Comment on the new leader of the opposition
A Scoop Reader Opinion by Jocelyn Brooks
Don Brash, De Facto Act Mp And Leader Of The National Party
Don Brash was introduced at a recent ACT conference as “the ninth ACT MP”.(Tracy Watkins in the Dominion Post)
The appropriateness of this has been detailed in Alister Barry’s documentary video, “In a Land of Plenty”(Vanguard Films).
As Governor of the Reserve Bank he has had independence from both the government and the bank’s board to implement his policy of containing inflation by using interest rates, this in turn has controlled the level of unemployment to achieve price stability.
However the governments in power during his governorship have not wished to oppose this policy priority or his chosen means of attaining it.
Key figures agreeing with him on the policy and the means of implementing it have included Roger Douglas and Richard Prebble early luminaries of ACT.
Treasury and the Business Roundtable have been in full support of monetary policy being the dominant theme in government economic policy.
Both Labour and National governments over this period have had broadly similar policies using the interest rate to control the inflation rate and in the process reducing employment.
They have also privatised the railways and parts of the Electricity network, reduced work schemes - replacing them with training schemes which did not earn a wage - and have privatised parts of the health and education services while under funding public services and indeed social services generally.
They have cut tariffs , destroying much of the manufacturing sector and destroying the car assembly industry in particular.
“In a Land of Plenty” details how National furthered the process of reducing incomes of the low paid by reducing benefits to what was deliberately intended to be barely survivable levels. This was accompanied by the inducement of public belief in widely occurring benefit fraud (most of which is in fact mistakenly made payments by the Department of Social Welfare).
Through the Employment Contracts Act they reduced the power of unions to protect the wages and conditions of their members - and so reduced membership in unions by tens of thousands.
The results of these policies have, of course been widespread, profound and obvious, though not all have suffered.
During the 1990s New Zealand was reported as the country within the OECD group which had the fastest growing division between rich and poor. But apart from the less numerous affluent, decreased support of public education and health and the tertiary student loan system has made services less available to many and the last of these has led to the loss of many of the educated young who have gone overseas.
The privatisation of electricity services has caused further deprivation and danger where alternative means of lighting have caused fires and deaths, insufficient heating has led to illnesses and some poor have been denied the means to cook.
Homelessness is another of the problems of poverty causing increased ill health, as is malnutrition widely observed in schools where hungry children are hard to teach.
High levels of indebtedness have added to the insecurity of individuals and families. With so many social problems it is not surprising that crime rates have also increased.
These policies have been - it appeared - acceptable to Dr Brash, and their effects do not appear to have moved him in spite of his “yarn” quoted by Tracy Watkins in her article in the Dominion Post. Dr Brash said on becoming leader of the opposition that he was influenced by the sight forty years ago of a stooped, elderly woman being turned away by a receptionist when she asked about a job.
This claim does not seem compatible with his demeanour depicted in “A Land of Plenty” when stating the need for price stability based on control of the inflation rate, a policy which was based in turn on increasing the unemployment rate and removing demands for wage rises.
In the documentary, CTU economist, Peter Harris stated that while the Reserve Bank has denied it ever had an unemployment objective, whenever the unemployment rate approached 6% the Bank has manipulated interest rates to keep around 100,000 to 150,000 NZers out of work.
Not only has the Governor of the Reserve Bank achieved a large measure of independence from the government of the day, but by law he also is independent of its board.
Suzanne Snively, a board member (1985-92) stated that her request for the model that showed the necessity for unemployment to contain inflation be explained was not met, and the repeated request that one be supplied that allowed the board to discuss different approaches was refused on the grounds of expense.
Dr Brash has made no secret either of his intention - when and if in power - to increase further the division between rich and poor, and as the Dominion Post reported on October 30th, tax cuts would be his “opening salvo”.
The government surplus meant that some of it could be spent on reducing company tax to 30% and the top tax rate to 35% with further reduction over time to 25%.and a cap of $1 million total tax for the wealthiest.
This would generate growth and deter the wealthy from going offshore, he said.
There would be no tax reduction for those with an income below $38,000.
Brash’s further labour market “reforms” would include scrapping the Employment Relations Act with its emphasis on good faith and collective bargaining and the minimum wage and the right to make personal grievance claims.
Further asset sales are also on his agenda and further privatisation of health and other services.
He has said that the current rate of superannuation is unsustainable, suggesting that the age of eligibility would have to rise to 75 or perhaps 80.
He sees no need for a Ministry of Women’s Affairs and has named an MP who claimed she could support a household on the unemployment benefit but who very soon gave up the experiment, as his choice to head the Social Welfare ministry.
In response to those who decry the “horrors of the 1990s” he has said that none of the big changes of the late 1980s and early 1990s has been reversed.
While not entirely true it is true that many have been unchanged including, the retention of the Reserve Bank Act, the Fiscal Responsibility Act, reduced tariffs on imports (in fact the tariff on clothing imports have recently been further lowered) and the abolition of import controls.
There has been no reversal of the corporatisation of government owned trading operations, and the privatisation of many of them and of services formerly regarded as essential to the social infrastructure.
And no reversal of the benefit cuts overall.
Since Dr Brash became leader of the opposition it is now clear that a distinction can be made between the policies of the two major parties.
Dr Cullen has commented on the proposed tax cuts to the effect that if the sum of money they cost were to be spent on family support for lower income people they could receive $150 extra income per week.
Shortly afterwards though, he warned that these families should not expect too much from the budget.
At the Labour Conference the Prime Minister told the party members to Expect, “cautious and predictable policy change rather than rapid reforms”.
These would include a proposal for four weeks holiday for workers taking effect from April 1, 2007 and one for the return of government superannuation for public servants also not in the near future.
Deputy Prime Minister Cullen said he would move to boost the incomes of low and middle income families but made no mention of the amounts intended.
Dr Brash is now stating that he will follow Centre Right wing policies while Labour claims Centre Left. The difference between them seems rather little. Unfortunately a true Left agenda appears not to exist in the New Zealand political spectrum.