Roger Douglas

Guest Post – Douglas wrong about National

A guest post from Lindsay Mitchell.


Making some otherwise sound recommendations to his old party, Labour, Sir Roger Douglas made this statement:

 “National’s do-nothing, status-quo approach to economic and social policy provides Labour with a real opportunity to get back up on its feet.”

In the last six years National has done more to address working-age welfare dependence than Labour did in the prior nine.

A Labour supporter would reject my claim on the basis that numbers on the unemployment benefit took a nosedive over their incumbency. That’s true. Work and Income put enormous effort into those on an unemployment benefit, and Labour luckily oversaw an economic boom (giving them full credit for which is as questionable as blaming National for the GFC.)

But chronic welfare dependence, a crippling social and economic issue for New Zealand, lies in the other main benefits:  pre-reform they were the DPB  and Sickness/Invalid benefits combined.

In 2009, National set up the Welfare Working Group, and from there, commissioned the Taylor Fry actuarial work which exposed where long-term reliance is concentrated. The revelation that teen parents and other young beneficiaries entering the system at 16 or 17 would stay there the longest was no surprise.

Through the early 2000s, while only 2-3 percent of the DPB total at any given time was teenagers, between a third and a half of all recipients had begun on welfare aged under twenty. Throughout Labour’s administration I argued that average stays on welfare were much longer than government issued figures. Point-in-time data produces much longer averages than data collected over a period of time, but it suited Labour politically to use the latter data to minimise average stays and downplay dependence.

To understand this statistical phenomena imagine a hospital ward with 10 beds. Nine are occupied year around by chronically ill patients; one is occupied on a weekly basis. At any point-in-time 9 patients have an average stay of 12 months and one, an average stay of one week. But calculated over the year, 85 percent of total patients had an average stay of just 1 week. Equate this to spells on welfare and you can see how long-term dependence can be disguised.

Here is the huge difference between National and Labour.

National looked for what Labour had denied.   Read more »

Guest Post – Thoughts on Labour

A reader and new commenter emails:

Dear Team,

I posted my first comment recently after a long time reading and enjoying the blog (as ‘Reasoned and Rational’). Slowly getting drawn into the vortex ;-)

Some time ago I seem to recall an article which indicated that submissions from readers might be considered if of a suitable standard. I wonder if you’d read through my thoughts below and consider if it meets that standard? If so, please feel free to use it at some time when you have space. If you choose not to, no worries, it’s been fun getting it down in writing.

Best regards,

Reasoned and Rational


I grew up in home with a photo of Michael Joseph Savage on the mantel above the fireplace. My Dad was a working man, and the party ‘we’ supported looked after the interests of the workers, ensured a fair deal from ‘the bosses’, was interested monitoring the terms and conditions of employment, and made sure that there was a safety net in the form of social welfare if something went wrong. Social welfare was to catch you if you fell, and support you until you were back on your feet again. You took personal responsibility for finding work and getting back into it as quickly as possible if circumstances changed.

In the house I grew up in there was a pride in working. My Dad was very unhappy when once I mentioned University as an idea. “That’s just for those that can’t work, boffins and the sons of the bosses” I recall him saying. That certainly didn’t mean that education wasn’t valued, and teachers were respected as providing the route to a better job for me than he’d managed.

Times were different. Unemployment was low. Rob Muldoon once half joked he knew all 70 odd registered unemployed by name. Yes, there were only 70! When I got my first job upon leaving school I was employed not because I was the best man for the job, but for the simple reason I was the only one to reply to the ad.

It was easy to change jobs. Give the boss the two fingered salute on a Friday night, read the ‘Sits Vac’ in Saturday’s Herald and there was a good chance by Tuesday or Wednesday you were starting a new gig. Management trainee jobs were good to get all round experience and were plentiful at the time and amongst many other things I got experience at the Otahuhu freezing works with Hellabys and a timber yard with Henderson and Pollard.

My first five elections were all votes cast for Labour, as much out of habit and conditioning as anything else. I was more interested in what was happening on Saturday night than the long term future of the country.

