It is increasingly clear that some supposedly expert commentators on the political scene have a poor understanding of how a parliamentary democracy actually works.

The cardinal principle of such a system of government is that it is parliament – not the government – that makes the laws. If it were otherwise – so that government need pay little or no attention to parliament – we would have a quite different system – one that Quintin Hogg, later Lord Hailsham, characterised as an “elective dictatorship.”

Under our system, the government must, in other words, be able to command a majority in parliament; otherwise it would not be able to pass new legislation. And it is here that things get a little tricky for countries like New Zealand.

Like many other countries, New Zealand has a proportional representation voting system (in our case it is one called MMP). It is inherently unlikely that any single party will be able to secure a parliamentary majority under such a voting system all by itself.

This is not an accident or a disaster; it is how the system is meant to work. The whole point of MMP was to ensure that parliament could not be steam-rollered by a single party and that parliament and government would represent a wider range of interests and views than those of just one party.

That means that governments must usually be formed on the basis of a coalition agreement between two or more parties – and if the party with the most seats or votes does not itself have a majority, they need not be included.

The parties which make up the coalition do not lose their identity and their separate view points and interests. They merely agree to work with each other and – by supporting each other on most, if not all, issues – to ensure the the government has some stability.

But, consistently with the need for a majority if any particular law is to be passed, any one or more of the parties in the coalition can withhold their agreement to a particular measure and thereby prevent it from being passed if they do not support it.

There is nothing remarkable about this. It is how the system is meant to work and it is entirely consistent with – indeed required by – the principles of parliamentary government. So, in the present coalition government, any one of the two parties to the coalition agreement, Labour and New Zealand First – or perhaps three if the Greens were to be included on the basis of their general stance of supporting the government on most issues were to be included – could withhold their support and prevent the passage of a particular measure, on the basis that without their support there would be no parliamentary majority.

When the coalition partners occasionally do not agree on a particular issue, here is no reason, in other words, no reason to froth at the mouth, or bemoan the fact that National, with the largest number of seats but not a majority, is not in government, or to ask, who is running the government. A coalition government that has to muster a parliamentary majority to get its measures passed is what both our constitutional principles and the will of the people as represented by the outcome of the election both dictate; it is called democracy at work.

So, when New Zealand First declines to support a particular proposal put forward by Labour, or if the roles are reversed so that Labour fails support something New Zealand First wants, we should celebrate, not fulminate. We have the best of all worlds – a more representative parliament, a government that has to take account of a wider range of opinion than just its own, and a coalition government that provides stability and a consistent strategic direction.

Perhaps some of our commentators should pause to reflect for a moment before going into print.

Bryan Gould
13 September 2018

I decided a few weeks ago to step down from my role as Chair of the Board of EBPHA, the Eastern Bay Primary Health Alliance. As I confessed to my friends and colleagues at a farewell they had kindly organised for me this week, I had known very little about how the health sector actually worked when I had been asked to take on the role eight years ago.

Like most people, I had been vaguely aware that primary health care was about visiting the doctor when you felt unwell or needed health advice, and it also provided a range of other nursing and specialist services, all designed to keep you in good health so that you did not need to go into hospital.

What I hadn’t realised was how complicated were the arrangements that made all this possible. I rapidly learned that primary health care depended on the skill, experience, commitment and sheer hard work of a dedicated team of qualified people, working as a team under the expert leadership, first, of our foundation Chief Executive, Steve Crew, and then of his successor, our excellent, able and young Chief Executive, Michelle Murray.

My job was the relatively simple one of chairing a Board, comprising clinicians and representatives of iwi and of the wider community, and enabling them to provide to our
excellent executive arm the strategic vision and leadership that would enable them to perform their important work to the best effect.

I was fortunate in leading a Board that naturally gelled and was united in its determination to get the best possible results for the community we served. As our title indicated, our focus was the Eastern Bay of Plenty – with a particular emphasis on the “Eastern” – and the particular issues faced by our region were, for us, always front of mind.

We have in the Eastern Bay a high proportion of Maori patients and we constantly struggle to eliminate the unacceptable disparity in health outcomes between Maori and pakeha. We also have a greater incidence of poverty and of the problems that it throws up. Factors such as these combine to create difficulties that are greater here than elsewhere.

Poverty often means damp, overcrowded and unhealthy housing, and poor diet, from which flow a number of health risks. It can also mean that people are less able to travel to get medical care and, with less access to modern electronic media, are more difficult to contact. Cultural issues can mean a resistance to immunisation for small children and to breast and cervical screening.

We have learned that there is no point in simply bemoaning these factors. We have to accept them for what they are and need to work with them and at times to use them to our advantage. We have come to understand, for example, that health care for Maori is greatly more effective if it is made available and delivered in a culturally appropriate way and – as often as possible – by Maori themselves.

Does any of this matter? Yes, of course it does. If we can reduce the incidence of conditions like diabetes and rheumatic fever, if we can improve the mental health of our young people, if we can enhance the care available to the ill and elderly, then we not only lessen the burdens on our hard-pressed hospital services, but we greatly lift the quality of life of our own people.

