NZ’s radical new government of change

POLITICAL ROUNDUP

Dr Bryce Edwards

Could we be witnessing the beginning of a radical new time in New Zealand politics? The newly announced Labour-NZF-Greens coalition government is certainly starting out by making some rather radical statements and promises. 

The first radical declaration came in Winston Peters’ announcement that he was going with Labour. Peters stated “Far too many New Zealanders have come to view today’s capitalism, not as their friend, but as their foe… And they are not all wrong.” He emphasised that his party’s choice between National and Labour was “for a modified status quo, or for change”, and so he chose “change”. 

A government for these “anti-capitalist” times
It is a sign of our times that the word “capitalism” is so frequently used by New Zealand politicians, and normally in a critical way. The global zeitgeist of anti-Establishment rebellion has truly made its way to New Zealand politics. 

Winston Peters is not the only one denouncing the problems of capitalism. Prime Minister elect Jacinda Ardern went on The Nation today and gave one of her more leftwing interviews. She signalled the need for radical change, saying "When you have a market economy, it all comes down to whether or not you acknowledge where the market has failed and where intervention is required. Has it failed our people in recent times? Yes. How can you claim you've been successful when you have growth roughly 3 percent, but you've got the worst homelessness in the developed world?" – see Newshub’s Homelessness proves capitalism is a 'blatant failure' – Jacinda Ardern

There is certainly change in the air, and Newshub’s Patrick Gower channels this very strongly in his column: A true Government of change

Here’s how Gower starts the column: “Change. That is the word that sums up the new Government. Change – complete change. The new Government will totally change New Zealand's politics and its economy. It will be truly revolutionary and transformative in so many ways.”

For Gower, it goes far beyond a change of government: “When the last Government changed from National to Labour in 2008 there was never going to be change like this – and there wasn't, there was incrementalism. Not this time. This time it is different. The politics of the day were extraordinary – but the change to come will be even more extraordinary. There is a huge warning that comes with this huge change – it will hurt, and some of it won't work. This Government is unique – but that also means it is untested. All these represent a different New Zealand – a changed New Zealand. Change isn't coming: it is here – and it is coming at New Zealand very fast.”

We are headed into “uncharted waters” according to Duncan Garner, who says Winston Peters “may want an end to the neoliberal capitalist agenda, which he claims has hurt too many” – see: The accidental prime minister and the Utopian expectations. And Garner concludes his column saying “Some governments promise little and deliver more. This one is promising big and that makes it awfully hard from day one. All the best.”

A mood for change
A government of change seems to have been widely welcomed. Simon Wilson takes a moment to contemplate the change he dreams of seeing – see: Jacinda Ardern and the left boldly look to the future

Even newspaper editorials are welcoming a new era. The Otago Daily Times says that “New Zealand is in for a significant change in direction in policy. Social policy will be front and centre of the new government. Ms Ardern has made it clear she wants to end child poverty” – see: Mood for change recognised. But it warns that if “a financial downturn is on the way”, then “Ms Ardern and her Cabinet will be truly tested.”

The Dominion Post argues “Peters is right that this was an election where a majority wanted change” – see: A welcome game-changer. And the editorial emphasises Peters’ self-proclaimed radical orientation: “So Winston Peters has gone for change and not just a modified status quo. He even talks about reforming capitalism so New Zealanders will view it as a friend and not a foe. These are astonishing remarks from a man who is supposedly a conservative.”

Rod Oram also celebrates change, saying “The change to a Labour-led coalition government will bring new ideas and energy to a wide range of New Zealand’s economic challenges” – see: With new leadership comes a fresh agenda. Importantly, he points out that in 2017 the business community made it clear it is also relatively open to change, with many CEOs signaling that they are more pragmatic than in the past, and keen for urgent progress to be made in the areas of “infrastructure; housing; productivity; education; and inequality”. 

Radical policy change?

There is a strong focus in political commentary on how much radical change is about to occur in terms of policy reform. Dan Satherley has one of the best summaries of what we can initially expect – see: What Labour has planned in its first 100 days, and how likely it'll happen. He evaluates the likelihood of various policy initiatives being implemented over the next few months.

