As the contenders for the leadership of the National party line up at the starting gate, they are each faced with a dilemma that confronts anyone seeking the leadership of a political party in a democracy.

This is because – for them – the leadership of their party is presumably not an end in itself, but is merely a stepping stone to the ultimate goal of becoming Prime Minister.  The contenders are embarking, in other words, on a two-stage process that requires them to win two elections in succession and to do so by gaining support from two quite separate and very different electorates.

The first contest demands that they should convince their own party members and activists that they are the candidate best able to represent and remain faithful to the party’s central values and goals and to sell those values and goals to the wider public; while the second contest will be about  persuading the (largely non-political) wider electorate that they are not so preoccupied with the party battle that they lack the breadth of vision and understanding that will equip them to tackle and resolve society’s wider problems.

The difficulty is this.  Those whose vote will decide the party leadership are just a very particular sub-set of the wider public; they will tend to be the party warriors, intent on winning the party battle, attaching great importance to ideological issues and requiring evidence that the fight will be carried to the enemy.  They will be looking for proof of single-mindedness, aggression and the strength never to back down.  Politics is, after all, a tough business and it demands the capacity to give, and take, some pretty rough treatment – and I say this with feeling, as someone who stood unsuccessfully in 1992 for the leadership of the British Labour Party.

But even those voters whose votes decide the leadership (as well as the candidates themselves) will have to have half an eye on the electoral contest yet to come at general election time.  What would be the point of demonstrating to the party faithful all that they might wish in terms of strength and toughness and ideological purity, if it is achieved at the price of alienating those whose support will ultimately decide who wins a general election?

The contenders, in other words, are fighting two separate battles.  The first is to win the support of their own party’s “attack dogs” – but following immediately, and spilling over from that exercise, is the battle for the support of the uncommitted voters in the wider public.

That is the dilemma that now faces the contenders, particularly the two who seem most likely to emerge as the front-runners, Judith Collins and Simon Bridges.  It is a dilemma that is, for both of them, extremely difficult to resolve.

Judith Collins exemplifies the point.  She is reported as opining that the National party has moved “too far to the left,” a view calculated to appeal to the National party’s conservatives and ideologues.  Her problem is that while it may appeal to party members who want to see a tougher line – the party’s “red necks” perhaps – it may not play so well with those voters who are not so committed.

It is, of course, a view that fits well with her carefully cultivated image as a tough operator –remember her role as mentor to Cameron Slater and how she seemed positively to relish the soubriquet of “Crusher” Collins.  But even those party members who would welcome that kind of aggressive approach might pause to wonder whether the floating voter will be attracted or repelled.

Simon Bridges is another instance.  His reputation largely rests, for good or ill, on his aggressive performances in various television studios.  Many of his supporters will welcome and celebrate his “take no prisoners” approach but what will be seen by some as strength will seem to others to be combativeness for its own sake.

In either case, sweetness and light would certainly be in short supply – and the lesson of our current politics is that our voters want to be led by people they like.  John Key cannot be resurrected (I think) but some of his famous affability might not go amiss.

Bryan Gould

17 February 2018

Banks are, as we know, very profitable institutions.  Last year, the big five banks operating in New Zealand made a combined profit of over $5 billion.

Reactions to this news will vary from one person to another.  Many will say “good on them”, and “just as well – we want our banks to be profitable, so that our money is safe” and “they provide a reliable service which we should be prepared to pay for”.  But many will have little idea as to how these profits are made, what happens to them and what is the true role of banks in our economy.

The first point to grasp is that four of the” big five” banks are Australian-owned, and that last year they sent back across the Tasman to their Australian owners $3.485 billion.  It is as though there is a massive vacuum cleaner that is sucking this huge sum out of the New Zealand economy and depositing it back in the Australian economy where, as well as unbalancing our balance of payments and adding to our indebtedness,  it works to the advantage of Australian investment in new productive capacity.  Little wonder that, by virtue of this $7 billion adjustment (whereby we give up $3.5 billion and they gain $3.5 billion), the Australians enjoy a higher living standard than we do.

The second point is that the profits are “earned”, not because the banks provide a service of this value but because the banks have a unique monopoly power – they alone are able to create new money, which they do every time they make a new loan, usually on mortgage.  They do not, as many people believe, lend money deposited with them by one group of people to another group of people who pay interest on their borrowings.  When a bank lends you money, it doesn’t actually send round a cartload of $50 dollar notes to put in your account.  It simply writes a bank entry that authorises credit of the agreed amount to be drawn down from your account, and then it makes its profit by charging you interest on the money it has created out of nothing.

The truth of this is now established beyond all doubt by an excellent research paper published by the Bank of England.   What that paper demonstrates is of huge consequence to our economy.

This is because money created in this way is by far the single most important source of new money in our economy and therefore has a major influence on issues such as the rate of asset inflation (particularly for property and especially houses) and inflation more generally, and on the affordability of housing.  We, and our political leaders, may think that they are in charge of economic policy but they are actually just operating on the fringes; the real running is made by the banks.

