• Maori Politics Are Not A No-Go Area

    For many pakeha, the Treaty of Waitangi is an exclusively Maori domain. It is seen as simply a mechanism for the pursuit of Maori grievance. This indifference to our defining constitutional document means that our country is weaker and less united than it should be.
    Similarly, Maori politics are seen as solely a Maori concern – so much so that non-Maori gratefully concede that it is not a topic on which they should intrude. Yet pakeha commentators are failing in their duty if they treat Maori politics as irrelevant to our wider national concerns.
    We all have an interest, after all, in the success or otherwise that Maori have, not only in managing their own affairs but in making their full contribution to our national life. We all have a stake in seeing those shocking statistics for Maori health, education and employment reversed. We are all poorer and our society is more divided because we tolerate a situation in which an ethnically defined and growing part of our biculturally based country is left to languish.
    When I was growing up, it was widely believed by pakeha that the future for Maori was assimilation, a process that was seen to be both painless and inevitable. We now know better. Not only have we (or at least most of us) learnt the real and continuing value of Maori language and culture, but we also understand the magnitude of the challenge that Maori have had to meet in adapting to a bicultural world. And we now know, too, that we have much to learn from the Maori world view.
    Most Kiwis of whatever ethnicity will have grasped that Maori have a better chance of success in today’s world if their own language and culture are recognised as the basis of building confidence, security, self-identity and a sense of self-worth. If Maori are required to operate in a pakeha-dominated world according to exclusively pakeha values and prescriptions, it is little wonder that they will struggle.
    So, there will – or should – be an understanding welcome for measures, like the whanau ora programme, that are designed to provide a culturally appropriate way of improving access to a range of public services for Maori – services whose successful delivery for both Maori and pakeha is essential to our health as a society. There is little point in providing such services but placing them behind an impenetrable cultural barrier which in effect denies them to those who most need them.
    But this is only part of the story. It is right to accept that an increased role for te reo and tikanga Maori is essential to provide a secure base from which Maori can play their full role in our country. But that secure base should be just that – a base. Valuable though it is in itself, it is not the destination. It is not the endpoint. Cultural security should be the launching-pad for an assault on the real goal – the increased ability for Maori to operate successfully in today’s rapidly changing and increasingly international and multicultural world.
    My old friend Robert Mahuta used to tell me that “it is time for Maori to stop looking in the mirror and to look out the window”. He was right. Maori, like everyone else, need to be looking forward as well as back – forward to a new world in which a good education, good health and well-paid employment are the crucial passports to success.
    Many Maori are already showing the way. But the statistics for overall Maori health, employment and educational achievement cannot be gainsaid. Maori politicians who want to make a difference should have no difficulty in accepting that these statistics point to the correct priorities. Their concerns must, in other words, go beyond issues of Maori language and culture; Maori are even more directly concerned than the rest of us by wider social and economic issues – not least because, when those issues are badly handled, it is Maori, and particularly young Maori, who are the most vulnerable.
    There is one issue above all that should demand attention. The restoration of full employment, and the chance of a job for the more than 15% of young Maori currently unemployed, would be the single most important advance for Maori that could be made. It would put money in pockets, raise living standards, improve health, lift self-esteem, encourage educational effort – and it would transform the life prospects of future Maori families.
    For as long as large numbers of young Maori are excluded from the chance to play a full role in our economic life, the outlook for Maori – and for all of us – is grim. Maori leaders should be using their political clout to force a government that treats the issue of unemployment with supreme indifference to do something about it. Maori politicians should not be satisfied with a few inexpensive concessions on specifically Maori issues. Their focus should be on those wider issues that really matter, to pakeha as well as Maori, yes, but that have an especially damaging impact on Maori. It’s time that they – and we all – spoke up.
    Bryan Gould
    1 December 2012

    This article was published in the NZ Herald on 10 December 2012

  • Why Have Maori Leaders Got It Right?

    As a chastened Prime Minister looks back over the last six months and registers the decline in his own standing and that of his government, his record over that period leaves a number of unanswered but increasingly pressing questions.

    It is clear enough, of course, that the Epsom cup of tea last November seemed to usher in a series of errors and misjudgements, large and small, of the kind that can of course afflict any government from time to time. What is surprising, however, is the Prime Minister’s uncertain handling of some of those issues, so that the tribulations of ACC, for example, seem to have caused more damage to the government than should have been necessary.

    The John Key of the first term would have handled such problems with a smile and an easy charm that would have disarmed most critics. But the going in his second term has been much tougher; we have seen a much more petulant and irritable Prime Minister who has sometimes compounded difficulties rather than smoothing them away.

