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Politics New Zealand’s leftward turn

The new Labour PM is still in her honeymoon period – but CRAIG STEPHEN is sceptical about how radical she will turn out to be in the long run

THE Labour-led government in New Zealand will soon be 100 days old, following the welcome usurping of the neoliberal National Party government after nine years in power. 

It had to do so with the help of two minor players, however — the populist, anti-immigration New Zealand First and the Greens.  

The unions are delighted, and there’s a new star on the block: 37-year-old Prime Minister Jacinda Ardern, who only became leader of Labour eight weeks before election day. 

Labour may never have got into Parliament but for the continued efforts of one of the heavyweights of the Labour left, Jim Anderton, who died this month aged 79. 

Anderton was pivotal in hauling Labour leftwards after decades of being in bed with big business that paved the way for the National Party’s unique brand of “I’m all right, Jack” capitalism.

Like Jeremy Corbyn, the former deputy prime minister was never taken in by Labour’s rightward shift. 

Ostracised for his refusal to kowtow to the great betrayers, Anderton was suspended from the party, formed the NewLabour Party and brought it into the Alliance, a grouping of NewLabour, the Greens (initially), a Maori party and two centrist parties, gaining nearly 20 per cent of the vote in 1993. 

The Alliance was part of one of Labour PM Helen Clark’s governments and Anderton was pivotal in progressive policies such as the formation of the “people’s bank,” Kiwibank. 

There are great opportunities for the new government: under the National Party, New Zealand experienced the greatest loss in economic growth due to rising inequality. 

The economy should have grown by nearly 44 per cent between 1990 and 2010, but the gap between the haves and have-nots caused it to grow by only 28 per cent.

The incomes of the top 10 per cent of New Zealanders in mid-2017 were nearly 10 times of the bottom 10 per cent. The concentration of 53 per cent of wealth in the hands of that elite group is greater than the OECD average.

As the National Party’s third term wore on, the massive cost of housing forced families to live in cars, garages — anywhere, whether suitable or not, with incomes failing to rise quickly enough to match the rises. Meanwhile, child poverty reached obscene levels.

The government’s refusal to recognise the housing crisis and insistence (at least until the campaign started) that child poverty was in the too-hard basket eventually backfired, and in late October Ardern formed a coalition with the two minor parties. 

The coalition gained 50.4 per cent of the vote in the previous month’s election with a further 2-3 per cent for parties that backed change but failed to make it into Parliament. National and its tiny, rabidly right-wing support partner ACT finished on 45 per cent. 

So far, the government has upped the minimum wage by 75 cents an hour (40p), extended paid parental leave from 18 to 22 weeks (with a further extension to 26 weeks promised), cancelled National’s proposed tax cuts that would have benefited the rich and increased the amount students get through loans and allowances by $50 (£26.40) per week.

It aims to reverse the harsh sanctions scheme imposed on beneficiaries and expand and increase the Working for Families tax credits.

That increase is part of a $5.5 billion (£2.9bn) package which Labour says will halve New Zealand’s child poverty statistics in four years, with initiatives such as giving parents of newborns $65 (£34.30) extra a week for a year (three for those on the lowest incomes) and pensioners and beneficiaries getting extra to help pay for heating over the winter.

The inclusion of the Greens in the new government has given them the crucial climate change and conservation portfolios, plus they are part of the transport and women’s ministries. 

The Greens are seen as to the left of Labour on issues such as poverty, equality and housing, so will provide a leftward anchor should Labour’s right and New Zealand First attempt to block more progressive policies. 

NZ First backtracked on its demand for the seven Maori seats to be axed, but that doesn’t mean it will stop its attacks on what it mistakenly sees as preferential treatment in some aspects for New Zealand’s first peoples.  

It will also press Labour to put the brakes on immigration, though Labour does not appear to need much persuading.

What of the new Prime Minister, little of whom the population knew about before she took over the party leadership from former union leader Andrew Little due to plummeting poll ratings?

Ardern has been described as a Blairite and worked in Blair’s office while living in London, joining after the illegal invasion of Iraq. She has since tried to backtrack on the decision. 

Since becoming PM she has said that neoliberalism has failed, without pinpointing exactly why. 

Worrying, Ardern’s government has shown to be very willing to sign up to the contentious Trans-Pacific Partnership trade deal that had to be reviewed after Donald Trump pulled the United States out. 

New Zealand has gained a concession on medicines but the facility for multinational companies to sue entire member countries for alleged discriminatory practices remains. 

The government’s first action in trying to cool down rising house prices was to stop foreign investors (except Australians) buying Kiwi properties. 

How watertight this is will soon be tested. While the government is also stopping sales of state houses, it will need to build more houses, put pressure on landlords’ power and act to stop local investors from pricing out first-time buyers.

Ardern has no intention of nationalising any industries sold under National, including the ailing train network, and instead will invest in a high-speed rail network connecting Auckland, Hamilton and Tauranga. 

The new government is in honeymoon mode at the moment. Its real tests will come in how it tackles inequality, gets children out of poverty and makes homes affordable again. 

But without wanting to haul in, say, domestic housing investors, it’s hard to see Labour and its allies standing up to the bullies and the greedy responsible for these problems. 

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