Three more years of business as usual is the real risk.
by Gordon Campbell

Faith-based voting is the norm, in that we tend to select the election messages that best fit with our deeply held beliefs. Routinely, faith trumps the evidence. There is, for instance, a doctrine that says National is better at managing the economy, and this religious conviction goes hand in hand with an ingrained belief that Labour is a tax-and-spend lightweight on the economy, and should therefore be shunned by the cautious and the prudent. To be fair, Labour did totally screw the country once before, and a few 1980s survivors have never forgiven it. As in Vietnam, Labour’s excuse at the time was that it needed to burn the village, in order to save it.

Even so… the last time Labour was in power it ran eight straight years of budget surpluses and created such current staples of mainstream governance as the Cullen Fund, Kiwisaver, Working for Families, the China free trade deal and Kiwibank. Rather than spending up large on its pet social causes, Labour paid down government debt, thus leaving New Zealand pretty well placed to ride out the impact of the Global Financial Crisis. Whatever else he was, Michael Cullen was hardly a tax and spend lightweight.

The point being...if anyone you know is thinking of voting National in Saturday’s election, there’s still time for an intervention. You owe it to your friends and relations to intercede. Why? Because there’s plenty of evidence on National’s mediocre-to-awful track record over its nine years in power. We can’t afford another three years of drift. Here’s ten examples :

1. Ordinary people have been systematically denied their fair share of the country’s wealth.
Despite the repeated claims that the economy is strong, GDP growth is healthy and New Zealand is the rock star envy of admiring foreigners….little of this alleged largesse has trickled down to wages and salaries, which comprise a declining share of the nation’s wealth. In Budget 2017, Treasury forecast only a 1.2 per cent rise in the average hourly wage in the year to June. That’s a fall in real wages of 0.6 percent, given inflation is also running at 1.8 percent.

So, it you’ve felt some level of cognitive dissonance whenever Bill English keeps on saying how great things are, and how we shouldn’t put all these fabulous gains at risk…trust your instincts. Chances are, this economy hasn’t been delivering for you. Or for people on the minimum wage – which as we were reminded during this tense recent encounter between Bill English and a Gisborne fruit picker has risen by only $3.76 an hour over the past nine years.

In fact, the rosy GDP figures have largely been a by-product of high net immigration – more people means more stuff is being done – and immigration doesn’t necessarily lift everyone’s boat. Income per capita – always a more accurate indicator of well-being than GDP – is running at a miserly 1.3% per annum, which again (given the inflation rate of 1.8 %) means a lot of people in this country are actually losing ground.

More to the point, productivity per worker has also been either flat-lining, or falling – down by 2.3 % in 2017, on Budget estimates. We are in fact, in a ‘productivity recession’ as this recent report found.

New Zealanders may be working some of the longest hours in the OECD, yet we’re producing comparatively less per worker – and that’s largely because the government and private sector ha not invested sufficiently in skills training and R&D. Looking ahead, even Treasury (in the Budget and in the recent PREFU update) is forecasting that this allegedly ‘strong’ economy is coming off the boil – with net migration, tourism and construction all showing signs of peaking, if they haven’t already peaked already. If the economy is on a roll with National, the evidence would suggest that it's actually rolling downhill.

2. For nine years, National’s response to climate change has been abysmal.
Our greenhouse gas emissions both (a) per capita and (b) per unit of GDP are well behind almost every other developed country, and are going backwards:

Unlike the vast majority of developed countries, our emissions are still going up. Rather than improving our position, we are falling further behind.

Regardless, the government seems more intent on building more roads for more cars, than in planning how to reduce transport and energy emissions, which comprise a rising 40.5% of our total, on 2015 figures.

At the same time, agriculture – which contributes 47.9% of it – have been exempted by National from exposure to the price signal incentives of the emissions trading scheme.

On the campaign trail, National has done all it can to encourage every farmer in the country to feel victimised by any suggestion that a minority of them should pay anything extra towards the pollution being generated from the irrigation schemes lavishly funded (to the tune of $400 million) by the taxpayer, for the private profit of the relatively small number of dairy farmers who access such schemes. A few fences put around waterways and a bit of riparian planting – while welcome – doesn’t really cut it, as payback.

3. National has systematically underfunded the public health system.
Thanks to immigration and other demographic factors, our population is rapidly increasing and ageing, while our health needs (and the cost of drugs) are rising in tandem. Yet since 2010, public health’s share of GDP has been systematically reduced – to the point where an extra $1.6 billion would be needed to return health to the same ratio of the nation’s GDP that it enjoyed seven years ago.

