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Gordon Campbell On The New Government’s Great Leap Backwards

After all the cries of “are we there yet” New Zealand does now indeed have a new government. And as the incoming Prime Minister Christopher Luxon worked his way through the policy details/division of spoils, the process of government formation sounded less like a cut-throat boardroom battle, and more like one of those wimpy liberal events where care is taken that every kid goes home with a prize.

When it came to the spoils of office for example, National got 14 ministerial posts, and its junior partners got three apiece. Winston Peters will be this country’s deputy PM (and acting PM when Dad’s away) until just after he’s turned 80. Then, and at the stroke of midnight sometime in mid 2025, David Seymour will take over the role. The kids may have squabbled, but they’ve learned to share.

Among the highlights/lowlights on the policy front : National won support for its tax cuts, but lost the foreign buyers tax that (on the campaign trail) Nicola Willis had said would provide the “lion’s share” of paying for them. This morning Luxon talked vaguely about there being “buffers” in the tax plan, and some re-prioritisation would be required. This loss may be a blessing in disguise for National, given what little chance the tax ever had of reaching its revenue targets, while also having every chance of hiking house prices in the Auckland market.

Under the new government, landlords will receive a massive tax break on their speculative investments, plus the ability to evict tenants at will plus the ability to extract a“pet bond.” Presumably, this bonus measure for landlords will be on top of the current maximum bond of four weeks rent. We’re helping tenants, Luxon said with a straight face this morning, by helping landlords. Dignity and respect, he added, will be given back to landlords who – apparently - have had their dignity besmirched by being required to provide healthy homes for their tenants. New Zealand kids will once again be able to dream of growing up to become landlords.

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While New Zealand is one of the least regulated countries in the developed world – as reflected in us regularly being voted number one as the easiest country in the world in which to do business - ACT was awarded a new Ministry of Regulations that will be funded by scrapping the Productivity Commission. While railing against backroom staff and the rampant growth of the public service, this Ministry of Regulation will, to quote ACT’s agreement with National :

.... Carry out regulation sector reviews, which could include the primary industries, the finance sector, early childhood education, and healthcare occupational licencing, in each case producing an omnibus bill for regulatory reform of laws affecting the sector

Phew. That sounds like a whole new level of bureaucratic bean counting and output measurement that will require a swag of back room staff to do it. Yet in the next breath ACT also promises to:

Deliver savings in public sector spending by reducing non-essential back office functions, with expenditure reduction targets to be set for each agency, informed by the increase in back office headcount at that agency since 2017.

You remember 2017. Population increases and innovation since then regardless, 2017 will now be frozen in time by ACT as being the yardstick for the delivery of public services. In fact, the health system had been run into the ground by 2017, and was ill-prepared for the pandemic. Schools and hospitals were crumbling in 2017 and in need of vast capital expenditure. Even the Defence forces in 2017 were in dire need of revitalisation.

Probably, we should count ourselves lucky that ACT didn’t succeed in taking New Zealand further back to the Golden Days of the mid 1980s. For all the talk of the Seymour v Peters conflict, there are so many policy crossovers between the grumpy conservatism of NZF, and the neo-liberal young fogey-ism of ACT. Both of them are hostile to any form of identity politics, both oppose any expression of indigenous rights and Lord help us, both oppose anyone on a bicycle. The ACT policy agreement promises to :

Cancel Auckland Light Rail and Let’s Get Wellington Moving and reduce expenditure on cycleways

In their collective foot dragging on climate change, all three parties are committed to re-starting oil and gas exploration, and to repealing the Clean Car Discount. ACT wants to phase out fuel excise taxes and introduce electronic road user charging by -perversely - imposing it initially on electric vehicles. At ACT’s insistence, National will have to include a ”robust cost benefit analysis” before public money is used on National’s plan to build 10,000 electric vehicle charging stations around the country.

