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Taxing the Richardson Will Not Be Enough

Taxing the Richardson Will Not Be Enough

A shrill screeching sound has been echoing around Aotearoa in the last couple of weeks.  From Cape Reinga to Stewart Island, the deafening screams of the rich — terrified at the idea that they might have to pay a little more tax — have been reverberating across the country, reaching every corner of the land.

This ear-splitting pitch has been induced by the Government’s Tax Working Group, who have finally, after sixteen months of deliberation, released their report exploring ideas of how to adjust the country’s taxation system.  This report has the audacity to suggest that the Labour-NZ First Coalition should bring in a tax on capital gains at a similar rate to how ordinary income is currently taxed — a radical, far-left proposal which is found in the communist dictatorships of… the United States, Japan, Australia, and no less than 18 other OECD countries.

Leader of the Opposition Simon Bridges has condemned this suggestion, issuing an outraged warning that a Capital Gains Tax (CGT) would be “an assault on the Kiwi way of life”.  Ever-outspoken and ambitious National Party frontbencher Judith Collins has proclaimed that Labour going ahead with a tax on capital gains “would make Simon Bridges Prime Minister” — something she must be even more worried about than everybody else in the country right now, given that her hopes of successfully challenging Bridges for the leadership of their party are currently looking rosier than ever!  Meanwhile, Business Central have called the proposed CGT “fatally flawed”, while the Taxpayers Union have complained that it would be “aggressive and unfair”, and the architect of our current free market economy, Sir Roger Douglas himself, has labelled the suggested policy “a joke”.

From page 33 of the Tax Working Group’s final report.

Take a glance at the anticipated effects of a CGT, which are outlined at length in the Working Group’s report, and you will instantly see why the richest people in Aotearoa and their political representatives in the National Party are so angry and upset.  Page 33 of the report shows the spread of total net worth for each fifth (or ‘quintile’) of New Zealanders, excluding owner-occupied family homes, which would not be taxed by CGT — something Business Central actually object to.  The bottom two-fifths of households combined have a net worth of around $28.9 billion — meaning 40% of the country own roughly 4% of the total net worth above and beyond people’s personal houses. The next 40% own $159 billion, or 20% of that wealth.  Then there’s the top fifth of the country. They own $602 billion, as well as the homes they live in; that means that the top 20% own 76%, more than three times what the other 80% of us do.  The kind of wealth which a Capital Gains Tax would apply to is concentrated in the hands of those at the very top of society.  The vast majority of the country hold very little of the wealth which CGT would affect — it’s far from “an assault on the Kiwi way of life” for ordinary people.

The reasons why the rich are so scared of a CGT are further illuminated by the statistics provided on page 62 of the Working Group’s findings.  The bottom 30% of the country would have around 0.13% of their current disposable income taken by the proposed tax. How much would taxes go up for hard working middle New Zealand?  Well, an average of 0.5% of what the middle 40% of households are earning right now, after existing taxes, would be paid to the government through this new tax. It’s not even that bad for the upper middle class!  Deciles 8 and 9, the group richer than the bottom 70% but poorer than the top 10%, would have approximately 1.65% of their current disposable income taxed.

From page 62 of the Tax Working Group’s final report.

It’s only the top 10% who would be hit hard.  7.7% of their current disposable income would be paid to the state if the Government decided to accept the Working Group’s proposal of a CGT.  Even if you include owner-occupied housing, the five hundred thousand New Zealanders who make up decile 10 currently own significantly more total wealth than deciles 1 through 9 — the other four-and-a-half million of us — put together.  The wealthiest citizens in the land would still be ridiculously well-off even if the CGT was implemented — in fact, they would still be far, far richer than everybody else combined.

So, the poorest households in Aotearoa would have to pay as little as 13 cents out of every hundred dollars earned, while the average working family would only have to pay 50 cents, and even the upper middle class would be charged just $1.65 out of every $100.  The top 10% would have to rummage around in their oversized bank accounts and hand over just $7.70 out of every $100 they make. They can more than afford that, many times over. Taxing capital gains is common sense. It would help reduce the speculation in the housing market which has caused the price of buying a home to skyrocket in the last few decades, and it would raise a solid amount of money for the Government to spend — the Working Group have proposed to spend that money on income tax cuts of around $15 per person per week, but the money could also be spent on public services, or on building the new houses which we so desperately need.  Either way, it would reduce the obscene levels of inequality this country currently experiences by a small fraction. What’s not to like?

A Door Opens — Only to Be Slammed Back in Our Faces

It is most amusing to see the richest citizens of this country freak out at the idea of a minor increase in their taxes.  Unfortunately, amongst the panicked screams of greedy landlords and corporate fat cats terrified of a small reduction in their vast hoarded wealth, there lies a sinister pledge to take revenge if this CGT goes through.

It’s a pledge which perfectly demonstrates why merely tinkering around the edges of the existing economic framework — raising taxes on the rich and redistributing that money to working class people, but ultimately leaving the fundamentals of the system unchallenged — is always going to be entirely inadequate.  The unpleasant truth is that the wealthiest people in Aotearoa hold the real power in society. Their power is derived from their control over the economy — meaning they can hold the government to ransom if the elected representatives of the people dare to even think about going against the interests of the wealthy.  They can make day-to-day life very hard for ordinary people, because they own our workplaces, and they even own many of our homes.  They are determined to get their way, no matter the cost.

Enter ageing ex-cricketer Mark Richardson.  Richardson is a pundit on the AM Show — he is officially their sports presenter, but he also uses his platform on the popular radio program to give voice to his mean-spirited, increasingly brazen political views.  Last year, Richardson expressed exasperation at the media’s “unfair” treatment of Donald Trump, telling people to “give the guy a shot” in response to his co-presenter Amanda Gillies calling the US President racist.

