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Robson-on-politics - 6th November 2007

Robson-on-politics - 6th November 2007

Count-down to Election 2008: 12 months to go
With a general election due in November 2008, the fifth MMP election in New Zealand history, it is a good time to review the general political situation.

The state of society under the progressive government
Next month, we'll commemorate the eighth birthday of the election of the minority progressive coalition government and some of the highlights of the Labour-led administration for me include:

  • The most spectacular rise in employment in New Zealand history and the collapse of unemployment to the lowest level in the world;
  • A spectacular increase in the number of people in skills and work-based training and the introduction of the highly successful Modern Apprenticeship Scheme;
  • Policies to promote work-life balance and to support working families including an additional week of annual minimum paid leave and new paid parental leave entitlements - plus annual increases in the minimum wage which has assisted to push the wage rate structure of society higher across the board - this will in time reward firms that invest more in technology and innovation and deliver future productivity gains for the whole economy;
  • Between 1990 and 1999 a big gap opened between the typical take-home pay in Australia and in New Zealand but this process has been arrested under this government. Kiwi workers had an increase of 21% ($69) in their take-home pay in the first seven years of progressive government, compared with just 14% ($41) under eight years of National '91-'99 (and that is a big understatement for families with children - because their tax obligations have been slashed much further when you include the tax benefits of KiwiSaver and Working for Families);
  • A big annual commitment over eight years to significantly unwind the investment deficits in public health and public education inherited from previous National-United-NZ First governments - delivering lower doctors' fee costs for the vast majority of New Zealanders and lower pre-school costs;
  • An end to interest charges on those with student loans and substantial increases in public investment in higher education;
  • An end to the previous National-United-NZ First's strategic national asset sales and public investment in stratetic national assets instead (the successful nationwide New Zealand-owned Kiwibank has been established, taxpayers rescued Air NZ and public rail which had been run into the ground after being privatised while taxpayers now own a majority shareholding in the now-successful national airline;
  • The government has established the New Zealand Superannuation Fund and committed millions of dollars a day into it - the government has invested $2 billion a year of the surplus into the NZ Super Fund which is offers greater security against any excuses any future National-NZ First-United government might try to use to cut pension entitlements of New Zealanders;
  • The floor of NZ Superannuation has been lifted, while the scheduled timetable for cuts to that floor under the last National-led government has been reversed;
  • The government has established KiwiSaver and GSS to encourage and to reward those working families that have reached a position in their lives where they are able to put away a little extra for their retirement years - by doing this, the government is diversifying families' asset and future income base - making the country much stronger and less vulnerable to changes in overseas investment or trading conditions which (as we all know) can and do periodically knock our small economy;
  • The most substantial increase in research and development investment in the country's history;
  • The most significant reduction in the tax burden of families since the 1960s - Working for Families has enabled our government to target the greatest tax relief to those that most need it and when they need it - i.e. younger families with children;
  • Pro-jobs changes in the taxation system to encourage research and development and employment and skills development, and to reward long-term savers. Changes to the tax system announced in 2004, 2005 and 2007 involved a much larger level of tax relief than was provided during the entire nine years of National-led administration (1990-1999);
  • The big divide that emerged between the general population and Maori under the last National-led government (Maori unemployment reached 21% in the early 1990s), is diminishing again. Since 1996, for example, there has been around a 290% increase in the number of Maori earning between $50,000 and $70,000 (the comparative figure for all New Zealanders is about 180%);
  • An end to National's blind ideological foreign policy and the development of an indendent moral foreign policy based on our national interest to have a rules-based international system for fair trading rules: this is expressed through the establishment of NZAid and the progressive government's refusal to risk young Kiwi lives in illegal, illogical and criminal overseas wars such as the invasion of Iraq which has resulted in the biggest international refugee and humanitarian crisis in 50 years;
  • By utilising the dividends of government surpluses to reduce Crown debt levels, to build up financial assets in the NZ Superannuation Fund and to partially fund infrastructure investment (such as in public transport, roads, schools and hospitals) rather than relying on debt which has to be paid for by future generations, the progressive government has now got the Crown accounts into a strong position ahead of the big challenges of global climate change and population ageing which will be very costly to governments as this century progresses.

Policy based on evidence
A defining feature of progressive government has been to base policies on evidence - the evidence of what delivers the greatest gains to the majority.

