Monday, October 18, 2010


At the Labour Party conference over the weekend, Phil Goff signalled a change in economic direction, promising restrictions on foreign ownership and land sales, amendments to the Reserve Bank Act, better labour laws and a more interventionist government position. The commentators have been quick to catch on: as Vernon Small put it, for the first time in over twenty years voters will have a real choice on the economy:

It will be the first time since the late 1980s that the two parties will not be arguing from roughly the same bedrock of economic "orthodoxy" inherited from the Rogernomics and later Ruth Richardson eras.

Helen Clark and Michael Cullen took some steps in that direction, but National tended to dog their footsteps on issues such as KiwiSaver, Working for Families, interest-free student loans and the Cullen fund.

This time there is little possibility that John Key and Bill English will follow in lock- step.

And so we'll actually get to vote on NeoLiberalism - a vote that has been denied us since 1990. Its an exciting prospect. And also, hopefully, a vote winner. These policies have impoverished us as a nation. They have widened the gap between rich and poor, lowered the living standards of the majority of kiwis, reduced social mobility and killed people. And now, finally, we'll have a chance to vote them out and get something different. Its ironic that this change is being led by Goff, a former Douglas acolyte - but unlike Douglas, he seems to have changed his mind in response to the failure of these policies. Though it would be nice if he actually stood up and said so, rather than treating us like goldfish.

As for National, they'll try and pretend that these policies spell economic ruin. Given their track record in government - higher unemployment, lower living standards, a promised decade of deficits to fund their tax cuts for the rich and ETS subsidies - that will be hard to take seriously. Alternatively, they can try and differentiate themselves by moving even further to the right - but that takes them away from being moderates into truly toxic territory. Labour's shift to the left leaves them with nowhere to go, isolated as the only supporters of a failed economic system (the Greens and the Maori Party don't support it, and ACT and United Future likely won't be around). Which will only make their coalition game harder.

There is one concern though: what happens if Labour loses? The usual course of events would see the blame heaped on the policies, which would then see Labour recommit to NeoLiberalism. That would be a tragedy for the New Zealand left. We need to make sure it does not happen.