• Good – But Could Be Better

    Labour was, not surprisingly, in good heart at its annual conference last week in Dunedin, as Jacinda Ardern celebrated her first anniversary as Prime Minister.

    The past year has not been without its difficulties for the new government, but the coalition has encountered fewer problems than might have been expected. Winston Peters has performed well in his sphere of expertise – foreign affairs – and has proved to be, as some of us expected, a steadying influence, bringing the voice of experience to the consideration of complex issues.

    The Greens have offered exactly what might be expected of a helpful partner – a distinctive and constructive approach to the green issues that matter most to them, and steady support for the government’s wider agenda.

    Labour has handled its role as the senior partner of the coalition with good sense and diplomacy and a strong and identifiable sense of purpose. Most of the crises which the Prime Minister has had to handle have been relatively minor and have flowed from the deficiencies of individual ministers. The missteps of Clare Curran and Meka Whaitiri, and even of Iain Lees-Galloway, have reflected inexperience rather than incompetence, and pale into insignificance by comparison with the internal travails that have racked the National party.

    The new government’s main difficulty in its first year has been in grappling with what seems to be a long-standing strategy developed by their opponents and one that always poses real problems to an incoming Labour government. It can be simply described.

    When National is in government, it makes a virtue for ideological reasons of cutting public expenditure, preening itself on producing “surpluses” and warning that a change of government would threaten that achievement. When the voters finally decide that the cost – in the form of weakened public services – is too high and a less ideological government is elected, the second stage of the strategy is put in place.

    The new government finds that it has to pick up the bill to meet the backlog of all the essential spending not made, and to make good on its promises to re-build our health services and education and defence capability and environmental protection and economic infrastructure and all those other parts of public provision which have been run down.

    The struggle to reverse the failures of its predecessor and to do so overnight disappoints the new government’s supporters – and their public demonstrations of dissatisfaction (teachers’ strikes and the like) and the consequent inconvenience to the public make it more likely that those responsible for the problems in the first place will be returned to power and the cycle can begin again.

    How well is Jacinda Ardern’s government doing in breaking that cycle? It is too early to say, but Labour have not made it easy for themselves. Their self-denying ordinance to the effect that they will manage the public finances within a monetary and fiscal framework defined by their predecessors has limited their options.

    If the framework of policy remains unchanged, there is an obvious limit as to how much can be achieved by individual decisions taken within (and limited by) that framework.

    Labour’s supporters will be happy in the main with what has been achieved so far, in terms of individual commitments such as the increase in the numbers of teacher aids for pupils with special needs, but there will be some disappointment that there is not more new thinking as to how the shackles of right-wing orthodoxy can be cast aside.

    The great achievements of past Labour governments – such as the building of thousands of state houses by Michael Joseph Savage in the midst of the Great Depression – required a willingness to challenge orthodoxy. Such courage brought great benefits to those who gained jobs and homes they would not otherwise have had, but also cemented Labour’s standing and support, and at the same time strengthened our economy and our social cohesion.

    The acid test for Labour will come in 2020. The task is to persuade voters by then that a different approach pays off, that breaking new ground makes us all better off, and that the real risk lies in returning to the failed policies of the past – so that the cycle starts all over again.

    Bryan Gould
    5 November 2018

  • More Punch – and Judy Too?

    The fall-out from the Jami-Lee Ross debacle no doubt accounts for Simon Bridges’ latest poll rating as preferred Prime Minister, at just 7%.

    Political commentators have interpreted this as the writing on the wall and have become excited at the prospect of a leadership challenge – but not, it seems, as excited as Judith Collins – rating at just 2% behind Bridges. She has wasted no time in seeking the headlines with a mean-minded attack on a young couple who had the temerity to holiday overseas while waiting to move into a KiwiBuild house.

    A couple of cautionary observations should perhaps dampen the excitement. A Collins rating of 5% is hardly a ringing endorsement, particularly when recorded at a time when the incumbent was up to his neck in adverse publicity.

    More importantly, it is less than a year since the National caucus had the chance to survey all the candidates and to make a judgment on each one of them. They decided on that occasion that Judith Collins was not for them. There seems no obvious reason for them to change their minds.

    Any flirtation on the part of the National party with a Collins leadership presumably arises from the sentiment that the party needs, in opposition, more aggression and energy – someone better able to land a telling blow on a popular Prime Minister.

