Wednesday May 15 2002

Hon Laila Harre
Speech to Press Club Leaders Series breakfast
Members and Guests Dining Room
Parliament Buildings
Wellington

I want to test a theory over the next few months.

The theory is that it is possible to combine intellectual honesty, a principled policy programme on the left, a willingness to compromise, an unwillingness to capitulate, a messy leadership transition, and a highly motivated and creative campaign team, win one or two seats and make it over the 5% thresh-hold and back into Government.

I intend to be single-minded about that objective despite the best efforts of the Opposition parties to distract me into a prolonged legal argument in front of the Speaker over who wears what badge in Parliament.

I’m not playing. The most such a battle could achieve would be to give me, rather than Jim Anderton the odd call allocated to Party Leaders in the House. I could not invoke the Electoral Integrity Act, which defines the Party Leader as the person recognised as such by a majority of members elected for the relevant party at the last election.

It is a real shame that after building such a successful party of the left, taking it into government, and marking up some real policy successes we have been put in this position. But we have.

More important than the minutiae of Parliament’s standing orders is the question mark that now hangs over minority partner status in a coalition government. Two MMP terms down the track, are we to conclude that going into government places inevitable strains on the minority and is not fit for third party consumption?
I don’t think so.

Both NZ First and the Alliance entered different – but in each case exceptional – coalition agreements with the mainstream parties from which we had split.
Whereas the NZ First/National agreement was a detailed government policy programme, the Alliance/Labour agreement was quite different. The focus was on process, not policy.

Neither form of agreement had much international precedent. Each was a reaction to recent political history.

In our case, it is important to remember some of the pressures that existed at the time. The weeks of negotiation between NZ First, National and Labour still haunted people, and with a late election there was a lot of pressure to sort things out and get things running by Christmas. Having more time to conclude what could well be more complex negotiations in future, perhaps between three or four parties, would certainly justify holding elections sooner in the normal range of dates than later.

Having tried the all and almost-nothing approaches to coalition agreements, expect thing to gravitate towards a more conventional position, while retaining some of the innovations of our agreement.

The differentiation provisions, for instance, are now enshrined in the Cabinet manual and do provide a pressure valve where consensus simply can’t be reached. With such provisions NZ First would not have been forced to choose between government and principle when the Wellington airport sale came onto the Cabinet agenda.

Policy, though, is paramount. The privilege of Government is the promotion and implementation of policy. There has to be room for the minority partner to bring its policy priorities to the table and be supported in progressing them. There are big advantages in setting at least some of these out clearly at the outset. The focus is then on implementation, rather than bargaining, during the Government’s term. Elections are then about showing delivery of the priorities and seeking a fresh mandate for a new set.

The greater the number of key priorities that can be agreed up front, the less the room for tension to develop through continuous policy negotiation. And when such tension develops it will either damage the relationship between parties or within them, neither of which bodes well for stable government.

So you can expect that if the Alliance is back here, and in a position to engage in post-election negotiations to form a new Government with Labour, we will be looking at policy as well as process. The big ideas we are beginning to signal will be distilled into key policy priorities over the next few months.

What will mark us out from others is a very strong focus on social investment as a tool not just of social justice but of economic development.

Nearly of third of New Zealand’s children live below the poverty line.

In the context of a falling birth rate, with replacement levels only exceeded in our poorest regions, that is a very worrying picture for our future development.
Our Government aspires for New Zealand to be back in the top half of the OECD. Ambitious, but also attainable.

It means increasing our per capita gross domestic product by about a third.
That in turn means that for every three things produced today, four things have to be produced in the future by a smaller workforce. To do so without a massive investment in the education, training, health and wellbeing of families with children is logically impossible.

This is not politics. This is maths.

The knowledge age is not just a public relations exercise. There is a real transformation in the way goods and services are produced, as well as the goods and services themselves. Yet the new right has bequeathed us a deeply unequal society that cannot meet the needs of the new century.
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It is the children from families and communities with limited resources who depend entirely on state provision for education and healthcare, and often on state provision for their basic incomes or for top-ups from low wages, who will be paying our superannuation in 25 years time.

Our Labour/Alliance Government has stopped the new right in its tracks, begun the remedial work and even some deeper reforms. But much remains to be done, and especially in the area of social policy and social expenditure.

Low and increasingly middle-income families are left with ever-declining incomes as the value of family support fails to keep pace with inflation and the cut-off point for qualifying for family assistance gets drops as average wages increase but the threshold doesn’t.

This means that each year less people get less money in real terms to assist them in bringing up children, and families on very low incomes who depend on benefits or are on ACC get the least of all, because they don’t qualify for in-work family assistance.

Even with lower unemployment, re-distributing income to low income families remains a serious issue which the Alliance wants advanced in the next term of this Government.

Our Government has identified and met some key priorities – such as the reinstatement of income related rents in state houses, increased funding for low-decile schools and childcare centres, and a variety of housing, health and social service programmes for those with the greatest need .

But there is a limit – a big limit – to what can be achieved within the budgetary constraints required by Labour as the majority party in the Coalition.

And it is inevitable and quite proper that the story of this Government’s achievements will depend on who is telling it.

Labour’s story will be that they have honoured their promises and even done a little more. The little more of course has often come down to the Alliance in the form of such policies as12 weeks paid parental leave, significant minimum wage increases and the Kiwibank.

The Alliance’s story will be that many of our immediate priorities have been achieved but that we need a greater level of influence in a second term Labour-Alliance Government if there is to be a more fundamental shift towards universal provision of health and education services and redistribution of resources to low and middle income families.