Jane Patterson’s version is also very good – see: Sixth Labour govt: What's in store for NZ. And for a focus on how reforms might immediately impact on youth, see Max Towle’s What can young people expect from a Labour-NZ First coalition? 

Duncan Garner advocates that, given that “the country is so structurally broken apparently”, “Ardern must cancel holidays for her new ministers and pull them back to Parliament early next year. That would signal intent and urgency. Parliament goes to sleep for two months; this new Government must change that and get to work and stay there. The first 100 days programme is big, and will require a similar commitment” – see: The accidental prime minister and the Utopian expectations.

There are plenty of sectors that might be about to get a shake up. Adele Redmond writes that “New Zealand's education sector is preparing for a sea change under the new Labour-New Zealand First government” – see: New government brings policies marking massive changes in education. And Nicholas Jones reports that Free university study just months away

For changes in the media, see Tom Pullar-Strecker’s New era for public broadcasting anticipated. And on immigration, see Matthew Theunissen’s New Government could cut immigration numbers 'overnight'

Already there are leaks coming out about what the Greens have gained from the new government, see Anna Bracewell-Worrall’s The Greens' 10 big policy gains

The strongest radicalism of the new government may end up occurring – perhaps counter intuitively – in the provinces. Peters has negotiated a supposedly transformative agenda for the regions. This is best explained by Politik’s Richard Harman in his report, NZ First gets huge fund to spend in provinces.

Here’s Harman’s key point: “Labour has agreed to a huge provincial Development Fund as part of its coalition agreement with NZ First. The fund is Labour’s answer to NZ First’s manifesto promise to restore GST collected from tourists back to the regions where it was collected. The money will be under the control of NZ Ministers. It is estimated that around $1.5 billion in GST is collected from tourists each year. Politik understands that the Provincial Development Fund will have at least hundreds of millions of dollars in capital – possibly more with a total nearer $1.5 billion.”

For more on this regional development, see Martin van Beynen’s Will Labour-NZ First coalition bring a new era in regional development? 

The Labour-led government will “tap into the zeitgeist of the time”, producing change in economic and social policy, according to Tracy Watkins – see: Get ready for the Jacinda Ardern honeymoon

Here’s Watkin’s list of where we can expect significant change: “An Ardern-led government will be able to lead from the front on many of the issues that dominated the election - the environment, cleaning up our rivers and streams, doing better at delivering affordable housing, and addressing deprivation and disparities. These were all issues National would have had to tackle also, but there would have been a difference in emphasis and tone, and the shifts would have been incremental, rather than dramatic. There will also be a big shift in economic direction – a Labour, NZ First, Greens government will be more interventionist than a National government and will go harder and further on income distribution through measures like Labour's families package, boosting the minimum wage and a big step up in the State house building programme”.

Reality check on radicalism

Former National Cabinet minister Wayne Mapp expresses his enthusiasm for change in his very interesting column, I was a National MP for 15 years, and today I’m excited about Jacinda

He suggests change perhaps might not be as extensive as promised: “Don’t expect the end of neo-liberalism, which seems to mean whatever anyone wants it to mean. For instance the new government is not about to re-impose tariffs and bring back import licensing. They are not going to end the floating dollar. They are not about to nationalise swathes of the economy. And due to Labour’s Rules of Budget Responsibility and the coalition deal, they will not be increasing taxes, or bringing in a capital gains tax, or a water tax, at least not before 2020.”

“So what sort of government are we going to get?” Mapp asks. Here’s his answer: “It will be in the atmospherics that the biggest changes will come. And these will really mean something. Even today there are people who remember the optimism that Norman Kirk bought to New Zealand. Jacinda has the chance to remake the narrative of our country. This is less about the hard core of policy and more about the image we portray to ourselves and to the world.”

