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Guest post - Date published:
8:31 am, December 19th, 2023 - 49 comments
Categories: community democracy, Deep stuff, economy, labour, social democracy, Unions, workers' rights -
Tags: nigel haworth
The world has changed, rejecting in large part the social and economic commitments of the Keynesian era (1930s-1970s) and, since the 1970s, held in the embrace of divisive market economics. The world today is divided into two spheres.
The one, broadly bounded by the state, the rule of law and the democratic process, is assailed both economically and politically. Liberal democracy is under threat in every direction, from the UK’s Sunak to Argentina’s Milei. In this sphere, economic policy settings since the 1970s have strongly favoured market solutions, individualism and greater wealth inequality. Social democratic interventions have at best stemmed temporarily the tide of pro-market measures, but have failed to introduce radically different, ‘transformative’ policy measures. The wisdom of Piketty and Varoufakis and Reich has been trumped by a nervous clutching of the “centre” as it moves evermore to the Right. And the Left, sensing this self-imposed limit, becomes more and more sensitive to criticism from within its own ranks.
There is a second sphere, a “Modern Buccaneering Capitalism”. Its leitmotif is the power of new global wealth. In 2022, for example, the richest 1% of the world’s population owned about 45% of all global wealth (inequality.org). Oxfam suggests that between 2020 and 2022, the 1% appropriated two thirds ($28 trillion) of new growth in that period; the remaining 99% shared one third ($14 trillion) of that growth. This sphere adheres to the rules and norms of the first sphere insofar as its members choose to do so. If they demur, they seek to escape the legal and financial constraints of the first sphere, by design, mobility and subterfuge, powered by financial leverage. This behaviour enjoys protection by the institutions and practices of the first sphere. One still remembers, for example, during the last global economic crisis, the bailouts by the ‘first sphere’ of vast financial institutions operating happily across both.
Denizens of the second sphere pay proportionally less tax than we, who inhabit solely the first sphere. Their power is such that individuals and their business operations act on occasion as quasi-states, offering advice, funding and technology to states, even aspiring to a privatised space effort, but in search of advantage and profit. Supporting this elite is the banking and finance infrastructure and the efforts of the 1940s global financial institutions. These arrangements prosper because of, first, ideological support for wealth provided by market ideology, and, second, a “it’s just too hard to do anything” argument.
The Left has constrained its efforts almost wholly to the first sphere. In part, this constraint has a real basis in the difficulties of enacting trans-national alternative arrangements; it also reflects a lack of analysis, imagination and focus. Above all, it is a self-imposed constraint, embodied in the perennial location of much of the Left in a faux centre, distant from its history and purpose.
The shift of global power into the second sphere cannot be met effectively by actions solely in the first. New, more effective forms of global governance will be needed to rein in that power. This explains the Right’s firm opposition to any notion of global governance. At the nation state level, action is required at two levels – support for that global governance, and actions to qualify the local power of Capital.
In terms of the latter, the key policy area is wealth creation and distribution. A Left government with any claim to progressive credentials will focus on three policy areas – first, high-quality, high value production; second, taxation measures to reduce significantly wealth differences; third, strengthened democracy, including industrial democracy beyond collective bargaining. These three are indispensable. A Left politics, which does not build on these three, will founder.
Nigel Haworth
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Trotter makes similar points.
https://democracyproject.nz/2023/12/18/chris-trotter-what-would-it-take-for-labour-to-win/?utm_source=rss&utm_medium=rss&utm_campaign=chris-trotter-what-would-it-take-for-labour-to-win
Excellent article. by Trotter that dovetails with the post above. He even finally accepts that the Greens are dynamic and inspired.
One term government.
yeah, let's see how Trotter is about the Greens in the next election year. He has a very long history of undermining them.
I think thats called freedom of speech…he can express his opinion and you can counter it.
The alternative?
sure, anyone is free to say stupid shit or undermine the left.
The alternative is that people on the left learn how to work together.
Everyone is free (hopefully) to express their opinion…and if their opinion makes sense then (hopefully) enough will be convinced that that opinion is something they can support.
Its a numbers game….as much as you may dislike the notion.
yes, it's a numbers game, but not only in the way you mean. Trotter has far far more readers than I do. Our voices are not equal.
What are you are arguing for is both majority rules and those with the most influence win. That's why we have climate change and a death cult running the country.