As well as the price we pay in terms of the bank profits that many see as excessive and that are then transferred across the Tasman, in other words, we concede to these Australian-owned banks the major influence over how our economy develops, with the result that, because lending on mortgage is more profitable than lending to industry, a large proportion of our national resource is diverted into house purchase rather than into productive investment.  We cannot hope to improve our productivity in comparative terms while this bias in our economy remains.

We suffer, by virtue of the current role of the banks in our economy, not only an economic loss, but also a partial loss of the power of self-government.  We have less control of where our economy is heading than a truly sovereign country has a right to expect.  The amazing thing is that this huge influence over our economy is achieved – through their unique ability to create new money – by private (and in this case foreign-owned) companies in the course of pursuing their own private profits, and that they are allowed to do this without any democratic control whatsoever.

Our politicians, however, seem unconcerned; they are happy to disclaim any responsibility for this important aspect of economic policy and to rely on the ignorance of the public to allow the situation to remain undisturbed. Wouldn’t it be good to think that our new government might take a fresh and more critical look at it?

Bryan Gould

17 February 2018

As the National party struggles to come to terms with its failure to win the general election, it needs to face up to the reality of its situation.  So far, it has done little more than feel sorry for itself, and that has been rapidly followed by looking for someone to blame.

The prevailing sentiment is that, in reality, they “won” the election and were cheated out of it – if not by a perverse electoral system, then by an unprincipled chancer who refused to play by the rules.

What they will not recognise is that they were required to play by the rules that everyone else (including the electorate as a whole) had accepted, and that their failure to prevail was theirs alone.  They lost because they could not assemble enough seats in parliament to command a majority.

What they cannot seem to accept is that, having held office for nine years and won three elections in a row, it should have come as no surprise that the voters might have been prepared to give someone else a chance – especially when the main opposition had a new lease of life under a new and charismatic leader.  Nor should it have been a surprise that the voters who signalled their wish for a change should have reached a range of different views (under a proportional representation voting system) as to precisely who they wanted to see take over, and that it was then up to the various parties to construct a parliamentary majority and form a government.

The difficulty National has had in accepting these simple truths is significant in at least a couple of respects.  First, it represents a real obstacle to their chances of recognising, rapidly adjusting to, and overcoming their current plight.  And secondly, it tells us something about how National sees its place in New Zealand politics.

Although my own political sympathies lie elsewhere, I like to think that I have some insight into that very question – and that is because my own dear (and long departed) parents were lifelong National party supporters, as were their parents before them.  For them, the way they voted was less a matter of personal advantage or political calculation as it was an expression of a social attitude.  “People like us”, they felt, and would sometimes say, “vote National”.

“People like us”, in their terms, were people who had a vested interest in the status quo, by virtue of their achievements, and who therefore had a special responsibility to maintain the social order.  And with that responsibility came a special and unique role – to be available to take the important decisions needed to hold society together.

It is only a short step from those assumptions to a belief that the exercise of governmental power was almost a kind of birthright, and that any departure from that norm was at best an aberration.  I encountered a much more overt and deliberate expression of the same attitude when I became involved in British politics.

British Conservatives, of course, operate in a much more class-conscious society than we are used to, and noblesse oblige is perhaps one of the less objectionable manifestations of the belief that some people are “born to rule”.  It is an attitude that generations of public-school educated boys took with them, for good or ill (more usually for ill), to the further corners of the Empire.

It may seem somewhat fanciful to draw a parallel between the New Zealand National party and the British establishment, but I suspect that the incredulity of National supporters at the loss of power and their refusal to accept it or accommodate it stems from a similar belief that they are meant to govern and that the natural order has somehow been overturned by the advent of a Labour-led government.

The sooner National can get over their failure to win, and can accept that they have no special claim to government, the better for them and for New Zealand politics.  The most difficult lessons are sometimes the most salutary.

Bryan Gould

8 February 2018

Changing the leader can be one of the most difficult things a political party can do in a democracy, as the National party is perhaps about to find out.

The process they may be about to embark upon could well be fraught with difficulties; it seems unlikely that they will find it as straightforward as Labour did last year.

The luck very much ran Labour’s way in 2017.  An accommodating, not to say selfless, leader in Andrew Little reached his own conclusion that it was time to go.  The Labour party had already identified, in Jacinda Ardern, a deputy leader who could succeed to the leadership with a minimum of angst.

And, she was able to resolve one of the most difficult potential dilemmas faced by political parties – how to choose a leader who commands the support and loyalty of party activists, while at the same time appealing to the wider electorate.  All too often, a potential leader who commends himself or herself to the party faithful will be a complete turn-off for the uncommitted public.

It was Labour’s good fortune that their leader-in –waiting was not only the obvious and widely supported candidate from within the party, but that she immediately proved her vote-winning credentials with the wider public.

National, on the other hand, has a more difficult row to hoe.  Bill English is a widely respected leader, still enjoying support from his party and under no immediate pressure to go.  While National has a deputy leader, there is no widely accepted successor – but rather, as we are about to find out, a number of other challengers, each of whom will have counts against him or her.  None has quite the same freshness and novelty value that Jacinda Ardern displayed when she first emerged into the limelight.

