Editorial: Empty appeals to populism aren't enough

Empty appeals to populism do not deserve electoral support. Photo / Paul Estcourt

There will be a real choice at next year's general election. That much is clear after the Labour Party's annual conference.

The distinctive policies sketched by the party leader, Phil Goff, represent a substantial departure from the central ground so keenly coveted by Helen Clark during her nine years in power. That territory has, effectively, been ceded to John Key, whose personal popularity left Mr Goff needing to chart a new course before the election.

That course marks the end of Labour's marriage to neo-liberal economics. The new interventionist thrust has necessitated some about-turns, from Mr Goff and the party. Labour allowed 650,000ha of land to be sold to foreign buyers while it was in government.

Now, it says it would turn down big land sales to overseas buyers except in exceptional circumstances. That means Mr Goff, who was involved in many free trade deals, is overseeing a policy that would, for example, have big implications for the reciprocal provisions of the Closer Economic Relations agreement with Australia.

Unfortunately, this particular change, like the plan to axe GST on fresh fruit and vegetables, can be explained only in terms of populist appeal. The Government has announced new overseas investment rules that will create uncertainty for potential investors.

Labour, heeding the sentiment aroused by the Chinese bid for the Crafar farms, seems intent on trumping these. Despite its claims, its policy would be governed by the prevailing fancy, not what is best for the country in terms of economic benefit. A subject as vital as foreign investment is in danger of losing a foundation of sound and consistent principle.

The proposal for a "fairer" tax system has a similar populist tinge. No detail has been released but the politics of envy seem certain to re-emerge in some shape to take more off the wealthy. Those earning a six-figure income could face a higher tax rate.

Mr Goff has also been mulling a capital gains tax on investment properties. While that is a place politicians have feared to tread, it would go much of the way towards correcting the imbalance of investment in the economy. The housing market is in a slump, but the drivers that prompted the last bubble have not been fully addressed.

One thing is certain. If it wins the next election, Labour would have to find a means of broadening the tax base to provide alternative sources of revenue to pay for its policies.

Probably the most expensive of these would be Annette King's plan for a new focus on the care, wellbeing and education of children under 6. Every newborn would be enrolled with a Well-Child provider, with the aim of ensuring babies at risk are identified early, so support can be provided.

Many reports have argued for placing the ambulance at the top of the cliff in this manner, not least for its potential to reduce crime and the imprisonment rate. If the early childhood expenditure proved effective in breaking a depressing social cycle, it would be money well spent.

The conference also heard the party president, Andrew Little, reinforce Mr Goff's earlier call for a debate on New Zealand becoming a republic. This, also, is territory where too many politicians have been too timid to go. There is no obvious electoral appeal in such a policy, but it is the right thing to do.

Mr Goff's new course has parallels with Britain, where the Labour Party, after electoral defeat, has opted for a left-leaning leader, Ed Miliband, and "turned the page" on the New Labour era of Tony Blair and Gordon Brown.

Such changes present opportunities, but they are not without obligations. Empty appeals to populism do not deserve electoral support. The case for a more managed economy needs to be made responsibly.