There are alternatives to that.
Yes I am arguing for majority rules….because if the majority decides incorrectly the majority will have to live with the results…do you suggest the minority should impose their views on the majority right or wrong?
And if we allow the minority to do so, how small should that minority be?…and who are that minority?
sorry, really can't help you with your binary thinking tonight.
I will correct this though,
What I actually said,
Ah the binary thinking slur….not really an argument.
Yes the most influence….so make your argument more influential.
The same Chris Trotter who opposed a CGT? Who criticises Cullen (who had been part of a group recommending one). And the criticism of GR, who had been working a moderate WT, one Trotter has hardly been an advocate of (nor of the return of an estate tax).
Neo-liberal is market rents for state houses, selling down state housing rather than increasing stock, low MW rather than significant increases, the ECA rather than the Fair Pay Agreement, across the board tax cuts rather then WFF tax credits, one could go on – slaps people when they are dead or are down, but where the hell was he when …
I simply cannot fathom why so many people on this site are still so attached to the bloviating rants of people like Bomber and Trotter – if they're the one true left, count me out.
Bomber is pro Maori, but otherwise anti-woke liberals, especially feminists, (who he blames for undermining support for the left).
He is critical of Trotter on Maori issues
https://thedailyblog.co.nz/2023/12/19/infamous-tdb-media-awards-2023/
Given I am neither a misogynist nor anti-Māori, I shall pass
Labour would be wise to ignore Trotters "Sun Tsu" advice on the Treaty/Tiriti.
For one, there is nothing being sought by National as per defining principles of the Treaty/Tirirti.
And a nationwide hui approach, that sought to be anything more than a consultative, would have to confront the distinction between TPM advocacy and Labour's positioning as per leading a government for all New Zealanders.
"high-quality, high value production" – What does this even mean? Who determines if something is high value? Does it mean highly profitable or does it mean something else?
There are plenty of MBIE reports on this theme. You could also go back to the old Growth and Innovation Strategy from back in the Clark era all of which still holds just fine.
It means we make things that cost a lot for people to purchase, that those things (products or services) are lower in mass and weight, that they require a decreasing amount of resource to apply to their production, and that the goods and services we produce are highly desirable across the markets we target.
Again not very helpful. It is kind of like stating "We should become rich but by doing something which is really good".
Start here. Read it. Respond with thinking.
https://www.beehive.govt.nz/speech/strategic-framework-growth
Yes that is a great speech in terms of broadly setting out a path to grow the economy. It could have been given by any number of people in NZ from both the left and the right of NZ politics. This was given almost 20 years ago. Based on what was happening back then surely NZ already has "high-quality, high value production". If we don't then what did we do wrong?
What went wrong was John Key led one of our laziest governments for 2.5 terms that we've ever had, and pushed us ever-deeper into cheap bulk milk production and little else. He just made us dumber and also kept us busy repairing that same old same old.
Just love that last paragraph.
…first, high-quality, high value production; second, taxation measures to reduce significantly wealth differences; third, strengthened democracy, including industrial democracy beyond collective bargaining."
I'd hope out of that we get once more a collective sense of direction.
Reading some of the history of class struggle and state housing in Aotearoa, the past is a foreign country. It was a cultural moment when there was an ‘obvious’ ethical imperative to invest in state housing for workers and their families… such things are not obvious to us today.
We have come to accept huge disparities of wealth as the norm; and homelessness and poverty are something to be ignored or blamed on the victims. It is our national shame, but we are ruled by the shameless and lackeys of the 1%
Traumatic events such as wars and pandemics are opportunities for radical shifts in the national dialogue; unfortunately the keynesian interventions of western democracies were subverted by the amoral wealthy 10% and funneled into grabbing more property and making a bad situation worse.
Gary Stevenson, ex City of London trader has much to say on the machinations of the bankster class and their utter indifference to the permanent poverty they have created
https://youtu.be/ViY-zI3b5JQ?si=456yYmvMqSOTbiXy
Let's pretend for a moment that you are correct on this. How is it possible that 1% of the population is able to stop you implementing a set of policies which supposedly would make life so much better for the vast majority of people?
