The challenges ahead for the new government

Ian Shirley

As the 2017 general election graphically illustrated New Zealand society has reached a turning point in its economic, social and political development. Throughout the election campaign the voting population seemed uncertain which way to go and this uncertainty was reflected in a series of opinion polls and in a range of opinionated statements from the mainstream media. While some of these opinions were based on evidence as advanced by journalists adhering to the best standards of professional journalism others were advanced by ideologues peddling their wares on behalf of a party or a cause to which the individual commentators clearly subscribed. In the end the public demonstrated a degree of ambivalence in casting their votes with 44 per cent opting for the status quo and more than 50 per cent voting for those parties that signalled change.

While it has become fashionable since the election to blame the electoral system for any public ambivalence with the leader of New Zealand First singled out for criticism, there is little doubt that the uncertainty stems from what the electorate has experienced over recent years and from the living realities of our social and economic lives. The international environment has become increasingly unpredictable making citizens in this country apprehensive about a future dominated by an unstable President in the White House and fractious Brexit negotiations being conducted by a government that has lost its authority as well as its united kingdom.

At the same time the national environment has become more divided, more unequal and less certain of New Zealand’s place in the world despite our historical record and achievements. Aside from the extravagant claims made in promoting our ‘100 per cent pure environment’ and our international profile as ‘a great country to raise children’ the realities for many individuals and communities falls well short of the rhetoric. Even the conspicuous wealth displayed by a small group of New Zealanders cannot disguise the low wage economy, the increasing evidence of hardship and destitution, and the abject failure of public policy to address the mounting social deficit.

The major failures confronting New Zealand today stem from the neoliberal economic agenda that has dominated the past four decades with its blind faith in ‘free’ markets, the increasing privatisation of public policy and the out-dated approach to measuring our economic and fiscal performance. As articulated by Treasury during the 1980s and 90s the neoliberal agenda has played a critical role in reinforcing class differences, in generating a low wage economy and in promoting the social conditions for child poverty and for what is best described as a major social deficit.

The best illustration of failure during the election campaign was evident in the pre-election economic and fiscal update (PREFU).  Treasury formulated the PREFU guidelines for political parties to debate the state of the country in the lead up to the 2017 general election. In the context of economic and social development, the guidelines were a distortion. They effectively reduced ‘the economy’ to a spreadsheet of accounts demonstrating once again that the way in which we measure New Zealand’s development today is a distorted picture of our economic and social lives.

Any comprehensive overview of the state of the country in 2017 should have included:

  • The shift that has occurred over recent years from an economy based on production and exports to a series of economic policies increasingly dependent on property speculation and on expanding the population base by means of immigration;
  • The deficit that has been established in terms of an ailing physical infrastructure and utilities especially in urban centres such as Auckland;
  • A rapidly deteriorating natural environment characterised by unswimmable rivers, the exploitation of water resources and the absence of safeguards in both rural and urban New Zealand capable of addressing the climate change agenda outlined in the Paris agreement;
  • The need for a comprehensive population policy that appreciates the labour requirements of regional New Zealand as well as the pressures generated by escalating tourism numbers and foreign students;
  • The housing crisis and the way in which low income New Zealanders and especially the younger generation have been shut out of the housing market;
  • The sale of state houses and the way in which rental housing has been allowed to undermine the health and living conditions of families, especially children ;
  • The low wage economy that has reinforced cycles of hardship and facilitated labour market practices that impact most severely on vulnerable households and especially Maori and Pacific populations;
  • The systematic introduction of austerity policies across the public sector that have undermined health, education, housing and the social services, so much so that government itself is now seriously in need of a major overhaul;
  • An ailing health system that is seriously in need of ‘treatment’ with the most obvious indicators of ‘illth’ being the indebtedness of area health boards and the youth suicide rate which continues to outstrip death on the roads;
  • The abject failure of government to deal with inequality and a level of child poverty that is an indictment on any twenty-first century society;
  • The archaic practices in justice and policing that have led to bulging prisons and incarceration levels that are among the highest in the developed world; and
  • Trade agreements that threaten to undermine the ‘national interest’ in the context of global treaties and regulations that have lost their ethical and moral bearings.

These are some of the challenges facing the new coalition government and in that respect it is not difficult to understand why an administration wanting to make a difference has concentrated its early pronouncements on policy fundamentals. It will not be an easy task even for a persistently positive government but the ultimate goal they have before them is a more humane society and a country that seeks to invest its future in the next generation and beyond. In pursuing this agenda the government should take courage from the fact that it has the support of more than fifty per cent of New Zealand’s population.





Ian Shirley
About the author

Ian Shirley

Emeritus Professor – Auckland University of Technology
Ian Shirley is a former Professor of Public Policy at AUT, and founder of The Policy Observatory. He has led major research programmes both in New Zealand and overseas the most recent being an international study of economic and social development engaging 15 research teams in the major metropolitan cities of Asia, the Pacific and Latin America. Professor Shirley has led ministerial councils for both Labour and National administrations in New Zealand. He has acted as a consultant to the Minister of Finance and a Budget taskforce on Income tax and Social Security. He continues research on New Zealand as a social laboratory and Auckland city governance.