As I give up my own responsibilities, I am absolutely confident that I leave behind a team of friends and colleagues who are totally committed to providing the huge blessing of good health to our whole population. I wish them well in the important and valuable work that they do.

Bryan Gould
5 September 2018

Workers who go on strike, and thereby cause some inconvenience to the public, cannot usually expect much by way of public sympathy.  But last week’s striking teachers, like the nurses before them, seem to have been met with a great deal of understanding.

This was, I suspect, because it was seen that their protest was not just on their own behalf as individuals, but was also directed at securing a better education for our children.

I know from my own brief experience as a teacher that teaching is a much more difficult and demanding occupation than most people realise – and a recognition of that fact seems to have at last penetrated the public consciousness.

Yes, the goal of the strikers was to secure better pay and conditions for each individual.  The sentiment that teacher s were under-paid was no doubt prompted by a sense of unfairness – that they were under-valued by comparison with other workers of comparable skill and responsibility, and that the way to remedy this was to put more money into individual pay packets.

But the teachers were able to persuade most observers that their concern was not just for the size of individual pay packets but was also for the future of the profession and therefore for the future of education.  They were able to show that the consequence of paying less than teachers deserve was that it is proving increasingly difficult to persuade new recruits to join the profession, and then to retain them once they have joined.

A shortage of teachers, and particularly of good teachers, is of course very bad news not only for the current generation of school children but also for our future as a nation.   We cannot afford to see a profession on which so much of our future depends in a state of such low morale and short of basic capacity.

Yet, while the reasoning behind the strike may be widely accepted, there is still a puzzle at its heart.  As the strikers made clear, the problems facing teachers have not arisen overnight.  Indeed, they made a point of reminding us that it is 24 years since they last found it necessary to strike – their current plight has been building over much of that 24 years, and more particularly over recent years, when any attempt to avert the current crisis was abandoned in favour of cutting public spending.

The puzzle is this.  Why did they not strike, or take other appropriate action to draw attention to the growing crisis, during the term of the government whose policies were largely responsible for creating it?  Why wait till a government more sympathetic to their claims was in office?

The answer to that question is presumably that they feel that putting pressure on the new government is more likely to produce results – and that is probably true.  A Labour-led government has generally been better disposed to public sector workers, and teachers in particular, than governments further to the right.

Yet the puzzle remains.  The strike will be widely seen by voters as a count against the new government, wherever the responsibility for its causes may lie.  The strike, in other words, is likely to deliver a political bonus to the political party whose government held down teachers’ salaries and created the current crisis in the first place, and it thereby makes it more likely that a government of similar persuasion will be elected at the next election.

In education, as elsewhere, the new government is having to pick up the tab for the cuts in public spending perpetrated by its predecessor – and that tab is not merely a financial one (though the financial cost of making good the backlog is certainly significant).  But it is also the case that the new government must, in the national interest, face and meet the need for restoring necessary standards in a profession that has been underfunded and prevented from doing its best over a long period.

Yes, the strikers’ case is a pressing and persuasive one.  But some strategic thinking would not come amiss.  It is in no one’s interests, least of all for teachers, that a leg up should be given to a party that would, returned to government, as the record shows, plunge us back into crisis.

Bryan Gould

16 August 2018

What should we make of the domestic political situation as normal business is resumed? As Winston Peters hands the reins back to Jacinda, and Simon Bridges considers the fallout from the National party conference, who has reason to feel pleased and who should be worried?

It is a reasonable bet that Jacinda Ardern has the strongest case for satisfaction. She has, after all, achieved the first and (in personal terms, no doubt, most important) steps into childbirth and parenthood, and has returned to head her government with its unity and sense of purpose intact.

Her brave effort at multi-tasking has so far succeeded, and has been generally commended – apart from a bizarre attack in print from an Australian feminist who berated Jacinda for devaluing motherhood by making it appear too easy!

The other politician whose fortunes might have been compromised was Winston Peters. Serious misgivings were expressed by his critics about his taking over the reins of government but – as befits an experienced minister – he hasn’t put a foot wrong and has even distinguished himself by calling out the Australians on their immigration policies.

With the support of his fellow-minister, Andrew Little, he has – not before time – held the Australian government to account for their shameful denial of human rights in their treatment of immigrants (including large numbers of Kiwis), and particularly of those below the age of majority, when they are held in detention in inappropriate conditions and denied access to legal advice, medical treatment and – in the case of school-age children – education, and are then deported without any legal process and merely by decision of the relevant minster – a minister who, this case, seems to think that young Kiwis with no convictions for any offence constitute a threat to the safety of Australians.

It cannot be said that, in standing up for the rights of Kiwis, and for the international obligations Australia has undertaken to protect human rights, Winston Peters will succeed in changing the policies of the Australian government; but he has at least made it clear that their deficiencies in this respect risk doing serious damage to Australia-New Zealand relations – with the corollary that any failure to remedy the situation would lay bare the little value the Australians apparently now place on the Anzac partnership.