Image from Newshub.

After Labour’s 2018 Budget a couple of months earlier, he had been complaining that “I’m going to be left out of pocket by this Budget […] I’m running a business here, you know!”.  He announced live on air, without even telling the people affected beforehand, that because of the rising costs the Budget would give him, he would be increasing rent for the tenants in the properties he owns.

The latest of Richardson’s angry right-wing rants came last week.  He insisted to AM Show listeners that “there is no housing crisis in this country, there is an accommodation crisis.  That’s very different!”  He elaborated by saying “I don’t give a rat’s arse if you can’t afford a house!  What I care about is if you can’t afford to rent a nice place to stay.”

Here are a few facts about the housing crisis which Richardson denies the existence of:

Never mind all that though — as he says, Richardson couldn’t give a rat’s arse about the colossal crisis in home ownership.  So surely, as he points out, everything is fine, and people are able to get by renting lovely accommodation to live in.

How utterly out-of-touch he is with the real lives of working class people.  Rents have also been skyrocketing in the past few decades, well outstripping wage growth.  The 600,000 households who rent are up to their ears in outrageously high bills from landlords, and it shows — housing costs for the bottom fifth of New Zealanders nearly doubled between 1990 and 2015, going from an average of 30% of their incomes to a staggering 54%.

Source: The State of New Zealand Housing, The House Site.

As for “a nice place to live”?!  Don’t make me laugh! The appalling conditions which so many renters have to put up with every day have been thoroughly documented.  Cold, damp, mouldy flats — it’s a story which scarcely needs repeating.  I know myself and too many of my friends have suffered symptoms such as disgusting skin conditions and shortness of breath in the winter — the situation is even more horrible for children who have to grow up in this environment.  Aotearoa is a developed country. It is positively criminal that serious health problems which were thought to have been eradicated are returning to the poorest and most vulnerable of our communities, while the wealthiest citizens of the nation enjoy such extreme affluence.

In response to the proposed Capital Gains Tax, Richardson decided that he needed to add yet more injury to his insulting attitude towards working people.  He once again proclaimed live on the AM Show that, if Labour’s planned CGT and accompanying $15 per week income tax cuts are implemented, he will take back whatever he loses by raising rents for his tenants.

“These tax cuts, alright?  I’m sorry — I went through how much people stand to make in tax cuts if it comes in, about $575 a year — I’m sorry, that might make a small difference to those right down the bottom, but that makes diddly-squat difference to the people who will be hurt by this tax, which is the middle class, who are trying desperately to get ahead, not to be a burden on the system when they retire, trying to get their kids ahead — they’re the ones who will take a proportionally greater hit!”

He continued:

“If they don’t own something, what are they doing, they are renting.  Well I will take that fifteen bucks a week back within the next couple of years, thank you very much!”

The sheer ignorance.  Richardson is genuinely convinced that the “middle class” are as wealthy as he is, and that people who don’t own investments, rental properties and businesses are a small group at the bottom of society.  He couldn’t be more wrong if he tried. The class who will “take a proportionally greater hit” are the top 10%. They’re the ruling class. They are the only group who will see a tax increase of 7.7% from CGT; they’re the group who between them own more wealth than the bottom 90% of us combined; they are the greedy profiteers, the leeches on society who live off the backs of the hard work everybody else does.  Yes, a $15 a week tax cut would make a difference to ordinary middle New Zealand — that is, if you didn’t raise rents and take that cash straight back for yourself, you elitist bully-boy.

The absolutely revolting hypocrisy.  Within a week of saying he will raise the rents of his tenants to make up for a modest tax increase on his massive wealth, to proclaim that there isn’t a housing crisis in Aotearoa!  To act as though it’s fine because people who don’t own anything can afford to rent “nice places”!  How Richardson can make these two statements within just a week of each other without the blindingly obvious contradictions causing his brain to explode simply baffles me.

A Useful Idiot

It’s infuriating that this man can espouse such ignorant, selfish and hypocritical views with such a mind-numbing lack of self-awareness.  However, on the other hand, I would argue that it is actually very useful that Richardson is being so honest. He is not only exposing to the rest of us, with absolute clarity, the odious position he occupies in society.  He is in the same breath illustrating the odious nature of his class. He is revealing for all to see the utter disregard for fellow humans which landlords embody; he is displaying the mental contortions they must necessarily exercise in order to avoid feeling guilty for their actions; he is demonstrating that himself and people like him either simply cannot understand the realities of life for the vast majority of working class people who exist around them — or even worse: if they do understand, they do not care.

Above all, he is shouting to the world, more sharply and concisely than a thousand of my wordy articles ever could, the exact reason why capitalism as an economic system and a political power structure must be overthrown.  Yes, it is possible to elect a Labour Government, and yes, if pressure from below is applied, that government will have to concede reforms to the majority of people in order to reduce extreme inequality and the daily suffering it causes the working class.  But reformist governments will always be powerless to actually change things on the scale necessary to truly end that suffering — precisely because a reformist government, even one led by the most brave and radical of people, will never hold any true power in society.

Housing Action Now march.

The power Mark Richardson is expressing when he tells AM Show listeners that he is going to raise rents for his tenants is the power which is the source of the crisis of inequality Aotearoa faces today.  We have a housing crisis because of the all-consuming greed of property speculators and landlords. It’s not a technical hiccup in an otherwise functioning system. It’s a problem which will always exist when the small group at the top of society control the vast majority of the wealth and power.  It’s a problem which will always exist under capitalism.