    But that sentiment rests on flimsy foundations. Yes, Judith Collins has carefully cultivated (and probably propagated in the first place) her image as “Crusher” Collins – but does that image, even if it represented some element of reality, necessarily equip her to do a good job as Leader of the Opposition and eventually, perhaps, as Prime Minister?

    For every voter who might respond positively to a supposed bruiser and street fighter as National leader, there will be another who is repelled by that style of politics – and, in any case, Simon Bridges’ deficiencies do not include a lack of aggression. He is marked down because people do not warm to the way he comes across. Who is to say that they would warm to another leader who was even more aggressive and lacking in charm?

    There are many qualities other than aggression that voters seek – as Jacinda Ardern’s popularity demonstrates. A leader of the Opposition who was able to mix it in a roughhouse could still be seen as lacking the poise and judgment that would be needed in a Prime Minister. We should never forget that what makes the job of leading the Opposition so difficult is that the holder of that office must be seen not only as an effective and combative critic of the government but also as a potential Prime Minister.

    It is here that the case for a Judith Collins leadership really starts to crumble. We now know enough about her to doubt whether she is an appropriate, let alone credible, candidate for the top job. A simple rehearsal of some of the high (or perhaps that should be low) points of her political career should be enough to confirm those doubts.

    Her close relationship with Cameron Slater – he of “Dirty Politics” fame – should ring the alarm bells; Cameron Slater regards her as his mentor in the black arts and has said as much. Her refusal to recognise the conflict of interest implicit in a dinner with her husband’s firm, Oravida, when on a taxpayer-paid ministerial visit to China was compounded by the misinformation she offered to explain the visit she paid to its offices – it was, she said, simply for a “cup of tea on the way to the airport”, when the airport was actually in the opposite direction. These malfeasances obliged both the Speaker and John Key, when Prime Minister, to reprimand her and stand her down.

    These elements strongly suggest that what might be seen by her supporters as a commendable willingness to cut corners and to “get down and dirty” should actually disqualify her from offering herself as a potential Prime Minister. The National caucus should think hard before re-considering their earlier verdict on a Collins leadership – if you want more punch, do you really have to have Judy as well?

    Bryan Gould
    27 October 2018

  • The Story That Keeps On Giving

    The Jami-Lee Ross saga is the story that keeps on gIving. There may still be many more twists and turns in what has so far proved to be an unpredictable roller-coaster – the allegations of affairs and harassment, sexual and otherwise, continue to fly in all directions – but we may now be approaching the point when some analysis is possible of the story so far.

    It now seems clear that Jami-Lee Ross, for whatever reasons – perhaps a sense of personal grievance or a genuine sense of moral outrage – has from the outset embarked on a campaign to damage the National party and its leader. His initial claim – that Simon Bridges had broken electoral law in the way that major donations were handled – may not have been the main element in the case he wanted to mount against the National leader.

    It may instead have been bait for the media, to ensure that there would be a keen appetite for what was to be revealed when he played the famous recording of his telephone conversation with Simon Bridges. The point of that recording may not have been to establish that the donations were mishandled (though they may have been) but to reveal to the press and the public what sort of person was seeking to be Prime Minister.

    The damage suffered by Simon Bridges when the recording was heard came, not because of the evidence provided of corrupt practice – on that issue it disappointed – but from what it told us about the kind of politics practised by the National leader.

    It came not just from the language he used – not just the diction on this occasion but the vocabulary as well – but more importantly from the sentiments and attitudes he expressed.
    The revelation that was most serious was surely the unmistakable willingness to offer for sale seats in parliament to those willing to pay enough. This surprising and unedifying admission was compounded by the further comments he made about the ethnicity of those most likely to pay an inflated price for such a privilege.

    At the centre of the claims and counter-claims is the vexed question of a large donation that was – as is admitted by all parties – made by a Chinese businessman to the National party. No one is suggesting that Jhang Yikun did anything wrong in making the donation; the dispute is whether the donation, once made, was handled in accordance with the law and was for a legitimate purpose.

    It is worth pausing for a moment, however, to register the point that, sadly, it comes as no surprise that the donor at the heart of the dispute was Chinese. The reason for this is that in cultures less accustomed than our own to the rules as to how democratic politics should function, it is natural to assume that political support can be bought.