By the end of that fifth election though, I was out the other end of an apprenticeship, married and watching the sense of disbelief and betrayal that the Lange/Douglas Labour government wrought on my father. He never cast another vote for Labour as long as he lived. He could never vote National so he became one of Winston’s supporters.     Read more »

Using tax cuts to revive the economy – How the poms see NZ

The opposition likes to talk down the economy and the government, yet New Zealand has recovered faster than the rest of the world from the global financial crisis, without the need to slash and burn.

Our economy is the envy of the world.

Even the Poms see that:

In New Zealand, John Key’s National Party romped home to victory on a platform of cutting taxes and balancing the budget, trouncing a Labour opposition that promised to put up taxes. Slashing the top rate of tax has revived the economy, and been rewarded with electoral success as well. True, there are lots of differences between New Zealand and this country. And yet the truth is, there are a fair few similarities as well – and if tax cuts can work there, they can work here.

For a small place a long way from anywhere, New Zealand has a fine history of leading the way with radical experiments in economics. While we were battling over Thatcherism, and the Americans were debating Reagan-omics, the Kiwis had “Rogernomics”, created by the Labour finance minister Roger Douglas. What had been a very 1970s, state-dominated mixed economy was swiftly transformed under Douglas into a laboratory for free market ideas. Financial markets were deregulated, the money supply was brought under tight control, the currency was floated, and industries were privatised. It was a mix that was to become orthodoxy by the 1990s, but Douglas was implementing it while our Labour Party was still planning to nationalise the top 100 companies.

Now it is doing it again – except this time without any encouragement from the US or the UK. Ever since the financial crash of 2008, even centre-Right governments have followed a very narrow path, buying into high taxes, and near-zero interest rates, and allowing budget deficits to balloon, even when financed by printed money, to keep the economy afloat. No one has strayed far from the orthodoxy. Except, that is, New Zealand.

Read more »

A Guest Post – Oppose oppose oppose!

Frances Denz writes:

And like many New Zealanders I hate it!  It switches me off.  I stop listening to constant negativity and whining.  It doesn’t work in a marriage and doesn’t work in elections either.

Many years ago in another life, I stood for Labour Women’s Council.  I had to give a speech from the stage with all the other contestants.  Without exception they stood up and whinged – in this case opposing Roger Douglas and Richard Prebble.  There were no hope, no dreams, no goals in their hearts or their speech.

My heart was in my boots as I got up to make only my third speech in public.  Was I going to do the same as them and grizzle and whine?  No, I was going to outline my vision for the positive things I was going to do as their representative.  And every time I made a positive statement I felt myself losing brownie points.  If there had been a “worm” measuring the opinions I would have scored bottom I thought.  The opinion leaders were very hostile to my positivity – I was supposed to prove I could oppose. I thought I had no chance, but I wasn’t going to change my speech which predicated that  we could create a better country with positive action and vision.

I lost.  But not completely as I became the second highest candidate, and when the winner later resigned, I was appointed anyway.  Curiously enough I saw this as a failure but on reflection I realise it was a success as the negative opinion leaders did not win in the long run.   Read more »

Anyone want a rug of dud politicians

Some wag is selling a rug of dud politicians…the cabinet of the 1984 Lange government…complete with a mustachioed Phil Goff who is still in parliament.

dudrug

The good guys on this rug are Roger Douglas and Michael Bassett…the rest are useless, or dead which is a moderate improvement on useless since they can’t do anymore harm.

unbelievable that Phil Goff is still there after 30 years.

Trotter goes all in, Cunliffe a Walter Mitty character

Chris Trotter has gone all in…I sense he is sniffing there is serious trouble inside the Labour party and in particular with David Cunliffe.

One News last night mentioned results of a poll in relation to Winston Peters so I suspect we will be drip fed information and other poll results over the weekend. Over he past 4 weeks there have been a number of polls and none of them are good for Labour and Cunliffe.

My Labour sources are telling me that the rumblings in caucus are pronounced and whatever supporters Cunliffe did have are fast evaporating as their own internal polling shows zero movement, even after major policy announcements.

Chris Trotter is a bellwether for strife in Labour…he is sensing it.

WE’LL ALL HAVE TO WAIT for Sunday’s One News bulletin to discover whether or not the results of the Fairfax Ipsos and Roy Morgan polls are confirmed by Colmar Brunton. If they are then David Cunliffe will have to act swiftly and decisively if he’s to preserve what little remains of Labour’s hopes for victory.