It’s not just a problem found in housing.  Workers experienced a huge reduction in our real median wages in the 1980s and early 1990s, aided by the policy of full employment being endedstate-owned industries being privatised, and unions being smashed.  Real median wages have been stagnant ever since this reduction.  Just as the housing market has been driven into crisis by speculators and landlords pursuing ever-higher profits, bosses have held down wages in order to achieve the same goal — cut the share of income going to workers so they can hoard that cash for themselves.

It is why inequality has soared in the last 35 years, to a point where the top tenth of the country own more than the bottom nine-tenths, and the two men at the very top — the richest men in the country, Graeme Hart and Richard Chandler — own more wealth between them than the bottom 1.4 million people.  It’s a class war which has been waged against the working class of Aotearoa by the bosses, landlords, bankers and investors.  It’s a war which has been fought by their representatives in government, both under National Party and under Labour Party rule.  And it’s a war which cannot be fixed even if Labour are prepared to tax the rich a bit more and redistribute the wealth — because the landlords can just make rents even higher, the bosses can just push wages even lower, and the banks can just raise interest rates.  They will get their way under this exploitative economic order.

Capitalism isn’t working.

Another World Is Possible

It’s time to fight back.  Mark Richardson has shown us why, as do all the statistics about the housing crisis, wage suppression and inequality.  We don’t even need those statistics to understand; most New Zealanders, especially young New Zealanders, can feel that something is deeply wrong.  We can feel the unbearable pressure we are under as we see house prices, rents and debts soar through the roof while wages are stuck on the floor; and we can see clearly that the super-rich are the only ones benefiting from this state of affairs.  The mental health crisis amongst the youth of today is largely caused by the hopelessness and stress produced as an inevitable result of capitalism.  Again, my personal experience, and the experiences of my friends, make the statistics on this issue strike far too close to home.

We’re ready to fight back.  That’s why National were kicked out of power after the nine long years of misery they gave us.  That’s why 2018 saw the biggest strikes in decades, with tens of thousands of nurses, midwives, teachers and public servants taking industrial action against the Labour-NZ First Government, demanding a better deal — these workers know that nothing is going to happen if we wait in vain for Labour to deliver, and that we have to take matters into our own hands.

The fight against obscene inequality is happening across the world, not just in Aotearoa.  Young people in the United States of America — of all places! — prefer the idea of socialism to capitalism.  Not only that, but in Britain and Germany, a majority of the total population have a favourable view of socialism and a net unfavourable view of capitalism.  Working class people, especially amongst the youth, are rejecting tired old status quo politics in favour of unashamed left-wing reformists who are willing to call out the rigged economic system for what it is, and promise meaningful changes which will make a genuine difference in people’s daily lives.  That’s why in the last few years, out of the political wilderness and into the centre stage have sprung self-proclaimed socialists such as Bernie Sanders and Alexandria Ocasio-Cortez in America, Jeremy Corbyn and John McDonnell in Britain, Jean-Luc Mélenchon and his La France Insoumise movement in France, Die Linke in Germany, Pablo Iglesias and the Podemos party in Spain, People Before Profit in Ireland, and SYRIZA in Greece, just to name a few examples.  Their political messages all contain a common theme: as Jeremy Corbyn’s iconic slogan states, they stand “for the many, not the few”.

There is no question that we need a new political party in Aotearoa which will fight without compromise for the interests of the bottom 90% of New Zealand — the workers, renters and debtors who deserve a better deal — and against the bosses, landlords and bankers who exploit us for their own gain.  There is no question that such a workers’ party would be popular — the number of people desperate for change is massive. The only questions are of detail: who, when, and most importantly, how?

I, for one, can’t wait to see the look on Mark Richardson’s face when his beloved ‘middle New Zealand’ turns out to be a complete myth; when the real majority in this land turns out to be the exploited and righteously angry working class; and when that working class turns out to be ready to stand up, fight back, put Mark and his rich mates in their place, and build an Aotearoa which works in the interests of everybody.



This article has been republished. You can read the original here.

Elliot Crossan is a socialist writer and activist.

6 March, 2019

Posted by Elliot Crossan in New Zealand Labour Party, New Zealand politics, 0 comments
We Cannot Escape the Tide of History — Nor Should We Want To: A Class Analysis of the 2017 New Zealand General Election

We Cannot Escape the Tide of History — Nor Should We Want To: A Class Analysis of the 2017 New Zealand General Election

Part 2 of 2

The world is currently experiencing its greatest moment of political upheaval since the 1980s.  The presidency of Donald Trump is normalising authoritarianism and white supremacy in the United States to an alarming extent.  Worse still, ideological fascists are on the rise across Europe.  This year, Marine Le Pen of France’s extreme nationalist party, Front National, received double the number of votes her father managed at the party’s high point in 2002.  Austria is now ruled by a coalition between hardline conservatives and the far-right.  Most chillingly of all, given historical events within living memory, Alternative für Deutschland, a neo-Nazi party, is now the third largest faction in the German parliament.

Fortunately, the polar opposite of fascist politics is resurgent too, growing in a way we have not seen in the developed world for decades.  Socialists agitating for a confrontation with “the greed and reckless behaviour of the billionaire class”, and a world that works “for the many, not the few”, are also on the rise.  They are campaigning to expand worker’s rights, the welfare state, and environmental protections, while fighting racism and authoritarianism.  From Britain’s socialist Labour Party leader Jeremy Corbyn to American left-wing presidential candidate Bernie Sanders; from France’s left populist Jean-Luc Mélenchon to Spain’s anti-austerity movement Podemos to Greece’s governing party SYRIZA, class politics and socialist reforms are fast becoming mainstream and popular again.  A bold message of hope and genuine change is charging back onto the field of political contention.

Britain’s Jeremy Corbyn, Spain’s Pablo Iglesias, France’s Jean-Luc Mélenchon and America’s Bernie Sanders: the generation of leftists bringing socialism back into fashion.