The popularity of our Government – or more precisely of Labour – is not just about the things we have done. It is also about the things we haven’t done. We haven’t slashed benefits. We haven’t ripped off the elderly. We haven’t sold assets. We haven’t increased student fees or the student loan interest rate.

While people’s expectations of what a government can achieve remain low, it is not so hard to meet them. The converse is that the Alliance cannot expect to increase our support unless we are able to raise people’s expectations.

Unless the people we aspire to represent dare to dream of a better future, than how we can deliver one?
I believe that if we can put the most basic issues of social provision onto the agenda in this election campaign we will be back in Parliament.
The right has no solution. The best they can come up with is Don Brash who advocates lowering the incomes of the poor by time-limiting benefits and abolishing the minimum wage.

And as long as it continues to avoid redistribution on the one hand and universal provision on the other, the third way will also flounder on these basic issues. The fact is that New Zealand went so far in the wrong direction between 1984 and 1999 that we no longer have much of the first way, or the second way, on which to build a third way, anyway.

Take healthcare.

Our Government has begun to implement the Alliance’s long-advocated policy of primary health care being provided by non-profit community-based organisations funded by government according to the health needs of the populations they serve.

That’s a big improvement. We know that the cost of visiting the doctor and the cost of medicines deter people from seeking help early. They get sicker and then they end up in hospital.

Because our Government has dedicated much of this and future year’s new funding to health, over time those costs will come down. Not as quickly as the Alliance would like. We have unsuccessfully advocated for free doctors’ visits for all school children, and not just under-sixes. It would have cost around $35 million, or one tenth of one per cent of total Government expenditure.

Now look at Britain – the home of the third way and also the home of a completely free health system – the NHS, a good old first way approach.
More significantly, they have recently abandoned any pipedream of relying on natural revenue growth to modernise the NHS through third way concepts and done something very old-fashioned, very effective and very popular - increased tax by 1 per cent for health.

Now, there’s a thought.

Indeed the last Gordon Brown budget is generally recognised as an abandonment of the view that it is possible to deliver social justice without resdistribution – a problem that the third way had credited itself with solving. With a pledge to end child poverty the UK government is starting to deliver some serious support to working families, including those in the middle class, in a way that is looking more and more like universalism.

And then there is education policy.

I have received hundreds of e-mails in the last two days decrying the fact that students are the only people we expect to borrow the money they need to live on. The Alliance agrees. No other adult is denied a basic income in this country.
The student loans scheme was introduced with no analysis whatsoever of its social or economic impact. It is discriminatory. It limits access. It is unpopular. And it will be a big target for the Alliance this year and over the next three years.

The only reason we have a loans scheme is that earlier governments cut taxes and had to make up the difference. They made it up by forcing middle class parents to support their children financially up to the age of 25. And because the threshold for qualifying for a student allowance has not been increased since 1991, 12,000 less students get a student allowance than when means testing was introduced.

They made up for it by letting the institutions increase the fees that Labour first introduced in 1989, and then giving the institutions less money – making fee increases inevitable.

Now our Government has wiped the interest while students are in full time study, hasn’t raised the interest rate for graduates, and negotiated fee freezes with the institutions. The Alliance has tried and failed to get allowances for the lost 12,000 students, and unsuccessfully campaigned for the restoration of the Emergency Unemployment Benefit.

But even had we been successful much more fundamental change is needed.

Whether education is paid for publicly by the Government or privately by students it has to be paid for. A medical degree is no more a private good than the hip replacement it trains a doctor to do. Yet we charge the doctor for the degree and we don’t charge the patient for the hip replacement.

There is a big risk that unless the Alliance is back in government next time around with an unequivocal commitment to a universal student allowance and the phasing out of university and polytech fees there will be little more than fiddling with the student loan scheme over the next three years.

I am especially worried that ideas like families and communities getting together to support young people in education by saving from birth are beginning to be floated by our coalition partner as an alternative to free education. I am not opposed to encouraging communities and families to prepare for the future, but such preparation will never be a substitute for full state funding.

It would be tragic if even two terms past the National Government we had not signed the death warrant of the student loans scheme by eliminating student fees and extending allowances – a minimum policy requirement for any party to the left of the centre line.

The next three years have the potential to be more important than the last three in shaping the future and I want the Alliance to be there and to be there in strength.
In essence I want us to be there because I trust us. To side with the powerless over the powerful. To look beyond the three-, six-, or nine-year term of a government, towards a just society supported by a sustainable economy.

The Alliance is the unique result of a unique set of circumstances in a unique country. We are under new management and are now faced with an awesome task.
There are no coat tails to hang onto. We will run on our record of working effectively with Labour in Government, and our determination to work even harder in the next few years to show what more can be achieved by a popular government.

Two seats will play an important part in our campaign.

Tainui, where Willie Jackson will be seeking to spark new support for Mana Motuhake and the Alliance.

Waitakere, where I will stand on my record as an effective and experienced West Auckland Member of Parliament.

It’s a record I would put up against any other candidate, any day of the week, but right now they seem focussed on the negatives. The mantra from the Labour candidate is that a vote for me is a vote for National. The mantra from National is that both I and the Labour candidate are evil unionists.

I do think that Waitakere voters can figure out that MMP means they can vote for the person they want without it making a difference to the number of seats that Labour and National have in Parliament. Indeed if the Alliance doesn’t make the thresh-hold, then winning Waitakere will increase the total number of seats on the Government side of the House and not reduce them.
This is not an election between the left and the right.

Labour will be in Government after the election. The real issue to be decided by voters is who will be there with them.

Ends

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