Farmers of course, stand to be the next biggest winner to landlords. ACT’s agreement even promises to amend the RNA “to allow farmers to farm” – an activity otherwise impossible under the current tyranny. From now on, local councils won't have to be impeded by those pesky regulations to do with water pollution and water quality :

Replace the National Policy Statement for Freshwater Management 2020 to allow district councils more flexibility in how they meet environmental limits and seek advice on how to exempt councils from obligations under the National Policy Statement for Freshwater Management 2020 as soon as practicable.

With similar de-regulatory gusto, and while we’re still coping with the impact of the leaky homes crisis, ACT has won approval for preliminary work on this daft proposal:

Explore allowing home builders to opt out of needing a building consent provided they have long-term insurance for the building work.

New Zealand First, the big winners

Winston Peters not only scored for himself the plum roles of Foreign Minister and deputy PM, but also won equal numbers of Cabinet posts for NZF as ACT, despite winning fewer votes. Peters has forced ACT to swallow another round of the much-derided (by ACT) regional development fund, which once again will gift Shane Jones with the power to dispense $1.2 billion this time, on regional “infrastructure” projects.

Peters not only killed the foreign buyers tax, but won from National a commitment to keep the retirement age at 65, alongside a raft of other gains for aged and dementia care and for (unspecified) enhancements to the Gold Card.

In short, Peters has delivered for his base. Even the cranky conspiracy theorists in his ranks can take solace that the new government will not be pushed around anymore by UN resolutions on indigenous rights, or by the World Health Organisation: 1 December 2023 reserve against proposed amendments to WHO health regulations to allow the incoming government to consider these against a “National Interest Test”.

For those hoping that Peters would play a moderating role within the new government there were a few crumbs. The powers of the Grocery Commissioner to foster supermarket competition may be increased, banking sector profits may face select committee scrutiny and the tax police at the IRD will get more money to do tax audits. These extra IRD funds may, or may not, be cancelled out by the IRD’s wider obligations to meet the austerity cuts being imposed on almost all government departments and state agencies, even though – by world standards – this country already has one of the lowest state spending to GDP ratios in the world. No matter, Crown spending is now officially being set to decrease on the back of today’s announcements, regardless of population increases, of evolving expectations, and of raw social need.


In the coming days and weeks, more extensive coverage will be given to other parts of the policy programme. Overall, the culture wars aspect of the policy agenda is pretty striking. All three parties seem intent on rolling back any recognition of identity politics based on race or gender - and are particularly opposed to any affirmative action to bridge the current gaps in health, education and opportunity that have been fostered by this country’s colonial history.

Under the catch cry of “need not ethnicity” equality has become the bogus value used to justify a social regression on several fronts - even where it is obvious that not all ethnicities and not all genders enjoy equal opportunities or experience anything like fair and comparable social outcomes. The scrapping of the Māori Health Authority, the promise to force the school curriculum back to basics, and the related erasure of any reference to Treaty principles from existing legislation are only the most obvious examples. Basically, the new government has interpreted its mandate for “change” as a licence to regress.

Footnote One: The workplace relations policy has been another clear example of the Great Leap Backwards that was unveiled today. Token support has been given to the idea of fostering high wage jobs here, but all of the workplace-related measures contained in the policies released today directly erode the power of workers to bargain collectively for better wages and conditions. ACT has made it perfectly clear that we’re headed backwards in time, back to where its corporate donors want us to be. As in promises to:

*Repeal the Fair Pay Agreement regime by Christmas 2023.

*Reform health and safety law and regulations.

*Expand 90-day trials to apply to all businesses.

*Consider simplifying personal grievances and in particular removing the eligibility for remedies if the employee is at fault, and setting an income threshold above which a personal grievance could not be pursued.

And in this added blow against workers in the gig economy, the ability of employers to exploit their contractors has been legally entrenched:

*Maintain the status quo that contractors who have explicitly signed up for a contracting arrangement can’t challenge their employment status in the Employment Court.

So much for the court system’s ability (and increasing willingness) to move the status quo, and to strike a fairer balance between the competing rights emerging in the gig economy, worldwide. Why would ACT’s donors want that sort of thing happening here ?

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