Calm Waters Surrounded by Titanic Storms?

On the other hand, New Zealand’s recent general election produced a result that will leave society and politics almost entirely unchanged.  This fact is confusing given the context of international events.  The National Party’s level of support remained astoundingly high for a party in an MMP system, particularly given their nine years of office, and the fact that they had presided over and made worse an economic paradigm that works against the interests of the majority of the people.

Winston Peters may be an anti-immigration populist, but he is tame and mostly harmless compared to Donald Trump, let alone the fascist insurgents in Europe.  He is not unfamiliar to our political scene; he has dominated the headlines in New Zealand media for decades.  New Zealand First did not receive a large share of the vote, and the party has been in governments before — held them to ransom before, even — without very much effect.  His role in the new government is not demonstrative of New Zealand succumbing to international upheaval.

The social context of the election is that inequality, especially its most severe consequences in child poverty and homelessness, is at utterly unacceptable heights.  The housing crisis, precarious and low paid employment, underfunded public services, and a shockingly skimpy welfare system are making life worse for so many working class people in Aotearoa.  Mental health problems are worsening and suicide rates are escalating.  Our environment is being polluted in ways that may be beyond repair, with our rivers poisoned and our seas drilled for oil, while New Zealand’s net greenhouse emissions continue to increase.

These social and ecological crises are not just the result of National’s nine years in government — though National did make them worse.  These crises are features of the economic system we live under, and typical of international trends over the last 30-40 years of worsening inequality and environmental destruction — trends largely unaffected by whichever political party holds power.  In New Zealand, these problems have been exacerbated by the policies pursued by every government in the last 33 years — they are not nine years old.

Aotearoa’s inequality crisis is decades old — every government since 1984 is complicit. Image credit: Inequality: A New Zealand Conversation.

Do not believe their rhetoric for a second: the Labour government is committed to managing our current system as conservatively and unimaginatively as possible, and as a result we will see little to none of the change we so desperately need.

Those who have a vested interest in the status quo will celebrate the conservatism of the new government, overjoyed that they are not being confronted with political anger in ways their overseas counterparts are currently facing.  And yet they are fools if they believe that this rigged economic system can last forever.  If they do not believe that unrest will arrive on our shores, and sooner rather than later, they are sorely mistaken.  It will happen here, whether any of us like it or not.  The consequences of the storm we will surely experience shall be decided by whether a vision of hope or hatred can prevail.  Those of us who wish to see a better world must be ready to fight as hard as we can.

To understand what is happening around the world, why it will happen here, what is at stake, and what vision we must advocate, we must first explore the most recent era of world history: the neoliberal era.

The End of History

In 1992, political scientist Francis Fukuyama published ‘The End of History and the Last Man’.  The book argued that, with the advent of neoliberalism and the fall of the USSR, free market capitalism had finally triumphed over all other economic systems, and that humanity’s social evolution was at an end.  Fukuyama’s case was that the Washington Consensus of free trade and free markets was the final stage of history, and that future politics would simply revolve around the expansion of and minor adjustments to this political settlement.  Until 2008, it seemed that Fukuyama might just be right.

In the 1980s, conservative politicians around the world had aggressively implemented the free market reforms of the Washington Consensus.  US President Ronald Reagan and British Prime Minister Margaret Thatcher were the leading  exponents of this agenda.  Their aim was to dismantle the postwar economic order, known as Keynesianism, which had dominated the capitalist world from 1945 until the economic crisis of the 1970s, and replace it with a new economic paradigm, neoliberalism.  Keynesianism had involved:

  • a generous welfare state paid for by high taxes on the rich;
  • extensive state involvement in the economy, with a mix of public ownership and heavy regulation, especially of finance;
  • strong trade unions which were able to campaign in the workplace for better wages and conditions, and in the political sphere for the continuation and expansion of worker-friendly policies.

The neoliberals dismantled Keynesianism through:

This assault on the institutions and power of the working class was arguably the most thorough and successful class war in history.

Breaking the trade unions was the most important pillar of the neoliberal project. Image credit: New Zealand Council of Trade Unions.

A Class Project

Many attempts have been made to explore the intentions of the neoliberals.  Reagan and Thatcher have been presented as moralistic true believers, who saw the government as inherently totalitarian, counterposed with capitalism, which they viewed as the ultimate expression of freedom.  They are attributed noble intentions as champions of their individualistic worldview.  Thatcher went as far as to claim that “there is no such thing as society”.  Their stated aims were to destroy socialist principles of collective struggle and provision, and to create the conditions for high economic growth, and therefore greater prosperity for everybody.

Neoliberals may or may not actually believe the narrative they espouse — it doesn’t really matter.  Whatever these people believe, their stated aims are proven to be either incorrect or flatly disingenuous by the actual results.  Neoliberal policies have, in practise, dramatically increased the wealth of the privileged few in society at the expense of the vast majority of people.  Everywhere neoliberalism has been tried, it has been unsuccessful in boosting economic growthas even the International Monetary Fund admits — and in growing the living standards of working class people.  It has not improved society by any measure that matters in people’s lives.  Neoliberalism has not smashed the state, but rather used the state as a tool for redistributing wealth upwards; it has not ended collective struggle, but instead acted to advance the collective interests of elites rather than the interests of the working class.  The only success of neoliberalism has been to further stratify society; inequality has increased in every country that has taken this route.  As a result, we have seen increasing poverty for the working class, while the capitalists have thrived.

