Is This The New State We Want?

Written By: - Date published: 12:02 pm, November 19th, 2021 - 24 comments
Categories: Economy, kiwisaver, Privatisation, social democracy, Social issues, superannuation, uncategorized - Tags:

The New Zealand state is gaining power again, but is it what we want?

Some, just a few, may still remember a grey old time when central government was simple and huge. It provided you with electricity and gas, insurance, postal and banking services, local-focused tourist hotels and holidays, all the television and almost all the radio, highly subsidised if simple housing, a solid but uninspiring job, in a great singular circular economy of high taxes and a rosy optimism. It did everything but brush your teeth for you.

A few more will recall most of that being corporatized and sold off by Labour and National in the 1980s and 1990s, into a narrow, poorer, and bitter little country.

Then deeper still in the late 1990s, government forced the corporatisation and sale of local bus fleets, regionally-owned banks, and much more besides. New Zealand went from being a high-tax, high public ownership, low-inequality country to one where the entire public sector owned very little. What it retained in the public register was controlled by corporate boards. Easton and Jesson wrote on this extensively.

This is the kind of state most New Zealanders 50 years and younger will understand now, insofar as they register the state as a thing.

But growing and accelerating in the new millennium, the state generated new public entities to do specific things.

There was Kiwibank, an outgrowth of NZPost.

There was Crown Fibre Holdings, which has now expanded into Crown Infrastructure Partners.

There was the NZSuperFund (and others), now a behemoth of public capital and helping other Crown entities build huge infrastructure, as well as keeping future oldies supplied with Chocolate Wheatens.

There were all the entities formed to rebuild Christchurch, guided by specific legislation that empowered them, and tightly coordinated by central government.

There were entities that evolved to generate innovative spinoff companies, like NZVIF and Callaghan Innovation.

There was Hobsonville Land Company, merged into HLC, then expanded inside Kainga Ora.

Then still more state entities in the form of alliances such as the Supporting Growth Alliance and City Rail Link.

That’s just a small sample of the unexpected expansion of state agencies and state power across our country since the early 2000s, many of them having a decade or two to evolve. Some like the irrigation one had a term or two then died. But they represent billions upon billions of dollars, many thousands of workers, and not a whole bunch of accountability.

Then we get to the 2017 Labour government, and the state really starts taking the steroids by the cupful.

They merge all of New Zealand’s polytechs into one, by legislation.

They are now well on the way to merging all the District Health Boards into one.

The Three Waters policy programme that had rumbled along under DIA for several terms is now preparing to strip management power of all water away from local government and put it in the hands of just a handful of new entities.

And now, under COVID, there’s a huge story to be told about the massive interventions into the economy that the government has made over the last 18 months. Particularly the integration of Health, Police, Customs, Immigration, NZDF, and Education into an integrated state command. There’s not often the call for lots of entities to ‘stand up’ together, outside of Commonwealth Games or Rugby World Cup event.

The formation of the new Crown entities over the last 20 years had no particularly strong common ideology to them: it was often just the state reacting to exigency, and at other times the state realising it didn’t have an existing agency with enough focus or expertise to roll out the policy it needed. You can guarantee serious agency redesign out of this latest crisis.

And no, there’s no secret intergenerational cabal of deep-state warriors who play poker and figure the perpetual expansion and redesign of state governance and instrumentality.

Oftentimes agency reintegration is, borne within crisis, pretty useful for a time. That’s where commercial alliances between corporates and state agencies help. Also, practically, small states dominated by no more than a dozen oligopolies can’t afford to annoy too many corporates at once. New Zealand’s government is still really a weak regulator and a small presence in our country, other than in extreme moments.

But there is a pattern to the recent centralised reaggregation of power all the same: locals lose out, customers lose out, human rights lose out, central government absorbs the remaining agency of local government instead of really hitting specific market dominators hard, and no timetable in which any of the powers that the citizen has lost will ever be given back. Also, no ideological shape to any of it to make any collective sense let alone collective benefit to them all.

Sure, the state is back and with scale and speed.

But is this what we want?

24 comments on “Is This The New State We Want? ”

  1. Better a Leviathan State serving the public good, than huge unaccountable corporations running rampant in the name of Capital.

    • Ad 1.1

      False binary.

      Ours is hardly a Leviathan State.

      Such state as we now have now primarily consists of (public) corporations and massive NGO contracts.

  2. Blazer 2

    When state assets are privatised for pennies on the dollar as occurred in the 80's-90's …locals and customers sure lost out.

    A large proportion of NZ's rich list reaped the benefits.

    There is no evidence to support the much vaunted efficiency of private business.

    The 'going rate for talent',is a load of b/s.

    All vital utilities should be run for the benefit of a country's citizens, not to enrich a few born to rule capitalists that get first use of credit creation.

    Politicians are virtually bought and paid for by corporate interests these days.

    I like Trotters recent article about the downfall of the Whitlam Govt when it threatened the status quo….that magic show ,the hamsters in the wheel are meant to…embrace.

    • millsy 2.1

      The biggest irony is that Whitlam's goverment was already starting to soften its stances prior to its overthrow. The radicals in his cabinet (ie Jim Cairns, etc) had been thrown out and replaced by more moderate figures and a more restrained budget had been drawn up.

