How Labour Won in 1996 – How Helen Clark was not Michael Foot

Several days ago I received a link to a story about an aborted coup against Helen Clark by Labour Party right-wingers in 1996.  Titled, ‘The Anatomy of a Failed Labour Coup‘ it was written by former Labour Party staffer Phil Quin and published in the New Zealand Herald on Saturday 2 April. Quin was an inside member of the Labour Party’s right faction and his description of the aborted coup against Clark was an interesting account of that part of Labour Party history.

It had the effect of setting me thinking about the various strengths that Clark had and also of the importance of her role as leader of the Labour Party in that period. 

I have felt that Labour’s predicament in the mid 1990s could be readily compared to that of its UK counterpart in the mid 1980s.  Both had lost seminal elections twice, NZ Labour in 1990 and 1993 and UK Labour in 1979 and 1983, both were seen as having lost significant support and direction, both lacked credibility and both were seen as lacking determined and dedicated leadership.  What was important for UK Labour in 1987 was that it re-established itself as the second party in United Kingdom politics.  In 1983, it had been strongly challenged by the SDP-Liberal Alliance, which had come within two percentage points of overtaking Labour’s vote in the General Election.  Labour still had a large number of seats in the UK Parliament due to the First Past the Post Electoral system, but lacked credibility.  In 1987, Labour had to convincingly defeat the SDP-Liberal Alliance to retain its status as the major opposition party.  In doing so it would allow its new leader, Neil Kinnock the ability to cement himself as an alternative Prime Minister to Margaret Thatcher and thereby reinforce the perception that Labour was the alternative Government.   

In 1996, Labour in New Zealand had to do the same.  In 1993, Labour had simply been outdone on a number of fronts in terms of direction and credibility.  While, the particularities of First Past the Post may have meant that Labour, as had its 1983 UK counterpart, gained more seats in Parliament, there was little debate as to the fact that it had been beaten in seeking voter’s hearts and minds by the Alliance and New Zealand First. Added to this was Moore’s, some might say, ‘unhinged’ behaviour on election night in 1993.  If UK Labour’s 1983 Manifesto has been labelled as the world’s longest ‘suicide note,’ Moore’s rambling incoherent speech conceding defeat in which he blamed everyone else for Labour’s failure, combined with references to a ‘long dark night’ was, without doubt, New Zealand’s longest political suicide speech.  It was in those moments that Moore cemented his fate as Labour Party leader. 

In comparison, Jim Anderton’s political behaviour in the aftermath of the 1993 election, especially when compared with Moore’s, saw him being lauded.  Jim’s status was upgraded to statesman.  And, for a brief few months, James Patrick Anderton was the preferred Prime Minister of a significant number of New Zealanders. Labour slumped in the polls. 

Given those circumstances, Helen Clark had to take over the reins of the Labour Party. She was the only plausible option. 

But, unlike, Michael Foot who stood aside for Neil Kinnock, Moore had no intention of going quietly. What followed was a period of bloodletting in the Party combined with even more strange behaviour from Moore, before Clark could settle into her role as Labour Party leader.

But, it paid off.  Labour was, even though it lost, the victor in the 1996 Election.  Like 1987 was for the British Labour Party, 1996 was for the New Zealand Labour Party.  The aftermath of the 1996 Election secured Labour the position as the dominant party of the centre-left and crippled the Alliance as a potential and potent left-wing force. This had occurred despite Labour having lost the election and dropping in percentage points.  The Alliance did as well.  But the difference lay in how they reacted. Labour emerged from the wreckage of the 1996 Election sounding confident.  Clark emerged sounding like a potential Prime Minister.  This is in comparison to the Alliance, whose campaign consisted of a petition that failed to fire, a series of ads and sound bites that were simply embarrassing and an organisation that was wracked by inter and intra party strife. Unlike the Alliance, the Labour Party ran a coherent and competent campaign.  The fact that its vote fell in the 1996 Election had more to do with the campaign and message projected by Winston Peters and New Zealand First which substantially increased its vote, than with a failure on Labour’s behalf.  However, in the end what really counted was Labour and Clark’s ability to dust themselves off  and pick themselves up. 

Moore or Goff did not have the ability to project that level of leadership in the aftermath of 1996.  They lacked the ability to sound like winners despite a loss and of having the ability to unite a Party around them. Both were too tainted by their experiences with and in the Fourth Labour Government.  Both were seen as part of the Party’s right and both lacked the resolve and determination that Clark presented, especially in the aftermath of 1996.  Retaining Moore in 1993 or electing Goff as Leader of the Labour Party in 1996 and toppling Clark would have almost certainly would have had the effect of killing the Party’s chances.

