Memories are short. As Brian Rudman reminds us, one of the new government’s first acts in 2009 was to cancel the attempt to keep junk food out of school tuck shops. Flying in the face of all expert advice, the new Education Minister set herself up as an expert on child nutrition and moved quickly to meet the interests of the pedlars of fast food and sugary drinks. Child obesity was apparently a minor consideration.

Fast forward six years. The World Health Organisation and the Prime Minister’s Chief Scientific Adviser, Sir Peter Gluckman, are in no doubt that child obesity is a major threat to the nation’s health. The government has little option but to concur.

But some things never change. The one startling omission from the package of measures put forward to combat this newly recognised threat is any action to restrain the activities of major companies in selling and advertising to young people the very products that are unerringly identified as responsible for the obesity epidemic.

It may be that, as the Herald explains, there are difficulties in taxing particular products on social or health grounds. Similar arguments were advanced in respect of tobacco and alcohol. Even today, the major tobacco companies argue that selling a product that causes pain, misery and death to hundreds of millions of people should be of no concern to government, and threaten legal action every time their right to do so is challenged.

The significant feature of the government’s response on the obesity issue is, in other words, the easy acceptance that it is not their responsibility to protect us, including the most vulnerable – our children, and that any attempt to do so would violate the sacred right of big business to make profits wherever they can, whatever the cost to our citizens.

So naturally does this conclusion come to our Ministers that they scarcely bother even to address the issue. The profit motive is sacrosanct; there is nothing more to be said.

The outcome, as I see and understand from my work in primary health, is that growing obesity will go on wreaking its avoidable and terrible damage. But the significance of the issue extends beyond the health of our young people.

The government is in the process of signing up to an agreement that parades as a “free trade” deal. They profess to be unconcerned about provisions in the TPPA that allow major corporations to sue our government for any action taken that might adversely affect their profits.

“We have nothing to fear,” our government tells us. “We have no intention of taking any action that would run counter to the interests of our overseas investors”. In the light of what we are seeing in respect of the fast food and sugary drinks issue, we can see what they mean.

In the global economy, and like so many other governments around the world, our own government sees it as axiomatic that their role is to represent the issues of big business. Little wonder that they are relaxed about the prospect of being sued when they see no prospect of their policies causing any problem to business interests.

It was John Lennon who asserted that, in a democracy, “we are the government”. If only that were the case! But the truth is that the government – in many important respects – operates quite independently of us, the people. The TPPA is a case in point. The government has blithely conceded to powerful overseas business interests a major part of our power of self-government, not only without consulting us, but without even allowing us to know what it is they have committed to. And their excuse is that the TPPA simply codifies in this respect what they have done and will go on doing anyway.

Democracy, we should never forget, is a mode of government, not just a process. It is about more than votes and elections, but is about ensuring that the interests of everyone are properly taken into account, on every issue, and that a fair balance is struck. A government that serves interests other than our own is not democratic.

We are often told that people in other countries and with different histories and cultures do not share our commitment to democracy, but are content as long as they have full bellies and stability. But are we so different? Are we not happy to trade away our right to decide for ourselves in return for the material things to which we now attach such importance?

And since we care so little, can we blame a government that is confident that it can keep us happy by just jollying us along – not so much bread and circuses, but a Prime Minister happy to entertain us with supposedly “jokey” interviews on Radio Hauraki and revelations about his less salubrious habits? Is this what democracy has become?

Bryan Gould

21 October 2015

The government is to be congratulated on achieving a fiscal surplus – even if, as the commentators point out, it is likely to be short-lived. They have finally succeeded, for the first time in seven years, in hitting a target which they, at least, evidently see as important.

But, does it really deserve the importance given to it, and has it not been achieved at a greater cost than is justified?

The public discussion about “the deficit” is bedevilled by misunderstanding. Most people, and many commentators, fail to distinguish between the government’s accounts and the country’s. When they are told that we have eliminated “the deficit”, they take that to mean that the country is back in the black. If only that were true!

The truth is that we continue to live well beyond our means, and are likely to do so to an even greater degree in the coming years – hence our perennial need to borrow from overseas and to sell our assets to foreign owners so that we can finance a living standard we have not earned. A government that poses as a prudent manager of our economy has done nothing to change this rake’s progress.

The deficit the government have focussed on, however, is not the country’s, but their own; and, while cutting public spending may seem like good housekeeping, it has made the economy as a whole smaller and less efficient than it could and should have been.

The priority given to reducing its own expenditure means that important public services – the police, armed forces, health, education, biosecurity at our borders – have been denied the resources they need. Valuable voluntary organisations are forced to close down for want of proper funding. The public service is weakened as public servants lose their jobs and are replaced by consultants.

State-owned organisations – like ACC, Air New Zealand, TVNZ – are compelled to make ever larger profits to swell the government’s coffers, even at the expense of failing to meet their proper purposes. The private management of prisons and other services is encouraged so that the expenditure can be taken off the government’s books. New taxes are surreptitiously introduced, including most recently higher charges to those leaving and entering the country.

Most importantly, lower government spending, targeted in isolation, simply means a lower level of demand and economic activity in the economy as a whole. The reduced level of economic activity explains why, for example, our unemployment rate remains so high, growth is slowing, Bill English kept missing his deficit target for so long, and further government deficits – as tax revenues fall – seem inevitable.

