Saturday, September 20, 2008

Fatigue and irritation

(Published in the Nelson Mail and Manawatu Standard, September 17)

A couple of weeks ago I attended a pre-election forum organised by Business New Zealand, an organisation that advocates on behalf of the private sector. It was an opportunity for the various political parties to put forward their policies on business and the economy.

The atmosphere was civil and everyone – even the Greens, whose policies are anathema to many people in business – was given a polite hearing. No fistfights erupted among the rival politicians sitting shoulder-to-shoulder on stage. There was, however, an occasional taunt – nothing serious, but enough to indicate that tension was mounting in anticipation of the election campaign.

Since then, of course, the political landscape has changed with the announcement of the election date, and the telltale aggro that occasionally rippled briefly to the surface at the Business New Zealand forum will erupt like a geyser. Labour is fighting against the odds for an historic fourth term in government and the campaign is likely to be brutal.

Prime Minister Helen Clark goes into the election with an albatross around her neck in the form of New Zealand First leader Winston Peters. She has been less than honest in revealing what she knew about behind-the-scenes shenanigans over undisclosed donations, but she can’t afford to cut Mr Peters adrift because she may depend on him to help Labour stitch a coalition together post-election.

If the polls are any guide, National will get a substantially bigger share of the vote than Labour. That means Miss Clark’s best hope of forming another government – perhaps her only hope – lies in her ability to negotiate deals with the minor parties, where she enjoys a distinct advantage over National.

For his part, National leader John Key has taken a huge political gamble in emphatically ruling out a coalition with the Peters party, a punt which – in theory at least – could mean the difference between National winning power and ending up in opposition again. This is by far the most significant development in the campaign so far because it provides a very clear point of difference (a cynic might say the only one) between the two major parties.

Mr Key’s rejection of Mr Peters is interesting because in every other respect, the National leader seems almost obsessively risk-averse – strangely so for a man who, before entering politics, made his reputation in the high-risk business of international currency dealing, where prodigious sums can be made or lost in a trice by making the wrong call.

So what are the election issues? Miss Clark would like us to think it’s about trust, which seems a risky strategy in view of her questionable behaviour over the Peters affair. Of course she will frame the issue of trust in quite different terms, pitting her experience and record against the untested skills of Mr Key, who by comparison is a political novice and lightweight.

She will also try to convince the voters that National has a secret agenda, but I’m not sure the voters will buy it. They know, and National knows, that a National government that springs any unpleasant surprises on the country will be punished harshly in another three years. I’m sure Mr Key wants to stay in power longer than that.

For many voters, the election will be about fatigue and irritation – the fatigue of a government that has been in power for three accident-prone terms, and the irritation of an electorate that has turned prickly at the increasing level of state intervention in people’s lives.

People sense that government has grown bigger and more intrusive during Labour’s three terms, and they’re right.

Disaffected voters are most likely to cite the anti-smacking legislation or perhaps the repressive Electoral Finance Act as reasons for switching off Labour, but those are simply two of the more visible provocations. Less obvious, but no less real, is the steady growth of a suffocating bureaucracy that busies itself making unnecessary rules and acts as a dead weight on an under-performing economy.

Labour has come to represent a well-entrenched and inter-connected network of vested interests that includes public servants, teachers, trade unions, iwi, academics, activist lobby groups and non-government organisations dependent on government contracts (a group that encompasses what used to be the voluntary charity sector, now a significant part of the Wellington bureaucracy and closely aligned to Labour).

It’s richly ironic that Labour tries to portray National as a party of narrow sectional interests when its own agenda is largely dictated by interest groups that could hardly be described as representative of mainstream, middle New Zealand.

Ultimately, though, the crucial issue underlying this election is the economy. For years New Zealanders have been gulled into thinking the economy is strong. Property hysteria and frenzied consumer spending binges, largely funded by borrowed money, have created the illusion we’re doing famously, when in fact the economic fundamentals are deeply worrying. What economic growth there has been – and it’s been modest – has been driven more by consumption than by production and exports generating real wealth.

Labour likes to point to the healthy state of the Crown finances as if this were proof of a strong economy, when all it shows is that people have been paying too much tax. Other key economic indicators – productivity, per capita GDP, average incomes, the overseas deficit – are dismal and getting worse, relative to other comparable countries. New Zealand is slipping down the OECD prosperity rankings and being overtaken by upwardly mobile countries that we once patronisingly looked down on as “Third World”.

We used to hear a lot from Labour about New Zealand working its way back into the top half of the OECD, but the government has gone strangely quiet on this subject over the past few years and I don’t expect to hear Miss Clark raise it on the campaign trail.

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