One of the most amazing aspects of politics in New Zealand in recent decades is the enduring popularity of a Prime Minister who leads a Government which has failed in almost every major policy area. It is indeed a sad reflection on democracy itself that voters seem more impressed by a pretty smile than by the Government’s ability to deliver on its important policy objectives.
Too harsh? What about the brilliant way the Government has dealt with the pandemic? Well, it’s certainly true that, like Australia, New Zealand has suffered an absolutely minimal number of deaths as result of Covid-19, the result of our ability, as an island nation, to effectively seal off our borders to the outside world and the willingness of New Zealanders to submit to one of the toughest lock-down regimes in the world.
But months after vaccines became available in the rest of the world many of the most vulnerable workers on our borders have not been vaccinated, and the roll-out of vaccinations to the most vulnerable people inside our borders is months behind schedule – indeed, at time of writing a lower proportion of our citizens have been vaccinated than in any other of the 36 countries belonging to the OECD, and that by a large margin. Of course, in one sense that doesn’t matter: just keep ourselves locked away from the world and we’ll be OK. But while that may seem an attractive policy choice to people who have no need to travel, or to have family members visit from overseas, it’s a lousy choice for those who desperately need to get into the country, or need to travel on business and want to be able to get back into the country without interminable delay.
Adversely affecting even more people – probably at least 40% of the population – the Government has totally failed to do anything to make housing more affordable. Making housing more affordable was one of the Government’s major promises in its 2017 election campaign. KiwiBuild was to build 100,000 houses over 10 years – quietly abandoned as a target when it became crystal clear that there was not the slightest chance of the target being met. Likewise the promise to make residential land more affordable by abolishing the Metropolitan Urban Limit around Auckland – that was an explicit promise in the so-called Speech from the Throne shortly after the 2017 election. That promise has now been explicitly scrapped, and both the Prime Minister and the Minister of Finance are on record as saying that they want house prices to keep rising, albeit more slowly.
House prices in our major cities are now among the least affordable in the developed world despite the virtual cessation of inwards migration, with the median house price having risen some 30% in the last 12 months alone. And the best that the Prime Minister can suggest is that she wants prices to keep rising. There is absolutely no point in her talking about a concern for poverty unless she does something decisive to get house prices to a more affordable level – a median house price some nine times the median income, as in Auckland currently, is a very long way from affordable. Yes, house prices rose far too quickly during National’s nine years in office too, but as David Farrar has pointed out recently, New Zealand house prices rose more in the 12 months to June of this year than they did in total in eight of National’s nine years in office. And all this Government has done is extend the so-called ‘bright line test’ and complicate the income tax system by denying the deductibility of interest to those buying residential property as a business.
The Prime Minister professes a desire to reduce poverty in New Zealand, and particularly poverty among children. It should not need an economist to point out to the Prime Minister that she will never achieve that objective until she deals effectively with outrageous house prices.
Recently, the Government boasted about a fall in the number of those on benefits between the end of the March quarter and the end of the June quarter. Many swallowed this boast at face value. But benefit numbers are by their nature somewhat seasonal. What the Government boast did not reveal is that the number of those on Jobseeker Support at the end of June 2021 was 190,257, barely changed from those on that benefit a year earlier at the height of the pandemic, 190,455. Those who were classified as “work ready” on that benefit had risen from 63,027 in June 2017, just before the Government came to office, to 110,790 in June 2021, despite all the Government’s talk about “getting the ‘nephs off the couch” through the Provincial Growth Fund, despite massive fiscal stimulus, despite the most stimulatory monetary conditions in New Zealand’s history, and despite the best export prices in a generation.
And the reasons for that failure lie squarely with the Government. The Government has increased the cost and the risk of hiring people by further increasing the minimum wage, increasing the entitlement to sick leave, adding an extra paid public holiday, promising so-called Fair Pay Agreements (despite explicitly being advised against them by their own Ministry) and abolishing the 90-day probationary period within which an employer can end an employment contract if the person hired proves unsuitable for the job. It’s worth noting that New Zealand’s minimum wage is now one of the highest in the world relative to the median wage.
In the middle of July, we saw farmers and their supporters demonstrate their increasing frustration with the Government in the “Howl of protest”. There was no one single factor driving that frustration but rather a host of factors – the so-called “ute tax” was the final straw and seemed to epitomize a Government which was happy to tax farmers and tradies who have no realistic option of buying an electric vehicle in order to subsidise affluent city dwellers. But behind that was anger at unrealistic demands to improve water quality, arrogant demands to designate privately-owned Significant Natural Areas as effectively public property, the abrupt refusal to allow into the country the people desperately needed to pick fruit and staff dairy farms, and the threat that livestock numbers will need to be significantly reduced to meet environmental standards.
For some, there is mounting anger at the way in which the Government seems intent on “Maorifying” everything –
- with the name of the country and of our major cities suddenly being referred to on taxpayer-funded media in te reo Maori;
- with government departments insisting on the use of some te reo in both internal and external communications,
- with school boards told they should take all reasonable steps to include instruction in te reo;
- with every public sector meeting beginning with several paragraphs of te reo despite almost none of the audience understanding what is being said;
- with a radical re-write of our History curriculum emphasizing all things Maori scheduled to be introduced next year; and
- with government departments instructed to buy at least 5% of their purchases not on the basis of best value for money but on the basis of the business being a “Maori business”.
People are increasingly aware that 50% of the governance of the four entities which are proposed to control the Three Waters will be iwi representatives, and only the other 50% representative of the local authorities which currently owned the water infrastructure. Some are angry that under urgency the Government abolished the law put in place by a previous Labour Government to allow ratepayers the right to demand a referendum before local authorities establish Maori wards. And the initially secret He Puapua report, proposing a radical restructuring of our whole country along racial lines, with promised “consultation” confined to Maori groups for the next six months or so, has turbo-charged the concern.
One could go on – increasing gun violence at a time when Police recruitment is on hold; potentially radical restrictions on free speech, which neither the Prime Minister nor her Minister of Justice can explain; the thick end of a billion dollars to build a cycle bridge across the Waitemata Harbour when there’s not enough money available to properly bridge the Ashburton River; the hypocrisy of closing down offshore gas exploration while importing dirty coal to keep the lights on; and so on.
And why isn’t their more public anger at this appalling situation? It’s hard to avoid the conclusion that part of the problem is that much of the mainstream media have been bought by the Government’s promise of financial support to those media which promise to say nice things about the Government. In particular, any media outlets receiving financial support from the Government’s Public Interest Journalism Fund must show a “commitment to Te Tiriti o Waitangi and to Maori as a Te Tiriti partner”. So if you want to argue that the Treaty of Waitangi, in both English and te reo Maori versions, makes absolutely not the slightest mention of Maori being a partner with the Crown, don’t expect to get published in any of the mainstream media.
It’s nice to have a Prime Minister who smiles a lot. But it would be much nicer still if we had a Prime Minister who actually deals effectively with the serious challenges we face as a country.
Dr Don Brash is an economist and former Member of Parliament. He served as the Governor of the Reserve Bank of New Zealand from 1988 to 2002.