A smaller and weaker economy inevitably has greater difficulty in paying its way, so that the country’s deficit – the one that really matters – is almost certain to get worse. And, in a kind of vicious circle, a larger overseas deficit means in turn that a government deficit becomes harder to avoid.

That is because the overseas deficit is accounted for – as a matter of accounting identities -by the deficits of the two sectors of the domestic economy – the public and private – taken together. A larger overseas deficit makes it inevitable that the combined deficits of the two sectors will also get larger; if the attempt is made to reduce government’s deficit while the overseas deficit is growing, it is equally inevitable that the private sector deficit must grow even faster.

So, if the economic case for targeting government finance in isolation from the rest of the economy is not convincing, why is it being done? The answer is that it is seen by the government as politically desirable to achieve a smaller role for government, whatever the economic consequences.

And that makes it all the more surprising that the government’s opponents have also committed themselves to achieving a surplus if elected to government. Their reason for doing so is presumably to maintain “credibility” with a public that is conditioned to see a “surplus” as a good thing; yet, even when viewed in isolation from the rest of the economy, a government surplus simply means that the government takes more out of the economy, by way of taxes, than it is putting in – not necessarily what the economy needs or the taxpayer would welcome.

None of this means that governments should not insist on value for money and efficiency in the public sector. Nor should it preclude a sensible distinction between the government’s current spending and what it invests for the future, where – as anyone with a mortgage will tell you – borrowing to build a future asset is perfectly sensible and where the government is generally able to borrow at a lower rate than the private sector can.

But it does mean that government spending is an important and valuable element in our overall economy and to cut it back for purely ideological reasons is likely to make us all poorer. We should not forget that the best and surest way to eliminate the government’s deficit is to get the rest of the economy working properly. Cutting public spending – in isolation from anything else – runs directly counter to that goal.

Bryan Gould

15 October 2015

As the Prime Minister signals that he might re-consider his unwillingness to help with the refugee crisis, students of New Zealand politics will have recognised a familiar syndrome. First, a proposal is roundly rejected; then the language softens; the merits of the proposal are partially acknowledged and, finally, it is accepted.

Most politicians with aspirations to remain at or near the top will have learnt that it is not a good idea to stray too far from where public opinion is thought to rest. Some political leaders have perfected the technique of deciding policy on the basis of what the voters think; Bill Clinton, with his “triangulation”, even went so far as to give that process a name.

All political parties use polling to help them decide what to do and say; and the polling they find most valuable is not the measurement of voting intentions – so-called quantitative polling – but the tracking of opinion on a range of issues through the use of “focus groups”, or what is termed qualitative polling.

I know from my own experience in politics that politicians pay an inordinate amount of attention to the results of such polling. And John Key, more than most, seems to have made an art form of tracking public opinion and deciding policy accordingly.

We can accordingly hazard an informed guess as to what has happened on the refugee issue. John Key’s first assumption was that Kiwis would react adversely to the prospect of increasing the number of refugees we are willing to accept. But, as the television pictures have become increasingly harrowing, the focus groups have registered a decisive shift in opinion.

Kiwis, to their credit, seem to have reacted to the crisis with common humanity. They did not like to see themselves portrayed as selfish and stony-hearted.

John Key recognises that he got it wrong, and that he is taking some flak as a result. But he also knows that he can limit the damage if he can re-position himself quickly, without being accused of flip-flopping too obviously. A carefully choreographed and well-practised process of cautious change is therefore under way.

At one level, this sensitivity to public opinion is to be welcomed. A Prime Minister who is willing to admit on occasion that he is wrong and to adjust his position accordingly can be seen as an example of democracy in action. And who can complain if a politician changes his pitch when the polls tell him he should? It seems likely, for example, that the focus groups have delivered the message that people are a little tired of seeing so much of the Prime Minister as a “cheeky chappie” or “man of the people”, which is why we seem to have seen less of that persona on our screens since the election.

The practise of deciding policy in the light of public opinion does, however, have its downsides. It may be used, for example, to conceal from a possibly sceptical or hostile public just how far and fast a given policy is intended to go.

John Key has occasionally revealed, perhaps unwittingly, how that can be done. In November 2014, for example, he was reported as advising Campbell Newman, the then Prime Minister of Queensland, that an asset sales programme could be made acceptable to public opinion if it was undertaken in stages, so that people were not unduly alarmed and could not see the end goal.

Using the results of qualitative polling can help a government, in other words, to identify techniques for manipulating public opinion so that it becomes more receptive to proposals that are initially opposed. Those techniques include proceeding by carefully calibrated stages, and interposing intermediate processes, such as the setting up of inquiries guaranteed to reach conclusions congenial to the government.

The readiness to track and follow public opinion may also, if it becomes too obvious, redound in the long run against the reputation of those practising it. Voters like to believe that their leaders are people of strength and principle and do not swing around like a weather vane.

A politician who says too often “you don’t like that policy? Well, here’s another one” can seem shifty and untrustworthy. And, once the impression is gained that a leader’s statement cannot be relied on, and is always likely to change, an important element of leadership is seen to have been undermined and lost.

That sentiment is all the more likely to be felt when it is the country’s concept of itself that is at issue. There will be many who believe that it is not the role of focus groups but that of the Prime Minister to identify and articulate the values we hold and to define who we are as a people.

Bryan Gould

4 September 2015