Steven Joyce: Here's an idea for the Government - try listening

The Prime Minister and the Finance Minister have an agenda they are busy delivering but are they listening to public concerns? Photo / Mark Mitchell

OPINION:

There were more datapoints this week suggesting the public of New Zealand and its Government are currently inhabiting different planets.

Going on the statements from the Beehive, ministers are clearly focused on growing the public service, doling out a big climate change slush fund, taking the long handle to the public's preferred means of getting around, implementing co-governance of public assets, and pouring another massive dollop of borrowed cash into the hungry maw that is their giant new health bureaucracy.

The public, on the other hand, are dealing with a runaway cost of living, shrinking household budgets, rising mortgage rates, diminishing asset values, a surge in aggressive criminal activity, long queues at the local hospital, a declining education sector and the growing realisation that economic activity is being frustrated by an obstructionist political class.

The two are talking past each other. And if someone doesn't start listening soon, we are heading towards a messy divorce.

The first rule in politics is the public is almost always right. That means the one that has to do the listening is the government. They claim they are — but so far there is little sign that anything is changing.

Monday's love letter in the Herald from Chris Hipkins in praise of a bloated and ever-growing public service is a case in point. Celebrating a boom in well-paid public service jobs in Wellington is hardly going to cut the mustard with families struggling to make ends meet in New Lynn, Hamilton East or Hawke's Bay.

And then there is next week's Budget. The Prime Minister and the Finance Minister have made it quite clear that it is for everyone else to tighten their belts — not the Government. They have an agenda they are busy delivering, thanks very much. Never mind your priorities.

Deputy PM Grant Robertson speaks to reporters at a Chamber of Commerce breakfast in Wellington. Photo / Marty Melville

The Finance Minister is even pulling a sleight of hand on government debt by co-opting the Super Fund into it so it looks 20 percentage points smaller than it actually is, to take the public pressure off all his borrowing.

And if their rapidly growing expenditure of borrowed money fuels inflation even further — then tough luck. It's not us, you understand. It's the war in Ukraine, it's all imported, there's nothing we can do.

It really is a quite fascinating and growing disconnect between the public's day-to-day lived experience, and the Government's policy agenda. Right across the country from Auckland to Wairarapa to Southland, more and more people are shaking their heads. You would be hard-pressed to find a more obvious mis-match between what the country needs the Government to do, and what it is in fact doing.

Take the labour market. If you wanted to prevent a wage-price inflationary spiral then artificially restricting the labour market with tight migration settings and new rigidity in the wage-setting process would be the last thing you would do. But here we are. The Government's immigration re-set finally announced this week and was greeted by businesses as not quite as tight as they thought it would be. But make no mistake — it will still be a massive handbrake on growth.

There is a strong and persistent whiff around this Government of a group of ideological students of politics who are determined to implement the ideas they have cooked up over the past 20 years irrespective of the consequences. The question is why?

Most governments understand that their tenure is shaped by events. Often they have to shelve much-cherished ambitions to deal with what history throws up. They have to take seriously the mantra of "governing for all New Zealanders". Weirdly, not so much this one.
I suspect it has something to do with the manner in which they initially obtained office.

The public had a good close look at them in 2017 and decided they weren't quite ready for prime time. However Winston put them in government anyway, and then Covid gave them the means to run with their agenda irrespective of what the other parties in Parliament thought, contrary to the spirit of MMP.

They are also egged on by the people on the left who believe this is their time. The anti-car crowd, the co-governance crowd, and the identity politics crowd are just some of those who have waited all their lives for the chance to impose their version of utopia on the country. I see the anti-car crowd is even turning into the anti-EV crowd now as climate change outlives its usefulness in the cause of engineering social change.

Those groups may believe their time has come, but I suspect it has already almost passed. Yes it's a new world now, but not in the way they think it is.

As inflation takes off around the world, interest rates normalise, and pumped up asset prices decline, the coming world is clearly one of stagflation, recession, and declining living standards. It's a world where voters are going to want different answers. They are going to say forget your fancy causes and your ideological battles. What I want to know is what are you going to do to help my family, my community and my country get ahead. And what are you going to do to keep us safe.

It's a world where the preoccupations of what could be called late capitalism, like managerialism, ESG and social engineering, might have to take more of a back seat again to things like revenue, growth, and paying down debt.

Governments are going to have to get serious about encouraging growth, entrepreneurialism and taking risks. In a world where the limits of monetary and fiscal policy have been clearly exposed, rolling up your sleeves and getting on with it will be the only successful way forward.

Its not just our Government which is showing a lack of understanding and preparedness for what is coming next. The whole political class, here and overseas, is at risk of looking backwards and fighting the last war or the one before that. That would only increase the disconnect with the public, who more than anything else want answers about how they are going to get ahead and succeed in the mid 2020s and beyond.

The economic and political winds are changing again, and quickly. The political winners here will be those who best take up the new concerns of middle New Zealand, and act decisively on them. The current Government is certainly leaving the door wide open.

Steven Joyce is a former National MP and Minister of Finance