Helen Clark was a leader – it remains to be seen whether Goff can match her in the aftermath of an election defeat.


If Cuts are the Answer -Then It’s a Pretty Stupid Question.

The Government has announced further cuts to New Zealand’s public sector because of ballooning debt.  The public sector, which has been the focus of Government cuts since the election of the National led Government in 2008, is being told to prepare itself for more cuts and even, privatisation in some areas.

As I mentioned previously in this blog, the Government is going to attempt to reduce some of the nation’s debt by reducing the public sector.  Key had mentioned this course of action last year, he then trotted it back out in the aftermath of the second Christchurch Earth Quake, muttering that it was the only option.  As I said at the time it was rather disingenuous considering he had already proposed this line of action previously.

The fact is that the New Zealand Public Sector is already very compact compared to other Western Democracies. It is not bloated and it is actually, thanks to 25 years of cuts, privatisation and corporatisation, fairly efficient.  New Zealand’s public debt as a total of GDP is actually very low and as the CTU’s economist Bill Rosenberg noted in the CTU’s November Economic Bulletin, that Government expenditure as a percentage of GDP in 2007;

“ … are below the small country average, and below higher income countries such as Finland, Denmark, Sweden, Austria, and Norway. On the other hand, Ireland with lower levels of government spending is now suffering economic calamity. Average spending in these smaller countries is higher than the OECD average as a whole. Even so, New Zealand’s expenditure has been below the OECD average for most of the decade (until about 2006).”

Where oh where then is New Zealand’s increase in debt coming from?  Firstly, it is from Government borrowing, which the Government needed to do to starve off the worst effects of the recession.  But, the vast bulk of the debt is actually private sector debt, (70% of which is owned by the Banks) which has ballooned in this country since the mid 1980s.  Simply, the argument that the public sector has to be reduced to lessen debt has been the argument which has existed for as long as the New Right has had the purse strings.  It is an ideological argument and nothing more, and an exceptionally weak one at that.  Its weakness in this regard is noted by none other than the High Priest of the Free Market, Roger Douglas who in 1993 commented that;

“I am not sure we were right to use the argument that we should privatise to quit debt. We knew it was a poor argument, but we probably felt it was the easiest to use politically.”

The final insult to injury is allowing the very sector that is actually responsible for the majority of New Zealand’s total indebtedness run some public sector agencies and operations after the Government’s razor has been through the public accounts.  The Government has announced that the private sector will pick up some of those resources that will be cut.  Having the private sector run areas of the public service is akin to asking Dracula to run a blood bank. 

Simply, the Government is doing everything it can to cover up for its own appalling and inept policies in the economic area.  Having cut taxes for its friends on New Zealand’s rich list and then got everyone else to pay for it, through a hike in GST, it is now resorting to cuts and privatisation (which it always wanted to do anyway).  Simply, the Government’s own policies are responsible for the state that the country is in.  Instead of opting for policies to boost production and alleviate the recession, it is, instead, going to add to it.

People have to ask how long does it take before this particular baby is thrown out with the bathwater.

Being My Brother’s Keeper – The Public Health Sector that Never was.

Several days ago was the 139th anniversary of the birth of Michael Joseph Savage, the first Labour Prime Minister of New Zealand. Savage’s Labour administration is credited with the creation of the welfare state in New Zealand.

Several days ago a friend of mine was watching ‘Sicko’, Michael Moore’s expose of the American Health system. She commented about the favourable aspects of our health system as a consequence. While, these two events might appear unrelated, it set me thinking about the original intentions of Labour and of Savage in the health sector and how those intentions never came to pass.

For the original intention of the senior members of Labour’s first administration was to actually create a comprehensive, universal and fully publicly funded health service, just like the NHS in Britain. From its earliest years, Labour had consistently promoted a comprehensive and fully state funded health system which was accessible to all people and, likewise, it did so in its 1935 manifesto. This health service would cover all aspects of a person’s health from GP visits to surgery, from dentistry to optometry. It was all to be freely available to people and it would all be funded from the taxpayer’s purse.

Such was the belief that Labour was going to replace the existing medical system upon its election in 1935, that as Janet Frame records in ‘An Angel at My Table’ her father burnt all the family’s doctor’s bills. This was a scene that was repeated elsewhere in New Zealand. People had complete confidence in the new Government’s commitment in this area.

