What makes this government popular, deep into its third term?
What makes it so hard to corrode their popularity?
There’s no conspiracy to it. This is no ordinary small-or-large c conservative government. This is a very clever government. And in order to win the people, it is very important for an aspiring alternative government to admit to what they are doing well.
A standard leftie electoral campaign platform, for the last three elections, has been to propose massive public welfare programmes to help the poor. Worthy aim. And to do it, raise those taxes on the richest. Who except the richest would object? But proposals to raise taxes on those with the very highest incomes to fund programs for lower-income people, haven’t generated much enthusiasm from those whose incomes have not grown as expected, and who may be doing less well than their parents.
That is a key test. In this barbeque season, you will engage a lot more with your relatives. You should be able to tell, reviewing all of them, which government they did better under, and which ones slid them backwards. Are they doing less well than their parents?
The people who can’t see they’ve improved their collective lot from their parents, won’t like the sound of another proposed handout even if it might help them; they aspire to achieve their own worth by working and earning a good income. Yet in the current economic conditions in so many countries, that prospect eludes them.
If people don’t have that sense that the struggle of ordinary life is worth the grind, they will get resentful. In Europe, Britain, and the U.S., they continue to lash out at those who they see as gradually taking away from the opportunity that they thought was going to be theirs: immigrants. The left both here and worldwide has to face immigration and commit to controlling borders harder.
An aspiring alternative government has to squarely face rising inequality, rising immigration, and weak economic growth. If these trends continue across the developed world, we may see more unhappiness, more disenchantment, and more political disruption. Substantial fiscal stimulus might be helpful, but it is often blocked. Further direct welfare is too often resented even if it helps people.
One of the secrets to the popularity of this government is that its public welfare programmes have been indirect; they have been put into water, transport, and increasingly housing infrastructure, and less into direct social welfare transfers. Indirect. Particularly through the rebuild of Christchurch – uneven and unambitious as it is – it has used public debt for the right reasons. It’s subtle, and it works.
The second element an alternative government has to face is this: reducing taxes is far more attractive to the public than more expensive welfare programmes. Making the tax system progressive enough to break the trend towards even greater income inequality has for too long been put into the leftie too-hard basket, yet it may be the best option we have.
This makes the New Zealand situation stand in stark relief against almost all European countries who chose to respond to the GFC of 2007 with austerity measures which cut public spending including public sector employment, public works, and social welfare such as pensions. Austerity economics and immigration resentment have together caused a long, wide, slow rolling wave of political instability.
If an alternative leftie government is going to do more than wait for the housing market to usher this lot out, it needs to admit to what this government has done really well. It needs to address immigration levels. It needs to address the income tax levels even more boldly than the current government. It needs to socialise wealth subtly, rather than through resented higher direct social welfare transfers. It also needs to figure out that people will find them attractive if overall they believe they and their descendants will do better.
Key gets this, and because of this he could still win another three years in 2017.