    I recall that when I was an MP in the British city of Southampton, it was common for constituents from immigrant communities who sought my help and advice to approach me bearing gifts of various values. They saw nothing wrong about expressing their gratitude for services rendered or anticipated in this way – I would be obliged, as gently as I could, to decline to accept the proffered inducements.

    It would clearly be a retrograde step and a blight on both our democratic system and our corruption-free reputation if such practices became endemic in our country. Donations on this scale, especially when concealed, can seriously distort our politics. The National party was hugely advantaged by gaining such resources to spend on staff, organisation and advertising that were not available to their rivals.

    The current saga is just one instance of the murky waters in which we could become swamped if the notion became established that the way to political influence lay through political donations.

    What is apparently accepted on all sides in the saga is that a major donation was made to the National party by Jhang Yukin who had earlier been the recipient of a significant honour recommended by a National government and was keen to have an associate elected to parliament.

    There was also a separate question as to whether other significant gifts were concealed by not identifying who the donors actually were. It now seems likely that names were invented to conceal the identity of the true donors who have been revealed as the millionaire businessman Aaron Bhatnagar in one case and, in another, as a group with links to the Exclusive Brethren, a religious group with, as they say, “form” in such matters.

    Again, it is not the donors who are at fault, other than perhaps in their failure to understand the unacceptability in our society of surreptitious gifts being used to buy influence in political decisions.

    The attitudes demonstrated by Simon Bridges have once again highlighted the risks we run as a result of our refusal to contemplate the public funding of political parties. Whether we like it or not, those parties are an essential part of our democratic infrastructure; their proper functioning is central to any democratic system worth the name. Without the structure provided by the political parties, we would not be able to choose between one potential government and another and the whole point of democratic general elections would be lost.

    The opposition to public funding seems to stem from the view that political parties are voluntary organisations which must be responsible for their own welfare and survival, and should not therefore look to the taxpayer for support. But this is unrealistic; their role as public institutions should not be obscured by the fiction that they are private associations.

    As the current scandal demonstrates, that fiction places us all at risk. We cannot afford to tolerate a situation where private money buys influence in public affairs. A properly functioning democracy is the responsibility of all of us; some of us might give up our time and effort to ensure that the necessary infrastructure is in place, but others should, as taxpayers, be ready to make a similarly valuable financial contribution to that essential purpose.

    Bryan Gould
    20 October 2018

  • Dumping Simon Bridges May Be Just the Easy Option

    Simon Bridges may seem to have been around for a long time but, in truth, he has been leader of the National party for a matter of only months rather than years.

    The qualities that persuaded his colleagues to vote him in to the leadership must surely, in other words, still be there and front of mind for National MPs who had every chance less than a year ago to survey the field and make their choice. What they saw in Bridges was, presumably, that he was a personable young part-Maori family man, with an excellent academic record, and was a proven (and combative) political warrior with a good grasp of parliamentary procedure and an ability to more than hold his own in debate.

    Those qualities are still there – and their value has presumably not faded away in the minds of his supporters. Yet it is undeniable that he is now in trouble and that some commentators are saying that if he does not fall upon his sword soon, someone else will pick it up with violence in mind.

    It is certainly true that he has failed to commend himself to the wider electorate who have not, on the whole, warmed to him. And he has on occasion made matters worse for himself, as in the case of the “leaker” from within his own party – an issue that he has seriously mishandled by letting it drift on unresolved and unnecessarily extending its life.

    Politics is of course a tough business – and if National’s private polling is telling them that Simon Bridges has failed to fire, then it is only a matter of time before they pull the trigger. But before they do so, they should perhaps pause and reflect.

    The most important question they must address is – what has changed since they elected Bridges as leader? They had every chance to survey the available options last year, and no new options have presented themselves in the meantime. If Bridges was the best choice less than a year ago, who has emerged to lead them to a different conclusion this time?

    That question has no obvious answer, but it gets more difficult still. Politicians are able to persuade themselves of almost anything – so someone who was rejected last time might suddenly seem to be the answer to their prayers now. The danger now, though, is that they would not be making that judgment in isolation but would be looking for someone who was not Simon Bridges – with the result that someone who seemed unqualified, even unelectable, last time might suddenly seem the right choice on the simple ground that he or she was not the current leader with his admitted failings.