  3. Visubversa 3

    I don't want the State favouring and promoting an ideology. We separated Church and State decades ago after centuries of abuse. However, we have increasingly seen this government being prepared to use the levers of the State to promote gender ideology.

  4. Tricledrown 4

    Being a western first World Democracy requires a protection racket of the Economic Elite global corporations.

    Our economy is just a drop in the bucket if we stray off the path of neoliberalist economics plus modern day calvinism, we will be treated like Allendes Chile.

    Throw the peasants a few crumbs off the table a bit of tinkering around the the best we can hope for.

  5. Tiger Mountain 5

    “We” want? what about we need. With 50% of the population owning just 2% of the wealth, and people locked into renting overpriced dumps for life, and living rough, the children of Roger’n’Ruth and their descendants certainly do need a stronger state. Just not a neo liberal corporatist one such as we have had for almost 40 years. With fifth columnist senior public service officials putting the spanner in and leaking.

    Asset sales of public infrastructure are gifts to the capitalist class–theft some would say. Electricity generation and supply is case number one for full public ownership to be restored and there are many others. Sadistic WINZ/MSD needs to be retired forthwith and a basic income instituted for all citizens paid via IRD.

    There are around a dozen devolved Govt. agencies with responsibility one way or another for food safety. Got a nasty touch of Campylobacter after that COVID level change dinner–who would you call? SirKey’s term saw increased powers granted to the State Security and surveillance agencies–warrantless activity, life time immunity for operatives, powers extended to Govt.Ministries and contracting out okayed. Be nice to have the Kiwitea St lot eat that.

    So yes Ad, there is ample room for increased state activity. But it will not happen in a class left way until there is community organisation and direct action demanding it. This is quite possible with new gen voters in the ascendency.

    • Kiwijoker 5.1

      Got it in spades TM!

    • Gezza 5.2

      “Sadistic WINZ/MSD needs to be retired forthwith”

      Yep, a monolithic organisation that behaves like an unfeeling behemoth that Sepulono seems almost captured by, tho.

      She was on tv 1 the other night on an item pointing out how MSD penalising those who don’t turn up for their scheduled Court appearances – by cutting their benefits – just inceases the already existing financial stress on them, their whanau & especially their tamariki.

      Sepuloni was basically pleading that work is already going on in MSD to do something about it, but it all unfortunately takes a lot of time to make any changes. Very vague.

      “and a basic income instituted for all citizens paid via IRD.”

      I’m not convinced / not sold on the UBI idea. I think too much risk of creating a large number of freeloaders other working taxpayers will come to strongly resent. A UBI will be a frequent target for Opposition parties & will likely be dumped if introduced by the next change of government.

      “So yes Ad, there is ample room for increased state activity. But it will not happen in a class left way until there is community organisation and direct action demanding it. This is quite possible with new gen voters in the ascendency.”

      Maybe. I was part of the hippy/Woodstock/stop the Vietnam War/No nukes generation that rejected many of the money-accumulating values of business & corporations & wasteful consumerism. We thought we were going to change the world. What we actually did was let neoliberalism in the door & it frackin took over Western Society completely.

      New gen voters are encouraged by a thousand social media means to be self-absorbed & selfish BUT to THINK they are acting in accordance with higher values than their parents or the generation born the decade before them. They might turn out to be as ineffective as my generation was at changing the world for the better. But I agree it’s the STRIVING for a better world that we cannot & should not do without.

      • Tiger Mountain 5.2.1

        My take is Carmel Sepuloni has been well captured by senior officials at MSD.

        With precarious employment for so many, would other taxpayers really care given that Basic Income recipients would also be able to work and pay tax?

        The new voters may vote in patterns similar to other generations is the standard right wing response. I am not so sure given the numbers paying off thumping great student loans and extortionate rents for dumps.

  6. McFlock 6

    I'm ok with it.

    Conflation of covid responses with things like kiwibank and Callaghan Innovation is a bit misleading, imo.

    Infection control measures always need to be somewhat draconian, because some people have a tendency to be morons. This doesn't go back to youtube, or even the 1918 pandemic, but even to the black death. For every village of Eyam, where everyone took conscious steps to avoid spreading the literal plague, there are thousands of refugees or quarantine-relaxers for the sake of commerce (today known as "plan B" aficionados).

    But these measures tend to pass as the emergency passes. Sometimes too quickly, as in the current unpleasantness.

  7. Patricia Bremner 7

    I am happy Education is not a commodity being sold to overseas students ahead of our own. My relatives in Australia also say their children have attained courses usually crowded with overseas paying students.

    The State may be " a drop in the ocean" but if it is working for our wellbeing, good.

    Ok, last time the State let Corporates run things after the Christchurch Earthquakes, we had shoddy builders doing repairs willy nilly. The take up of water rights given to huge factory type dairy farms for irrigation has been a huge mistake. That was done to generate wealth, and people who wanted wellbeing were gradually shut down. MBIE grew out of that. Four Ministries amalgamated. That did not improve housing, innovation or employment, but did benefit business.

