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On National’s Great Leap Backwards

It isn’t surprising that at the height of its disarray, National should have looked for certainty and picked the least introspective candidate on offer. With Judith Collins, there is absolutely no risk that the leader will suddenly have an angst attack about whether they’re really up to the job. You would have to go all the way back to Robert Muldoon to find a National Party leader less prone to self-doubt, and more willing to use fear as a weapon to maintain discipline within the rank and file.

The question now is whether New Zealand – faced with the threat from the pandemic – will be just as willing to embark on the same Great Leap Backwards. Let us all hope not. After a moment’s reflection how could anyone seriously think that this tapped-out duo of Judith Collins and Gerry Brownlee are our best and most shining hope for the future. Is this really a team that’s willing and able to address the challenges posed (a) by the pandemic (b) by climate change, and (c) by the level of social inequality? Hardly, Not on performance to date, anyway. Basically, Collins is offering very little more than a blind assertion that National has some innately superior (and hitherto invisible) gift for sound economic management.

All the available evidence would suggest the exact opposite. The last National government – in which Collins and Brownlee were both senior Ministers - failed miserably to run a modern economy in ways that benefitted the majority of New Zealanders. National starved the public health system, ignored glaring social deficits and crumbling national infrastructure. It shrank the welfare safety net available to the most vulnerable, while offering corporate welfare handouts and tax cuts that disproportionately favoured the more affluent members of society. This really wasn’t a success story, much as Collins will be trying to say otherwise over the next seven weeks. (There’s no success like failure, as Bob Dylan once said, and failure is no success at all.)

Unfortunately, National appears unlikely to face serious scrutiny during the election campaign for this dismal outcome of its last period in office. That has already gone down the media memory hole. The spectacle – Jacinda versus Judith! – seems to be what matters. To the point last night, when asked for his immediate reaction to the leadership change, the first response offered by one of the academic featherbrains on the mike was to say how exciting the advent of Collins was going to be for the commentariat. 

It didn’t appear to register with him that Election 2020 isn’t actually a spectacle being put on largely to entertain the pundits. Many, many New Zealanders are now facing a struggle to survive over the next five years. The election outcome matters. And surely it is worth pointing out that there is nothing in the track record of Judith Collins to suggest that she has the vision, the economic nous or the flexibility to adapt to these new challenges, - let alone a willingness to treat the wellbeing of those already being harmed by the pandemic, as a priority.

In any other circumstances, National’s claims to possess an innate and higher level of competence about anything would be pretty laughable. If, for instance, a Labour Opposition had been guilty of the same sort of shenanigans that National has indulged in over the past couple of weeks, it is a fairly safe bet that editorials up and down the country would be thundering that Labour had shown itself unfit to govern for a generation or more. Instead, the dishonesty on open display has been euphemised as errors of judgment, and washed away by a wave of compassion for Todd Muller.

Moving right along…the centre-right’s claim to economic competence also needs to be judged alongside National’s insistence that New Zealand has needed to adopt the Australian method of handling the pandemic. Well, that advice is not looking good right now. There is rampant community transmission occurring in Victoria, and in parts of New South Wales. It is in fact, quite chilling to think about the carnage we would now be experiencing – and which we will face in future - if National was/is in power. Could someone ask Judith Collins if she now regrets National’s strident claims over recent months that we have needed to manage our economy through the Covid-19 crisis in the same way as the Australians have done? As things stand, we have been given every reason to feel concerned that National would be willing to gamble with the lives of New Zealanders, if there was a prospect of some theoretical gain for the economy.

In reality, the Australian model – and with it, the premature re-opening of our economy - would deliver the worst of both worlds. Right now, many hospitality outlets in New Zealand are currently reaping the benefits of the normality that the Ardern government has delivered to them. Customers have felt safe to go out to cafes and restaurants, and domestic tourism has partially revived. That’s because there is no community transmission in New Zealand, and customers can in confidence, venture out beyond the front gate. In stark contrast, firms across the Tasman are being plunged back and forth into lockdown, any thought of economic recovery is being postponed well into 2021 and beyond, community-transmitted infections are almost out of control, and lives are being lost.

This is precisely what the self-professed competence of the National Party would have delivered here as well. The gains we have made thus far are real, but they are also very fragile. If allowed, the virus would readily undo the gains we have made and overwhelm our limited tracing and treatment resources. Given that National has failed to offer competent advocacy thus far about how to handle the pandemic, why on earth should voters take it on faith that National would somehow make a better fist of managing the challenges that Covid--19 will pose in future? Early on, National was being reckless. Chances are, it would be reckless again in future.