Also providing a reality check, Andrew Geddis blogs to say we should not “see this as a new dawn of immediate, radical change” – see: Schrodinger's cat is Malawi's flag. He points out that “Ardern was very, very quick to emphasise in her first Q&A session after Peters' announcement that Labour remains committed to running surpluses and to staying within existing fiscal frameworks (or other economicy jargon I don't really understand). And, of course, the Greens have signed up to a similar commitment. So, there will be change - but change of a responsible, careful, considered sort. Change that won't scare the horses too much ... or, more importantly, the farmers who own those horses.”

Stephanie Rodgers points to a list of progressive reforms to come, but says “This is no Corbynist revolution” – see: After the sigh of relief, time to set a decisive course. She calls for the political left to keep pressuring and support Labour to make big bold changes in its first term.

In terms of any type of anti-capitalist or anti-neoliberal ideology that might underpin the new government, it’s worth reading Oliver Chan’s blog post, Single malt Keynesianism for a new New Zealand. He describes an odd alliance between two very different forces in the new government: “A seemingly unlikely cabal has emerged out of the New Zealand general election, between inner-city left-wingers and a pinstripe-suited older gent who, together, might lead the death knell of neoliberalism in New Zealand and could be an example for the broader-left worldwide.”

For Bryan Gould this mix of radical populism is a relatively benign one, and he celebrates that New Zealand has gone down a more progressive route of anti-Establishment politics: “We are all entitled to congratulate ourselves on the fact that this potentially ticking time-bomb has produced in New Zealand, not a Donald Trump or some other extremist, but a broadly based and secure government that is committed to considered policies that will address the problem” – see: Our democratic process worked

Finally, for satire about the government’s new anti-capitalist approach, see Steve Braunias’ The secret diary of Winston Peters


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32 Comments & Questions

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Excellent & informative article.

I must correct [?] Ardern's grammar in stating 'capitalism is blatantly not working' - surely she means PATENTLY - as in clearly is not [working] as opposed to [intentionally] not working. Maybe a small point but words are very important right now.

I fear a quantum shift having read these articles & I don't think we voted for that - most especially if a global crisis arrives on our door - be it financial or military.

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I suppose i'm correcting her vocabulary not her grammar.. to be correct - but I stand by how important it is to get this right. or am I wrong ? Where is Max Cryer when you need him ?!!

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Capitalism is working fine. The problem in this country is that there are far too many Chicken Littles' on the Left. The sky is not falling, monsters don't exist and there aren't things that go bump in the night. But the child-like magical thinking of swathes of New Zealand's economic illiterates and peasants just cant see or comprehend that.

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I suspect after the shambles we ended up with that next election people's mentality will be to vote with an FPP conviction - to avoid ever witnessing this again.

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So this is how you are explaining the election result now...??? I suspect you will find quite quickly that your "Chicken Littles" will be very happy with this Government as it starts to work for all rather than the pockets of the few.

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Your being a little bit pedantic here. How do you know it's not what she means. That's right you don't know.

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Once the new government has settled, everything will be back to the good old days.
National wasn’t doing too well the last few years. The Kiwi dropped to historic lows two years ago.
Depending on immigration to boost the economy is fundamentally wrong.
The economy should be export based.
At the same time, the Kiwi should be strengthened so that people can buy imported goods such as TVs, computers cheaper,

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This prov fund smells of corruption comrades...

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How Labour-NZ last-green, an unelected government, pretend to have compassion for the needy when the manifesto and first "100" days are to stitch up everyone with water taxes (rain tax), emissions taxes (sun tax) and fuel taxes. As well as an absence of any economic development policy, the lives of everyone especially the impoverished just got very expensive and very grim. Next they'll call to build cheap, "affordable" and condensed housing which will be used as a symbol of "success", but stigmatises people as having no hope or aspirations. Basically, Labours new urban ghettos.

Let's do social decay!

Charlatans!

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I too do not understand how MMP works. All I know is my team lost and I'm very sour now.