Currently, our health system is being held together by frontline staff and managers who are burning out under the pressure to deliver more, with insufficient means.

High levels of unmet need exist in the health system, to the point where some hospitals are now being forced to cancel elective surgery entirely.

The situation is due to get much worse. New Zealand’s public health system is unusually dependent on overseas trained health professionals as reported here and also here.

Yet the current combination of excessive workloads and low pay is making it increasingly hard for New Zealand to recruit and retain specialists – and our ratio of specialists per 100,000 of population is falling behind the benchmark levels envisioned with Australia, by 2021. Horror stories about the health system are now commonplace, such as here and here.

Staff are turning up while themselves being sick, out of a sense of duty to patients and to colleagues. In an ASMS survey reported early this year, 88 per cent of health professionals said that during the previous two years, they’d come to work while sick during the previous two years, and a third of them had been suffering from infectious diseases while doing so.

Meanwhile, Health Minister Jonathan Coleman seems to live in a world of denial. Similarly, and only a few days ago, Bill English was claiming on television’s Q & A programme that the current pressures on the public health system were just a reflection of the usual cycle of more people being sick at the height of winter. Since English has announced his government’s intention to reduce Crown spending as a ratio of GDP in coming years, the crisis in public health is being set to deteriorate further. Now, that’s sick.

4. National has systematically reduced the funding for mental health services.
On the campaign trail, National has regularly cited its Budget 2017 input of an extra $224 million to mental health funding. In fact, this ‘boost’ relies significantly on a $100 million contingency fund from the nation’s already hard-pressed District Health Boards. Moreover, the CTU and Association of Salaried Medical Specialists (ASMS) have estimated that mental health services in 2017/18 will receive just $18 million in extra funding - ie the funding for services is actually being cut, given the simultaneous pressures of inflation, population growth and for example, the earthquake-driven PTSD needs of Canterbury. As the ASMS article says:

A 7.3% funding increase is needed in 2017/18 just to maintain the mental health services we already have, given client numbers are increasing at about 5% a year – and more money is needed if the Government wants to improve access to services.

What’s been the effect of this neglect? See the separate entry in this article on youth suicide. Here’s a fairly typical example of a system under serious stress.

Reportedly, in the Lakes DHB catchment area there have 17 suicides in the past year, and this rate of 16.6 per 100,000 exceeds the (already high) national average of 12.64. Yet reportedly, only six out of ten people under 19 referred to mental health services - and classified as non-urgent – could be seen sooner than a three week waiting period at Lakes DHB, in 2015/16.

5. National has run its re-election 2017 campaign on a strategy of lies based on social divisiveness and fear of change.
Fake news is a global harrumphing issue, so it was hardly surprising that Paddy Gower opened one of the television debates between Labour’s Jacinda Ardern and National’s Bill English by asking whether politicians can survive any more without lying. While I agree with Danyl McLauchlan’s contention that lying competently is a political skill that voters actually expect and reward, I’m not so certain about his conclusion - wherein Danyl felt that Ardern’s forthright denial of lying was exactly the sort of fake prime ministerial bullshit that we applaud, while English’s fumbling inability to answer the question was genuine, and therefore made him look fake.

Instead, I'm inclined to think English was experiencing another “why are you losing” flash of Catholic bad conscience, and a related fear that maybe he was about to be rumbled (by Paddy Gower! The Pennywise of Kiwi politics!) over his deliberate blurring of the lines between political spin and outright lies. You’d have to say that judging by his track record English has quite a lot to take into the confessional.

For the record, National has lied during this campaign about (a) the infamously non-existent $11.7 billion hole in Labour’s alternative budget and (b) Labour’s non-existent plans to raise income taxes. English has also (c) deliberately exaggerated the impact on farmers of Labour’s water tax proposal which – amazingly – will not actually destroy farming as know it, crash the rural economy and send prices for basic foodstuffs through the roof.

Why not? Well, because five out of six dairy farmers will be almost entirely unaffected by Labour’s plans, given that only an estimated one sixth of our dairy farmers are reliant upon water from irrigation schemes. Irrigation NZ disputes Ardern’s figures, but the numbers that it cites actually re-inforce her point. In its press release, Irrigation NZ cited (in what it seemed to think was a rebuttal) 58, 071 farms of all kinds from the 2012 census figures, with only (at most) 11,000 of them taking up irrigation consents. Which is almost exactly the same ratio. Either way, English has no genuine reason to be playing Chicken Licken about the devastation that Labour’s water tax would allegedly wreak on the rural heartland. In particular, English’s contention that the tax could cost farmers $50,000 a year (Steven Joyce has even doubled that amount) is an extreme, highly atypical case:

To get to a figure of $50,000, you would need to have a very large farm - well over 500 hectares [the average dairy farm is only 144 hectares]or be irrigating at three to four times the suggested rate.