National’s contenders will all bring a certain amount of baggage with them into a leadership contest – and, in an open democracy such as ours, any black marks from their past will be remembered and revived in the public memory.  Whether it was a disastrous television interview or pulling a fast one when a Minister, the contenders will have to expunge those unfortunate memories and will have to hope that their supporters are a forgiving lot.

In modern politics, it will almost certainly be the case that a good deal of “qualitative polling” will be carried out in what are known as “focus groups”, to find out just how the contenders are seen by the public.  I remember that, when I ran the 1987 general election campaign in the UK for the British Labour Party, we did this kind of polling, about both policies and personalities.  It came as quite a shock to us to discover that one of our leading spokespeople was a complete “no-no” for the public.

For party loyalists who are primarily looking for a leader who can win a general election, a demonstrated tendency to alienate undecided voters will ring the deal knell for a candidate’s hopes.  Responding to a television interviewer rudely and aggressively, for example, may be seen by some as a plus, seeming to demonstrate leadership qualities, but not if it is a turn-off for the non-committed.  As the contenders line up, they will be hoping that they can start with a clean slate and will be forgiven past transgressions.  Politics, however, is not usually so accommodating.

There is one further hurdle for them to surmount.  Labour had to endure years of John Key’s unusual ability to appeal to the voters.  The shoe is now well and truly on the other foot.  Now, National have the extra burden of choosing someone who can contest toe-to-toe with Jacinda Ardern.  And that contest is not just about policies, important though they are – it is about the whole package, principle, personality, the lot.

Being as objective as I can, I cannot, when I survey the field of National hopefuls, see anyone who fills the bill from among the supposed frontrunners.   Favourites are usually favourites for a reason – but in this race, the favourites seem to have used the inside running to disqualify themselves. Trying someone who is completely untried, on the other hand, is a huge risk, but it may be one that National feels compelled to take.

Bryan Gould

30 January 2017

Changing the leader can be one of the most difficult things a political party can do in a democracy, as the National party is perhaps about to find out.

The process they may be about to embark upon could well be fraught with difficulties; it seems unlikely that they will find it as straightforward as Labour did last year.

The luck very much ran Labour’s way in 2017.  An accommodating, not to say selfless, leader in Andrew Little reached his own conclusion that it was time to go.  The Labour party had already identified, in Jacinda Ardern, a deputy leader who could succeed to the leadership with a minimum of angst.

And, she was able to resolve one of the most difficult potential dilemmas faced by political parties – how to choose a leader who commands the support and loyalty of party activists, while at the same time appealing to the wider electorate.  All too often, a potential leader who commends himself or herself to the party faithful will be a complete turn-off for the uncommitted public.

It was Labour’s good fortune that their leader-in –waiting was not only the obvious and widely supported candidate from within the party, but that she immediately proved her vote-winning credentials with the wider public.

National, on the other hand, has a more difficult row to hoe.  Bill English is a widely respected leader, still enjoying support from his party and under no immediate pressure to go.  While National has a deputy leader, there is no widely accepted successor – but rather, as we are about to find out, a number of other challengers, each of whom will have counts against him or her.  None has quite the same freshness and novelty value that Jacinda Ardern displayed when she first emerged into the limelight.

National’s contenders will all bring a certain amount of baggage with them into a leadership contest – and, in an open democracy such as ours, any black marks from their past will be remembered and revived in the public memory.  Whether it was a disastrous television interview or pulling a fast one when a Minister, the contenders will have to expunge those unfortunate memories and will have to hope that their supporters are a forgiving lot.

In modern politics, it will almost certainly be the case that a good deal of “qualitative polling” will be carried out in what are known as “focus groups”, to find out just how the contenders are seen by the public.  I remember that, when I ran the 1987 general election campaign in the UK for the British Labour Party, we did this kind of polling, about both policies and personalities.  It came as quite a shock to us to discover that one of our leading spokespeople was a complete “no-no” for the public.

For party loyalists who are primarily looking for a leader who can win a general election, a demonstrated tendency to alienate undecided voters will ring the deal knell for a candidate’s hopes.  Responding to a television interviewer rudely and aggressively, for example, may be seen by some as a plus, seeming to demonstrate leadership qualities, but not if it is a turn-off for the non-committed.  As the contenders line up, they will be hoping that they can start with a clean slate and will be forgiven past transgressions.  Politics, however, is not usually so accommodating.

There is one further hurdle for them to surmount.  Labour had to endure years of John Key’s unusual ability to appeal to the voters.  The shoe is now well and truly on the other foot.  Now, National have the extra burden of choosing someone who can contest toe-to-toe with Jacinda Ardern.  And that contest is not just about policies, important though they are – it is about the whole package, principle, personality, the lot.

Being as objective as I can, I cannot, when I survey the field of National hopefuls, see anyone who fills the bill from among the supposed frontrunners.   Favourites are usually favourites for a reason – but in this race, the favourites seem to have used the inside running to disqualify themselves. Trying someone who is completely untried, on the other hand, is a huge risk, but it may be one that National feels compelled to take.

Bryan Gould

30 January 2017