Shearer and Cunliffe: yes, there is a difference

There are two big differences between the current rivals for the Labour crown, Davids Shearer and Cunliffe.

Well, biggish differences.

The two are united on policy.

Nothing in Labour leader David Shearer's Sunday speech was at odds with anything economic development spokesman David Cunliffe has been saying, not only this year but before the election, before his demotion from the finance spokesmanship. 

It was all there: the veneration of manufacturing over other sectors; the laments over the high New Zealand dollar and the need for some "tool" to deal with it; the need to encourage savings; the belief a capital gains tax on all the country's businesses and a third of the property market will encourage people to invest less in property and more in New Zealand businesses. 

Mr Shearer added to it Kiwibuild, a programme to build 100,000 new "affordable" houses, but there was nothing in that which was at odds with anything Mr Cunliffe has been advocating.

And Mr Cunliffe has not criticised this latest initiative.

It should be stated that all these policies or goals are not bad in themselves. Some are highly desirable.

Not a coherent programme

It is just they do not hang together as a coherent programme. Economically, they are contradictory and they will cause more problems than they solve.

And this is the first difference between the two. Mr Cunliffe is economically qualified enough to know they are incoherent and will strain against each other. Mr Shearer has no such knowledge and probably believes what he is saying.

According to Mr Shearer, some unnamed "tools" are to be used to get the exchange rate down and help New Zealand manufacturers.

As an aside, why manufacturers are more treasured than other exporters in Labour rhetoric is baffling until you remember the Engineering Printing and Manufacturing Union is a key Labour lobby group and will become more so when unions are given voting power in leadership elections from February onwards.

What those "tools" are is not clear. One thing is certain: Mr Shearer is not going to pick them up in a pre-Christmas sale at Mitre 10 Mega.

There aren't really any tools. The only tool which is going to lower New Zealand's exchange rate is to have less borrowing from overseas, and the only way to do that is a combination of more savings by New Zealanders and containing government spending.

Restricting lending further through more bank regulation means restricting, mostly, the ability for people to buy houses, as well as restricting the ability for businesses to borrow to expand.

None of that fits with Labour policies, which are based on promising more government spending in areas such as extending paid parental leave from its present 14 weeks to 26 weeks and in encouraging people into "affordable" housing.

A highly stimulatory housing policy is not going to help reduce the current account deficit – something Mr Shearer identified as a key economic goal for his party – and nor is it going to reduce the country's debt levels.

Highly questionable

True, there is compulsory KiwiSaver. But whether this would add to the pool of savings is highly questionable. With a little more than half the working population already in KiwiSaver, it does not seem unreasonable to conclude that most of those who can afford to save more are doing so.

In any case, half of the money in KiwiSaver is not individual savings but the various subsidies and incentives provided via the taxpayer. 

Most of those who have not yet joined have done so because they cannot afford to, and making them do so will only add to the amount the taxpayer has to put into KiwiSaver.

As noted, Mr Cunliffe is economically savvy enough to know all this, and is shameless enough to peddle it to people who do not know any better. It is one of the ironies of all this that many of those who do not know any better are in the Labour Party and include its current leader.

The second difference between the two is presentational and/or personal and is best described in terms of how they might be seen in election mode.

Mr Shearer's enemies fear that in the heat and pressure of an election campaign he will waffle and stammer as he has in so many interviews in the 11 months since he became leader, and leave an impression of indecision and incoherence.

While Mr Shearer did deliver a good speech on Sunday, delivering such a speech to your own party is a minimum standard to meet, not a maximum one.

Mr Cunliffe's enemies, on the other hand, fear that in the heat and pressure of an election campaign the New Lynn MP's grandiosity and self-regard – which never lie dormant for long – will be unleashed on an unsuspecting public. 

After weeks of exposure to this, the "turn-off" factor could be crucial. New Zealanders do not like a smart alec and the chorus of "get your hand off it, mate" will be heard from Spirits Bay to Stewart Island.

email Rob Hosking

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17 Comments & Questions

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The third primary difference between the two Davids is that Cunliffe is in the wrong political party! His friends are business people, his wife is the founding partner of a city law firm, he lives in Herne Bay, and he has a business consulting background with Boston Consulting Group.

Then for some bizarre reason he goes and picks a political party that means he has to spend the rest of his life defending polices that are economically outdated, vague, lacking common sense and frankly disingenuous.

And all the while he is well smart enough to know the cr*p he is forced to peddle in public is being laughed at behind his back by those who know him well. In this context you can understand how he feels so frustrated and that he doesn't have much to lose...