In Government, Labour moved swiftly and appointed one of its new members, but someone with some interest in the area, Arnold Nordmeyer (later Minister of Finance in the 2nd Labour Government), to chair the Select Committee looking at proposals for a National Health Service. Nordmeyer was ably assisted by his friend and later Minister for Health, DG ‘Doc’ McMillan in proposing the new service. McMillan also had the benefit of being a Doctor and having been in private practice before being elected to Parliament. Both McMillan and Nordmeyer were supporters of a comprehensive and state funded health system. Mary Logan in her biography of Arnold Nordmeyer, ‘Nordy‘ notes that Nordmeyer and McMillan had even won support from Walter Nash, Labour’s Minister of Finance for a completely public funded health system.

The other trump card that Nordmeyer and McMillan had was the support of Prime Minister Savage. Along with Labour’s commitment to implementing social security, Savage took an active interest in the organisation and outcomes of this ‘new’ health service. He perceived it as an integral part of Labour’s social security system and another step toward creating a society which catered for all people from ‘the cradle to the grave’.

But, the one person that they could not convince was Deputy Prime Minister, Peter Fraser. Fraser had close contacts within the British Medical Association (BMA) and consistently thwarted attempts to impose a comprehensive system. Fraser’s opposition and that of the BMA finally angered Savage to such an extent that there was, as Gustafson records in ’From the Cradle to the Grave,’ a ‘showdown’ in the Prime Minister’s office between Savage and the Head of the BMA.  The BMA told Savage that they would oppose the new system to their utmost. In response, Savage stated that the Government would treat the BMA Doctors as being ‘locked out’ and that the Government was committed to implementing its policies to the betterment of the people and as a result it would hire immigrant Doctors if necessary to ensure its policies were enacted. A furious Savage then walked out of the room leaving an apologetic Fraser.

Of course, Savage died in 1940 of cancer and his desire of a universal state funded health system died with him. As Prime Minister, Fraser struck a deal with the BMA for a more limited scheme which allowed Doctors to be subsidised by the state. It also set the standard for the private sector to operate in cooperation and later, competition with the state sector. In the 1980s and 1990s this commitment to public health service was scaled back even further with funding to the public sector cut, the public sector corporatized and the private sector making great gains in the supply of health services.

Presently, Labour is involved in a debate over its leadership. However, of real importance to me is who picks up the mantle for supporting similar policies such as those that I have detailed. Labour needs people who have the same steely forthright resolve as Savage in this regard and a commitment to implementing policies that benefit all in society. Currently, I don’t see any Labour MPs who are being touted as potential leaders at the moment making that commitment. That is, however, not to say that they will arise.

Unpaid Jobs – The Abnormal becomes Normal.

A friend posted the following on his facebook page.

Unpaid jobs: The New Normal?

March 25, 2011 12:33 pm

While businesses are generally wary of the risks of using unpaid labor, companies that have used free workers say it can pay off when done right.

By Katherine Reynolds Lewis, contributor

FORTUNE — With nearly 14 million unemployed workers in America, many have gotten so desperate that they’re willing to work for free. While some businesses are wary of the legal risks and supervision such an arrangement might require, companies that have used free workers say it can pay off when done right.

“People who work for free are far hungrier than anybody who has a salary, so they’re going to outperform, they’re going to try to please, they’re going to be creative,” says Kelly Fallis, chief executive of Remote Stylist, a Toronto and New York-based startup that provides Web-based interior design services. “From a cost savings perspective, to get something off the ground, it’s huge. Especially if you’re a small business.”

And, thus begins the latest onslaught against conditions and rights.

I remember, several years ago, watching an item on ABC News (with Dan Rather).  ABC used to be shown on TV 3 late at night in opposition to BBC World, which was being shown on TVNZ.  The item in question detailed the problems of a US based software firm which was being undercut by its competitors in India.  The firm’s profit margins were being severely squeezed and there was a danger of it being forced into liquidation.  The owners of the firm hit on an ‘ingenious’ idea to save it.  This was to lower employee’s wages, thereby making them competitive with the Indian based company.  ABC interviewed some of the employees and the owners who testified as to the beneficial effects this was having.  Several months later, I was watching ABC and learnt that the firm had gone out of business. It appeared that the competing firm in India had simply lowered their wages further.  The moral of this sordid tale was that you cannot compete against firms in developing nations which pay their workers food.