    No ideological shape? I disagree.

    We have the perception of Safety and Wellbeing as drivers. A Collective goal of covid conduct and vaccinations to regain as many of the old freedoms as is possible in a Pandemic.

    Climate change may also impinge on freedoms to a greater or lesser degree in the near future. So yes I am happy for the State to have a larger role in the Governance of the three waters, as Councils have largely failed to provide for the necessary Capital Expenditure, have few ways to raise it so have been ignoring the many signals of failure, broken pipes sewerage in rivers and on beaches.

    A coordinated approach to Health has exposed a few cranks in its midst who were counterproductive. Those not practicing from a sound basis are not what is needed.

    There are fundamentals in Health and Education that begin with equity for our Treaty Partner. This is so accepted now, no one is querying the extra funding needed to achieve this. We are growing up.

    A State that is effective working beside business to achieve better lives for all. If that means better oversite of rules regulations and taxes, yes. We all have a stake in this.

  8. DS 8

    Sure, the state is back and with scale and speed.

    But is this what we want?


  9. Stuart Munro 9

    It's a pertinent question, and I think that the left inevitably desires a little more state than the right might prefer. That would be because only a state is equipped to deter or pursue plutocratic excesses like slave ship operators or wage thieves, or dairy intensification taken to poisonous extremes.

    Laissez faire being one of the descriptors of letting business do whatsoever it choses, the existence of at least equally powerful regulatory forces is a public interest necessity. Unhappily it is far from clear that any increases in state power under neoliberalism have been directed towards that end. Too often they provide cosy sinecures, dubious bonuses, or unprofessional excesses like the helicopter time bill NZMA ran up over the wreck of the Rena, or the obstructiveness of Callahan Innovation that drives folk unfortunate enough to have to deal with them to ranting.

    It is in the nature of the human species that we do not stand still. We evolve or decline – there is no point of inflection. Human societies must aspire and strive if they are to prosper, and the increasingly unequal rewards of work as people are casualised and rack-rented do not cultivate a culture that rewards productivity, only a cynical group that exploit vulnerable labour.

    There is great scope then for an enlightened and diligent civil service – but little or no sign of such values in contemporary practice.

  10. James 2 10

    Holy smoke. Something I might agree with.

    Because surely, the state never did wrong in the name of good? No state in the 20th century did horrendous things under good intentions.

    Locking up Muslims because they just could be terrorists is of course completely different to wanting to lock up and exclude anyone anti-vaccine or even against vaccine mandates and passports. Public Health as a concept has of course never been abused by 'experts', such as supporting compulsory sterilisation.


    The state is power, often monopolistic power. It can and does do good, but often very bad.

    What we have now is ideological hegemony combined with massive expanded state power. That is bad, and especially for democracy in a heavily unitary and centralised system.

    Add on the fact our cultural and government institutions speak from a massively homogeneous view on social matters and the media has a mass injection of Government funding and unprecedented advertising dollars.

    And then Covid hit. Human Rights are now selfish. Government controlling everywhere I go, and what I can do, is just normal. If I speak against it, I'm just a raving selfish neo-liberal because health. Nuance is lost.

    These days it is a hell of a lot easier to just shut up and smile.

    • peter sim 10.1


    • DS 10.2

      Nature abhors a vacuum, mate. Without a strong state… you get the space filled by other entities. Corporations, and so forth.

      The Neoliberal Right have spent half a century (and billions of dollars) trying to spread the notion that the State is counterproductive at best, and a villain at worst. No need to do their work for them.

    • McFlock 10.3

      The state should have a monopoly of some types of power.

      Proactive use of force to gain compliance, for example. The ability to levy taxes and fines without consent. The ability to restrict freedoms where the expression of those freedoms would clash with the public good. The determination of property rights.

      I sure wouldn't want my employer or supermarket to be able to exercise those powers, even if sometimes they might be necessary for the protection and orderly operation of society.

    • KJT 10.4

      The "anti state power advocates" are the first to call the police when "their property rights" are threatened.

      They sat silently while State overreach such as National's Search and survaillance bill was enacted.

      At present also loudly calling for more state money.

      It is not State control they are against. Masseys Cassocks assaulting workers was fine. It is Democratic control that is good for ordinary people, not the Oligarchy.

      The State, in a Democracy, is us!

      The solution to State overreach, is more citizen control. Democracy.

      • Hunter Thompson II 10.4.1

        Your first comment is bang on. A good definition of a liberal is a conservative who has just been arrested.

        Same applies to tax dodgers – once they are injured in a car crash, they expect instant (and free) treatment in a public hospital.

  11. Castro 11

    Your use of the word citizen underscores the damage done to No Zealand under neo-liberalism, and highlights the damaging, and ultimately failed-state-inducing aspects that you neglect to mention. Foreign residents have both voting and property rights in No Zealand. Oh, they're 'citizens' too? Madness. No Zealand is a (not so) slow motion runaway train of a failed state waiting to happen.

  12. pat 12

    The sad reality is neither the private sector (in NZ) nor the state having the required capability or capacity for that required….nor do we have the time to redevelop it.

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