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8:14 pm, March 15th, 2025 - 8 comments
Categories: act, assets, Austerity, benefits, Brexit, business, capitalism, Christopher Luxon, class, class war, climate change, Coalition NZ, david seymour, don brash, Economy, economy, Europe, inequality, infrastructure, International, john key, national, nicola willis, nz first, overseas investment, Politics, Privatisation, privatisation, Public Private Partnerships, public services, simeon brown, uk politics, welfare, winston peters -
Tags: david cameron, te tiriti o waitangi, Treaty of waitangi
By pursuing cuts, selling off assets to multinationals, enabling ACT’s attacks on the Treaty and cutting back on climate commitments, Luxon is guaranteeing that NZ will not be stable for long, writes Elliot Crossan.
“New Zealand has been and will continue to be a poster child for social and political stability […] when you look at all the tension, volatility and strife in the world today, I think that makes us pretty special, and a very attractive destination for anyone looking to take shelter from the global storm.”
This was Christopher Luxon’s key message on Thursday in his speech opening the government’s Infrastructure Summit at Auckland’s Park Hyatt Hotel. The Prime Minister’s audience was a room of foreign investors representing multinational corporations worth a combined total of 6 trillion dollars. His pitch was simple: invest in New Zealand, we’re a safe bet.
Why is Luxon selling New Zealand to the highest bidder as a bastion of stability in a volatile world, when at the exact same time his government is engineering the conditions for this country to rapidly become more polarised, volatile and unstable?
The Finance Minister is currently imposing the harshest per-capita budget cuts in our nation’s history upon the public sector. This austerity comes amidst a crisis in our already-underfunded health system. Voters are concerned — a Horizon poll this week revealed that improving the health system is the top issue for the voters of all six political parties. Health workers are also concerned — last week a survey found that 86% believe the government’s cuts to Te Whatu Ora will make it harder for people to get healthcare. The impact of the cuts is being felt elsewhere too — 65% of voters believe that David Seymour’s revamped school lunch programme isn’t working, with just 17% disagreeing.
Instead of responding to these concerns by tapping the brakes and reversing these unpopular cuts, the Coalition is ploughing ahead with phase two of its plan: privatisation. After Simeon Brown’s announcement last week that the government’s “major overhaul” of health will involve “partnering with the private sector,” it is a fairly safe bet that contracts to run sections of our healthcare system were advertised to the multinational corporations in attendance at Luxon’s summit. The John Key government’s partial privatisation of the energy sector has proven to be a disaster for everyone except the profiteering shareholders; privatisation in the health sector will have even worse consequences.
The ACT Party isn’t satisfied with National’s piecemeal approach to privatisation. In his State of the Nation speech in January, Seymour declared that Kiwis “need to get past squeamishness about privatisation.” He asked: “How many people here would give up their right to the public healthcare system if they got $6,000 for their own private insurance?”
Seymour is advocating a US-style approach to healthcare for Aotearoa. The US has the worst-performing healthcare system of any high-income country. The only people who would benefit from this sell-off would be major corporations; working families would suffer.
ACT’s ultra-divisive Treaty Principles Bill ties in directly to the party’s agenda of privatisation, as Rupert O’Brien highlighted in the Spinoff last September. “The Treaty principles have proved a significant roadblock to both corporatisation and privatisation in the past and present a clear threat to any plans of future development of public assets to the private sector.” ACT is attacking the foundations of our country’s constitution in order to sell off state assets to corporate shareholders.
The Treaty Principles Bill has the added benefit for ACT of polarising the nation, and sowing division among working class communities. ACT is following the exact playbook that Don Brash adopted when he became leader of the National Party in 2003.
As revealed by leaked emails in Nicky Hager’s bombshell book ‘The Hollow Men’ — the contents of which forced Brash to resign in 2006 — Brash was advised by Karl Rove (chief strategist for George W. Bush) to stop emphasising National’s unpopular economic agenda, and instead focus on “wedge issues.” The issue that Brash chose to prioritise, unveiled in his infamous 2004 Orewa speech, was the anti-Māori “One Law For All” campaign. “Iwi vs. Kiwi” was the wedge National used to sow division across Aotearoa. The party nearly doubled its vote share in the next election using this strategy.
When the economic system is rigged in favour of the rich and powerful, and is driving down living standards for working people, the rich — and the right-wing parties which represent their interests — need a scapegoat to blame for society’s ills. The scapegoat chosen by Brash in 2004 was Māori. ACT has taken up this strategy; the Treaty Principles Bill is the culmination of this 20-year right-wing populist project to divide-and-rule.
