Political Roundup: Will Labour coalition bring radical change?

Could we be witnessing the beginning of a radical new time in New Zealand politics? The newly announced Labour-NZF-Greens coalition government is certainly starting out by making some rather radical statements and promises.

The first radical declaration came in Winston Peters' announcement that he was going with Labour. Peters stated "Far too many New Zealanders have come to view today's capitalism, not as their friend, but as their foe... And they are not all wrong." And he emphasised that his party's choice between National and Labour was "for a modified status quo, or for change", and so he chose "change".

A government for these "anti-capitalist" times

It is a sign of our times that the word "capitalism" is so frequently used by New Zealand politicians, and normally in a critical way. The global zeitgeist of anti-Establishment rebellion has truly made its way to New Zealand politics.

Winston Peters is not the only one denouncing the problems of capitalism. Prime Minister elect Jacinda Ardern went on The Nation and gave one of her more leftwing interviews. She signalled the need for radical change, saying "When you have a market economy, it all comes down to whether or not you acknowledge where the market has failed and where intervention is required. Has it failed our people in recent times? Yes. How can you claim you've been successful when you have growth roughly 3 percent, but you've got the worst homelessness in the developed world?" - see Newshub's Homelessness proves capitalism is a 'blatant failure' - Jacinda Ardern.

There is certainly change in the air, and Newshub's Patrick Gower channels this very strongly in his column: A true Government of change.

Here's how Gower starts the column: "Change. That is the word that sums up the new Government. Change - complete change. The new Government will totally change New Zealand's politics and its economy. It will be truly revolutionary and transformative in so many ways."

For Gower, it goes far beyond a change of government: "When the last Government changed from National to Labour in 2008 there was never going to be change like this - and there wasn't, there was incrementalism. Not this time. This time it is different. The politics of the day were extraordinary - but the change to come will be even more extraordinary. There is a huge warning that comes with this huge change - it will hurt, and some of it won't work. This Government is unique - but that also means it is untested. All these represent a different New Zealand - a changed New Zealand. Change isn't coming: it is here - and it is coming at New Zealand very fast."

We are headed into "uncharted waters" according to Duncan Garner, who says Winston Peters "may want an end to the neoliberal capitalist agenda, which he claims has hurt too many" - see: The accidental prime minister and the Utopian expectations. And Garner concludes his column saying "Some governments promise little and deliver more. This one is promising big and that makes it awfully hard from day one. All the best."

A mood for change

A government of change seems to have been widely welcomed. Simon Wilson takes a moment to contemplate the change he dreams of seeing - see: Jacinda Ardern and the left boldly look to the future.

Even newspaper editorials are welcoming a new era. The Otago Daily Times says that "New Zealand is in for a significant change in direction in policy. Social policy will be front and centre of the new government. Ms Ardern has made it clear she wants to end child poverty" - see: Mood for change recognised. But it warns that if "a financial downturn is on the way", then "Ms Ardern and her Cabinet will be truly tested."

The Dominion Post argues "Peters is right that this was an election where a majority wanted change" - see: A welcome game-changer. And the editorial emphasises Peters' self-proclaimed radical orientation: "So Winston Peters has gone for change and not just a modified status quo. He even talks about reforming capitalism so New Zealanders will view it as a friend and not a foe. These are astonishing remarks from a man who is supposedly a conservative."

Rod Oram also celebrates change, saying "The change to a Labour-led coalition government will bring new ideas and energy to a wide range of New Zealand's economic challenges" - see: With new leadership comes a fresh agenda. Importantly, he points out that in 2017 the business community made it clear it is also relatively open to change, with many CEOs signaling that they are more pragmatic than in the past, and keen for urgent progress to be made in the areas of "infrastructure; housing; productivity; education; and inequality".

Radical policy change?

There is a strong focus in political commentary on how much radical change is about to occur in terms of policy reform. Dan Satherley has one of the best summaries of what we can initially expect - see: What Labour has planned in its first 100 days, and how likely it'll happen. He evaluates the likelihood of various policy initiatives being implemented over the next few months.

Jane Patterson's version is also very good - see: Sixth Labour govt: What's in store for NZ. And for a focus on how reforms might immediately impact on youth, see Max Towle's What can young people expect from a Labour-NZ First coalition?.

Duncan Garner advocates that, given that "the country is so structurally broken apparently", "Ardern must cancel holidays for her new ministers and pull them back to Parliament early next year. That would signal intent and urgency. Parliament goes to sleep for two months; this new Government must change that and get to work and stay there. The first 100 days programme is big, and will require a similar commitment" - see: The accidental prime minister and the Utopian expectations.

There are plenty of sectors that might be about to get a shake up. Adele Redmond writes that "New Zealand's education sector is preparing for a sea change under the new Labour-New Zealand First government" - see: New government brings policies marking massive changes in education. And Nicholas Jones reports that Free university study just months away.

