News from across the Tasman

The outcome of the NZ election is certainly worth two cheers. Labour was deservedly returned. The much-maligned multi-member proportional (MMP) system worked well, producing an outcome that reflects the wishesof voters. Finally, New Zealand has clearly put the era of radical free-market reform behind it. The National Party vote plummeted to a historic low of 21 per cent. Despite the collapse of the National vote, and the opportunistic adoption of a law-and-order platform, the true heirs of the free-market radicalism of the 1980s and 1990s, ACT NZ, went nowhere, getting only 7 per cent. This has led to suggestions from within the party that its leader, Richard Prebble is a liability, because ‘many would-be voters associate him with the Rogernomics policies of the 1980s.’ Presumably the suggestion is that ACT NZ should dump its economic line and stick to law-and-order .
The potential gains from this approach can be seen in one of the more negative outcomes of the election, the resurgence of anti-immigrant demagogue Winston Peters and his NZ First party. This is part of a more general shift where the political right is downplaying economic policy in favor of appeals to racial and cultural prejudice. In some cases, the same free-market policies are pursued but more cautiously. However the natural outcome is an economic policy based on opportunistic handouts. This shift has been made successfully by John Howard, and is also evident in the right wing of the Australian blog world.
Finally, what are the prospects for NZ Labour’s second term? Tim Colebatch sees Clark as leading a directionless, though competent, managerial government similar to that of Steve Bracks, and he’s not alone in this view. I’m currently reviewing a book by NZ academic Jane Kelsey who takes much the same line. But there’s a difference between caution and aimlessness. With the opposition in tatters, and evidence of pressing need everywhere, I think Labour will have little alternative but to spend more in areas like health and education. The model for all of this is the Blair government, which, like Clark, began by claiming to represent the ‘Third Way’, but has been mugged by reality, which dictates that the only way to substantially improve public services is old-fashioned ‘tax and spend’. My impression is that, despite its caution, NZ Labour is aware of this, and will take the necessary steps.