This combination of austerity, privatisation and right-wing populist attacks on the constitutional order is guaranteed to create a more unstable social and political environment. Luxon should know this. After all, his political role-model is none other than former British Prime Minister David Cameron.
The parallels between Luxon and Cameron are striking. Both claim to be “compassionate conservatives.” Their governments both imposed sanctions on beneficiaries, driving up poverty and homelessness as a result. Both governments cut funding to disabled communities.
The UK’s National Health Service was subjected to dangerous levels of underfunding under Cameron’s Conservative-led Coalition. Two years into this austerity programme, the government unveiled the 2012 Health and Social Care Act, which allowed up to 49% of NHS services to be outsourced to private companies.
These cuts and asset sales were all part of a broader programme of harsh austerity. Luxon is following in Cameron’s footsteps in his attack on the welfare state.
It is no exaggeration to say that austerity kills. Over 330,000 excess deaths in the UK between 2012 and 2019 were linked to austerity policies. Public services are not a luxury — they are a vital part of everyday life for those who lack the money to pay for private alternatives.
Luxon, like Cameron, comes from a wealthy background, and is insulated from this brutal reality. The same deadly consequences that resulted from austerity in the UK will happen in Aotearoa if the Coalition is not stopped in its tracks.
Austerity is invariably the precursor to heightened social and political instability. Cameron learned this the hard way in 2016, when his most right-wing backbenchers successfully lobbied him into agreeing to a referendum on British membership of the European Union. EU rules presented a roadblock to further privatisation and deregulation, and the UK’s most hardline free market radicals wanted out. The Prime Minister, on the other hand, confidently expected voters to opt for business as usual and vote Remain.
A country driven to the boiling point by falling living standards was in no mood to vote for business as usual. Britain voted for Brexit by a margin of 52-48%. Cameron resigned as a result. His mission to defend the stability of British capitalism went up in flames.
By supporting the Treaty Principles Bill to first reading, Luxon is playing with fire just as Cameron did. Even if the Treaty Principles Bill is stopped at second reading, the Prime Minister will have helped greatly widen divisions between tangata whenua and tauiwi on this colonised land; and Seymour has no intention of letting his Bill die at first reading. Phase two of ACT’s plan is a citizen-initiated referendum in 2026.
The Prime Minister is further enabling the rise of right-wing populism by declaring himself open to New Zealand First’s “anti-woke” proposals — i.e. attacks on diversity policies in the public sector, which Winston Peters has lifted straight out of the Trump playbook. Both of National’s coalition partners are trying everything they can to provoke a culture war.
If the Prime Minister had any interest in “social and political stability,” he would stand up to this hateful and divisive rhetoric. Instead, Luxon is playing along. His government needs cover to distract from its economic assault on the working class. A culture war suits his agenda perfectly — he just doesn’t want to get his hands dirty. He wants to present National as the sensible moderate party, while it links arms with ACT and NZ First to destabilise Aotearoa.
Economist Clara E. Mattei has drawn a clear link between austerity policies and the breakdown of social cohesion, the erosion of democratic norms, and the growth of the far-right. By pursuing harsh austerity and enabling populist rhetoric, Luxon’s legacy may end up being the rise of far more extreme elements than Seymour and Peters.
Again, Luxon parallels Cameron. 15 years on from the beginning of Cameron’s austerity agenda, Nigel Farage’s hard-right Reform party has surged to take the lead in some UK polls. It’s not just the UK; far-right parties are currently on the rise across austerity-ravaged Europe.
I recently conducted a research project for CAFCA, a group which campaigns against the takeover of Aotearoa by multinational corporations and shareholders. The findings showed that foreign investors took a whopping 26.2 billion dollars out of the NZ economy last year — more than the combined value of our exports of dairy and forest products. NZ investors overseas in return made less than half that amount. We have had a permanent deficit on overseas investment income since records began in 1972; this deficit grew rapidly after foreign direct investment regulations were relaxed by the Fourth Labour Government.
Last year, multinational corporations reinvested barely more than a quarter of their profits into our economy. Despite foreign direct investment being worth the equivalent of 41.2% of NZ GDP, foreign-owned companies employ just 17.1% of our workforce.
11.4 billion dollars — nearly half of the total 26.2 billion — was taken out of the country by foreign-owned banks in 2024. The finance and insurance sectors combined took 16.6 billion dollars — nearly two-thirds. Huge profits are being extracted every year from working class communities in Aotearoa, all to benefit shareholders of overseas banks and insurance companies that we have no democratic control over.