In short, National has been lying, in order to terrify and energise its rural base. In practice, Labour is suggesting a water tax of two cents per cubic metre on commercial bottlers, and on those using irrigated water. At most, the proposed tax would recover only a fraction of what it is costing taxpayers to (a) subsidise irrigation and (b) abate the pollution that is being caused – primarily – by intensive dairying, on land that’s patently unfit for that purpose.

In some parts of the country, the reality is that dairy farming has become addicted to quite unsustainable inputs of irrigated water that – in the likes of the Mackenzie country – are severely distorting the natural habitat. Farmers use 80 per cent of this country’s water and irrigation accounts for 97 per cent of the water used on dairy farms. The OECD has just warned us about the harm that our current farming practices are doing to environmental quality. In sum, what Labour is proposing will not create an intolerable burden.

RNZ estimates that it would impose on the small minority of dairy farmers who are reliant on irrigation, an average cost of about $13,800 a year, which is a small payback for the substantial subsidy that’s being pocketed by the same minority of farmers. In many other countries, this kind of tax is routine practice. On international comparisons, our ratio of environmental taxes to tax revenues (and GDP) is currently one of the lowest in the OECD.

Despite this weight of evidence, National has chosen to stoke the fires of a rural vs urban social division, which involves feeding the chip-on-shoulder attitude of rural voters towards those flashy big city townies, with their wine and their avocado on toast. National’s calculation is that its combo of (a) fake news and (b) pandering to the resentments of rural New Zealanders will work to its advantage. The strategy comes straight from the Brexit/Trump playbook, where one’s fellow citizens are to be demonised, by any means available. At least if Ardern is faking, she’s faking solicitude for all of us.

6. National has demonstrated a systematic inability to recruit and retain teachers.
In part, this has been due to the profession’s chronically low wages. Only a generation ago, as film-maker Bryan Bruce recently demonstrated, teacher salaries used to be roughly comparable to an MP’s salary – yet now, an experienced teacher earns less than half what a first term backbench MP receives. More recently, National has forced the profession into a fixation on standardised testing, that is not delivering the promised results and is reducing the time remaining for teachers to teach. This is having obvious negative consequences for job satisfaction and morale, as “teaching for the test” becomes rife.

While the operational funding for essentials in state schools has been kept at inadequate levels, National has poured funding into the creation of 16 charter schools, many of which enjoy funding and class size advantages compared to comparable state schools. In National’s approach to education, ideology trumps need.

7. National has presided over huge rises in house prices, while selling off its existing stock.
The ability to buy a house – once central to the nation’s identity – is a receding dream for many. Homelessness and over-crowding in bad and unhealthy conditions is on the rise. Because the current government professes to be phobic about sending any form of tax signal – whether that be a meaningful capital gains tax, an assets tax, or a land tax – the government has rendered itself all but impotent in coping with the recent house price spiral that has now spread to regional New Zealand.

Because National has preferred not to gather the relevant data on house purchases, there is little reliable information on the role that foreign speculators have been playing in our property market. To date, the government’s only suggested solution has been to open up land and build more houses at the city margins – regardless of whether the people most in need of housing earn sufficient wages to put down a deposit, service a mortgage, or afford the transport costs involved. In all likelihood, the people who could afford to won’t want to live out there, and the people who might do so, won’t be able to afford the cost.

Clearly, housing solutions require a lot more than de-regulating the building consent process. They will require the co-ordination of an incomes policy, explicit measures to deter speculation, and the channelling of resources into more productive forms of investment. None of which has been of much interest to the Key/English governments.

8. National has been hostile to forward planning, especially with respect to alleviating poverty.
Given its preference for small government, National’s usual response to crises – in affordable housing, homelessness, child poverty, state education, public health – has been to deny that a crisis exists, until media headlines drag the government kicking and screaming into a response. Those responses have tended to be reactive, piecemeal, and more expensive than what a pre-emptive approach would have delivered. Back in 2011, MSD Minister Paula Bennett’s dismissive response to expert reports on child poverty was a telling example of the government’s classic approach to social problems. Now…six years dowen the line, the child poverty that the government once claimed it couldn’t measure has become one of National’s promised targets in election 2017.

