Political promises don't match reality and people demand more for less

Kiwis seem to want their cake and eat it too – according to some survey results.

In the wake of shock and horror over an IPSOS survey that suggested nearly two thirds of New Zealanders think the economy is “rigged to advantage the rich and powerful” and want “a strong leader to take the country back from the rich and powerful”, it was refreshing to see Prof Jack Vowles write: “A certain degree of dissatisfaction with politics is endemic in a democracy, and in moderation it is a good thing. We should value a critical public that is demanding more from those who govern it.” (My italics.)

Scepticism and distrust are healthy for democracies – although there’s no trustometer with a “moderate” setting. One person’s “moderate” dissent might look irresponsible to another – as we saw in debates about the schools climate strike. But if, like 65% in that survey, you agree that New Zealand’s economy is “rigged to advantage the rich and powerful”, then you’re definitely on to something.

As for demanding more from those who govern, do people demand too much?

60% somewhat or strongly disagreed with the proposition that “the government should increase taxes to pay for any additional public spending”. Fair enough. Times are hard and we’ve been promised tax cuts.

And big majorities also said that the government should increase spending in healthcare (83%), public safety (74%), education (71%), and reducing poverty and inequality (65%). Fair enough. Police officers, nurses and teachers deserve better pay.

But can we have it both ways? To get more spent on public services, the money has to come from somewhere. It’s called tax. The present government’s attack on excess in “back office” public-service operations won’t achieve both aims at once: tax cuts and better public services. The promised tax cuts will almost certainly require more borrowing (or at least the delayed repayment of current debt) which, in turn, puts demands on your taxes to service the interest payments – and that’s money that could have gone into public services.

The politics of these intense pressures to cut taxes while borrowing to keep the state’s promises are a well-known recipe for a debt-spiral which can ultimately lead to default. (A point that was put bluntly by Matthew Hooton in Friday’s Herald.)

The IPSOS survey seemed to reveal that many respondents held self-contradictory views: they don’t want to pay higher taxes to pay for additional public spending, and yet they do want the government to increase spending on basic public services. You probably know a grumpy person (maybe yourself) who complains about paying taxes and then, in the next breath, complains about the under-funding of public services. It reminds me of that song “Everybody wants to go to heaven but nobody wants to die” (1968). We hold opinions that aren’t logically consistent with one another, as needs and desires often lead in opposing directions. Humans are like that.

As discussed in my previous post, the apparent problem of inconsistent or self-contradictory beliefs is partly created by the opinion survey itself. The very image of ourselves as political subjects with opinions is, to an extent, a product of a polling industry that was invented in the twentieth century. The traditional phone survey is individualistic and asks each respondent about opinions one by one. But this is not how people actually form or express opinions in the real world of dialogue, social interaction and group affiliation. The survey method doesn’t accommodate the fact that our opinions are most often quite vague, mixed, malleable and “under construction”. (OK, I already hear someone saying, “Speak for yourself”.)

Furthermore, a survey doesn’t allow for the political reality that, when opinions get turned into policy decisions, compromises have to be made between competing values and priorities.

It’s quite understandable that a person (talking to a pollster) might not want to pay more tax and yet, at the same time, want more to be spent on public education and healthcare. But that person isn’t the minister of finance wrangling numbers, making compromises and dealing with shitty cabinet colleagues.

The survey respondent, as a fallible human, can say what they like. The surveyors, however, produce statistics divorced from the real world of contestable opinion-formation and policy-making.

It’s perfectly OK if you told a global market research firm that you wanted more to be spent on public services but that you didn’t want to pay more taxes for that. After all, IPSOS represents the rich and powerful. Their declared 2023 revenue was a cool 2,389 million euros.

Why not tell them (for free) that you want your cake and eat it too?

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There’s still a serious underlying problem, however. Since the triple-whammy in 1973 of oil-price rises, the unraveling of the post-WW2 Bretton Woods deal, and the loss of the UK as a guaranteed market, the NZ economy has fallen behind its major OECD trading partners in terms of productivity and growth. The long-term trajectory, however, could be that NZ becomes a latter-day Argentina: the once-rich agrarian economy in the southern hemisphere that fell out of step in the early twentieth century, then ended up broke and impoverished with a crazy libertarian populist president (the “strong” leader that the people had asked for).

Few political leaders consider it smart to be honest about New Zealand’s long-term poor productivity. After all, the bad news might come back to tarnish them later. And maybe a small country that’s so distant from major trade routes and commercial networks simply can’t compete and is bound to be robbed by global mega-platforms.

The people blame the government when things aren’t going well, but political leaders encourage this by pretending that they have solutions. They inspire false hopes – about “wellbeing” or about “growing the economy”. Anyone who believes fervently in such promises, however, has effectively joined something akin to a cargo cult. But the government has nothing nothing in store for you – nothing to deliver – that will make you either happier or richer.

Governments can and should do things that help to boost social and economic progress, such as public education, healthcare and social security, but there’s only so much they can do. The rest is up to us. And people have been saying for years now that Kiwis need to learn to work smarter – not harder, nor longer hours.

People willingly adopt many new technologies, and so it’s not as if no progress is being made, and there’s a new wave of AI-driven change on its way. But it requires our collective efforts to produce income and wealth (and hence tax revenue) to fund governments to do their job of improving public services.