A better explanation is needed for why neoliberalism has spread across the world so successfully.  David Harvey argues in ‘A Brief History of Neoliberalism’ that rather than being a utopian ideology of the supremacy of the market, neoliberalism is a class project by economic elites to restore and enhance their power.  Harvey demonstrates that in every instance where the supposed principles of market supremacy have come into conflict with the interests of the capitalist class, the latter have always prevailed.  As Harvey states, you can infer intent from probable outcomes.  Tax cuts for the rich alongside attacks on public spending and the unions are highly likely to redistribute wealth from working class people to the owners of capital.  Therefore, upwards wealth redistribution must have been the aim of the neoliberal project.

The rise in inequality is not local to Aotearoa, it is global — it is the product of a class project by the international economic elite.

The Disenchantment of Politics by Economics

The public posturing of neoliberals, with their protestations about the market, freedom and “personal responsibility”, need to be seen for what they are: a thin veil for an endeavour by the top 1% to increase their own wealth and power.  However, it is vital that we pay attention to the effects of market fundamentalism on democracy.  Here, Will Davies’ definition of neoliberalism is the most accurate: “the disenchantment of politics by economics”.  He is arguing that the neoliberals seek to depoliticise the very political process itself, to reduce democratic debate to nothing but political parties campaigning on marginally different ways of managing neoliberal capitalism.

Politics is about collective decision making.  Already, we encounter a problem for neoliberals; collective decision making goes against both the ideology of individualism, and against a policy agenda which benefits only a wealthy minority.  This is why since the birth of neoliberal ideology, its principal role has been, by necessity, to try to pretend that its ideas are not an ideology at all, but in fact that capitalism is the only way society can possibly be run.  Another of Thatcher’s common refrains was “there is no alternative!”  Neoliberalism can only ever succeed if people believe there is no other conceivable way to run society.

To succeed, neoliberals must depoliticise everything and everybody, remove all silly ideas about solidarity and the collective strength of a united class from the consciousness of society, and fundamentally stop democracy in its tracks.  Recent international events represent the return of democracy — a prospect that can only spell trouble for neoliberalism.

Social Democracy: An Impossible Dream?

If neoliberalism relies on tricking the majority of people into participating in a system rigged against their own interests, how on earth did it succeed in disenchanting politics?  The neoliberals had to destroy all opposition to their ideas and to their power, by convincing the opposition to vote for leaders who agree, on either an ideological or a practical basis, with neoliberal ideology — leaders who themselves believe deeply that there is no alternative.  Neoliberalism cannot succeed without subsuming social democratic parties in their entirety.  Conversely, the left cannot succeed without breaking fully and absolutely with neoliberal leaders of social democratic parties.

The Third Way is the tendency in centre-left politics to which the leaderships of nearly every social democratic party in the world subscribed from the 1990s until very recently.  Social democracy’s leaders, who once would have campaigned for the welfare state and represented the interests of the trade unions, now accepted that with the End of History had dawned the end of their political tradition, and that they should embrace neoliberalism themselves.  Third Way means social democracy accepting low government spending and a politically powerless working class.

Third Way politicians are often called ‘Blairites’ after Tony Blair, British Prime Minister from 1997 to 2007.  In an interview with Rupert Murdoch’s UK-based tabloid, the Sun, weeks before winning the 1997 general election, Blair reassured Sun readers that once Labour took power the UK would “still have the most restrictive union laws in the Western world.”  Blair defended this statement in the Guardian: “People on the Left have got to understand the realities of the economic world. You will do more to prevent people being treated as commodities by giving them the best educational skills and opportunities, and by having an employment service that is dynamic, than you will by trying to protect the workforce with over-restrictive union legislation. Again, we are under massive attack from the Conservatives in relation to the things we are offering.”  His response touches on another crucial point — that neoliberals in conservative parties must pretend that not only do Blairites represent the most change society can ever hope for, but that the ideas Third Way politicians represent are dangerous, radical, economically damaging, and a threat to the people.  They must do this not only to preserve the illusion that there is no alternative, but to justify the mere fact that Third Way and conservative politicians operate within separate parties!

Pivotal figures who helped cement neoliberalism around the world: economist Milton Friedman, Margaret Thatcher, Ronald Reagan, Tony Blair, and David Cameron.

Elections in the neoliberal era are no more than contests of personalities.  That is a major reason why we have seen the archetypal politician in the last few decades change from the image of an elderly statesman to being young, charismatic, and attractive.  Politics?  Who cares?  Our leaders have become smiling, slick and polished for a very good reason: to hide from sight what is missing.  Trudeau, Macron, Blair, Cameron, Clinton, Obama, Turnbull, Key: they all seem so similar because they are.  They all represent the same style-over-substance approach, and exemplify the same neoliberal conceptions about the world.

Hillary Clinton’s recent book ‘What Happened?’ describes how she managed to lose an election to Donald Trump.  She used the book to blame everything but her utterly uninspiring campaign for this loss, particularly targeting Bernie Sanders.  In the book, she quotes a Facebook post which she believes demonstrates the dynamic in which she and Sanders were caught in their primary contest.

‘Bernie: “I think America should get a pony.”
Hillary: “How will you pay for the pony? Where will the pony come from? How will you get Congress to agree to the pony?”
Bernie: “Hillary thinks America doesn’t deserve a pony.”
Bernie Supporters: “Hillary hates ponies!”
Hillary: “Actually, I love ponies.”
Bernie Supporters: “She changed her position on ponies! #WhichHillary#WitchHillary”
Headline: Hillary Refuses To Give Every American a Pony.
Debate Moderator: “Hillary, how do you feel when people say you lie about ponies?”’

Bernie Sanders vs. Hillary Clinton: a primary which polarised the Democratic Party.  Image credit: Daily Dot.

