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.
Chippy tends to have the right ideas, whether he has the courage to enact them is another matter. The Greens for all their issues have effectively taken up the soc-dem mantle, and look the closest in policy to Mamdani.
And I've heard political commentators lament the inability of centre parties (NZ First doesn't count because of its neo-Muldoonist niche) to launch (TOP) or last the distance (Peter Dunne's UFNZ). They need not worry; with the former airline CEO being wagged by two dogs, Chippy's Labour is basically that centre movement right now.
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
I'd probably disagree with that. There was certainly a lot of borrowing! NZ govt debt tripled during that period.
Unfortunately the last lot had cancelled the RoNS so we didn't have those, and because of that, they then spent the whole time planning their infra projects rather than constructing them (light rail to the airport by the 2020 election anybody?) which meant they could easily be discarded as a waste of money.
Agree that it was a frustrating waste of an opportunity,
Especially because when that cheap money is used on expanding the productive capacity of the economy, rather than on consumption, it places downwards pressure on inflation in the long run
The "1987 syndrome" still looms large. Those who lost their shirts in the sharemarket bubble simply swapped it for a real estate bubble, and here we are today. But a shift in thinking seems to be slowly but surely coming, especially among younger folk who are opting out of home ownership.
Having failed previously in the ultimately very disappointing 2020-23 term and lost his nerve before the last election over CGT, what makes anyone think he will succeed next time, during which our problems have only intensified? The problem is that there's no tough guy/ girl / unassigned waiting in the wings. It would be great to have someone say we're ignoring identity politics and the war on woke alike, and instead give priority to core issues - inequality, environmental degradation, unaffordable houses and supermarket shopping. The CGT move is a gimmick - if the monies raised had gone to free bowel cancer or melanoma checks I would be more supportive. Glue ear and bad teeth would probably require still further taxes. So the signs of Chippy as saviour are discouraging :-(
First on the 'competitive labour markets put downwards pressure on wages' - generally true in the short-term, in the long-term however, more efficient markets increase aggregate output and therefore wages. Additionally, and possibly of interest with regard to specifically restrictions on where skilled migrants can work (i.e less competitive markets), these less competitive labour markets have the impact of reducing wages as they push down wages for those migrants (as they have less bargaining power with limited employment opportunities), which pushes down wages for substitute native-born workers: https://wilburtownsend.github.io/papers/visas.pdf
Second, on NZ's long-running productivity problem. There are a couple aspects to this, but the biggest one is a lack of capital investment in the productive economy. Kiwis buy houses from each other, the S&P500 and mining stocks on the ASX. The net result is local markets starved of capital. Particularly venture capital.
Labour have identified the problem. But their solution is shockingly inefficient. The future fund being unable to sell businesses once it has funded them merges the goals of 'increase capital allocation to NZ's economy' and 'seize control of the means of production for the state'. Their suggestion that they will use it to pursue ideological goals is similarly misguided. Both these features will lead to very poor returns for this fund, while taxes will have to increase massively to fund the hole that removing SOE dividends from funding government services leaves.
This is another frustrating feature of the current Labour party. It's Kiwibuild all over again. They seem to have this really frustrating room temp IQ policy process:
1) You identify there is a problem in a market
2) The state will supply the capital in this problematic market.
This process costs hugely, and at the end of it you still have problems in the market! I.e Kiwibuild - the problem was multifaceted: fixed costs for planning and consenting were too high, pushing developers towards larger family homes and less affordable dwellings, zoning restrictions were too tight, preventing supply from meeting demand, pushing up prices and limiting the supply of denser, cheaper dwellings, building material markets were concentrated, pushing up prices. There's a lot to unpack there, but instead the answer was simply 'the state will build 100,000 homes'. LOL.
"Why, then, in that same interview did Hipkins say that he’s still comfortable to be called a democratic socialist?"
It's all about the perception of occupying a certain space. It means any competitor on the Left can be branded as an 'undemocratic socialist', or a 'communist' if you want to revive the ghosts of Stalin and Mao to terrify people.
Understand that the 'daddy' of Commonwealth social-democracy- the UK Labour Party, is more terrified of the burgeoning UK Green Party and the yet-to-emerge 'Your Party' (and presumably even more of the threat of an electoral alliance between them), than of the now-imploded Tory Party or their successor party Reform ( itself a 'Tory-heavy' elite-serving outfit masquerading as an ethno-nationalist alternative- rather like ACT)'.
This may well inform a Labour-Green schism in NZ. NZ Labour, like it's UK counterpart and the mainstream of US Dem's, is strongly concerned with maintaining fealty to what's left of the old consensus that revolves around the IMF. WTO, OECD, NATO/AUKUS etc. notwithstanding these institutions are being made increasingly irrelevant by the antics of the Trump regime and the emergence of BRICS alternatives.
NZF is re-platforming itself as opposed to asset-sales, but it likely won't stomach any coalition that involves the Greens or TPM, (presuming they survive their own implosion).
Should National/ACT not be able to form a government after the next election, this leaves the terrifying prospect of a 'Grand Coalition of the Centre' involving National, NZFirst and Labour as the only grouping that might be able to cobble together a working majority, and politically justifying itself by the notion of keeping out 'extremists'. This could be no more than a caretaker government to preside over another term of economic paralysis and decay.
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.
Chippy tends to have the right ideas, whether he has the courage to enact them is another matter. The Greens for all their issues have effectively taken up the soc-dem mantle, and look the closest in policy to Mamdani.
