With less than four months to go till the general election on 23 September, the question exercising the minds of many of those who voted National in the last few elections is: Do they deserve another term?
I can’t claim to be totally objective on this question – I decided to contest the 2011 election as leader of the ACT Party in large part because of my disappointment at what National had achieved in its first term. But perhaps nobody can be completely objective on a question of this nature: we all come to the election with a range of prejudices and preconceived views. So with that health warning, let me summarise my assessment.
In some respects, the National-led Government has done well under difficult circumstances – hit first by the Global Financial Crisis and then by the serious destruction caused by the earthquakes in Christchurch.
The economy has grown at a respectable pace by the standards of other developed countries, and unemployment has fallen below 5%. Government spending, though growing faster than I personally would like, has nevertheless been kept under reasonable control, and is heading below 30% of GDP (this was written before the Budget announcement in late May). Government debt, which rose strongly in the early part of the Government’s term in office, very largely because of the Christchurch earthquakes, is headed down relative to the size of the economy, and compares very favourably on that measure with government debt in almost all other developed countries.
But in many respects I find myself profoundly disappointed.
Yes, we were adversely affected by the Global Financial Crisis, but not nearly as seriously as many other countries, thanks to continued strong demand for our exports in China and Australia and to the fact that our Australian-owned banks were very well-capitalised and were able to continue to support economic activity in New Zealand.
When first elected, Mr Key made a big thing of raising living standards in New Zealand to those in Australia by 2025 but he made no attempt at all to adopt any of the recommendations of the 2025 Taskforce which he set up to advise on how that might be done. That would not have mattered of course if he had had some other cunning plan to achieve that objective, but it was quickly apparent that he did not. While total economic growth has looked respectable over National’s time in office, growth in per capita incomes has been very slow, the direct result of minimal growth in productivity. As a result, a great many wage and salary earners have seen little increase in their real incomes over the last nine years.
Nor was there any willingness to confront the long-term implications for government spending of our steadily ageing population. Even in 2011, when National had Labour on their political left and ACT on their political right both saying that there would eventually need to be a change in the age at which New Zealanders become eligible for New Zealand Superannuation, still John Key refused to countenance any suggestion that there would need to be a change eventually. As a result, the Treasury projects an explosion in the level of government debt relative to the size of the economy by mid-century if present policies continue. Our ageing population of course affects not just the fiscal cost of New Zealand Super, but also the fiscal cost of healthcare and care for the elderly. All three of those cost items will increase strongly on present policies.
Mr English has sensibly refused to continue with John Key’s promise not to touch the age of eligibility of New Zealand Super, but has for some unfathomable reason suggested that there doesn’t need to be any change in the age before 2037!
One of the most serious failings of the National-led Government is reflected in house prices – especially in Auckland of course, but now spreading throughout the land. Mr Key made a strong statement about the need to deal with the price of housing during the election campaign of 2008, and noted that the median house price in Auckland at that time was some six times median household income in Auckland. Now it is 10 times the median household income.
Too many people over the age of 50 are inclined to remark rather smugly that buying a house has always been a challenge, and that the younger generation should just knuckle down and start saving the necessary deposit. What they fail to recognize is that house prices have roughly trebled, relative to incomes, over the last 30 years to the point where buying a house in Auckland is quite simply beyond the ability of somebody on the average wage unless they have substantial help from parents or somebody else.
While income inequality has barely changed over the last 30 years (contrary to public perception), what has changed is wealth inequality, very largely because of the rapid escalation of house prices relative to incomes. And while there are many things driving this escalation, the fundamental driver is the tight restrictions on the availability of land for residential development.
The Greens were unwise enough to make the honest point that if house prices are going to become affordable in Auckland, they will need to fall by about 50%. This horrified Mr Little, who hopes to be in a coalition with the Greens after the election, and he stated that Labour’s ambition was to have house prices rise no faster than general inflation. Nick Smith chimed in with the hope that house prices in Auckland would only rise by single digit percentages rather than the double-digit increases of recent years. The sad reality for those who have bought houses in recent years is that if house prices are going to become affordable again, they need to fall substantially. This awful situation was made materially worse by National’s failure to get on top of the restrictions on the availability of residential land in 2009.
Finally, the National Party campaigned on a platform of equal citizenship in 2008, and a pledge to scrap separate Maori electorates. Indeed, equal citizenship is written into the National Party’s constitution, and was a major commitment by Bill English, me, and John Key before the 2008 election.
What we’ve got instead is the very opposite of equal citizenship. We’ve still got separate Maori electorates. We have an Independent Maori Statutory Board in Auckland. We have half the members of the Hauraki Gulf Forum appointed by tribes. We have “co-governance” written into many Treaty settlements, and an obligation on several regional councils to have unelected tribal appointees on decision-making committees. In April, the Government wrote into the Resource Management Act extensive powers for iwi, obliging all local governments to come to written agreements with tribes in their area about how tribes will participate in planning and decision-making. And we’ve had ministers meeting repeatedly behind closed doors with tribal leaders about how tribes can be involved in decision-making about the allocation of water, something traditionally reserved for local councils.
We’re on a very dangerous slippery slope, creating two classes of citizen – those with at least one Maori ancestor and those without – in clear violation of what Governor Hobson promised as each chief signed the Treaty of Waitangi in 1840. For the sake of our children and grandchildren, this needs to stop.
So would I recommend to friends and family to vote for National this year? I guess that depends what else is on offer. I’m looking for a party which will be willing to take the hard decisions to ensure a good future for our grandchildren – to raise our real incomes, to deal with the fiscal challenges of an ageing population, to make house prices affordable again, and to affirm that we are one people, irrespective of when we or our ancestors came to this land. National under John Key flunked that challenge.
Copyright © 2024 Don Brash.