Dr Michael Bassett

Dr Michael Bassett

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Modern Labour sticks to its Old-Time religion


One of the fascinating byways of history is the weird religious cults that people had followed over the years. In Oliver Cromwell's time there were the Shakers who shook with the power of the Holy Spirit, and who went off to America, getting madder in transit. And there were the Levelers who held property in common. And the Fifth Monarchy Men who believed that four cycles of earthly power had come and gone, and they ascended mountains at appointed moments hoping to welcome the fifth, the rule of their version of Christ. Come to think of it, my mother told me about a crowd who went up Mt Eden in their night attire in 1931 to welcome the return of Christ, got rained on, and were rather bedraggled on their descent.

Today there are still a few who have faith in this Labour government despite the overwhelming evidence that it is an outmoded religion, lacking analytical and executive skills. Ministers tell you they'll solve inflation by spending more; they'll fix the shortage of nurses in hospitals by refusing to allow easy entry for foreign-trained medical staff; they'll stop our locally trained nurses heading off overseas by expecting them to settle their wage claims for half the current rate of inflation; they'll lift kids out of poverty by persisting with failed methods of teaching literacy and numeracy in schools, and by teaching them Te Reo; they'll improve Maori lives by giving co-governance powers to Maori aristocrats; they'll fix all your problems by employing 17,000 more bureaucrats than we had five years ago, and inflation will waft away on the breeze, hopefully in election year....

All political philosophies have an element of faith to them. Believers have to think their nostrums will work. The problem with this government is that many of its policies have been shown historically to work no longer. Even before the Labour Party was formed in 1916, rent controls led to landlords selling their rentals, causing central city slums in many countries. By the mid 1940s one European economist who had surveyed rent controls at work in Europe concluded that the only thing that did more damage to central cities than rent controls was pattern bombing. But we hear today's crop of Labour ignoramuses still musing about possible rent controls. Learning from history is not something the current lot are prepared to risk instead of their doctrine. A caucus of trade union hacks, low level lawyers and lesser bureaucrats simply rely on Labour's ancient religion: if it moves, control it, if it makes money, tax it, and if there's still a problem, throw taxpayers' money at it.

The fact that much of the old-time religion doesn't work anymore, and that many parts need re-thinking and re-shaping to cope with modern life, is regarded as a form of apostasy. The sort that in their minds afflicted David Lange's and Jim Bolger's governments when they sold banks and enabled better services to emerge. Last week, instead of risking Kiwibank shares falling into Australian hands, Grant Robertson parted out with an un-budgeted two billion dollars that he could have spent on more deserving causes to buy the outfit. From Day One, twenty years ago, that bank was surplus to requirements. It delivers no measurable benefit to ordinary Kiwis. Keeping Kiwibank in the government's hands will guarantee that it stays small and uncompetitive. But Labour's old-time religion will remain intact. The banking lessons learned by the Fourth Labour Government in the 1980s where the ASB and then the BNZ under Jim Bolger quickly strengthened themselves by allying with expanding international entities, will now never be available to Kiwibank. You can count on it not growing much above its current 4% of the banking market. It will be tied hand, foot and finger to the Minister of Finance and the government's purse strings. A stagnant asset.

Having parted with an un-budgeted $2 billion, a few days later came a sneaky plan to charge GST on managed and KiwiSaver funds. This directly broke Labour's "No New Taxes" pledge. The plan would raise an additional $225 million a year, and many billions down the track. Hapless David Parker who eternally gives a possum-in-the-headlights stare on TV, was made to look foolish. Colleagues spent the next morning defending the new tax, falsely claiming that it had been in the pipeline for years, and busily preparing newspaper advertisements paid for with taxpayers' money. But they heard on the 3pm news that the new tax-grab was off. In Labour's world of political chaos one wonders who is the Ayatollah who authorizes such religious advances and retreats. Did the new tax ever go before Cabinet?

Come the next election, I suspect the Labour government will resemble those 1931 pilgrims, traipsing down the mountain like wet sheep. One has to hope, however, that eventually a brighter crop of political hopefuls comes along, a group that understands what works and what doesn't, who aren't tied to some old-time religion, and have been living in the real world.