    In that situation, a political party can all too easily make a decision for negative rather than positive reasons. They could end up with someone who does not share Bridges’ shortcomings (or his strengths) but who has a different (but equally, or even more, damaging) set of limitations.

    The frontrunners in any new leadership contest would, in other words, almost certainly run on the basis that they could offer an option that promised a remedy to the current leader’s problems. But a fresh start could simply mean a set of fresh and even more intractable difficulties – a moment’s thought and a consideration of the most likely contenders will quickly establish what they might turn out to be. The temptation may be to overlook what was previously seen as a disqualification in the make-up of someone who had earlier been found to be wanting. A new leader may be different, but in the end just differently deficient.

    The lesson to draw is this. A political party that is having difficulty engaging with the voters should not imagine that changing the leader will solve the problem. It would do better to look at itself – at its record in government, at what it is seen to stand for, at its understanding (or lack of it) of the issues facing the country.

    Simon Bridges may not have been able to resolve overnight the problems that led to National’s election defeat – but he at least understands by now that a defeat is what it was. Supporting the leader, rather than changing him, may be National’s best chance of reversing that result next time.

    Bryan Gould
    9 October 2018

  • A New Monetary Policy Needed

    Positive Money New Zealand is a voluntary organisation that campaigns for monetary reform. It is affiliated to other similar organisations across the globe and in particular to Positive Money in the UK. I have the honour to be its patron.

    The founders and prime movers in Positive Money New Zealand have been, however, a Bay of Plenty couple – Don Richards and his wife Sue Hamill. Don confesses that it was Sue who first developed an interest in monetary reform, and then recruited him to the cause. Sadly, Sue died a few weeks ago after a battle with cancer. Her ashes were interred at Hillcrest Cemetery in Whakatane last week.

    One of Sue’s last projects, now carried on by Don, was a petition to be presented to Parliament. The petition, (which can be found at http://www.positivemoney.org.nz/Site/petition/default.aspx), calls for a review of our current monetary system to be considered by a Select Committee in the hope that the resultant publicity (and the education of Select Committee members) might then stimulate the necessary pressure for change.

    The body of the petition sets out the case for change. It takes as its starting point the almost incredible fact – one still contested by many supposed experts, although confirmed by detailed studies produced by the Bank of England and other central banks – that around 97% of our money has been created, not by the government, but by the commercial banks, which create the money by simply making a bank entry in the accounts of those to whom they lend money, usually on mortgage.

    The banks, of course, charge interest on the money they thereby create ex nihilo (or out of nothing) and it is the interest they charge that produces their huge profits of billions of dollars which they then send back, in most cases, to Australia.

    What is really astonishing about this state of affairs is that the money supply – one of the key elements in determining our economic success or otherwise – is almost entirely controlled, not by our government or the Reserve Bank, but by foreign-owned commercial banks which operate entirely for profit and are in no way accountable to the New Zealand public.

    It is, however, the New Zealand public that pays the price and bears the burden of the inexorable and bank-driven increase in the money supply. That price is paid in the form of higher interest rates (which are needed to restrain the ever-increasing level of lending), an over-valued exchange rate (a consequence of the higher interest rates that attract “hot money” from overseas), a crippling level of private debt in our economy, a huge burden on our balance of payments, a diversion of capital away from infrastructure and productive purposes, and constantly rising housing costs – all of which we could do without.

    The petition proposes that we should change this inherently unstable system of money creation to one in which new money is no longer created by private and largely foreign-owned companies whose only goal is profit, but is issued only by the Reserve Bank under the direction of our elected government which would then be accountable to the people for its monetary policy, as it should be, but currently is not. New money could then be directed to productive purposes and would no longer simply fuel asset inflation, particularly in the housing market.

    This approach to monetary policy is not only endorsed by leading monetary policy experts, such as Lord Adair Turner, and applied by governments in overseas countries, such as Shinzo Abe’s Japan, but has a gold-plated pedigree right here in New Zealand, where Michael Joseph Savage’s Labour government in the 1930s authorised the Reserve Bank to issue interest-free credit in order to build thousand of state houses and thereby helped to bring the Great Depression to an end. Let us hope that the Select Committee will take note.

    Bryan Gould
    19 September 2018