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They're certainly off to a good start.
Implying that Ms Bishop should apologise to NZ for being brassed of that NZ interfered in Aus politics.
Lost the first test played after they were elected. Against Aus!!!!
But? Should only be expected from a "coalition of losers" I s'pose *sigh*
Hey Mr Edwards tell us the one about the pie shop? PLLLLease?

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I see we already have an issue between the Greens and Labour/NZF over the Kermadec Ocean Sanctuary, which the Greens didn't know about until after it was dumped by Labour to get NZF to sign on the dotted line.
I am also puzzled about moving PoA to Whangarei. Surely this is a decision for the owners, Auckland City Council, who are against it. How are central government going to handle that?

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"How are central government going to handle that"?
Easy, Peters is as Muldoon was, He and he alone, not the market, knows what is best for NZ.
All that is required for that to happen is(like Muldoon) bribe what ever opposition over to your side or into silence with tax payers money.

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Answer: It will be all out totalitarianism for as long as the 3 stooge "coalition" (calamity) can keep themselves convinced they have legitimacy and purpose. The rest of us can watch the carnage and comedy.

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And hopefully find a safe haven for investments until this sham is done.

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They'll be a new tax or three to pay for even the notion of self-preservation Comrade!

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Yes we are about to watch the biggest change this country has ever seen but because of Ahdurn or her bunch of no experienced layabouts.
The shift that is coming will shake the very foundations of what we live and stand for...

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If change was wanted it would have been voted for - it was not. National had the most votes but Rumplestiltskin wanted to make a name for himself. He has, but not a good one!

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I really don't get how people can struggle so much to understand MMP. Natonal lost because they did not have a majority and they also did not have allies, nor policy alignment with NZ First.

NZ First's billboard was clear: "Had Enough?" and their voter based preferred a coalition with Labour by a significant majority, as suggested by polls.

This is basic stuff.

Is it just much easier to stand up caricatures and straw men instead of engaging with actual facts?

Here's a basic infographic to simplify things, countering the propaganda out there: https://pbs.twimg.com/media/DMm9du8UQAA96vY.jpg

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Comrade Jacinda and her three-ring circus (which hopefully won't be a 3-year Government) will be blatantly in opposition to capitalism https://pbs.twimg.com/media/DMetPosU8AAmTFC.jpg

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My advice to Mr Shaw would be to not sign any agreement with Labour until he has read a full text of the signed agreement between Labour and NZFirst. There may well be other things in there which the Greens won't like. The Greens now hold the trump card!

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I’m very disappointed our new PM has taken the populist view to blame the “ failure of Capitalisim” on our social problems.

Capitalisim is working - the pie is growing nicely. It’s the cutting of the pie that is failing and this is governments responsibility.

Change is needed in the tax system to ensure it is fair and equitable - too much wealth is in NZ is accumulated tax free thru speculation and ownership of unproductive assets. A Capital Gains Tax will address this.

Change is needed to the welfare and education system to get people off multigenerational welfare dependency and get people to take responsibility for themselves and their families.and there futures.

Change is needed. But let’s hope the new government doesn’t “ kill the chicken and reduce the flock while trying to take more eggs”.

Taxpayers currently put a large proprtion of their earnings into supporting those in need ( via taxes and Welfare). The governments focus should not only be on taking more from those who produce wealth by increasing taxes but it must also be on making government more efficient and targeting government spending better so those truly in need get the support they need to get off welfare and can in future contribute to “ growing the pie”. This is done by education and having an economy that creates well paying productive jobs - and not just more high paid cabinet ministers, civil servants and local body politicians who divert tax money from those who truly need it.

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Despite being worried about Jacindas rant against Capitalisim I sm still optimistic Labour will introduce positive change in NZ. The main concern I have is Winston’s belief that a centrally planned economy run by an interventionist government will do better than Capitalisim. Muldoon tried that and it needed radical change from the Lange Labour government to put NZ on course again. Im surprised NZF and the Greens don’t get on well, both are fundamentally Socialist.

This government has the chance to help youth get education and housing, to change the attitude and rules concerning to the environment and savings for retirement and make the tax system fairer and more equitable.