If he fails to act, then the narratives being constructed around his leadership will harden into perceived facts that he will find increasingly difficult to escape.

There are rumours, but I’ve heard those rumours before and they’ve been wrong, so will wait for the results. I suspect though that Labour and National know so I will watch for posts on blogs framing the talking points.

What are those narratives? There are many, but for the moment these are the two most damaging.

The first asserts that while Cunliffe undoubtedly won the support of his party in 2013, he singularly failed to win the support of his caucus. That failure is forcing him to tread with exaggerated caution around his parliamentary colleagues in an attempt to maintain a facade of party unity.

The Leader of the Opposition’s and his advisers’ preoccupation with unity is now extending that caution into the realm of policy with the result that Cunliffe’s campaign promises to enshrine Labour’s core values at the heart of the party’s 2014 manifesto are beginning to ring hollow.  Read more »

1984 Snap Election

Geoffrey Palmer never wanted to be PM

Most politicians at some time or other in their careers desperately believe that they have the moxy and the goods to be PM. Most are deluded tools but thy still have this innate belief that one day they will.

Geoffrey Palmer reckons he never wanted to be PM and gives some insights into the fateful last days of the Lange/Palmer/Moore Labour government.

Geoffrey Palmer didn’t want to be prime minister. He knew the fourth Labour government was doomed.

Prime Minister David Lange had had a spectacular bust-up with his finance minister Roger Douglas.

Lange’s “weaknesses” had destroyed the government, Sir Geoffrey says, and the leader’s job “was a poisoned chalice”.

“I didn’t really want it but I felt it was necessary to have a stable hand at the helm while we tried to finish what we’d started.”

In fact, his demise came more quickly than expected. The panicking Labour caucus replaced him with Mike Moore a mere six weeks before losing the 1990 election.

Sir Geoffrey’s inability to bring the two warring leaders together “was my greatest failure in politics”, he writes in his new book, Reform: A Memoir.

His attempts at peacemaking “are too numerous to recite and painful to me still”.  Read more »

Chris Trotter speaks some sense on FTAs

I have always thought of Chris Trotter as a sensible, albeit wrong, voice of the left.

His ability to cut through the spin and to call things as they are despite wishful thinking is why I consider him a friend and a wise person to listen to.

In his post at Martyn Bradbury’s union funded little read blog he makes the following comment.

Not only does the TPP hold out the possibility of New Zealand adding much greater value to its agricultural exports – to the point where our export income is derived increasingly from the “how” of agricultural production rather than the production itself – but also, by reducing the pressures on land and water use in our own countryside, the TPP offers New Zealand’s beleaguered natural environment a much needed respite.  Read more »

Shrinking the State, never been a better time

I have never been a fan of the state providing solutions for anything. Any solution proposed by the state is likely to be bloated, inefficient and ineffective. Unfortunately in our  modern society we still have to get over the intellectual poverty that socialism has delivered to the body politic, where there is still an over-arching the belief that the state will provide.

Thatcherism though challenged this and in New Zealand we had Roger Douglas and Ruth Richardson to slay the socialist dragons…they are still breathing though, even if the breath is a bit wheezy and spluttery.

Still a generation of kids have grown up knowing that subsidies are bad, unions are useless and free enterprise delivers more often than not. The time has never been better than now to start looking at shrinking the state.

So the experiment is over and the results are conclusive. Part one was carried out under Gordon Brown who, as this column said at the time, tested to destruction the theory that vast increases in government spending would cure all the problems of the public services. The national disillusionment and exasperation which followed on that ideological adventure should have led to an immediate repudiation of it by all rational political leaders. But alas, there was a period of suspended disbelief in which the Conservatives insisted that sticking to Labour’s spending commitments was absolutely necessary if they were to have a hope of being elected. Yes, that was what George Osborne used to say back in the darkest days of modernisation.

We have seen the same thing here. Massive increases in spending in education for no discernible improvement in outcomes. Same in welfare. Money is not the answer. National, like the Conservatives stuck with Labour’s spending…time to start unpicking the excesses of Clarkism.  Read more »