Gordon Campbell on the morning after Three Waters

a02372a4638815463f5cReportedly, local democracy has been saved from the brutal tyranny of centralised water reform. One would like to think that spirited debate is now breaking out in the nation’s kitchens and cafes about the best ways of funding water infrastructure and managing its delivery. Let’s hope that families will not be coming to blows over how best to achieve balance sheet separation.

What we do know is that the fuss made about the potential loss of local democracy in the original Three Waters plan has led to compromises that will be more costly, and less efficient. “Don’t blame us for doing what you asked for” is an unusual sales pitch, but it could easily become Labour’s campaign slogan for Election 2023.

Over the weekend, Local Government Minister Kieran McAnulty took to TVNZ’s Q&A programme and to Newshub, and on both occasions, he gave a clear and dispassionate explanation of the necessity for water reform. The TVNZ interview included an unapologetic defence by McAnulty of the fact that a 50/50 Treaty partnership does not align with the balance between Maori and others in the population as a whole. Inevitably then, ensuring Maori representation is not “democratic” in the sense of a “one person, one vote” rule.

McAnulty’s unruffled candour on this point made for a refreshing change. In the recent past, Labour has gone to bat for its policies with all of the confidence and aplomb that the Black Caps commonly display when facing Mitchell Starc at the MCG. McAnulty however, not only freely admitted an unpopular truth, but calmly defended it. Put this man in at the top of the batting order!

Quite a difference. On a range of issues– taxation, climate change, welfare, housing etc – Labour has tentatively pushed its policies out into the daylight in the apparent belief that they’re likely to explode in the government’s face. Too bad McAnulty wasn’t responsible from the outset for making the case for Three Waters….

Timidity or Change?

The centre-left have been given a lot of reasons to feel angry and disappointed about how Labour has frittered away the unprecedented mandate it won in 2020. Its genuine achievements have been obscured by the clouds of regret about what- might-have-been if Labour had been more willing to lead from the front, and more confident about its ability to take the electorate along with it.

Critics on the left have tended to put this timidity down to the fear of a media-led negative backlash. Even at this late hour, there is still a lingering hope among some diehard Labour supporters that a stern talking to might stiffen the backbones of the Labour caucus. Against all odds, the hope endures that one day, Labour might yet dare to tackle the structural causes of poverty and social inequality, instead of merely doing its best to soften their impact.

Such hopes are misplaced. Here and in Australia, an identity shift has occurred in the major centre-left parties. Incrementalism is all that can be expected, given that consistent defeats and years spent in opposition have so fatally eroded the sense of what is electorally possible. As the Australian journalist Maeve McGregor recently said of the Albanese govermment, this paucity of ambition evident in centre-left governments is by choice, and not due to some accident of history or unfortunate aberration.

On the contrary, this is New Labor: a party that has not so much drifted as consciously stepped to the right and, in so doing, has abandoned basic fairness as an organising principle in many of the most fundamental areas of government policy…. The common thread that runs throughout is emblematic of a shift in political identity — the language of politics of aspiration unspooled from the constraints of fairness…

Still… As McGregor also readily concedes, the Albanese government- and the Ardern-Hipkins administration here – still remains superior to their conservative opponents, on issues of fairness. That’s a pretty low bar. As she also argues, much of the visible advances – eg, in reducing child poverty, in building houses, in putting more money into the health system, in raising the minimum wage etc – have been the low hanging fruit left by the appalling conservative government that preceded them.

Child poverty for example has been significantly reduced here. Yet no modern centre-left government would dare to promote the policies required to eliminate it entirely. But shouldn’t New Zealand have a zero tolerance approach to child poverty? It is entirely within the power of central government to eliminate it.

Meanwhile… The banks, the supermarkets and the airlines continue to prey upon their customers, unhindered by any significant government regulation. A windfall tax on their profits has been ruled out. So has a wealth tax on individual wealth over $1 million, apparently on the grounds that such riches are bracingly aspirational.

One would have hoped that a centre-left government would also be feeling impelled to challenge the Reserve Bank’s pursuit of higher unemployment as a corrective to inflation. In stark contrast, there has been little or no public debate about the role of excessive profits in fuelling inflation. Here’s an example of an argument rarely heard in New Zealand:

The idea that corporate profit expansion has been a big driver of inflation was once mostly confined to trade unions and left-wing academics, but it’s now taken seriously by central bankers. Bank of England Governor Andrew Bailey has gone from urging workers to forgo big pay increases last year to telling companies to exercise restraint in setting prices. Smart move.

Here’s the rationale:

Briefly, the theory of profit-led inflation goes like this: Consumers have been conditioned to accept excessive prices increases by a torrent of bad news and economic shocks — first the pandemic, then supply chain upheaval, and more recently Russia’s invasion of Ukraine and soaring energy prices. It began to seem plausible that the price of everything should increase a lot…. US and European companies have increased their operating profit margins since 2019, even when excluding the volatile energy sector.

There’s a valid argument as to why it makes economic sense to curtail excessive corporate profit-taking – by taxes, by regulation and by governments publicly shaming corporates for their greed. Arguably, this approach is preferable to simply continuing to hike up interest rates, an approach that makes the dreaded wage/price spiral even more likely to happen:

In fact it’s far better for the economy (and stock prices) than massive rate hikes that cause unnecessary unemployment. Workers will otherwise try to protect their purchasing power by bargaining for higher wages, and companies respond by hiking prices even more.

Buddying up to the central bank

For its part, the Labour government tends to nod in agreement with Reserve Bank contentions that household spending and wage demands in a tight labour market are the key problems. Allegedly, these problems are fixable only by interest rate hikes that throw more people out of work, and that raise the cost of mortgages ( and rents) beyond the threshold of pain. That’ll stop then spending at the supermarket!

We should all be worried by the evidence of the rightward shift taking place across the political spectrum. Globally, populism continues to look for answers for its grievances on the right, not the left. As the Labour government moves to the right to seek corporate donors and votes from the aggrieved middle, National and ACT are trying to harvest votes from the same ranks of the angry and the disenchanted. It’s a bidding war for the voting allegiance of the furiously alienated.

In the process, ACT and National are shaping up to form the most right wing government that New Zealand would have seen in over 30 years. Back then, Ruth Richardson was in charge of administering exactly the same harsh socio-economic medicine that David Seymour is calling for today. And we all know how that turned out.

Dogs, Videos, King Krule

Humans may suck but dogs are forever. The video for “Out Getting Ribs” (Archy Marshall’s first single in 2011 when he was calling himself Zoo Kid) featured a dog. The dogs are also the real stars of the video for “Seaforth” – which is the moody, restless first single from the upcoming King Krule album Space Heavy.

A lot of Marshall’s spiky music is based on the notion that attack is the best defence against betrayal and heartache. Yet the bloke is clearly a hopeless romantic, and that’s becoming more and more obvious:

Talking about dogs in videos, you can’t go past DJ Vitalic’s “Poney Part 1”dancefloor classic from 2005. BTW, Vitalic made it clear at the time that no dogs were harmed in the making of this video.