Editorial: Key's 'State of Nation' a lost opportunity

John Key during his State of the Nation speech. Photo / Brett Phibbs

Opinion

State of the Nation speeches, so called, are really about the state of the government or the party in opposition at the opening of a new political year. Politicians, like the public, have been refreshed by a summer break. The tired subjects of the previous year have receded and the country is ready to hear new projects, fresh ideas. The Prime Minister and the Leader of the Opposition were in quite different states at their speeches in Auckland yesterday.

Mr Key was in a country where, "the economy is growing, employment is increasing and wages are rising". Mr Little's country has low wages, growing inequality and too many children in poverty. Both are correct, as both know. The country needs to hear what might be done to lift lower incomes and spread the benefits of a strong economy without weakening it.

Mr Key's speech began on a note of promise. His Government has been re-elected "with an even stronger mandate". The election result, he said, "allows New Zealand to experience a different third-term Government than has been the case in the past". That is correct too. No previous party in power has increased its support at three elections. This is not (yet) a Government on the slide. But if could be, very soon, if it does not have some fresh ideas.

The "different third-term Government" was not evident in a speech devoted almost entirely to the reform of state housing. Extending income-related rent subsidies to beneficiaries who are not state tenants and selling state houses to other "social housing" providers is a bold policy, but not one that looks likely to make home ownership more affordable or lift low incomes and broaden economic growth.

The Government hopes to create a competitive market in housing for tenants with special needs and difficulties. Its prospect of attracting many investors to that sector, even with discounted state house sales, would not seem high.

Mr Little was offering no firm policy yesterday and nobody should expect it so soon after his elevation to the leadership.

He has wiped Labour's slate of previous commitments and can recast the heavily defeated party in his own way. For the second time since his election he chose a business audience for a major speech and he attempted to align Labour with people moving from employment into their own business.

He sees these people as the key to the country's economic future, with more highly skilled and better paid employment. Already, though, he is sponsoring some conflicting interests. The small-business sector that he wants Labour to win over is also where he will find the "zero-hour contracts" he means to stop - fulltime commitments by staff but not by an employer, who sends staff away without pay on days that business is slow.

Mr Little has the luxury of time to produce more definitive solutions to the issues still facing the country, Mr Key does not. He urgently needs to give his Government new themes and impetus. This time last year he announced an imaginative education initiative, yesterday was an opportunity lost.