A well researched book you could get out of the library precisely on your question is Max Rashbrooke's Too Much Money: How Wealth Disparity is Unbalancing Aotearoa
https://www.rnz.co.nz/national/programmes/afternoons/audio/2018820585/max-rashbrooke-s-latest-book-on-wealth-disparity-in-aotearoa
This is the primary current NZ expert on your question.
You will need to think. Read. Respond.
Max Rashbrooke doesn't really address that question. He just claims that they have done so much like you are doing. How they do it is what I am interested in.
How is it possible that 1% of the population is able to stop you implementing a set of policies which supposedly would make life so much better for the vast majority of people?
So Gossie I will have to do this myself.
New Zealand as you have seen from Max Rashbrooke is one of the most unequal countries in the developed world.
What makes the top 1% so powerful in resisting policies that would decrease inequality?
New Zealand society is trapped within a series of poorly regulated (if at all) oligopolies employing hundreds of people that also control internal supply chains and prices in the following:
airlines, airports, sea ports, sea transport, rail, heavy road freight, telecommunications (until recently), banking, insurance, supermarkets, domestic dairy supply, kiwifruit, red meat, wool, building products, fuel imports, electricity production, water provision, health provision, tertiary education, broadcast television, accounting, public transport, construction companies, fishing companies, building materials, and many more. They are camouflaged by the many tiny companies who are no competition at all and employ fewer than 20 people. They are also camouflaged by many of them having state shareholders in one form or another.
If you oppose them in any of those industries, or want something different to them, they will say that the market is yours to choose from, but in reality they control the market and you will not be chosen as a subcontractor, or you will find yourself in court and they will always win because they have the budget to rush you in the High or Appeals courts.
We have very, very weak anti-cartel legislation and the Commerce Commission rarely even takes a case to court.
And since there is no need to innovate to please anyone, none of them need to spend on R&D to innovate or otherwise improve things for a future generation.
They have a specific power which no one else can have.
Our local governments are weak and getting weaker, so there is no alternative node of power to challenge central government. They were deliberately stripped of running their own services through the late 1990s. Local government participation is plummeting, so if you really want to measure political power, go and try and change a policy. The state itself is a poorly performing monopoly with massive powers over us, and there is generally only one minister they answer to.
Potential nodes of power resistance from the social sector are hopelessly gagged by their reliance on state funding. This reliance is because there is functionally no NZ private donor class who would enable that independent power node to form.
The Minister has only the residual power that is not delegated to Departments chief executives or by statute to boards of Crown entities. Even if you wanted something changed and successfully lobbied a Minister to change that policy, and even if that Minister agreed to do that, there are plenty of entities that even Ministers have little power over, such as NZSuperfund, NZPolice, Reserve Bank Governors, universities, NZDF, state media, funding agencies for transport and energy and screen production, national parks, and frankly everything with a board and a bit of legislated delegation.
So most of the power is in the commercial board elites. Not in the political order itself.
With such concentrated power from corporate concentration, and political power concentration, comes astonishingly heavy inertia that there is no need to change anything.
New Zealand's path dependence into agricultural commodities is not going away. We remain really good at making cheap, heavy, dumb things. Very, very few people get rich doing that. The only people who get rich selling agricultural commodities are commodity traders.
Our universities and polytechs that might otherwise drive innovation are in rapid decline and have been for years. They are no longer independent nodes of power as they were in the 1970s and 1980s. They are about to be stripped for parts by the government. Our innovation drivers have been choked to death.
For the most part we export in agriculture the same things we were making after World War 1.
In the dairy industry for example, our innovative dairy companies are our smallest: Tatua and Westland. Fonterra has on last count 2 global patents, both for mozzarella cheese. Replicate that out into every single industry listed above.
If you want to see the power of this resistance, climate change policy has been going in NZ for 25 years and farmers and their corporations have won every single time.
Concentrated path dependence is at the core of resistance to change.
Those with real wealth in NZ are those who have the power and the time to plan and walk away from an average job, have the power not to be pushed around, and they have the power to walk away from a job and live life the way they want to. They are mostly over 55.
There's about 20,000 of them out of a population of 5.5 million, which is about the same wealth concentration you can see in any of the novels of Jane Austen in Regency England, if you want to see what gently mocked wealth protection looks like in practise.
They own at least 6 properties. They are used to dealing with debt gearing in a way us plebs couldn't fathom. They plan who they marry, and they actively succession-plan.