But hopefully they remember central government fixing of wages, exchange rates, and rents and prices doesn’t work, nor does picking business winners, investing in think big projects or investing government resources in areas better run by private investors.

The moving of the Auckland Port to Northland is Classic Muldoon. Auckland port should shrink ( not disappear) as the central city is no place for NZs biggest port. But it’s role can largely be accommodated in Tauranga with minimal government assistance.

Spend the 5 billion saved on better infrastructure, improved education and welfare for those who truly need it. Northland needs economic development but spending $5 billion on an unnecessary extra port is not the best way to achieve that.

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In my earlier rant I failed to acknowledge the fact that the NZ model of Capitalisim from recent years does need to change.

I strongly support immigration and foreign investment. But National failed to limit immigration to a level that was sustainable. National also failed to control foriegn ownership of entry level residential housing. These liberal policies helped NZ get thru the GFC economically but created pressure on housing and infrastructure. Growth must be sustainable - excessive migration is not sustainable.

Similarly National ignored calls to make agriculture more accountable for its impact on the environment. This was good business in the short term. But for Capitalisim to succeed it must have sustainability at its core.

I hope the new government makes positive change.

But early indications of poorly targeted extra spending and a bigger more interventionist government are not promising.

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How many NZ Firsts voters ( all 7% of them) would have still voted NZ First if they knew NZF is in fact the pro Māori Socialist Party it has now shown itself to be. I doubt NZF would be able to claim 50.4% voted for this change. Peters use of the anti- apartheid card in the build up to the election was a smart way to win Centre right voters. With the Maori Party no longer a force in MMP negotiations and the Maori caucus a significant force in Labour Party politics Winston can now show his true colours - they are red and black same as the Maori flag. NZF didn’t need to block the Kermadec Reserve. With Maori controlling such a significant block of Labour MPs it’s unlikely Labour will ever approve the Kermadec Marine Reserve. Also if Water Taxes are ever introduced by Labour it is probable the benefit will be given to Maori under the pretence of ownership under the Treaty. NZF did us a favour delaying that one.

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Having consigned the Kermadec Reserve to the chopping block, I wonder what else is there is the Labour/NZF agreement which is, ominously, still under wraps. I wonder if the Greens would have been so quick to jump on board if they had known that in advance? Labour has clearly sold its soul to the devil in the quest for power.

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According to Colmar Brunton, 65% preferred a coalition with Labour, to one with National.

Hope that helps.

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The option existed for Bill English to declare he would never go into coalition with Winston Peters at the start of the year. Stuart Boag a former Young Nats National President told me in about 1997 that National should have rejected the idea of forming a coaltion with Peters and waited for a Clark/ Winston government to collapse . Mathew Hooton suggest Wayne Eagelston favoured this course this yr.

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A couple of interesting points raised by occasional comments above. But otherwise just totally off the wall hysteria (or troublemaking by National Party campaigns by letters to the editor types).
Maybe all those talking ridiculously about communism and comrades should put their energies into packing their bags and leaving NZ because we don't want your self-interested negativism.ý

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What is all this "anti-capitalism, neo-liberalism" hysteria, if it isn't in support of "communism and comrades"
It seems the left can give it but can't take it?
No amount of bleating can ever wipe away the FACT; we are Governed by a coalition of losers. Not chosen by the people but rather, chosen by Mr No whose party received just 7% of the party vote and did not win an electoral seat.
The truth will not be denied.

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No, the truth will not be denied, so let's counter your non-truths:

https://pbs.twimg.com/media/DMm9du8UQAA96vY.jpg

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Check your % figures Mr Horse.
Using incorrect statistics completely destroys your argument.
Which by the way is otherwise reasonable.
MMP is what we have, so Mr No's Government is legal.
In NZ illegal is not a synonym of wrong and legal is not a synonym of right.
Politicians with lawyers prefer it that way.
More money for the lawyers who write the legislation.
And plenty of "exits" for poli's who sometimes find the peoples sense of right and wrong just a little embarrassing. .

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