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Just because he lives in herne bay and used to be business consultant does not make an individual national by inclination In the mid 1990s the Labour Party presdient was Michael Hirsfeld, very intelligent , gifted individual, who just happened to own a very large company. I live in a very nice house in an expensive suburb, I have never voted National and doubt I ever will

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You must have inherited your money then?

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The fact that the media is being played like a flute by Labour seems to have escaped everyones attention. having had next to no profile at all over the last 2.5 years, Labour suddenly has a highly public leadership bun fight that doesnt eventuate into any changes in leadership.

Funnily enough the media is tupid enough to lap this up and bang on about it for days/weeks etc

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So it will be down to National v the greens at the next election. Hang in there John Key as New Zealand needs you

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This article highlights the very danger, if there is ever again, a Labour government.
Unfortunately there is a sufficient number of deluded individuals who will vote Labour, or Green; thereby electing a coalition, and increasing the odds of a disasterous government in the future.

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Poor Shearer, he was always going to be the patsy & caretaker leader until the Labour Party can pull itself together & choose a decisive figurehead who can unite the different factions together. They are really a shambles at the moment, and the NZ voters see this.

IMHO they have a year to pull themselves together, create a comprehensive vision that holds the pragmatism and accountability that the public expect, not a loose collection of poorly thought through bribes that are designed to pander to key voting demographics. Until they can create a credible alternative to the current centre-right coalition ...

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Russel Norman is a supporter of Austrian Economics. So good bye Labour, you're never getting my vote!

Austrian economics is clearly the answer to the global financial crises.
BOA Bank and JK can move to aussie.

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I have yet to hear of, or read about any utterance from Rusell Norman; which could be remotely interpreted as reflecting the Austrian School of Economics.
Norman favours quantative easing for gods sake. Hardley Austrian School!

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David shearer Great but I do not think their is room for Learning to be a Leader, there is no time for these apprenticeships at this LEVEL. I am also concerned.................. can he take JOHN KEY on and WIN, my doubts overrule my thoughts.
Cunnliffe has more DRIVE and Mongrel in him, he can tackle National, As for his personal affairs, where his wife works or his children school is none of my Business, he is working for me and my family, that's what my vote is for, I do not vote on Political personal life styles. Good Luck DC hope you get in.

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Both Rob and the person writing the first comment assume that, because or Mr Cunliffe's background, he KNOWS that his policies are incoherent. I have met former business consultants (even ex BCG) who are capable of deluding themselves on economic policy! I think that it's just as likely that he's an idiot.
I've met smarter NZ analysts/consultants who are ideologically left-leaning. Has the stupidity of Labour (and the Green Party, and a large part of the mainstream media), alienated sensible supporters in the left?

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Cunliffe is many things, and quite a complex guy, but he is certainly not an idiot.

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Cunliffe's ridiculous economic policies (NOT ridiculous ideologically, just ridiculous from the POV of known economic reality) indicate that he is EITHER an idiot OR someone who knows that he is peddling rubbish (which is not necessary, and even potentially damaging to NZ).

The reporter and one commentator suggested that it's the latter case (equivalent to the "complexity" you mention, which I personally believe is not what NZ needs), and I proposed that it is equally likely that it could be the former (I'm not in a position to know which is actually true). In either case, the Labour Party's supporters and NZ deserve better.

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He made himself look like an idiot in the weekend.

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Tweedledum and Tweedledumber. Both National and Labour governments have been disastrous in recent years, and it's about time we stopped allowing them to inflict their awful self-serving choices on the country.
The obvious way forward is for New Zealanders to be treated as adults enough ( it may be a fast learning curve for some) to have the final say in these themselves.

New Zealanders are smart enough to take the consequences of their own actions.But we have been saddled with the consequences of the venal, vote buying parties ones that have so damaged the country.

The message is spreading and it's very practical... See www.100days.co.nz

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Delivering a 9 billion surplus was a disaster was it? Yeah, the same one that Bill English acknowledged as allowing us to weather the worst of the GFC? The same government which delivered Kiwibank as opposed to giving up and allowing foreign banks - where 80% of national debt payments go - to rule completely, a disaster?

They may be much but that makes the present lot complete imbeciles by comparison then. These guys foist the market policies that have failed abysmally - mainly because they've never worked in the first place, ever - and NZ voters think they should continue to the inevitable sticky end...

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What make me laugh is that Cunliffe is just sitting back quietly with his trademark smirk on his face, playing sainthood over this drama that he started since Goff became leader, while his supporters in and out of parliament are battling for him.

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