Categories
Business

Matthew Hooton: The left’s message to Jacinda Ardern

OPINION:

The Prime Minister’s centrist rhetoric may be a relief to business, but has prompted the first mini-rebellion on her left.

Jacinda Ardern has repeatedly said — including at UN-sponsored summits in New York — that the reason she entered politics was to rid New Zealand of child poverty. It ranks even above her “nuclear-free moment” of combating climate change.

Labour didn’t achieve much over nine years in opposition, but it did put child poverty and the associated issues of housing and inequality high on the public agenda.

Ardern can take credit for that political achievement, being Opposition Spokesperson for Children for five-and-a-half years from March 2012 to October 2017, although her policy output was less impressive.

Nevertheless, by the time she faced Bill English in the TV leaders’ debates in 2017, child poverty was so embedded in the public and media consciousness that the main takeout was the two leaders competing over which would lower it the most.

English claimed his families package had already lifted 50,000 children out of poverty that year, with another 50,000 to follow through post-election tax cuts, which Labour cancelled.

Ardern reckoned her families package would do better, saying 100,000 children would be lifted out of poverty by 2020. To underline her commitment, she appointed herself Minister for Child Poverty Reduction, a job she has retained in her new Labour-only Government.

The actual number is disputed, and her debates with English were based on relative measures rather than material deprivation anyway, but no one thinks Ardern came anywhere near her 100,000 target. It is common ground that the number of children living in material hardship has worsened since 2017.

Much of Ardern’s first term was used up waiting for working group reports. She also had the excuse of being constrained by Winston Peters — although not so much in social policy, where NZ First’s Minister for Children Tracey Martin was at least as passionate as Ardern herself.

Ardern’s Welfare Expert Advisory Group (WEAG) was also fairly efficient. After finally being appointed in May 2018, it delivered its report to ministers just nine months later.

When the report was eventually released publicly, it revealed the Government’s own appointees had recommended the welfare system needed fundamental change, including that benefits be increased by up to 47 per cent. The single person’s Jobseeker support payment needed to go up by $100 a week. Working for Families needed to be more generous.

Ardern appeared no more enamoured with this advice than by her Tax Working Group’s recommendation she proceed with the capital gains tax she had personally backed for so long.

As a Covid-19 stimulus measure, the Government did increase benefits by $25 a week, anddoubled Peters’ winter energy payment, but the working group’s recommendations were mainly set aside — to the chagrin of welfare advocates.

“People in this Government should be ashamed of the blatant lack of compassion and action for those doing it the hardest,” said ActionStation’s Ruby Powell.

Hoping for something better under a Labour-only Government, more than60 welfare NGOs wrote to Ardern, Finance Minister Grant Robertson and Social Development Minister Carmel Sepuloni on Monday seeking renewed action, including a benefit increase before Christmas.

Among them were ActionStation, the Auckland City Mission, the Child Poverty Action Group, Citizens Advice Bureau, Lifewise, the Mental Health Foundation, the National Council of Women, Plunket, the Salvation Army and the Waipareira Trust, plus a spread of church groups and unions.

They made the reasonable case that “the Labour Party has consistently said there’s more work to be done to lift families out of poverty” and that it now has “the mandate and opportunity to do so”.

The groups pointed to Ardern acting quickly during the Covid-19 crisis to set up a new income relief payment of nearly double the usual Jobseeker payment.

“You showed us,” the letter went on, “that you understand current benefit levels are insufficient and lock families and children into poverty — an issue that affects all of us.”

They have a point. Mainstream economists have long recognised the relationship between inequality and growth. Under pure equality or communism, growth will be zero or low, since whatever extra wealth is produced is confiscated by the state.

But similarly, under pure inequality or feudalism, growth will also be zero or low, since whatever is produced is confiscated by the local lord. The sweet spot lies somewhere between.

Where New Zealand lies on this parabola is debatable but having talked such a big game about poverty and inequality, Labour must believe we are closer to the feudal rather than the communist end of the x-axis. Moreover, the now completely out-of-control housing boom — fuelled by ultra-low interest rates, quantitative easing and Robertson’s own fiscal stimulus — has finally buried the possibility of Millennials or the Covid Generation saving a house deposit without parental assistance.

Ardern’s response to these issues is unsatisfactory. On benefit levels, she said this week that more “work” is needed but it is not clear what “work” is required to make a basic decision on those benefit levels. Ruth Richardson, after all, took just 53 days after the October 27, 1990 election to announce her benefit cuts. It is not obvious why any more “work” is needed to make the opposite decision.

In any case, the “work” was presumably already done in Ardern’s now eight-and-a-half years in the children’s portfolio and by her WEAG.

On house prices, Reserve Bank governor Adrian Orr rightly says it is outside his mandate while the Prime Minister just emotes her usual concern.

This is not economically or socially sustainable — and surely not politically sustainable either.

There must come a time when Ardern’s own political base demands something more on such issues than her frowny-concerned face.

It will be another 100 years before Labour again wins a mandate like the one Ardern secured last month. If she won’t act now on the issues she says concern her, left-wing activists will be entitled to ask whether hungry children and young couples struggling to buy a house really mean anything to her beyond being useful walk-on parts during election campaigns.

– Matthew Hooton is an Auckland-based PR consultant whose clients have included Lifewise, Plunket and the Waipareira Trust mentioned above. These views are his own.

Source: Read Full Article