Let’s keep hoping

Published in Insights, The New Zealand Initiative’s newsletter, 28 August 2020

Labour finally announced some election policies this week: a new public holiday, a cap on bank fees and a new top rate of income tax.

It is easy to point out what all these measures have in common. They are popular with the wider public. They do not cost the government anything – and one will even create a bit of extra revenue. And they are small fry.

Agree with these measures or not, no one would call them ambitious, visionary or transformational. People do not go into politics to abolish PayWave fees, and voters would not rally for such causes either.

The contrast between these gimmicks and Labour’s 2017 campaign is stark. When Labour then said “Let’s do this,” it talked about big-ticket items. It promised 100,000 new affordable homes. It wanted to connect Auckland Airport to the CBD with light rail. It also pledged to abolish child poverty and make rivers swimmable.

The Government sworn in three years ago did not just aspire to do a decent job. It wanted to be “transformational” and “the most open and transparent Government.”

Fast forward to today and some of those key promises remain unfulfilled. KiwiBuild is now synonymous with a policy disaster. Most child poverty measures have deteriorated. And the Auckland Airport connection was abandoned.

To avoid reminding voters of such failures, Labour’s 2020 election campaign is emphatically modest in its promises. Even the announcement to bring the 100% renewable electricity target forward by five years contains an opt-out clause via an interim review date. Not that it made economic or environmental sense in the first place.

Labour can afford to be vague. Its polling is so high, it need not promise much to be re-elected – potentially even with an outright majority.

However, Kiwis need a clear vision for their future.

Even before the Covid-19 crisis, the country faced severe challenges. New Zealand’s education system is mediocre by OECD standards and falling in every international ranking of student success. The country has a terribly unaffordable housing market and its productivity is in the doldrums.

Covid-19 made all this much worse. New Zealand’s monetary policy has joined the global madness of zero interest rates and money printing. Public debt is rising at an alarming rate. And the only reason many are still working is thanks to the wage subsidy scheme.

To deal with these boiling problems requires a different approach to policymaking – one based on sound economics, not just opinion polls.

New Zealand needs a transformational Government. Let’s keep hoping.