In an increasingly volatile world economy, putting working class communities at the mercy of fickle foreign investors who only care about extracting ever-higher profits from Aotearoa is not a wise policy. Yet the purpose of Luxon’s investment summit was to boost foreign direct investment. Seymour recently announced changes to the Overseas Investment Act which will further deregulate foreign investment rules. Not only are the Coalition not concerned about multinationals ripping us off — they want to flog off our public assets to the highest bidder on the international market.
Nicola Willis echoed Luxon’s sentiments in her speech to the Investment Summit, declaring that “stability is our middle name.” The Finance Minister told investors that Aotearoa is “an undervalued stock.” The most revealing line from her speech was the following: “In a world in which people are worried about food supply and the effect of extreme climatic events, I would choose New Zealand.”
The Coalition’s Fast Track Bill allows Ministers to override climate and Treaty obligations to accelerate approval of new infrastructure and housing projects. The government’s commitment to repealing Labour’s ban on new offshore oil and gas drilling permits was singled out by the Climate Change Performance Index as a reason for NZ falling seven places down their global ranking in 2024. We were already marked as a “low performer” by the CCPI before this government was elected.
For Willis to identify extreme climatic events as a reason for multinational corporations to invest in NZ tells you all you need to know about the priorities of her party. National is willing to dismantle environmental protections, pouring fuel on the fire of the climate crisis, even while senior figures acknowledge the catastrophic impacts that global warming will cause in coming years. Apparently, those catastrophic impacts overseas are good for NZ business.
The 2023 Auckland Anniversary floods, followed just weeks later by Cyclone Gabrielle, were a precursor of the devastation climate change is going to unleash upon Aotearoa. Global coffee prices are already soaring as a result of droughts in Brazil and Vietnam — a mere taste of the chaotic impacts climate change is going to have on the global food supply chain. This country will not be a “safe haven,” insulated from the crisis, even if we will likely not feel the very worst effects — unlike many of our Pacific Island neighbours.
The government has a responsibility to communities in Aotearoa, across the Pacific and across the world to rapidly reduce our greenhouse gas emissions. Yet once again, the Coalition is prioritising corporate profit over all else — including the “stability” that Luxon and Willis are so proud of.
The “global storm” Luxon referenced in his speech to investors has clear causes. One cause is governments colluding with greedy corporations to cut, privatise and deregulate the public sector, prioritising profits over people. Another cause is deliberately divisive “anti-woke” rhetoric from right-wing populists seeking to demonise minority populations to shield the super-rich from the scrutiny of an angry population. Working class communities across the world are suffering, as inequality surges and living standards fall. Climate change and resultant food price shocks will dramatically worsen this suffering over the next few decades.
We are being governed by a Coalition of the rich, by the rich, for the rich. Their policies and rhetoric are hurtling NZ rapidly towards the polarisation, instability and volatility that much of the world has been experiencing in the last two decades. The winds of the global storm are starting to blow in Aotearoa.
Foreign investors seeking to buy up our assets will not find a safe haven from this storm. They will help bring the storm with them.
Elliot Crossan is a socialist writer and activist from Tāmaki Makaurau Auckland. He is the Chair of System Change Aotearoa. Subscribe to his Substack page to read more.
This is a very good Post!
Let’s throw a spanner in the works of this class war for the Coalition and vote them out next year.
How much damage can they inflict in the next 18 months that won't be able to be easily undone?
How long is a piece of string? – the question is too open-ended.
What incognito said. A must read for Sunday morning.
Great summation of the perilous situation this CoC has and is creating.
Thanks great write up.The CoC have started attacks on Christopher Hipkins,
His strong clear communication is rattling the three CoC parties.
Chippy saying clearly, no foreign investment in hospitals schools or prisons, made clear the intentions of any Government he led.
He was clear also that roading piping and that type of infrastructure investment would be supported and that contracts would be honoured.
His first election meme of 'Jobs Health Homes' is clear and memorable.
imho LTuxon is desperate to get a win on the board, Seymour is no manager, and Winston is sour and even bitter at outcomes.
Roll on 26.
A well-researched/written post..
I would echo others calls for 'must-read' recommendations….
I think the point is that 'stability' means different things for different people. Luxon is touting NZ's stability for the owners and investors of capital. That includes a broad neoliberal consensus across all parties likely to lead a government in favour of free trade, low taxes, property rights, strong law and order enforcement, reserve bank independence and artificial self-imposed constraints on government spending. These are all music to investors' ears. Most of them do not care if the plebs are a bit unhappy, or start waving placards in the streets, or have an eroding quality of life. 'Stability' is a carefully coded weasel word intended to convey a particular message.
This below is a documentary of how the RightWing in UK generated insanely huge damage to the NHS using the exact same strategy please spread this far and wide
The CoC is IMO just…evil.