In reality, all Clinton’s witty post demonstrates is the mentality of Third Way politicians.  They believe that a society run, even slightly, in the interests of the majority of people, is laughably unrealistic.  Being challenged by socialists proposing mild reforms confuses them to the point of incredulity.  They believe so strongly that there is no alternative that they mock the millions of people crying out for one.  Perhaps that is how she managed to lose to Trump.

Tony Blair made similarly revealing remarks about Jeremy Corbyn during the 2015 Labour leadership election.  “Let me make my position clear: I wouldn’t want to win on an old-fashioned leftist platform.  Even if I thought it was the route to victory, I wouldn’t take it.”

The Return of Politics

History has a funny way of making fools out of arrogant intellectuals who try to proclaim its end.  The War on Terror saw the Washington Consensus begin to fracture and fragment; all was not well in Fukuyama’s paradise.  When the 2008 Global Financial Crisis hit, the hegemony of neoliberalism was ended overnight.  The crisis flipped every claim of neoliberalism on its head.  What was supposed to be the perfect economic system, bound to perpetually grow and create great prosperity for all, immune to boom and bust cycles, had produced the greatest crisis capitalism had seen since the Great Depression 80 years earlier.  After that, it was only a matter of time before the clash of different ideas about how to run society started returning to the world; it became a race to see who could re-enchant politics with their ideas first.

The Global Financial Crisis caused the worst recession since the 1930s, and even the recovery resulted in the rich getting richer and the poor getting poorer.  No wonder working class people are so angry.  Image credit: Pavlina Tcherneva/Levy Economics Institute.

For the working class, 30 years of stagnating wages, jobs heading offshore, increasingly dilapidated and inadequate public services and infrastructure, skyrocketing house prices, increased indebtedness just to survive, and a lost sense of social cohesion, was more than enough, even before the Financial Crisis.  The giant tax cuts for the rich were revealed for what they were: a simple act of class war.  To add insult to injury, the debt that governments had accrued when they bailed out the banks was passed on to taxpayers in the form of even harsher austerity measures.  This explains why people are so profoundly angry that they are willing to vote for anybody who offers a different approach.Working class people no longer believe that there is no alternative; they want an alternative, no matter what.

Unfortunately, the far-right got a head start.  Paul Mason gave a speech at the 2017 Socialists Together conference, a meeting of social democratic leaders from across Europe.  He quoted Will Davies’ assessment of neoliberalism, adding: “The far-right and the nationalists have re-enchanted politics through nationalism, race, and violent misogyny.”  The void filled by the depoliticisation of society is fast being filled by this terrifying politics, which can only lead to the fascism, racism, totalitarianism and world war of the 1940s.

The left must now offer a more compelling alternative to both neoliberalism and fascism.  The stakes are too high for us not to succeed.  Fortunately, the Corbyn movement is in the process of showing us the perfect example of how to do so.  Mason, a Corbyn supporter and volunteer, went on to say, “what happened is that we got 12 million people to vote for us, because we offered an alternative to neoliberalism, and a narrative of hope.  […] Shortly after we published the manifesto, crowds started to be real, they started to be spontaneous.  You can look at what the manifesto contained — basically, it was a massive fiscal redistribution programme, which said, we will spend money in these blighted towns.”

“Crowds started to be real, they started to be spontaneous.”  Image credit: Oli Scarff/AFP/Getty Images.

The Biggest Threat to the New Zealand Left

In 2014, when I was 16 years old, I paid attention to the New Zealand general election properly for the first time.  When John Key won, I shared the emotions of every other supporter of the left in the country: depression.  National had won and Labour had lost.

Three years later, my politics have evolved somewhat.  I trembled at the election of Jacinda Ardern as deputy Labour leader; I was horrified when Andrew Little resigned and Ardern took over as Leader of the Opposition, and when Winston declared he was going into coalition with Labour and that Ardern would be Prime Minister, I was every bit as depressed as I had been in 2014.  If you’re only just tuning in, er, no, I didn’t become a Young Nat in the intervening period, I, er… maybe you should read this essay from the beginning…

I struggled to write this follow-up to my original essay for three months, because I was trying desperately to work out how I could communicate my reasoning and emotions to those same people who groaned with me in 2014 — those who now celebrate ecstatically the election of a ‘progressive’ government — without alienating anybody who might read my work.  The thousands of words of extensive exposition leading up to the conclusions I am about to draw are my best attempt to communicate my reasons for this rational and emotional disconnect.

For the last year, I have been saying that Jacinda Ardern is the biggest threat to the New Zealand left — to any of us who want real change.  I ask you now, please, don’t celebrate.  Prepare to fight!  This new government is a Third Way coup de grâce.  They are as committed to managing neoliberalism as every other government we have had in the last 33 years.  Ardern represents everything we oppose.  She has moved any chance of systemic change down the agenda, possibly for years, and we do not have that much time to waste.

New Prime Minister Jacinda Ardern with her Finance Minister Grant Robertson.  Image credit: Marty Melville/AFP/Getty Images.

Style-Over-Substance Politics are Dangerous

Ardern represents a stunning victory for style-over-substance political culture.  Those who view Ardern in a more positive light than Andrew Little, ask yourselves: why?  Because she is more charismatic and therefore more electable?  All that demonstrates is that the new government’s mandate is built on sand.  If the centre-left is going to succeed or fail based on the popularity of its leaders, then as soon as a more charismatic National Party leader comes along, all Labour’s policies will be reversed.  Were we not right to despise the fact that John Key was popular for no reason other than his (inexplicable) personal appeal?  What Key represented could happen again; we have no choice but to reject personality politics and instead offer a substantive vision for society.

Many in the media are celebrating this bright new era, and the great change it will bring, just as they celebrated Blair, Clinton, Macron.  The corporate media exist to perpetuate the interests of the establishment; they cannot believe their luck that Labour are in power while tied to steadfast commitments against systemic change.

