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News and views from New Zealand – The more things change

News and views from New Zealand
The more things change – Dennis Dorney

When the dust has settled on the next NZ election, due on Sept 20th, we will have chosen once again either a National or Labour government, both with hangers on, who will modify the natural neo-liberal instincts of both parties. The modification of policy will be greater for Labour than for National because Labour will depend more on their partners in the coalition than National. Until the campaigns had begun in earnest, National had been regarded as certain to win comfortably, because the right wing press repeat- edly told us so, but in recent weeks, because the electorate has been forced to focus briefly, the repercussions of the government’s austerity measures are beginning to show.

For the last six years we have been force-fed a diet of balanced budgets, small government, pro-business deals, free trade, asset sales, and blind faith in the supremacy of the unfettered market-place.

A balanced budget was the centrepiece of the Government’s claims to being more financially astute than the Opposition and the last budget finally did balance (just), much to the front page celebrations of the media. Except that it didn’t balance. All budget figures are subject to later revision so it was no great surprise to read a few weeks later, that it hadn’t balanced after all.

What is worse, the revised figure may represent a high point. To achieve its meagre balance the Government has raised GST to 15%, added 9c per litre to fuel costs, borrowed about $50 billion from overseas lenders and cut public services back to the bone. The public has put up with this and had swallowed the media’s claims that NZ has a rock star economy, even though no-one admits to being better off.

Where it really matters – in the tills of the retailers – the economy looks flat. The much lauded Christmas sales boost was paid for by plastic debt.

Before Christmas, and since, spending has been slow. This is beginning to look liked a symptom of a cash-strapp- ed economy; buy only what is needed until Christmas, debt-binge at Christ- mas and try to pay off the debt before the following Christmas. The chances look bleak. Interest rates have risen to try to deflate a housing bubble; the market price of milk solids (our main export earner) has fallen steadily in recent months and lower economic deciles have not increased their income since this government won office.

Small government: Sympathy is also eroding for the ruthless cutting of the Public Service. At first this seemed a shrewd move – no Party ever lost votes by cutting the Public Service. In the voter’s eye a public servant ‘works’ hidden from view in a cosy office. In practice a public servant is as likely to be a nurse, teacher or policeman, all of whom are now seriously understaffed.

The consequences show every time the voter goes to a hospital ward or sees on the nightly news the mindless anarchy in the poorest city suburbs, where the police lack the resources to cope.

Asset sales: In previous articles I have mentioned the high price of houses, due to a considerable under-supply.

This situation is by no means true nation-wide but the remedy of raising interest rates affects everyone who has a mortgage or rents a property, so it is a sensitive election issue outside the cities of Auckland and Christchurch.

The increase in demand for houses and land (including agricultural) from overseas investors is also of concern especially since the Chinese, who do not allow sale of their land to overseas investors, are major players in New Zealand.

To complicate matters further our government gives favoured immigration status to anyone who brings $10 million into New Zealand. A cynic would say that such immigrants are likely donors to Party funds and certainly some of those who have done so, have been Chinese interested in NZ realty. This has led to claims of racial bias but there is evidence that the Chinese government is playing a far-sighted game.

Recently the China Central Television accused the Bank Of China, one of three major Chinese banks operating in Auckland, of money laundering (which it denied) by allowing holders of Yuan to convert their currency into overseas currency specifically for “overseas property purchases and emigration”.

Whether that involves money laundering or not (Ellen Brown seems to think so), it is not hard to see that if immigrants bring NZ dollars here and deposit them in a Chinese Bank it will provide the reserves for speculative purchases in NZ real estate.

Free Trade: The last topic that alienates those opposed to the current neo-liberal agenda is the ongoing rounds of the Trans Pacific Partnership Agreement TPPA), which Australia is also involved in. Here the biggest single issue is the secrecy under which negotiations are occurring. This has led to a number of anti TPPA rallies being organised throughout NZ. There seems to be little prospect of our getting the promised free trade Nirvana for our farming produce, and the likelihood of multinationals suing our government at the drop of a hat is sending shivers down many spines.

Given the obtuseness of the two main political parties, little will change after the election. But voters are starting to feel the pain, so I am expecting a much higher voter turn-out this time.

Dennis Dorney is a NZ member of ERA

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