And I've heard political commentators lament the inability of centre parties (NZ First doesn't count because of its neo-Muldoonist niche) to launch (TOP) or last the distance (Peter Dunne's UFNZ). They need not worry; with the former airline CEO being wagged by two dogs, Chippy's Labour is basically that centre movement right now.
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
I'd probably disagree with that. There was certainly a lot of borrowing! NZ govt debt tripled during that period.
Unfortunately the last lot had cancelled the RoNS so we didn't have those, and because of that, they then spent the whole time planning their infra projects rather than constructing them (light rail to the airport by the 2020 election anybody?) which meant they could easily be discarded as a waste of money.
Agree that it was a frustrating waste of an opportunity,
Especially because when that cheap money is used on expanding the productive capacity of the economy, rather than on consumption, it places downwards pressure on inflation in the long run
The "1987 syndrome" still looms large. Those who lost their shirts in the sharemarket bubble simply swapped it for a real estate bubble, and here we are today. But a shift in thinking seems to be slowly but surely coming, especially among younger folk who are opting out of home ownership.
Having failed previously in the ultimately very disappointing 2020-23 term and lost his nerve before the last election over CGT, what makes anyone think he will succeed next time, during which our problems have only intensified? The problem is that there's no tough guy/ girl / unassigned waiting in the wings. It would be great to have someone say we're ignoring identity politics and the war on woke alike, and instead give priority to core issues - inequality, environmental degradation, unaffordable houses and supermarket shopping. The CGT move is a gimmick - if the monies raised had gone to free bowel cancer or melanoma checks I would be more supportive. Glue ear and bad teeth would probably require still further taxes. So the signs of Chippy as saviour are discouraging :-(
A couple of things.
First on the 'competitive labour markets put downwards pressure on wages' - generally true in the short-term, in the long-term however, more efficient markets increase aggregate output and therefore wages. Additionally, and possibly of interest with regard to specifically restrictions on where skilled migrants can work (i.e less competitive markets), these less competitive labour markets have the impact of reducing wages as they push down wages for those migrants (as they have less bargaining power with limited employment opportunities), which pushes down wages for substitute native-born workers: https://wilburtownsend.github.io/papers/visas.pdf
Second, on NZ's long-running productivity problem. There are a couple aspects to this, but the biggest one is a lack of capital investment in the productive economy. Kiwis buy houses from each other, the S&P500 and mining stocks on the ASX. The net result is local markets starved of capital. Particularly venture capital.
Labour have identified the problem. But their solution is shockingly inefficient. The future fund being unable to sell businesses once it has funded them merges the goals of 'increase capital allocation to NZ's economy' and 'seize control of the means of production for the state'. Their suggestion that they will use it to pursue ideological goals is similarly misguided. Both these features will lead to very poor returns for this fund, while taxes will have to increase massively to fund the hole that removing SOE dividends from funding government services leaves.
This is another frustrating feature of the current Labour party. It's Kiwibuild all over again. They seem to have this really frustrating room temp IQ policy process:
1) You identify there is a problem in a market
2) The state will supply the capital in this problematic market.
This process costs hugely, and at the end of it you still have problems in the market! I.e Kiwibuild - the problem was multifaceted: fixed costs for planning and consenting were too high, pushing developers towards larger family homes and less affordable dwellings, zoning restrictions were too tight, preventing supply from meeting demand, pushing up prices and limiting the supply of denser, cheaper dwellings, building material markets were concentrated, pushing up prices. There's a lot to unpack there, but instead the answer was simply 'the state will build 100,000 homes'. LOL.
As opposed to:
1) identify there is a problem in a market
2) consider ways to fix the problem
3) fix the problem
I really don’t want a socialist country.
New Zealand is a democracy. It’s what we are known of. We have been paramount in global democracy values.
Labour now puts this at risk. As does the greens. And the other party that is squabbling so really should not be in parliament.
We need capability
"Why, then, in that same interview did Hipkins say that he’s still comfortable to be called a democratic socialist?"
It's all about the perception of occupying a certain space. It means any competitor on the Left can be branded as an 'undemocratic socialist', or a 'communist' if you want to revive the ghosts of Stalin and Mao to terrify people.
Understand that the 'daddy' of Commonwealth social-democracy- the UK Labour Party, is more terrified of the burgeoning UK Green Party and the yet-to-emerge 'Your Party' (and presumably even more of the threat of an electoral alliance between them), than of the now-imploded Tory Party or their successor party Reform ( itself a 'Tory-heavy' elite-serving outfit masquerading as an ethno-nationalist alternative- rather like ACT)'.
This may well inform a Labour-Green schism in NZ. NZ Labour, like it's UK counterpart and the mainstream of US Dem's, is strongly concerned with maintaining fealty to what's left of the old consensus that revolves around the IMF. WTO, OECD, NATO/AUKUS etc. notwithstanding these institutions are being made increasingly irrelevant by the antics of the Trump regime and the emergence of BRICS alternatives.
NZF is re-platforming itself as opposed to asset-sales, but it likely won't stomach any coalition that involves the Greens or TPM, (presuming they survive their own implosion).
Should National/ACT not be able to form a government after the next election, this leaves the terrifying prospect of a 'Grand Coalition of the Centre' involving National, NZFirst and Labour as the only grouping that might be able to cobble together a working majority, and politically justifying itself by the notion of keeping out 'extremists'. This could be no more than a caretaker government to preside over another term of economic paralysis and decay.
Nats plus Labour on their own would probably have the numbers, Kevin. Cut out the middle-man as well as the extremes?