For changes in the media, see Tom Pullar-Strecker's New era for public broadcasting anticipated. And on immigration, see Matthew Theunissen's New Government could cut immigration numbers 'overnight'.

Already there are leaks coming out about what the Greens have gained from the new government, see Anna Bracewell-Worrall's The Greens' 10 big policy gains.

The strongest radicalism of the new government may end up occurring - perhaps counter intuitively - in the provinces. Peters has negotiated a supposedly transformative agenda for the regions. This is best explained by Politik's Richard Harman in his report, NZ First gets huge fund to spend in provinces.

Here's Harman's key point: "Labour has agreed to a huge provincial Development Fund as part of its coalition agreement with NZ First. The fund is Labour's answer to NZ First's manifesto promise to restore GST collected from tourists back to the regions where it was collected. The money will be under the control of NZ Ministers. It is estimated that around $1.5 billion in GST is collected from tourists each year. Politik understands that the Provincial Development Fund will have at least hundreds of millions of dollars in capital - possibly more with a total nearer $1.5 billion."

For more on this regional development, see Martin van Beynen's Will Labour-NZ First coalition bring a new era in regional development?.

The Labour-led government will "tap into the zeitgeist of the time", producing change in economic and social policy, according to Tracy Watkins - see: Get ready for the Jacinda Ardern honeymoon.

Here's Watkin's list of where we can expect significant change: "An Ardern-led government will be able to lead from the front on many of the issues that dominated the election - the environment, cleaning up our rivers and streams, doing better at delivering affordable housing, and addressing deprivation and disparities. These were all issues National would have had to tackle also, but there would have been a difference in emphasis and tone, and the shifts would have been incremental, rather than dramatic. There will also be a big shift in economic direction - a Labour, NZ First, Greens government will be more interventionist than a National government and will go harder and further on income distribution through measures like Labour's families package, boosting the minimum wage and a big step up in the State house building programme".

Reality check on radicalism

Former National Cabinet minister Wayne Mapp expresses his enthusiasm for change in his very interesting column, I was a National MP for 15 years, and today I'm excited about Jacinda.

He suggests change perhaps might not be as extensive as promised: "Don't expect the end of neo-liberalism, which seems to mean whatever anyone wants it to mean. For instance the new government is not about to re-impose tariffs and bring back import licensing. They are not going to end the floating dollar. They are not about to nationalise swathes of the economy. And due to Labour's Rules of Budget Responsibility and the coalition deal, they will not be increasing taxes, or bringing in a capital gains tax, or a water tax, at least not before 2020."

"So what sort of government are we going to get?" Mapp asks. Here's his answer: "It will be in the atmospherics that the biggest changes will come. And these will really mean something. Even today there are people who remember the optimism that Norman Kirk bought to New Zealand. Jacinda has the chance to remake the narrative of our country. This is less about the hard core of policy and more about the image we portray to ourselves and to the world."

Also providing a reality check, Andrew Geddis blogs to say we should not "see this as a new dawn of immediate, radical change" - see: Schrodinger's cat is Malawi's flag. He points out that "Ardern was very, very quick to emphasise in her first Q&A session after Peters' announcement that Labour remains committed to running surpluses and to staying within existing fiscal frameworks (or other economicy jargon I don't really understand). And, of course, the Greens have signed up to a similar commitment. So, there will be change - but change of a responsible, careful, considered sort. Change that won't scare the horses too much ... or, more importantly, the farmers who own those horses."

Stephanie Rodgers points to a list of progressive reforms to come, but says "This is no Corbynist revolution" - see: After the sigh of relief, time to set a decisive course. She calls for the political left to keep pressuring and support Labour to make big bold changes in its first term.

In terms of any type of anti-capitalist or anti-neoliberal ideology that might underpin the new government, it's worth reading Oliver Chan's blog post, Single malt Keynesianism for a new New Zealand. He describes an odd alliance between two very different forces in the new government: "A seemingly unlikely cabal has emerged out of the New Zealand general election, between inner-city left-wingers and a pinstripe-suited older gent who, together, might lead the death knell of neoliberalism in New Zealand and could be an example for the broader-left worldwide."

For Bryan Gould this mix of radical populism is a relatively benign one, and he celebrates that New Zealand has gone down a more progressive route of anti-Establishment politics: "We are all entitled to congratulate ourselves on the fact that this potentially ticking time-bomb has produced in New Zealand, not a Donald Trump or some other extremist, but a broadly based and secure government that is committed to considered policies that will address the problem" - see: Our democratic process worked.

Finally, for satire about the government's new anti-capitalist approach, see Steve Braunias' The secret diary of Winston Peters.