Footnote: For many people today, Robert Muldoon is just a dusty footnote in the history books. Yet for nearly eight years, he held this country captive to his claims of economic omniscience. During Muldoon’s hey-day in the mid to late 1970s, New Zealand was still being hit by the hammer blows of Britain cutting us loose to join the European Common Market, and by the oil price shocks inflicted by OPEC. At this time of anxiety Muldoon exuded supreme confidence that he was (a) uniquely in tune with the wants and needs of ordinary Kiwis and was (b) uniquely able to steer the economy safely through the shocks it was experiencing. To enforce compliance Muldoon instilled fear in his critics both inside the National Party, and beyond it.

Flash forward to 2020, and to Nicky Hager’s depiction of the Judith Collins that he documented in depth over the course of writing his book Dirty Politics:

The chapter recounts where she recommended to [blogger Cameron] Slater about some National Party internal politics: "Personally I would be out for total destruction... But then I've learned to give is better than to receive." She called it the "double" rule: "always reward with Double"; and said "If you can't be loved, then best to be feared."

That is Muldoonism, in a nutshell. If you can’t destroy them, make them fear you. Welcome to the National Party, where - once again- an inflated sense of self-esteem is being marketed as strength.

Footnote Two: Is National able to even recognise the challenges facing the country, let alone diagnose and treat them? During her first press conference last night, Collins simply swatted away any suggestion that taxes may need to be raised at some point in future, to pay for the borrowing required to mitigate the economic harm being caused by the virus. National isn’t a party of high taxes, she replied, before going on to assert that National would keep control of spending – because National knew that if you borrow, you need to pay it back.

Right. So that’s the formula : no tax increases, less social spending. The only implication to be drawn from this is that Collins - and the party she now leads - regard the borrowing programme embarked on by the coalition government as excessive, and that she would not have done likewise and would not have supported economic activity to the same extent. It seems to be eluding Collins that around the world, governments have been borrowing to lessen the harms the virus is causing to ordinary people and businesses large and small. This borrowing has been carried out on the quite reasonable belief that (a) the social pain would otherwise have been intolerable, and that ( b) if firms can be helped to survive the crisis, they will eventually climb back into profit and thereby repay via taxes the borrowing – which in New Zealand, is currently still running at an entirely manageable level by comparison with other developed countries.

What Collins seems to be suggesting instead is that if elected, she would dial back the borrowing, and reduce social spending in order to “ balance the books.” The scale of pain resulting from the ensuing economic contraction would be astronomical. It is precisely what conservative governments did in the early 1930s at the onset of the Great Depression. The effect of reducing the role of government was to deepen the recession and postpone the recovery. It the end, it was the advent of leftist governments (here and in the US) that were willing to commit huge inputs of government money (and create state work programmes) that brought about the economic revival.

In similar fashion, it took massive infusions of state money by the Obama administration – and huge dollops of state spending hy China – to rescue the world economy from the Global Financial Crisis of late 2008. What Collins is offering as common sense about the economy is actually a throwback to the very worst policy failures of the Great Depression.

Footnote Three: One former National Party leader at least, recognises that fresh thinking is required. Yesterday Jim Bolger told RNZ that - given the scale of borrowing required to keep the economy afloat right now - tax increases and rates increases will have to be considered :

He said tax and rate increases were the stark reality of what New Zealand had to do, and the discussion it must have, but much bolder leadership was needed as a result of Covid-19.”We had bold leadership to manage the virus - full marks - now we have to have bold leadership to manage the aftermath and that requires a real look at how we go about taxing and spending because at the moment they're just totally out of kilter with reality. And I just hope there are leaders out there, in all parties, that'll step up to that."

Of course, the Jacinda Ardern/Grant Robertson team is well aware ( and is planning ways to address) the economic challenges that lie ahead. On the upside, at least we do not need to return to the peculiarly low ratio of borrowing to GDP that was being maintained pre-Covid, largely out of deference to the 1980s era of political ideology about such matters. The rating agencies seem quite comfortable with the current level of borrowing and with the route of repayment that Robertson is charting. By contrast, Robertson’s National equivalent – Paul Goldsmith – has always had far more in common with the Act Party’s crackpot ideas than with mainstream National thinking about the role of economic policy.

Finally, and on that score, there is simply no use in looking for fresh thinking from the Act Party – which is still touting the small government/low tax formulas of the mid 1980s, as if the past 35 years of failure of such policies can be safely forgotten. Together, David Seymour and Judith Collins are offering an imaginary past as our best hope for the future. We can – and we need – to expect better.

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