It could be argued that this is merely the next step in this progress.  Simply, why should you pay your workers at all? Currently, Federal and state laws in the US (and in other developed countries) prohibit this sort of action.  Workers undertaking specific tasks and roles are paid. There are laws guaranteeing them such.  But there has been a recent tendency in some US states to look at rolling back some of these collective rights, such as in Wisconsin, where the Republican Governor and Congress have repealed the rights of workers to collectively bargain.  If one can do that, why not simply pass a law providing for volunteer work in certain areas or on certain days.  You could additionally argue that the current world recession could bring upon the need for such action.

Certainly some employers and industrialists would argue that such action would actually help workers by allowing them to work.  Being the benign and progressive souls that they are, these employers are providing workers with employment, experience and, more importantly, self worth, in an ever competitive workplace.

Before people laugh, similar policies have actually occurred before.  In 1991, the New Democratic Party (NDP) provincial Government in Ontario, Canada implemented a series of economic and social policies designed to halt the growing recession in the province.  This included cost cutting, privatisation and the introduction of what were know as ‘Rae Days’ named after the NDP Premier, Bob Rae. Rae imposed a wage freeze and then legislatively forced civil servants (including teachers, doctors, nurses, etc.) to take ten days off without pay per year.

What Rae did is, of course, different to making workers work with no pay, but in the midst of a recession with high unemployment, a case could be made to do so, as it appears to be in this article.

Essentially, what is being suggested is a modern form of slavery.

However, it may not prove to be in anyone’s economic interest to introduce such a policy.  The reason for that is because the one thing that actually doomed traditional slavery in the United Kingdom and in the US Civil war was that it was actually economically inefficient.  (This is aside from the moral aspect). It was actually more efficient and productive to pay your workers.  But, this issue is not just about paying people, it is about who holds the economic and political power.

Lastly, one also notes that it is not the Captains of Industry who will be forgoing wages or salaries.  It will be left, as of always, to those on the lower ranks of society to do so.


Will He Stay Or Will He Go? Phil Goff and the Leadership of the Labour Party

The Darren Hughes saga may not just claim the political scalp of that MP. It could, it appears, have far reaching consequences for the Party’s leader, Phil Goff. News is leaking through the media that Goff is in danger of being rolled by members of the parliamentary and extra-parliamentary party due to his (mis) handling of the Hughes affair. It is rumoured (rumours are dangerous things) that one of those seeking to actively unseat him is former Labour leader and Prime Minister, Helen Clark.

I remember meeting Phil Goff when I was a young Labour Party member and activist in the 1980s. At that time Goff was Minister of Youth Affairs, and became Minister of Employment and Education. He and I did not hit it off. At the time the Labour Party was in open revolt. Indeed, there was open civil war in the Party, which eventually destabilised the Government, bringing to an end the Prime Ministerial leadership of David Lange and providing National with a 30 seat majority in the 1990 election. It also led to the creation of the Alliance and ACT, two parties which are diametrically opposed to each other, but whose membership and leadership were mostly Labour Party activists in the 1980s.

The problem for Goff has always been that he is a tainted man. When he was an up and coming Labour high flyer in the 1980s, he was given the ‘problematic’ portfolios of Education and Employment. These were ‘killer’ portfolio’s for any Minister, particularly a Minister in the most right wing Government the country had experienced since the 1930s. He quickly became identified with Roger Douglas and the right wing faction in the Labour Party. It was Goff, for example who first increased state house rentals in the 1980s, it was Goff who replaced employment schemes with training programmes and it was Goff, who implemented the Hawke Report, which advocated high fees, loans and a tertiary tax for University students.

I actually have a letter from Goff to me, when I was President of Labour Youth in 1989, in which he praises Margaret Thatcher, as creating a low inflationary economy in the United Kingdom and therefore setting the economic basis for future employment and economic security.

In the 2000’s under Helen Clark, he was seen as a conservative Minister who played it safe and opted for conservative social and economic solutions. Any semblance of the left wing ‘fireball’ that Goff was in the 1970s is well and truly gone.

But, to be fair to Goff, it is also under his leadership that Labour has again started to move to the left. Labour MP’s have actively started questioning the basis behind the neo-liberal market agenda that has underscored their policies since, well, the first time that Goff was a Minister in the Fourth Labour Government.  True, these have not been big questions, but they have been significant enough policy changes for a number of people to start talking about Labour recapturing its social democratic soul.

