Two senior figures are leaving New Zealand politics within a few months of each other: long-serving Labour MP David Parker, who recently delivered his farewell speech in the House, and Auditor-General John Ryan, whose seven-year term spanning most of the Ardern-Hipkins years ends on July 1.
With the current coalition arrangement beginning to rattle alarmingly, its lights flickering, engines stuttering, and the probability of a Labour-led government in 2026 slowly shifting from unthinkable to merely unlikely, these twin departures help illuminate what went wrong with the government Parker helped lead, and raise questions about what the next Labour government might look like.
For most of his time in Parliament, Parker was seen as Labour’s house intellectual; there’s no obvious replacement for that role in the current caucus. He was the architect of the New Zealand Emissions Trading Scheme, a senior minister in the Ardern-Hipkins cabinet and an advocate for the theories of Thomas Piketty, the rock-star economist whose light has dimmed in recent years, partly because it’s hard to point to any governments around the world that have implemented a Piketty-informed manifesto. Parker tried and failed.
In a series of books and papers, the French macroeconomist and his disciples tried to create a modern technocratic left. They attacked the assumption there was a trade-off between social justice and economic development by comparing the growth rates of the mid-20th century social democratic welfare states with the free-market/neoliberal models that replaced them and pointed out that the former grew faster than the latter.
Piketty suggested this was partly due to “rent-seeking”: that the very rich use their influence to capture politicians who cheerfully distort economic settings to protect their clients’ wealth, rather than maximise productivity and generate economic value.
For Piketty, this situation justifies higher taxes on the rich in order to deliver higher growth. But modern left-wing politicians seem reluctant to deliver economic settings that are more efficient and more just. This can be explained by his multi-elite party model, which showed that, across the developed world, the traditional parties of the left have been captured by educated elites. Their purpose is not to deliver economic or social justice but to transfer wealth to the managerial class, while right-wing parties serve the business and financial plutocracies.
Target the rich
In his capacity as revenue minister, Parker directed Inland Revenue to conduct a study of the nation’s high-net-worth individuals and families. It found what Piketty would predict: our tax settings had been designed to benefit the very rich, who paid much lower rates of tax on their income than wage and salary earners, because most of that income took the form of gains in the value of their property and financial assets, ie, their capital.
In 2023, Parker and then-finance minister Grant Robertson developed alternate wealth and capital gains taxes to present in that year’s budget. This was famously vetoed by Hipkins, and replaced with the inane GST exemption scheme that seemed calculated to benefit the supermarket duopoly under the guise of lowering the cost of living.
In his recent pre-Budget speeches, Hipkins has indicated Labour will soon reveal its “tax fairness” plans for the next election. It’s probably not an accident that this will take place in Parker’s absence.
Picking apart policies
Every journalist in Wellington loved John Ryan. The Ardern government was adept at celebrating its own world-historic fabulousness while aggressively concealing the actual performance of its policies and departments. Ryan could go where the media could not and conducted reviews into Kāinga Ora’s delivery of public housing, the Covid vaccine rollout, the $15 billion infrastructure upgrade and “shovel-ready” projects of the Covid stimulus, emergency housing payments, cost-of-living payments and performance reporting across the public sector.
Most public service reports are vague and exculpatory at the best of times. Nearly everything is blamed on poor process and underfunding, easily solved by more spending and further expansion of the bureaucracy. In contrast, Ryan was blunt and often scathing about the poor process, lack of accountability, lack of transparency and poor value for money he unearthed.
His findings constantly returned to an inability for government to ask a very basic question of itself: “Has all this activity and spending made our lives better?”
Labour loathed being held to account like this – although it may have found some comfort in seeing Ryan dive in to investigate the coalition’s fast-track process and the school lunches debacle.
When he criticised the $800 million cost-of-living payment introduced in the 2022 budget – overseen by Parker as revenue minister – for paying money to people who were ineligible because they lived overseas or were dead, Jacinda Ardern publicly disagreed with his criticism.
Tax or borrow
The idea of taking on more government debt to fund a more interventionist state has become an odd obsession on the modern left, including our Labour Party. Piketty pointed out such debt is highly profitable to the rich. Selling them interest-bearing bonds is not progressive; you should tax them instead. But whether you want to tax and redistribute – Parker’s inclination – or borrow to expand the administrative state, as the rest of his party seems to prefer, neither option has a lot credibility if much of that money is squandered.
Voters might consider returning Labour to government – and this is mostly due to Hipkins’ highly strategic performance as opposition leader – but it should recall the arguments put forward by Parker and the criticisms of Ryan when it considers what that government might look like, and why it should be in power at all.
