour and the Greens in the 2017 election was a programme that prioritised “fiscal sustainability” in the form of the Budget Responsibility Rules.

In his exit interview with Jack Tame on TVNZ’s Q+A last week, Grant Robertson said that he had changed his mind about the Budget Responsibility Rules that he and James Shaw developed in 2017, which had promised to deliver surpluses, reduce net core Crown debt and not increase spending beyond 30% of GDP.

He admitted that the purpose of the policy was “proving our bona fides on running the economy”, playing into conservative narratives that effective economic management is predicated on starving public services of investment.

Robertson and Shaw modelled the rules on Tony Blair and Gordon Brown’s fiscal golden rules, which were designed as a way of signalling an adoption of a “Third Way” approach to fiscal policy, as part of a broader New Labour policy programme that moved the party to the centre-right.

In the end both Brown and Robertson had to break their own self-imposed rules so that they could invest in lifting social outcomes.

The dissatisfaction with James Shaw on the left of the Greens is not often understood, but much of it went back to how he used his power as co-leader to adopt the rules and make fiscal conservatism an election priority, despite significant internal opposition both in caucus and among the membership.

It should be incumbent on progressive leaders to model a different approach to spending and investment, to make the case for an active interventionist state that is focused on social and environmental wellbeing.

We have been told since the Rogernomics era that there is no alternative to austerity, but this couldn’t be further from the truth.

Austerity not only causes irreparable social damage, but it also stymies opportunities for economic growth and long-term investment.

The only way to create a political environment that is conducive to dealing with long-term crises such as housing, poverty and climate change, is to convince the public of the necessity of state investment in infrastructure and public services.

Jack McDonald is a campaigner and political commentator who has worked for Te Pāti Māori and the Green Party.