In an interview with Radio NZ’s Guyon Espiner, Labour leader Chris Hipkins was asked to react to the election of the socialist Zohran Mamdani as mayor of New York. Hipkins replied that it’s shown how the economic system isn’t working well for working people, especially given the rising cost of living and the normalisation of insecure employment. It revealed, he said, that voters are looking for alternatives.
Key pledges in Mamdani’s campaign were city-owned grocery stores, a rent-freeze on rent-stabilised apartments, and fare-free buses.
Hipkins realistically pointed out, though, that New Zealand isn’t the US. It’s certainly not New York City. Income-related rents on New Zealand’s state houses didn’t come up in the RNZ interview, but Hipkins said he does not believe in state-owned supermarkets. So, what kind of alternative to the Luxon-led government was he offering on issues of affordability?
Rather than direct state intervention, Hipkins talked about the need for more competition in a range of areas, especially supermarkets (currently a duopoly) and banking (with four major trading banks, plus a state-owned bank). Hipkins complained that New Zealand doesn’t have a competitive economy. He wants a more productive economy with more choices for Kiwis and more competition.
But this talk of choice, competition and productivity sounds like the neoliberal capitalist model. Maggie Thatcher, if she were still alive, would be applauding. A competitive market keeps prices low and stimulates innovation, and this boosts productivity and incomes. The wealth, it’s said, “trickles down” to the wage earner.
As firms strive to reduce costs, however, a competitive labour market puts pressure on workers to accept lower wages, not higher. Competition works well only for those employees with the most sought-after skills, and that widens income inequality.
Why, then, in that same interview did Hipkins say that he’s still comfortable to be called a democratic socialist? Well, a simple explanation is that one official objective of the NZ Labour Party is: “To educate the public in the principles and objectives of democratic socialism and economic and social co-operation”.
Moreover, one of the core principles of the Labour Party is: “Co-operation, rather than competition, should be the main governing factor in economic relations, in order that a greater amount and a just distribution of wealth can be ensured.”
Just to be clear, then: Labour supposedly stands for co-operation, rather than competition.
The NZ Labour Party’s historical roots were in revolutionary industrial and reformist state socialism. The reformist “Fabian” version came to the fore as electoral support for Labour rose and they took office for the first time in 1935. New Zealand’s welfare state was then built on full employment under industrial awards (not individual contracts), and on the principle that a worker should be able to raise a healthy family with dignity. Hence the name of the party that Hipkins leads: Labour Party. Not Competitive Market Party.
Does Chris Hipkins understand what “democratic socialism” means, then? Or does he know perfectly well, but finds it convenient to ignore his party’s principles?
Or, on the other hand, are those party principles now past their use-by date? Would an actually socialist policy now be an election-losing platform – or is Labour just so afraid of “the markets” that they won’t stick to their principles?
I’ll let voters be the judges next year. But Hipkins and Luxon probably both understand that, to win an election, a major party needs to win over the middle-of-the-road voters.
In any case, Hipkins has told us that Labour’s priorities for the election will be jobs, health, homes, and cost of living. He hopes that a capital gains tax (CGT) at 28% should make the dream of home ownership more attainable and affordable. What are the chances?
I agree with him, at least, that Mamdani’s victory doesn’t necessarily signify much for any election other than New York City’s – and indeed Mamdani may have little impact on his city in the end.
The Zohran-mania that’s pulsing through the Left at the moment may well transform into disappointment.
I also agree with Hipkins that economic productivity is an underlying problem.
But I have yet to see any policy from Labour that would make a difference to that productivity lag. Proposing a “Future Fund” on its own proves nothing. What projects would Labour’s fund invest in? And will Labour’s education policy be about keeping education-sector trade unions happy or about challenging and developing young minds in a world full of AI?
Hipkins is at his core, a nice bloke. He is also a careerist politician with a managerialist mindset shackled to neoliberal thinking. Mamdani he ain’t. New Zealand desperately needs transformative change to repair a broken and declining nation. With Hipkins at the helm of Labour, that’s a New York pipe dream.
I've now lived in NZ for over 20 years, and low productivity compared to similar economies has been a constant refrain in that time. In that 20 odd years - numerous people with the same plaintive call, we need to improve on primary products such as milk powder and raw timber being our main exports, and export the value add premium prodcuts instead... and nothing has been done to realise that. I think our short termism (possibly as a result of 3 year terms) hinders our stragetic thinking and long term investment esp in infrastucture... you would've thought that during COVID, with money being the cheapest it'd been in a long time with near 0% interest, tht would've been the ideal opportunity to lock in some long term funding for much needed infrastructure investment... rail, public transport corridors, ferries, ports and even RONS, but it didn't happen - because apparently "debt is bad" when it comes to political optics