Still, to many people, Goff was always an in’-between’ leader. A man whose role it was to ‘babysit’ the Labour Party until a new leader could be appointed. It was commonly assumed that this would occur after the election. He was a ‘Michael Foot’ type leader. But, without the left wing credentials, duffle coat and unkempt look that Foot was famous for. 

However, in replacing Goff, Labour is taking a big gamble. They may be hoping for a ‘Gillard’ effect. That a new Leader will cause the polls to rise in Labour’s favour; that a new leader could deal with Key and, thereby, energise the Labour Party in the lead up to the election.

The Labour Party is no longer a Party that suffers a leader which loses it elections, like it did with Walter Nash, Norman Kirk or Bill Rowling. Both Nash and Kirk eventually won and Rowling was eventually deposed by Lange. It has transformed into a party in a hurry; it is party that actively seeks political power now.  (I even suspect that it might actually see it itself as the ‘natural’ party of Government). 

Either way, if Goff goes, Labour may not win the election. But, if he stays, Labour won’t win the election without massive blundering by the National Party. The choice is Labour’s

Unf**k the World – The Perils of Being Green

I was greeted by a poster this morning when I entered work urging me to attend a talk being given by Gareth Hughes, the Green list MP about the world and how Green solutions could unf**k it.  For the record,  I like Gareth, he has struck me as a hard working and honest MP.  I also have voted for the Greens in the past, as they are, currently, the most progressive option on offer in Parliament.  However, the meeting struck me as slightly ambitious mainly because while the Greens do have a number of progressive policies, what they really lack are progressive solutions.

The slogan of the Greens used to be neither ‘left nor right, but out in front.’ A Green MP once explained this to me as meaning that the Greens eschewed the traditional ‘materialistic’ left/right economic spectrum. Of course, one cannot escape the spectrum that easily, but it allowed the Greens to recruit a number of people who believed in the Green ethos even if they had vastly different views on the economy and social policy.  The situation changed after the 1990 elections. The Greens moved to the left in the 1990s due to their membership of the left wing Alliance.  Consequently, the deep Greens left and formed the Green Society, a short lived political grouping and the market Greens left mostly to the newly formed Blue Greens in the National Party.

For the most part the Greens have maintained a left position since they departed the Alliance in 1998.  That is the Greens are to the left of Labour in parliament and are seen as their natural coalition partner or allies.  Of course, being to the left of the Labour Party is, actually, relatively straight forward.  One only needs to believe in a more progressive economic policy which advocates regulations and controls, more rights for workers and the poor and fair over free trade and viola’.  The point I would make is that the Greens are to the left of Labour because Labour is not a social democratic party in the traditional sense and the Greens have moved to partially full that placement.  However, they would be considerably to the right of the Bill Rowling led Labour Party of the late 1970s and early 1980s and, of the Values party, which was their Green predecessor (and the world’s first Green Party) in the 1970s.

For example, the Green’s tax policy was actually to the right of Labour’s, this largely due to the Greens pendant for resource taxes.  From a Green perspective they make sense, unfortunately, these taxes are also indirect taxes and can be passed along until it ends up being paid for by those unable to pass it on. Also, as Bryce Edwards noted last year in his blog ‘Liberation,’ the Green’s alternative budget had accepted the 15 % GST increase and the party had included it in their costings.  However, these things in themselves do not cause me concern.  What does concern me are the issues that may arise in the aftermath of an election which nets the Greens more seats, but leaves National firmly in control as the largest party in the House.

And such an issue might arise for the Greens in the aftermath of this year’s election, especially if National (if expected) becomes the largest party in the House but lacks plausible coalition partners (read no ACT MPs and 1 Maori Party MP).  It is always been my impression of Key that he wants to be a long serving National Prime Minister (aka Keith Holyoake) and if that means that he has to strike a few deals and water a few policies down then he is prepared to do it.  In political terms this is called being a ‘statesman’.

But, would the Greens go for such a deal?  It is worthwhile noting that even though people (and Green Party members) assume that they would only go into coalition with or cooperate with Labour, the Greens have not, at this point, ruled out a deal with National.  Further, it is rumoured that in the aftermath of the 2008 elections, the Green caucus briefly entertained the idea of cooperating with National and allowing them to govern.  Such a deal was torpedoed by left wing members of their caucus

Certainly, a formal coalition with National would gain the Green’s Ministerial portfolios, and palatable influence within a National led Government.  But, it would almost certainly earn them the approbation of a large number of their voters and their members and either end the Greens as a political force or significantly weaken them.

