OPINION
The Ardern administration has finally confirmed — were confirmation required — that it is the most incompetent New Zealand Government in living memory, and perhaps ever.
It's a big call. Jenny Shipley's shambolic National Government was propped up in 1998 and 1999 by a bizarre bunch of party-hoppers including one from the far-left Alliance.
Labour embarrassed itself in 1989 and 1990 with two changes of Prime Minister.
Yet, for better or worse, those governments had competently executed change and maintained some sense of direction even at the end.
National's Muldoonist era might rival Jacinda Ardern's circus. But, however controversial, the Clyde Dam, the Waitara and Motunui methanol plants and the Marsden Point expansion were built — in contrast to Ardern's 100,000 KiwiBuild houses, the $30 billion Auckland tram, and the $6.4b Let's Get Wellington Moving programme, for which the Government has allocated a further $120 million for yet another business plan.
Perhaps we're better off those projects are doomed. But the Ardern Government's inability to deliver anything it says it values is surely unique.
Perhaps that's unfair. Successive Governments have delivered slow but steady increases in real wages over the decades. This Government has managed to "deliver" the biggest cut for at least 30 years in the real wages of the middle and working class — those a "Labour" Party supposedly represents. It is paying for it in the polls (see graph).
Since inflation was tamed after Labour's Reserve Bank Act 1989 and National's Fiscal Responsibility Act 1994, wages have risen faster than prices in almost every quarter, under National and Labour, with unemployment remaining relatively low.
It took this Government's special idiocy to decide that which wasn't broken should be fixed, by moving the Reserve Bank away from its laser-like focus on inflation, approving the appointment of Adrian Orr as Governor and signing the so-called dual mandate in March 2018.
Meanwhile, it accelerated increases to the minimum wage and began putting greater shackles around the labour market, including abolishing automatic 90-day trial periods, and restricting access to foreign labour and preparing the ground for 1970s-style national payment awards for workers.
After all this — and most likely because of it — real wages rose by just 1.5 per cent in Ardern's first three years, before any effect from Covid.
That anaemic real wage growth was well down from the 2.2 per cent and 2.3 per cent over the second and the third terms of the Key-English Government.
After Covid, the Reserve Bank began printing money and Grant Robertson threw it out the door.
Some bold Covid response was needed. But, as early as April 2020, the Government was warned by everyone from Treasury to me that its monetary and fiscal policies would hurt the young, poor and thrifty and benefit the old, rich and profligate.
Care was called for, but the Government disagreed.
It is no excuse that other governments did the same.
Infamously, ultra-loose monetary and fiscal policy transferred about $1 trillion to property owners at the expense of wage earners and savers. Now the data is in on real wages.
From mid-2020, real wages began falling and have done so for eight quarters. Since the Labour Cost Index (LCI) began in 1992, that has never happened before.
By mid-2021, real wages fell below where they were under National. A year later, they have fallen a further 3.7 per cent, so that New Zealand wage and salary earners have experienced a 3.3 per cent cut in their real wages since Ardern has been Prime Minister — the worst five-year change since the series began 30 years ago.
Idiotically, the response to the real-wages crisis was throwing more borrowed money on the inflation bonfire with Robertson's $350 cost of living payment, the centrepiece of this year's "wellbeing" Budget.
It can only push real wages lower.
Perhaps a government of political science rather than economics student presidents could be forgiven for putting votes ahead of sound money, but the Ardern regime has proven incompetent even at handing out free cash.
It turns out cost-of-living cash went to foreign landlords, Kiwis living permanently abroad and those who are no longer alive.
In the face of a formal ticking off by the Auditor-General and under questioning from National's Christopher Luxon, Ardern was sanguine. If Luxon knew about government, she said, he'd understand that "superannuation, welfare payments, energy payments do not always reach precisely those they should".
Such indifference about taxpayers' money echoed her reply five weeks ago when asked by TVNZ's Jack Tame about her record of failure on housing, education, poverty, mental health, inequality and vaccine procurement: "I would not ever change the fact that we have always throughout been highly aspirational ... what you're asking me essentially is to shy away from aspiration."
No one asks that. The demand is for basic administrative competence.
This week, the Government again fell well below that minimal test, with the Herald discovering it was — apparently by mistake — introducing a new KiwiSaver tax.
Ardern can do crisis management. The new tax was dropped within hours. Perhaps we should forgive them their confusion for, on everything except public emoting, it is clear that they know not what they do. This is a pattern.
When given a perfectly good proposal by Sir Michael Cullen for the capital gains tax in which Labour says it believes so deeply, it bowed to New Zealand First leader Winston Peters and ruled it out for as long as Ardern remains Prime Minister.
Greenhouse gas emissions continue to rise. The rivers are not even being continually monitored to see if they are getting cleaner. The repeal and replacement of the Resource Management Act will not be completed by the election. Those worrying about Three Waters should settle down. Does anyone believe it will move beyond the rebranding stage?
In social policy, Labour failed to deliver its teacher-union clients the end of school boards. Fees-free tertiary education didn't increase enrolments by disadvantaged groups, but was pocketed by the middle class.
Prolonged border controls destroyed the international education industry, putting the viability of universities at risk. Trades training faces collapse following the bizarre project to set up a Wellington-based super-polytechnic, at a cost so far of $200m, with nothing to show for it.
No one knows what the billions for two new health bureaucracies in Wellington will deliver. We don't know where the $1.9b for mental health went. There is wild talk of writing off student loan debt as an election sweetener.
It won't work. The defeat of the Ardern Government is increasingly likely, and more than deserved.
Labour governments can do many things and survive. Enriching property owners while slashing workers' real wages isn't one.
- Matthew Hooton is an Auckland-based public relations consultant.
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