When you have that amount of financial independence, you don't have to listen to anyone. So you successfully resist moves against your power, because you are that power.
Without death duties or other forms of residual capital gains taxes, wealth is transferred to their next generation without constraint. Not to anyone else.
Concentrated family wealth resists changes to power, and has the money to shut you up.
The final route to changing policy that is not strictly in favour of the 1%, is through generating enough pressure in the mainstream media that policy is successfully contested and re-written.
This can still be done, as we saw after the climate protests in 2017, and the anti-farm regulation protests in 2020-21.
But change through this route is remarkably rare. It needs sympathetic and intelligent tv commentators, and massive planned advocacy programmes if it is to succeed. It needs a rare combination of youth energy, highly charismatic leaders who are prepared to dedicate years of their life to the cause, NGO backers, and proxy spokespeople to support that cause in mainstream and published media.
Ideally you need whole political parties to be completely at one with your cause. Getting into the policy machinery of a major political party is a most arcane and exhausting task that requires luck and people on the inside who already think in perfect parallel to you. That is very, very hard to pull off.
So the above constitutes our 1%, and starts to describe why that 1% can successfully resist changes to rules that enable that wealth concentration to continue.
Not a bad assessment…..though you forgot mobility, theres always an exit plan.
To put it succinctly, oligarchs have figured out that the way to hack democracy is to own media empires. Analysis by Reporters Sans Frontiers: (reporters without borders):
2016-rsf-report-media-oligarchs-go-shopping.pdf
Robert Reich also elaborates on the strategies employed to bend democracy to the will of the 1%:
America's Real Divide Isn't Left vs. Right. It's Democracy vs. Oligarchy. – The American Prospect
You think the media landscape in NZ is not sufficiently balanced do you? You have major players like TVNZ and RNZ being State controlled and other media organisations like The Spinoff and Stuff openly promoting left wing progressive politics. Where is the unbalanced media landscape again?
Those links are about America, but the process to undermine NZ media is well underway.
NZ’s state owned media has an independent agenda. Stuff doesn't seem to lean either way, unless you think their commitment to oppose racism is a "leftie" cause?
Meanwhile some of our biggest media outlets, the Herald and ZB, are part of NZME
There’s also a right-wing troll army poisoning the well on social media. Is it a swarm of Russian bots or 100 losers like Cam Slater sitting in basements issuing spam and bile?
Such misleading BS! You’re starting to regress to your troll-mode again for which I have several remedies.
Explain the words in italics.
That is a brilliant link…..everyone (and their mum) should watch the entire thing….they will learn more about real world economics from that 1-2 hours than they will reading all the musings of economic commentators.
it blows the lid off the system and exposes how it's completely rigged for the 1%
Many others have observed the same but the facts of his background, success within the system and especially his concise way of explaining the mechanics make it available to even the most disinterested in 'money'.
All that , and the simple fact that he is correct.
p.s. thanks for posting link, I hadnt come across him before.
Limiting "unearned" income – mainly interest and rent – would make sense. I think that the government should be the only source of fiat money, and money backed by gold or bonds, rather than created through productive activity, is still fiat money. We also need to switch from taxing income to taxing productive assets such as land and property.
This is the point I was arguing earlier in the week when looking at what the current government is doing. They come in and don't give a damn about collateral damage. They simply get on and do what their support base expects of them.
The left seems to do the opposite. It is timid, tries to hug the centre and reacts to criticism from the right. Just look at what happened with the wealth tax and comprehensive CGT.
Labour had a once is a lifetime opportunity. In an MMP environment they had an absolute majority and the ability to make fundamental changes to the way our economy is structured.
They failed and I fear that another generation will pass before the opportunity arises agin.
" They failed and I fear that another generation will pass before the opportunity arises agin"….IF the oppotunity arises…..the great downtrodden which is set to explode in numbers may not be willing or be able to give a fuck…..1984
"The left seems to do the opposite. It is timid, tries to hug the centre and reacts to criticism from the right….."
Because it's not the left but a centrist rendition that indulges in identity politics and sucking up to business rather than rule over them on behalf of those who cannot I.e. the disadvantaged, poor etc.
Amuses me that people think labours the solution when they've just demonstrated they're not up to it.
It seems to me to be a 21st century dilemma. To win, you have to capture the middle.