A more likely scenario would be a similar deal which the Greens struck with Labour and the Alliance between 1999 – 2002.  In which they agreed to abstain on votes of confidence and supply thereby allowing Labour/Alliance to govern as a minority government.  They could strike a similar deal with National, freeing them from a formal coalition.  In return the Greens could gain some select committee chairs and have key policy aspects put into the Government agenda.  This would probably be the more palatable option for the Greens, but the results would be the same the Greens would be responsible for keeping the Tories in power and they would suffer for it at the 2015 election.

Of course, rumours are dangerous things and I think that the Greens will probably (at the end of the day) back a Labour led Government.  Certainly, I think that their policies and their membership would demand such an outcome.  But, I need certainty.  With the days counting down until the election and the choices to me closing in terms of voting preference, I am reluctant to cast my vote for something that could be used to support the Tories, even as a minority government.

Margaret Lives – This Government is Not for Turning

People expecting a radical change of economic direction from the Government are to be severely disappointed as a consequence of recent comments made by Bill English and John Key. To use a refrain that was popular during the Thatcher era in Britain, to describe its economic direction, ‘the Government is not for turning.’ Indeed, the Government has appeared to have used the Canterbury Earthquake as an excuse to announce further cuts in existing government spending.

People are being told that the Government needs to find appropriately $800 million as a consequence of the earthquakes and that we can expect nothing in the Budget. However, Key and National’s line would have been more convincing, if they had not been saying it prior to the February earthquake. It was at that point that Key signalled that government cuts and partial asset sales were on the Government agenda. He then used some exceedingly dodgy explanations to justify them, such as comparing New Zealand’s debt to that of Spain and Greece.

Now, the Government and its economist allies in the banks and finance houses are using the earthquake and an IMF report to the Government as ammunition. Apparently the IMF has called for cuts and balanced budgets. Of course, as CTU economist, Bill Rosenberg noted this morning on Morning Report, the IMF would recommend this solution regardless of the circumstances. The IMF’s refrain is comparable to, not as much as a needle stuck in a groove of a record, but a record that simply has one track and one verse.

But, what I found to be the really interesting thing about the discussion this morning between Rosenberg and Westpac’s ‘pet’ resident economist, Dominic Stephens was the belief that Stephens still had in the free market and spending cuts actually delivering the economic and social goods not only for Christchurch, but in the longer term for New Zealand as a whole. The recession and the resulting failure of market economics as a practical solution (not that it ever was) appears to have simply passed him and his colleagues by. Cutting spending and lower personal taxes, Stephens croaked was the only solution. GST had to increase he said. He made some references to the damage that having a ‘high’ 39 cent marginal tax rate had caused.

Further, Stephens was worried about capital gains as this was causing people not to invest in productive areas of the economy but, to speculate in unproductive areas such as land. Yes, quite. I am not disagreeing with him in this respect, but I would observe that this is an issue, mainly because New Zealand is one of the few countries not to have a capital gains tax. This is partially thanks to the efforts of people such as bank economists who have actively campaigned against it.

Labour and the Greens have gone on record as pointing out how damaging such cuts could be at this point. They are correct. As Rosenberg pointed out this morning, cuts at this point, especially since the recession is not over could have the undesired effect of prolonging it. It brings to mind Maynard Keynes’s famous observation during the Great Depression of the 1930s that the Budget could be balanced while lying on your back.

However, despite their comments, both Labour and the Greens are very light on detail. In my opinion, what is needed is an active government policy of investment and actually more government spending, this will mean higher taxes (read more tax bands)on those on higher incomes and, importantly, the imposition of taxes on areas that are not currently taxed, such as capital gains and bank transactions. Bank transactions have become a hot issue in Europe due to the amount of money involved. Taxing transactions especially those on large corporations would raise more money that GST would ever hope to. And, it would be progressive, something that GST is not. The other area in which New Zealand is being short changed is the area of free trade. New Zealand is in the process of negotiating yet another free trade deal, in this case the TPP (Transpacific Partnership). This deal involves a number of nations, including the US and the outcome of such a deal could be very detrimental to New Zealand’s economic, financial and social sovereignty. Every time such a deal passes, it weakens the productive base of the economy and the ability of people and the government to determine their own economic and social outcomes.

New Zealand stands at a cross roads. We can either build an egalitarian social democratic economy and society or continue on with the half baked failed free market economic theories that are the real cause of our present distress and have caused practically every major economic recession and depression since the 1870s. The choice is ours.