Wednesday, July 14, 2010

Another shift for Labour

The Fifth Labour Government saw a gradual erosion of NeoLiberalism, with an end to privatisation, improvements in worker's rights and social services, and a slightly more progressive tax system. But two of the core pillars of the NeoLiberal consensus - an inflation-focused monetary policy, and free trade, remained unchanged (and if anything Labour continued to push the free trade agenda vigorously). Now Labour is out of power and reassessing where it stands, these pillars are also under attack. First there was Phil Goff's announcement that Labour would abandon the Reserve Bank's myopic focus on price stability in favour of broader objectives. And now free trade seems to be coming under attack with Clare Curran's "Kiwi Jobs Bill".

The bill [PDF] is quite mild, establishing a commission of inquiry to investigate ways in which government procurement can be tilted in favour of kiwi businesses. Several overseas countries, including Australia, already do this, and so seeing if we can do what they do while meeting our obligations under the FTAs we have signed is a major focus. While this is the sort of thing governments can do simply by announcing it, being in opposition means even the simple things require legislation.

(As an aside: wouldn't our democracy be better if Parliament had a budget to allow opposition parties or the public by petition to establish a limited number of such inquiries each term? It would allow policy alternatives to be explored independently, boosting the choice available to the New Zealand public and deepening our democratic conversation. Governments would hate the idea because it would reduce their monopoly on policy discussion. Which is another reason to do it).

While not officially Labour policy, Labour MPs don't put member's bills forward unless they have been approved by caucus. So this signals a shift away from free trade (in services, at least) from the Labour Party, or at least a willingness to consider alternatives.

As for the merits, I'm cautiously supportive of free trade, with significant misgivings about environmental and social effects (not to mention giving corporations even greater freedom to behave like sociopaths). While in theory the absence of national preferment in procurement - a basic of FTAs - means the government can choose the best bidder from a wider pool, in practice it is not always clear that spurning competitive bids from locals in favour of slightly cheaper ones from foreigners is in fact "better" when all costs and benefits are taken into account. And on the gripping hand, past governments have signed these things, and so for better or worse we have to abide by them. The question is whether we can, as other countries do, have some sort of national preferment (or requirement for work to be done in NZ employing kiwis) while keeping our word. And on that front, I think it is worth at least taking a look.