Yet, voters born after about 1980 only know neoliberalism. They grew up in a world where the the word socialism has been captured by a matra that associated it with communism. And, I'm guessing that what makes someone a swinging voter is an ambivalence that suggests they don't want to dig deeper and find out.
Heck, many of the lefts politicians probably never experienced a more equal society in this country.
So, to win, it seems to me that Labour has adopted a lefter version of neoliberalism than the right. In other words, capture the middle by giving it the wealth-creation it wants, while throwing a few more scraps to the working class than the right would do. I think that's where the term "Chardonnay-sipping Socialists" might have come from.
What's needed is a focus on highlighting the wealth disparity between the top 1%and the bottom 99% – those people who think they're doing well and don't realise theyre also being fed scraps, just from a higher place on the hog.
Then, a true alternative needs to be developed. Not Blair's "Third Way", but something that truly responds to the growing inequality.
Will it happen? I hope so but I have doubts.
Was also thinking, we used to talk about the gap between the top 10% and the bottom 90%.
Since then, another 9% seems to have been added to the downtrodden.
It's great to see some of the heavy hitters stepping out on to the debating chamber floor.
After the recent electoral debacle we need all the intellectual horse-power we can muster to persuade Labour party members that re-setting our course leftwards is vital for our future health and safety.
Key elements of the change of course are:
Consult widely and often with members & natural allies about policy priorities
Remove all the sources of friction in our system to increase effective real wealth
Moderate capitalism by whatever various means, as required
Repair the infrastructure deficit, both built and natural, funded by our collective credit
Demand universal social security so everyone has a seat in the whaka
Strive for reconciliation and peace in Aotearoa and world-wide
Given the above, I look forward with others to heading down this track to universal acclaim.
Jacinda, for her fine leadership skills, really did Labour a disfavor when she ruled out wealth/CGT tax with her determination not to break her promise. If National had been in such a moral position the would not have had any such qualms about breaking a promise. It would have been business as usual.
Labour were probably left with not enough time under Hipkins to change this and make it look credible.
Advantage asked me to write a post – this could I suppose be lifted as guest post in reply to this one if a moderator feels like it meets requirements…
Since we are in the quiet patch before Xmas, I plan to also write two additional posts about the nature of the government we currently have, and how having established who and why Labour is, what kind of government it faces what sort of reforms and policies might work to win three years.
First up – What and who is the Labour Party?
If form follows function, then its stands to reason we need to examine the form of the current Labour party to get an idea of what it considers to be its function. And of course while it is important to quantify the current Labour parties form and function, that is ultimately a futile exercise unless we have a clear understanding of Labour's functional goals to measure it's form against and the need to be cognisant of the matrix of the political opposition it needs to address to achieve its goals.
Function:
In The State and Revolution, Vladimir Lenin wrote about "…the erroneous bourgeois reformist assertion that monopoly capitalism… is no longer capitalism." It was very common, Lenin argued, for people to confuse a capitalist regime with high levels of state spending and some public ownership with ‘state socialism’. It seems to me that is where the modern left finds itself – arguing falsely that a) the stagnant rentier caricature of neoliberal capitalism presented by our current government is not capitalism, and b) that:
"…A Left government with any claim to progressive credentials will focus on three policy areas – first, high-quality, high value production; second, taxation measures to reduce significantly wealth differences; third, strengthened democracy, including industrial democracy beyond collective bargaining…"
represents some form of state socialism. But as Lenin perceived, both are just variations of capitalism and in NZs case, variations on a very particular form of capitalism – settler neoliberal capitalism. The paragraph quoted makes no real attempt to address the elephant in the room – that is, the modern state is not about the governance of the markets but rather the reshaping of the state towards ever greater governance by the markets. Labour still assumes the purpose of government is neoliberalism, that is, to shape the economy around the demands of the markets (in reality that means the big end of town). Thus, we can now see the massive government spending during covid was simply the neoliberal state bailing out the markets and so it follows that Labours current function is fundamentally still the propping up of neoliberal capitalism.