It is the antithesis of the blind ideology which is the track record of National-led governments.

A progressive government gathers the evidence, sets out a framework based on transparent principles, then progressively advances towards its goals of making life healthier, happier and better for the majority.

National governments, in contrast, lurch from side to side making it up on the hoof - one moment radically pumping cash into the economy with large overseas borrowings to fund the type of tax cuts that by design give most to those that least need it (i.e. families without children on the highest incomes), the next moment finding themselves in a financial crisis and taking it out on the most vulnerable - i.e. reducing the floor of New Zealand Superannuation pensions which hurts the elderly retired dependent on fixed incomes.

That is exactly what happened when we had National-led governments in the 1990s.

New Zealanders don't deserve a return to all of that which is what a government run by Bill English, Tony Ryall, Lockwood Smith, Murray McCully et al will deliver.

National governments are driven by ideology - in foreign policy it shows up with a blind following of whatever comes out of Canberra, London and Washington, regardless of the evidence or international law (National, had it been in government in 2003, would have "stood with our traditional allies" to break international law by joining the Australian-UK-US led invasion of Iraq.)

Whereas our government has each year steadily reduced the net debt levels of the Crown (inherited from the last government) so that we are now at last in a position to maintain debt at stable, lower levels, National will always deliver the Crown into ever higher debt levels as it delivers gains to the minority of the population on the highest incomes - all funded with Asian and European savings for which the whole country is penalised with higher interest rates.

State of the parties - what the polls say
Labour won nearly 38.7% of votes cast in 1999, the year it first led the establishment of a minority progressive coalition government - and won just over 41% in both 2002 and 2005. In the polls taken last month, Labour polled 39% (Roy Morgan Poll), 38.8% (NZ Herald DigiPoll) and 37% (TVNZ Colmar Brunton).

In the current and previous two Parliaments, Labour has developed successful working relationships to its Left and to its Right - to the point where Labour managed to lead a government after the 2005 election in spite of the fact that centre-right parties held more seats in Parliament than centre-left parties - although neither side could claim an absolute majority.

If National, NZ First, United and ACT between them win an absolute majority next year, then obviously it will be a National-led government next year.

The challenge to everyone wanting to keep the country going forward, is to ensure that that does not happen with compassionate, practical policies that benefit the majority - in health, in education, in housing and in foreign policy.

Union scare campaign does not seem to be hitting the mark
Australian Prime Minister from 1983 – 1991, Bob Hawke looked very comfortable out campaigning for the Labor candidate for the Wentworth electorate in urban Sydney. Wentworth, normally a blue-ribbon seat, it is now marginal after sitting member and Environment Minister, Malcolm Turnbull, gave the green light for a pulp mill in a heartland forest and vineyard area in Tasmania.

Bob Hawke excelled himself talking, kissing and shaking hands with the people who also seemed pleased to see him out on the campaign trail. As a former Australian Combined Trade Union head for many years, Bob Hawke was ideally placed to take on Liberal claims that the unions will ruin the economy if Labor comes to power.

John Howard first raised the scare tactic of a Rudd Cabinet containing more than 70% of former union officials on the first, and perhaps only, debate between the two leaders last week. This is now a major theme of the campaign with Liberal television ads on it as well as ‘independent’ political postcards arriving in mail boxes on the same theme.

Labor continues with a largely positive campaign. Just announced is a first home saver account designed to enable young people to buy their first home. The plan is estimated to cost the government $600 million over its first three years and works like a superannuation savings fund. First home buyers are encouraged to save $10,000 a year, over five years, with $5000 coming yearly from pre-tax income and the other $5000 either saved by the individual or from a third party – which would also allow parents to help their children save for a deposit. Interest earned would be taxed at a discounted rate of 15% or less. Kevin Rudd also announced yesterday to spend $150M over 5 years on housing the homeless.

The election is by no means a done deal for Labor, Howard is a canny campaigner but it does seem that the anti-union campaign is not gaining traction and it is forays like Hawke’s, reminding electors that it was the unions and an ex-unionist turned PM who instigated far reaching economic reforms without the cruel and wasteful extremes of Reaganomics, Thatcherism or Rogernomics, that seems to be achieving resonance with the Australian public.


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