In the November 16 Listener, a trio of historians ranked New Zealand’s prime ministers, beginning with Richard Seddon. They all agreed Peter Fraser was our most impressive head of government, Helen Clark was the pre-eminent leader of the MMP era, and their aggregated scores for our most recently elected former prime ministers, John Key and Jacinda Ardern, were average at best.
Perhaps their legacies will improve with age? In future decades, when the nation is crushed under the heel of God Empress Swarbrick or torn asunder by the cruel warlords of Simeon Brown’s anarcho-tyranny, we may consider the Key-Ardern years as a golden era. But from our current perspective, they already merge as genial leaders who were popular in their time but left the real problems facing the nation unresolved.
We’re a year into Christopher Luxon’s first term as leader. He’s less beloved than his predecessors, but when we contemplate the state of the nation they have bequeathed him, this might not be a bad thing. Key and Ardern ran centralised governments with caucus allies and senior staffers vetting everything for risk, safeguarding the boss’s brand integrity and political capital. Luxon does not possess either of those commodities, so his ministers have a much freer hand. He cannot coast along on empty slogans and easy charm while maintaining the status quo: his government finds itself compelled to change things.
His Finance Minister, Nicola Willis, is cutting and reforming the administrative state. With luck, she will focus it towards delivering effective public services instead of serving as a bloated and expensive jobs programme for the capital’s postgraduate class. She’s making gestures about banking reform.
Education Minister Erica Stanford is trying to turn around the stark deterioration of the school system – this year’s OECD survey warns that declining educational achievement has become a serious threat to equality and prosperity.
Housing Minister Chris Bishop is driving through supply-side reforms to end the property bubble and resolve the housing affordability crisis that simmered under Key and then exploded during Ardern’s reign after Covid. In his other main portfolio, Bishop is attempting to address the infrastructure deficit.
The fast-track planning scheme, for all its evident flaws, is designed to generate growth and jobs.
The trade and foreign ministers are attempting to diversify our export markets and attract foreign investment.
Not all of these projects will succeed, but they’re serious attempts to solve serious problems. Many of them challenge the vested interests of influential sectors of society – banks, homeowners, the teaching and public sector unions – which is why they weren’t addressed by previous regimes prioritising popularity and stasis.
Amorphous blob
When National formed its government 12 months ago, it probably thought its work programme was wildly ambitious. But the ongoing recession, rapid decline of the health system and dire warnings from Treasury about the state of the economy and crown accounts confront it with an interconnected, amorphous blob of crises, steadily building in scale and strength and oozing towards the capital like a titanic mudslide.
Stories of patients dying in ED rooms or after discharge are becoming commonplace; more and more patients are becoming seriously ill after being unable to access GPs.
The impossibility of improving service while cutting $2 billion in spending highlights the lack of substantive policy in this area. How can we continue to fund a free, universal healthcare sector delivered by an inept bureaucracy to an ageing population funded by a failing economy? The government does not know. Or, more likely, it knows that we can’t and doesn’t want to say so.
Fleeting gains
Economist Paul Krugman famously said, “Productivity is not everything, but in the long run, it’s almost everything.” Our productivity was anaemic for decades and it flatlined under Key and in the early-Ardern era, surged during the pandemic years then collapsed again. Now, it’s roughly where it was in 2010. In terms of economic growth, per capita GDP is roughly where it was in 2020. Four lost years.
Schemes like fast-track consenting may deliver fleeting gains, and there’s optimism within government about the ongoing report into the science and research sector, which is expected to drive more reform. But the real shift will come from fixing the structural problems that show up in every independent economic assessment – and which Luxon’s government has largely ruled out: fix the tax system, incentivise savings, break up the monopolies in energy, groceries and construction materials.
In an RNZ interview last month, Luxon was challenged about the staggering profits he made flipping properties this year (a very odd way for an incumbent PM to spend his time). The capital gains were all tax free, and Luxon defended this by claiming that a tax on capital would hurt people’s KiwiSaver balances.
But KiwiSaver is taxed – heavily – and this is unusual. Most developed economies exempt retirement savings schemes from their taxation systems. They want their citizens to work, become wealthy and invest in their own economies.
New Zealand’s policy framework discourages all of these things. This is damaging our country in ways that are obvious and predictable and it’s worrying that Luxon does not understand this – that his wealth seems to insulate him from an elementary grasp of the problems we desperately need him to solve.
Voters around the world are signalling they are happy to throw out governments that aren’t performing – and New Zealanders are still getting poorer after 12 months of coalition government. They were prepared to throw Ardern overboard, and they’ll be more than happy to discard her richer, less likable, less coherent replacement. This government has some capable ministers and they’re addressing important issues. This time next year, it would be nice to say the same about its leader.