While the coalition government can now feel that it has successfully negotiated what could have been a tricky period of uncertainty and lack of direction, the leader of the Opposition will have faced quite different challenges. It is a truism to say that a newly elected party leader will find his first party conference to be a difficult hurdle to clear. He will be expected to reinforce his authority, see off any potential challengers, and satisfy his supporters that they have made the right choice. He will also want to land some telling blows on the government and persuade the wider public that he is a Prime Minister in waiting.

How did he fare? No too badly, but not as well, perhaps, as he would have liked. He suffered an unlucky setback when he referred to his deputy as “Paula Benefit” – a slip of the tongue of the kind that could befall anyone, but that inevitably caused some amusement – but it should, perhaps, provide an object lesson in the dangers of using a private nickname for one’s colleagues.

His real problem, however, remains unresolved. He is constantly urged to make himself better known to the electorate, and he has worked hard at doing so; but the polls show that the voters have not warmed to what they know and see of him – and changing one’s persona is not easily achieved. I recall that Margaret Thatcher managed it, when she took voice lessons to change her hectoring tone to a more dulcet sound and thereby made herself more acceptable. The risk in making such an attempt, however, is that the voters are quick to detect and punish any perceived lack of authenticity.

To sum up, then – Jacinda’s parental leave has been and gone without changing the underlying political balance too much. We have yet to see what, if any, response there might be to the emergence of little Neve Te Aroha into the public consciousness.

Bryan Gould
1 August 2017

So, the chickens are coming home to roost – and with a vengeance.  The tragedy for the new government is that the chickens were bred and raised by the previous government, and are only now flying in, in large numbers and with hefty price tags.

We are now getting some idea of the price that has to be paid for those “business-friendly” policies that were celebrated for their success in producing a “surplus” (at least for the government).

That price includes large numbers of underpaid public servants – nurses, teachers, midwives, care workers, Inland Revenue workers – and underfunded public services – health care, schools, keeping our water and rivers clean, and bio-security at our borders.  The bio-security failure alone will cost the current government around $900 million – the amount awarded by the courts for the previous government’s negligence in allowing PSA to decimate the kiwifruit industry (and that’s to say nothing of the cost of the myco-plasma bovis outbreak).

Through no fault of its own, the new government is having to pay up for the mess made by its predecessor, and that costs money that cannot, it seems, be easily found.  Every dollar paid to clean up the mess is said to be a dollar less for the government’s real aims – to improve our public services, to rescue our environment, to save families from poverty, to provide recent housing for everyone.

But is that really the case?  There may be other shortages – labour or land, or skills or technology, or materials – but a shortage of money should not be one of them.  How do we know that?  Because, as an increasing number of experts recognise, and as our own experience teaches us, the government of a sovereign country need never be short of money.

This is because money, in a developed economy, is what the government says it is.  Indeed, it is often called fiat money because it exists only by the say-so of the government – and, as the economist, Ann Pettifor, says, that means that “we can afford what we can do.”

Most of the money in our economy sits in bank accounts, and a large proportion of that money is created by the banks when they makes loans, usually on mortgage.  The fact that the commercial banks create over 90% of the money in circulation out of nothing is still disputed by some (including by those who should know better) but is now attested to by the world’s central banks, by top monetary economists (such as Lord Adair Turner, former Chair of the UK’s Financial Services Authority and a leading advocate of “helicopter money”) and by leading economic journals such as the Financial Times and The Economist.

This raises the question – if the banks are allowed to create money out of nothing (and then to charge interest on it), why should governments be inhibited about doing so?  And indeed, they are not so inhibited – governments all around the world have over recent years pursued policies of “quantitative easing”, and on a very large scale – and “quantitative easing” is just another way of describing the creation of new money.

The money created in this way has been directed to building up the balance sheets of the banks in the wake of the Global Financial Crisis, but there is no reason why it should not be applied to other (and more productive) purposes – as it has been in many countries, as well as New Zealand, in the past.  Japan, for example, both today and immediately after the Second World War, used this technique to get their economy moving and to build the strength of their manufacturing industry ; in doing so, they followed the precepts of the great Japanese economist, Osamu Shimomura, who is virtually unknown in the West.

The Chinese government today follows similar policies.  President Roosevelt in the US did likewise, before the US entered the Second World War, so as to build the strength of American industry and military capability; and, in New Zealand, Michael Joseph Savage authorised the Reserve Bank to issue interest-free credit in the 1930s so as to take us out of recession and finance the building of thousand of state houses.

All that inhibits our current government from using this technique is the fear that some will disapprove and regard it as taking risks with inflation.  But, as John Maynard Keynes observed, “there may be good reasons for a shortage of land but there are no good reasons for a shortage of capital.”   He went on to say that, if an increase in the money supply is applied to productive purposes so that output is increased, it cannot be inflationary.

As the new Labour-led government faces financial constraints not of its own making, why not emulate Michael Joseph Savage and authorise the issuing of interest-free credit to be applied to investment in stimulating new production?   The Provincial Growth Fund would seem to be an ideal vehicle; funding investment in new infrastructure in this way would free up financial resources that could then be applied to current expenditure, such as paying the nurses and teachers what they deserve.