There is nothing more terrifying to the media than a genuine left-wing politician.  A study of the UK media’s attitude towards Jeremy Corbyn demonstrates that 75% of coverage in his first two months as Labour leader (usually the honeymoon period) was negative.  Meanwhile, during the US primaries, Trump received twenty-three times more coverage than Sanders, despite the fact that Sanders was consistently far ahead of Trump in head-to-head polling.  If the corporate media are celebrating, that is because neoliberalism has won the day!

Media coverage of Jeremy Corbyn: how the establishment treats threats to its wealth and power.  The fact that Ardern has not been treated in this way demonstrates that the establishment are not scared of the new government.  Image credit: Media Reform Coalition.

Austerity and Xenophobia?  Let’s Not Do This

The Ardern government is embarking on an unambitious political project which amounts to tiny increases to social spending in a broader context of continued austerity and privatisation, alongside xenophobia, and a punitive response to climate change.  It is a Third Way project which buys into every neoliberal narrative about society — and will end up entrenching neoliberalism in a way that National could never get away with.  For the same reasons, under Helen Clark’s Third Way government, the bottom 10% of New Zealanders got poorer, while house prices doubled and emissions rose.  Third Way politics destroy any hope of even the most modest attempt to run the economy in the interests of the majority.

The Budget Responsibility Rules, a set of goals for the new government’s budgeting process which include running surpluses, reducing debt, and limiting new government spending, serve the role of solidifying the neoliberal narrative.  The most significant of these rules states that Labour will not spend more than an arbitrary target of 30% of GDP, meaning that small government is a permanent fixture of New Zealand’s economy which not just National, but Labour as well, are committed to.  So committed is new Finance Minister Grant Robertson to this austerity framework, that he has already announced that there may have to be spending cuts in order to make room for the small increases in spending in health and education that the government intends to make.

Buying into the idea that governments can either pursue this spending programme or that programme, but not both, because it would be too expensive, is just an excuse for Robertson to reassure the capitalist class that the government will not even dream of breaking with neoliberal orthodoxy and, say, raise taxes on the rich to increase spending and deal with our social, economic and environmental crises.

But it gets worse.  Robertson has also signalled that the government is prepared to pursue public-private partnerships in order to meet its social targets.  This is privatisation by stealth.  Public-private partnerships have long been used to partially privatise state assets, and to bankrupt areas of the public service so that neoliberal governments, whether Third Way or conservative, have an excuse to sell them off.

Ardern demonstrated how eager she was to shy away from even the most modest of tax rises on the rich when she ruled out raising the top tax rate near the beginning of her short election campaign.  Ardern and Robertson could not be clearer if they tried: they believe, as Blair, Clinton and Clark did before them, that there is no alternative to a neoliberal approach.  Meanwhile, if you are wondering how the National Party are trying to differentiate themselves from a neoliberal Labour government, how they are trying to not only make Third Way politics look separate from conservative politics, but portray this Blairite administration as dangerous and radical, look no further than the brave champion of the people, David Bennett.  In his speech decrying the evils of Ardern’s programme, he used the word “socialism” 26 times.  Comrade Bennett, as a socialist myself, how I wish this government was giving us even the most moderate social democratic reforms!

Another example of this government’s neoliberalism is the Auckland regional fuel tax.  It is a punitive response to climate change.  Rather than taxing large corporations, or stopping new mining, fracking and oil drilling projects, the government is going to tax working class Aucklanders to pay for a transition away from fossil fuels.  This is one of the great concerns of the climate justice movement, a concern championed by the trade unions’ Just Transition campaign — that neoliberal politicians will act to save us from climate change, but will pass the cost onto working class people rather than the wealthy in the process.  It is a climate policy for the few.  Workers are right to oppose the fuel tax, and the left of the environmentalist movement, and of the Green Party, should stand with trade unions in demanding a Just Transition away from fossil fuels.

“System change not climate change”, the demand of the union-led Just Transition movement, is not being lived up to by the government’s climate policies, which push the costs of pollution onto the poor instead of the rich.  Image credit: Sentro.

Finally, the government’s immigration policies are simply unacceptable.  The goal of cutting net migration by 20,000-30,000 is scapegoating migrants of colour for our social problems.  Make no mistake — when people hear “migrants,” they think “people of colour”.  I know I do, and I moved here from England when I was four.  This puts people of colour in danger.  By inferring that migrants are to blame for low wages and the strain on housing and public infrastructure, and then pursuing policies that supposedly deal with these problems by stopping people coming to Aotearoa, the government gives license to xenophobes to spread anti-migrant hate.  After Britain voted to leave the European Union, a vote seen as a protest against high levels of immigration, hate crimes against minorities surged by 29%, the highest increase on record.  The same xenophobia could take root here.

The left must be loud and clear.  Migrants are not to blame for our problems, capitalism is.  Low wages, a housing crisis, strained public services?  These are the direct result of the implementation of neoliberal policy, and of the greed of bosses and landlords.  Austerity has undermined our living standards.  Shifting the blame for falling living standards from the rich to people of colour not only puts ethnic minorities in serious danger, it allows the wealthy and their allies in government and the media to get away with what they have done!  We must oppose the government’s xenophobic immigration policies, and say loudly and clearly, as Corbyn and Sanders have consistently done: do not give in to racism, do not blame some of the most targeted and vulnerable people in society for our problems.  Blame the greed and reckless behaviour of the capitalist class, and strive to build a society that works for everybody, regardless of ethnicity, migration status, and all other factors.