Form:
If Labour is fundamentally a party of the neoliberal status quo, it follows it will recruit its MPs accordingly. If the goal of neoliberalism is to reduce the state to simply giving greater room to the markets to operate with impunity, then that comes with an explicit need to discipline organised labour (and to use increasingly authoritarian methods to quell resistance to neoliberalism, more on that later). Now, Labour is the supposedly party of organised labour but there isn't any organised Labour anymore. Having had a big role in presiding over the collapse of organised labour and the concomitant suppression of working-class culture, where would the Labour party now go to find it's best and brightest? The answer to me it lies in examining the sort of economy neoliberalism built, in particular in the burgeoning third sector of charities, voluntary (including student bodies) and community organisations, social enterprises and cooperatives (including unions), think tanks and private research institutes, academia, etc. These organisations have provided a steady stream of middle class, solidly progressive and reliably liberal candidates – think Helen White or Deborah Russell – for Labour. That many have turned out to be execrable MPs utterly ill-equipped to practice the real politik required to get things done should not surprise. More dangerously, as the liberal/left schism over Gaza demonstrates liberalism is now dead and is being replaced by an increasingly authoritarian radical centrism fundamentally at odds with left wing goals. The modern "progressive" liberal spends as much time defending the status quo in every way possible as they do publicly decrying it whilst centrists actively conspire to preserve neoliberalism and are aligned with the most right-wing opinion on foreign affairs. Fundamentally, the third sector is at best "frenemies" of the status quo, and they much prefer politics as a parlour game where the most dreadful thing imaginable is to disagree disagreeably.
So, it follows to me that Labour's form follows its function. To my mind, if you grasp that the Labour party as an institution is currently functioning to prop up neoliberalism, so it follows that the form it takes will always be the conflict avoiding, gun shy piss-weak candidates it often elevates to parliament.
Insightful as always Sanc. Await your full posts.
I agree that Labour is mainly a party of the neoliberal status quo but in opposition it has more freedom to float different ideas and challenge the status quo – especially in the face of raw capitalist shitfuckery, we suddenly appreciate the way it muddled along – frustrating for those wanting deeper reform, but generally sauntering in a progressive direction.
Labour isn't opposed to organised labour- the FPA law was evidence of that- but it does tend to be full of the university-educated Wellington lanyard class- it also signifies a shift in the demographics of work in New Zealand- solid working class types have a lot to offer our Parliament but 40 years of neoliberalism and appalling wages has trapped them in grinding poverty.
(IMHO Labour must be much more circumspect about feting shitstirrers like Shaneel Lal — he was a perfect agent provocateur for the Right — and the NZ Herald giving him a column was a masterstroke that probably turned a lot of people off the Left)
… Where should the Labour Party go now?
Well, work out what NACT goes for and go for the rest!
Assume ACT is NZs Tea Party, how much of the top does the combined NACT represent? 20% at best, I reckon.
Then, at the other end, maybe the bottom 20% who opt out.
That leaves 60% for Labour to target.
NO!!!
Vision is what is required….and salesmanship.
They need to explain HOW they will make NZ a better ,fairer place to live and raise your family.
The how is important….so they need to understand (and believe) themselves.
Pretty sure the fact National was able to put together a coalition has very little to do with Labour not being left-wing enough.
I don't think we can entirely blame the ascent of National/A.C.T./N.Z.F. into the Beehive on Labour not being sufficiently left-wing. That more likely goes to the failure in an election that I don't think they would have won anyway, to mobilize the left-wing vote.
The right wing of N.Z. after 2020 realized that if they don't want a similar thrashing to the one handed out that year to occur in 2023, they had to clean their act up. In 2020 the centre-right were a mess – even Gerry Brownlee admitted 2020 was a shocker. Scandals left, right and centre in the party; a hugely popular Prime Minister across the debating chamber playing to her strength's in crises, and the true right sucking up disgruntled conservatives.
National cleaned up. They got a new leader who excited the conservative and rural base. They managed to stop any serious scandals ripping the caucus like Jami-Lee Ross, Andrew Falloon and a bunch of others had in 2018-2020. The new leader promised to stop the things that National's donor base said were harming the party.
There was nothing elegant about the campaign National/A.C.T./N.Z.F. waged. But it did the job, aided by some spectacularly inept policies from Labour – repealing the R.M.A. was never going to work if it turned into a three headed monster; 3 Waters was a good idea, but so poorly communicated that it would have been easier to start again; etc.
Now, the question is, will the Left learn from the mess it now finds itself in and clean up too? Or will this be a multi-term nightmare in Aotearoa?