Film-maker with an eye on our economic policy

By GEOFF CUMMING

Lest we forget. As New Zealanders approach the first election for years in which economic direction is not the burning issue, it is timely to consider how it has come to pass.

An electorate satisfied that Labour has renounced the market-led extremes of the 1980s and 1990s seems ready to reward the Government with a second term. New Labour, spawned from an aversion to Rogernomics and its hybrids, appears redundant in the public mind. National, which took New Right philosophies to new heights in the 1990s, remains in disgrace with centre-left voters who have taken a decade to get over the 1980s.

Three years of more socially conscious government have coincided with relative economic prosperity. That 100,000 people are out of work is barely an issue. Structural unemployment is accepted as the price we pay for low inflation and lower interest rates.

Alister Barry is one, however, who does not accept the inevitability of six-digit unemployment. The Wellington film-maker's new work, In a Land of Plenty, reminds us that, until the 1980s, the primary goal of economic policy was full employment. A return to that objective need not bring runaway inflation, it suggests.

The 112-minute documentary premieres at the Wellington Film Festival tomorrow and the Auckland festival on Thursday - two days out from the election.

Barry, a film-maker since 1973, has mined similar territory before. His 1996 documentary Someone Else's Country focused on Rogernomics, the rise of the New Right and privatisation.

It attracted publicity when TVNZ refused to screen it, limiting its exposure to film festival audiences and interest groups.

His new film is a cautionary tale about the damaging effect of New Right economic policies, but stops well short of endorsing the Clark Government's approach to monetary policy.

The opening scene focuses on a makeshift cross marked "NZEF graves". Weary soldiers stand around in prayer.

In case we have forgotten, narrator Ian Johnstone says the survivors of World War II came home with the expectation that "all men could earn decent wages and raise a family".

But the 1980s brought a new wave of leaders who hadn't lived through the Depression or World War II, says Johnstone. "For some of them, the constraints needed to sustain full employment seemed old-fashioned. The ideas of free-market economists seemed new and exciting."

The nub of the film is that unemployment became an instrument of economic management, primarily to keep inflation down. In the 1980s and 1990s, governments and the Reserve Bank relied on a pool of unemployed to suppress wage inflation, raising interest rates to stifle growth when labour shortages loomed. Tariff reductions and attacks on welfare benefits were other mechanisms used by the New Right to top up the labour pool in an obsessive pursuit of zero inflation.

In a Land of Plenty is a film about economic policy but it is far from dry, academic fare. Mixing narrative, archival footage and interviews, Barry contrasts the policy objectives with their impacts on ordinary New Zealanders.

Kaitaia woman Pauline Broughton says she has $36 a week left for food. At the Porirua CAB, Pearl Briggs tearfully recalls swallowing her pride to accept a food parcel. "I didn't have anything there to feed the children and felt so ashamed that I couldn't do that."

It helps that the characters are recognisable. There's David Lange in 1986, telling Auckland watersiders that his Government is "as firmly wedded to social priorities as any Labour Government ever has been."

Roger Douglas, as dissent grew in the wake of the 1987 sharemarket crash: "I believe the events of the last three weeks mean we need to accelerate the process of reform rather than stop it."

Lange again, on his resignation. "There is no place in New Zealand for deregulated labour markets. There is no place in New Zealand for doing away with the minimum wage."

His stand was, of course, too little, too late. In the 1990s Bill Birch, Ruth Richardson and Jenny Shipley proved willing disciples for free-market evangelists, introducing the Employment Contracts Act and attacking welfare payments.

Only when inflation was well and truly beaten did the Reserve Bank ease interest rates and allow economic recovery to begin. But when unemployment fell, to 7.4 per cent by 1994, the bank feared more jobs would lead to higher wages and the return of inflation.

"From now on," says Johnstone's voiceover, "the Reserve Bank would manipulate interest rates so that at any given time 100,000 to 150,000 Kiwis would be unemployed."

Former trade union economist Peter Harris, now an adviser to the Minister of Finance, Michael Cullen, says the bank has always denied having an unemployment target. "But whenever unemployment got close to 6 per cent the Reserve Bank used to get very, very nervous and used to start putting the foot on the brake."

Barry's analysis is polemical. Its premise that full employment remained the prime objective of economic policy until 1984 ignores the unstoppable surge in unemployment which began in 1975. It was the failure of the Muldoon Government's interventionist policies that led to the free-market approach.

It is light on what alternatives were available and ignores the benefits which restructuring brought to some sectors.

It was the Barry analysis which concentrated the row over Someone Else's Country. "TVNZ said they had their own series called Revolution, which showed some months later, but they never really gave a reply as to why they wouldn't screen it."

But Barry concedes that his films don't easily lend themselves to television advertising schedules and, although he has sent a preview of his latest effort to the state-owned broadcaster, he's not holding his breath.

"Television current affairs at the moment is not really dealing with many substantial issues. I don't think the climate has changed to the extent that it would get shown on TV."

There's also the matter of whether his films satisfy the Broadcasting Act's criteria for balance. "That's not my approach - which is to research a subject very thoroughly and present my conclusions. In a sense I'm being a social historian rather than a current affairs programmer.

"With In a Land of Plenty, my question was why we don't have full employment any more."

The answer lies in the change to using unemployment as a tool of monetary policy. The film ends with Cullen renewing the Reserve Bank agreement with Don Brash after the 1999 election. As Brash gets back to work, Johnstone reminds us that "inflation would average 2.5 per cent and on a typical day some 110,000 New Zealanders would be out of work".

Barry says that despite widening the inflation target band and repealing the Employment Contracts Act, the Clark Government has left New Right monetary policy largely intact.

He expects the appointment of a new Reserve Bank governor and negotiation of a new target agreement after the election to bring only fine-tuning.

"If we really wanted to we could lower unemployment down to 40,000 or 50,000 - levels that were considered horrendous under Muldoon - but under the current regime that would be impossible."

* In a Land of Plenty screens at Auckland's Sky City Theatre on Thursday, 6.15pm, and on Friday, 11.15am. To buy the video, write to PO Box 3563, Wellington.

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