It is not the National Party that stops any chance of real change in Aotearoa.  It is both National and Labour — as well as New Zealand First, ACT and elements within the Greens, for that matter.  There is no question that if we want to change society, we have to first dismantle these organs of capitalist politics and build an alternative for the many, not the few.  We have to destroy the Third Way narrative, and to do so we have to oppose Jacinda Ardern and the Labour Party.  So, to misappropriate Tony Blair’s attack on Corbyn: “let me make my position clear.  I wouldn’t want to win on a Third Way neoliberal platform.  Even if I thought it was the route to victory, I wouldn’t take it.”  Incidentally, now that the majority of people are desperate for an alternative to the crushing weight of the status quo, class politics and socialist reforms are more popular than neoliberalism and are more likely to win.  When presented with an alternative, working class voters will turn out!



Author’s note: I ended part one of this series by posing questions which I have not fully answered: “What, then, is to be done?  What can the left do now to beat National and marginalise the racist voice of Winston Peters in the next general election, in 2020?  Was Metiria’s sacrifice for nothing?”  After events changed and my thinking developed — after the special votes, the conclusion many drew on election night that we were in for a National-NZ First coalition suddenly became less likely, and indeed, Labour-NZ First took power with support from the Greens — I had to revise my concept for part two significantly. This essay is the result.

Elliot Crossan is a socialist writer and activist. At time of writing, he was Co-Convenor of the Young Greens of Aotearoa New Zealand.

1 January, 2018

Posted by Elliot Crossan in 2017 New Zealand general election, Green Party of Aotearoa New Zealand, New Zealand Labour Party, New Zealand National Party, New Zealand politics, 0 comments
We Must Not Stop Challenging Power — Our Fight Has Barely Begun

We Must Not Stop Challenging Power — Our Fight Has Barely Begun

The Green Party exists to challenge power.  Our Charter principles are impossible to implement without a sustained assault on wealthy interests.  We must defy every premise of the capitalist system whose existence relies on colonisation, unlimited material growth, fossil fuel extraction, and the concentration of wealth in the hands of the few.

The government has just changed to a supposedly friendly, socially-conscious Labour administration, and the Greens have a Confidence and Supply deal and Ministers for the first time. But I worry that any arguments for structural change in Aotearoa that our Party has been (or should be) making will be suppressed in favour of acting to prop up the new face of the status quo.  This instinct, if followed, will lead to the dying away of the Greens as a genuine alternative — a catastrophe for any hope of real action in the coming years on any of the issues and values we care about.

We may have portfolios and a deal with the Labour Government, but we must not for one second make the mistake of believing that the Greens have power.  We are exactly where the Labour Party wants us to be — small, weak, unable to seriously challenge them, and unable to position ourselves clearly as a more progressive alternative to them.  We have only what power the Prime Minister and Finance Minister will allow us to exercise — able to make minor tweaks in the areas we have been given control over, but no ability to do anything at all that would threaten the capitalist, extractivist system that is harming people and planet.

Just look at what isn’t in our deal with Labour.  There is no mandatory Te Reo in schools, no carbon tax, no capital gains tax, no higher taxes on the rich at all, and no increase in core benefits, or systemic changes to the culture of WINZ and its sanctioning regime.  This constitutes a frail imitation of basic and vitally necessary changes to New Zealand’s benefit system — changes so bravely championed by Metiria.  There is not even a guarantee that there will be an end to new mining, fracking, or deep sea oil and gas drilling projects.  Fairly moderate policies that would have seen a more just and sustainable society were taken off the table by Labour before the Government had even begun.  Fossil fuel extraction will continue, everyday colonisation will go on as before, and the particularly savage model of capitalism we live under — neoliberalism, with the vast level of inequality it creates — will continue entirely unchanged.

When it comes to immigration, Labour and New Zealand First intend to be xenophobic and nasty.  Labour decided during its third term in opposition that trying to campaign in even a moderately social democratic way is too hard, and that it would make migrants the scapegoats for social problems instead.  Underfunded public services and infrastructure are the result of austerity, not migrants.  Low wages are the result of union busting and a low minimum wage, not migrants.  Inequality is the result of neoliberalism, not migrants.  In challenging power, it cannot be more crucial for the Greens to stand up to the xenophobic and factually untrue narrative that any of our problems are either caused or exacerbated by our already fairly restrictive immigration system.  We cannot call ourselves a party that believes in social responsibility unless we stand up to the xenophobia of this Government and say loudly and clearly that migrants and refugees are welcome here.

Over the next three years, in the next election and beyond, we need not only to continue challenging power as much as we can despite our compromised position, but we need to rethink the current direction of the Green Party and begin to fight a more bold, coherent and all-encompassing battle for the soul of Aotearoa.  We fought this election on a platform of fairly limited changes — our fiscal policy was restricted by the neoliberal straightjacket of the Budget Responsibility Rules, and we were not advocating truly systemic changes to the economy.  A bigger government will be necessary to urgently tackle climate change and inequality, and to grant serious reparations for colonisation.  Next election, we need to campaign on a platform of raising taxes on the rich in order to pay for bringing the essentials of life back under public, democratic control, spending more on services to benefit everybody, and implementing a Green New Deal that will shift New Zealand towards becoming a carbon neutral economy, fast.

A better world is possible — not with the current government, but with a new, radical vision for the future of Aotearoa.



This article was originally written on behalf of the Young Greens of Aotearoa New Zealand and published in issue 56 of Te Awa, the Green Party magazine. It has been republished with the kind permission of the editor.

Elliot Crossan is a socialist writer and activist. At time of writing, he was Co-Convenor of the Young Greens.

5 December, 2017

Posted by Elliot Crossan in 2017 New Zealand general election, Green Party of Aotearoa New Zealand, New Zealand Labour Party, New Zealand politics, 0 comments