Meanwhile, National’s highly invasive ‘social investment‘ approach to welfare spending – which uses Big Data to target welfare expenditure – remains fraught with concerns about privacy infringement, racial stigmatisation and circular reasoning, in that those families deemed to be in need of WINZ targeting will be those previously in contact with WINZ. Not accidentally, the social investment approach is highly consistent with the aim of reducing the amount spent on welfare - regardless of whether the families and individuals stripped of their benefit entitlements actually escape from poverty, or not. No data is gathered on the fate of people once they leave the welfare rolls.

Work in itself can be no solution, in this precarious low wage economy that National has nurtured, and in which food banks are being accessed by the working poor.

9. National seems incapable of a significant response to youth suicide.
Our sky-high rate of youth suicide continues to attract international headlines. In June, a UNICEF report ranked this country at a lowly 34th our of 41 countries on several key indicators to do with the health and wellbeing of children.

The report found New Zealand had the worst rate in the world [for suicide among adolescents]at 15.6 per 100,000 people in the designated age bracket (15-19) This was substantially higher than the next worst countries, Lithuania, Finland, Chile and Ireland, and more than eight times worse than the best performing countries, Italy and Portugal. It was twice as bad as the American youth suicide rate and almost five times worse than Britain's.

Overall, our suicide rates are getting worse, not better. The provisional suicide figures for 2016–17 show that 606 people died by suicide in New Zealand, a significant increase on the previous record high of 579 the year before.

10. National has sat on the sidelines while the student debt mountain has risen.
Earlier this year, student debt became a $15 billion mountain, with 731,800 New Zealanders having a student loan, which results in well-documented generational delays in the ability to afford home ownership and/or start a family. Many will still be repaying their student loans as they shoulder the burden of care for their boomer parents. The average rates of paying back student loans differ markedly for white professionals, as opposed to Maori and Pasifika - and similar income/class differences in the impact of student loans are reflected in the fact that those with trade diplomas - even though the tuition time is far shorter - are taking almost as long to pay back their loans as those students with tertiary degrees. The loans scheme has been a classic example of short term thinking, but with long term social costs.

What to do then, in election 2017?

The main risk factor for New Zealand is not the threat of change, but in perpetuating the status quo. For nine years, National has demonstrated its inability – or disinterest – in governing for the benefit of all New Zealanders. Overall, there’s been a stunning readiness by government to kick for touch over the challenges involved. As a consequence, the past nine years of drift have left a poisoned legacy for subsequent generations. The track record on child poverty, on the under-funding of (pre-school, primary and secondary) education and the unchecked levels of student debt, youth suicide and environmental degradation comprise a continuum of failure. While different in some ways, Brexit, Trump and the centre right in this country do share the politics of fear and resentment in common. Young voters in particular have every reason to feel betrayed by National. Currently, the polls here are showing that under 30s and women are voting for the centre left at Corbynist levels. . Basically, if New Zealand is to have a future, it can’t afford another three years of the current crew.

Footnote :
Every government makes mistakes, but the Key/English government has a whole litany of them. Here’s a sampling of the other problem areas I didn’t mention above :

(i) Early on, the government sold half of the public’s share in our state energy assets to its mates in the finance sector, therefore denying itself (and the public) a significant revenue stream, to no lasting public benefit.

(ii) In its first term, the government enacted tax cuts that disproportionately benefitted the better off, while increasing the rate of GST on everything. Both of these regressive measures – the poor have less ability to avoid GST, given their lack of discretionary income – have undermined efforts to reduce the gaps in income inequality, which Working For Families had actually begun to address. Despite the hysteria that National has deliberately stoked during this election campaign about Labour’s tax intentions, New Zealand is actually one of the least taxed countries in the developed world.

Meaning : even if, under a new government, we did implement a capital gains tax of the kind that every other developed country treats as an essential part of its tax arsenal, that situation won’t change.

(iii) National has ceased making payments to the super fund and will not resume them until 2020/2021, thus undermining the country’s ability to go some way towards meeting the needs of its ageing population.

(iv) National plans to spend $20 billion on re-equipping the defence forces over the next 15 years.

To National, it somehow seems easier to fund the ways to deal with the imaginary threats to our way of life, than to cope with the real ones. Right now, the Taliban pose less threat to ordinary Kiwis than our crumbling health system does.

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