    The Prime Minister was nevertheless back to more familiar form in his reaction to the debacle over larger class sizes. He lost little time in recognising that the game was up, and he did not hesitate to show the steel behind the smile when he sacrificed his Education Minister to the public clamour.

    The Prime Minister may say that governments cannot govern effectively if they change course in response to every shift and eddy in public opinion. Like his predecessors, though, he has been good in the past at recognising the point when the political damage of proceeding with an unpopular policy outweighs any downside of changing course.

    Which all raises the intriguing question – if John Key is ready to bail out in the face of parental opposition to larger class sizes, why is he so determined not to budge on the question of the sale of public assets?

    Opposition to asset sales, after all, has been sustained over a long period and by a wide range of public opinion. All the polls show that this is the issue on which unhappiness with the government has been most clearly expressed. As the government’s popularity has begun to slip, surely this is the issue which has caused them most damage?

    Yet the Prime Minister has at times seemed almost to revel in defying public opinion over this issue. It has become, so it seems, the touchstone by which his government is to be judged. So, why is he willing to take such risks over asset sales when he has been prepared to ditch other policies so readily?

    The answer is instructive. Larger class sizes would have saved $43 million; selling off public assets, though, will raise – according to whichever of Bill English’s “guesses” is the current favourite – around $6 billion.

    Even if the “guess” proves – as is likely – to be a substantial over-estimate, a sum of anything like this magnitude cannot be passed up. It is essential to the whole of the government’s strategy. Without it, there would be a huge hole in the government’s finances, and any chance of eliminating the deficit by 2014-15 would have gone.

    Whatever other arguments are pressed into service, the truth is that the sales are needed if John Key’s strategy is to retain any credibility in financial terms. But credibility is exactly what the strategy is lacking.

    The government’s whole reputation for sound financial management rests on doing something that every ordinary householder will recognise as bad practice – selling off an income-producing asset in order to consume the proceeds. John Key is forced to nail his colours to this shaky mast because the failure of an economy still mired in recession to generate more buoyant tax revenues means that the government’s deficit has remained stubbornly high.

    The government’s commitment to public asset sales, in other words, is driven by the need to raise the money to offset the government’s failure to get the economy moving again. But there are also reasons other than the specifically financial for resisting the sale of our national assets to what will inevitably be overseas owners.

    Those reasons relate to the degree of control we exercise over our own destiny. We have already sold a greater proportion of our assets to overseas owners than any other advanced country; every time we sell another important national asset to overseas owners, we lose a little more control over our own future.

    And that gives rise to the second major question about asset sales. Iwi have been clear that, if the sales are to proceed, they will be keen to buy. But it is their stated reasons for doing so that deserve attention.

    Iwi leaders have made it clear that their intention to buy is so that they can hold the assets in trust for future generations of Maori. There can hardly be a starker contrast with the attitude of John Key’s government, who – it seems – could not care less about future generations.

    So, the crucial question is, why are Maori so much better served by their leaders in this matter than the rest of us are by our own government?

    Bryan Gould

    17 June 2012

    This article was published in the NZ Herald on 20 June.

  • Opening Our Minds

    Over the past four years of recession, we have seen a re-run of the debate that surrounded the Great Depression. In the 1930s, there were those, like Herbert Hoover, who insisted that austerity – by cutting government spending – was the way to beat recession. Others, like John Maynard Keynes, were convinced that the remedy was stimulus and expansion.

    In the event, it was a no-contest – and so it is today. It is now clear that the austerity being inflicted on the benighted Greeks cannot work, but even the other “PIGS” – Portugal, Ireland and Spain – who have done everything required of them by the austerity disciplinarians, have found that they are going backwards, deeper into recession and with a rising ratio of government debt to GDP.

    And while the British may have avoided the problems of euro membership, they chose to impose their own home-grown austerity. The result? They are mired in a recession that threatens to be worse for them than the 1930s.

    In the US, by contrast, President Obama’s stimulus programme – bitterly opposed and relatively timid as it was – is pulling the US economy around. There can now be little doubt that stimulus is the key to beating recession. The time for austerity policies, after all, is when the economy is booming; in a recession, they are the last thing we need.

    As that reality becomes increasingly difficult to deny or ignore, where do we in New Zealand stand? Sadly, we find ourselves with Herbert Hoover, down an ideological cul-de-sac with nowhere to go. The proponents of the current orthodoxy now don’t even bother to defend it; they promise merely a continuation of the long drawn-out stagnation – resorting, like school-kids in the playground, to challenging their critics to offer something better.

    The critics seem increasingly ready to respond to that challenge. A recent example is Bernard Hickey’s interesting suggestion that we should consider “quantitative easing” (or, as it used to be called pejoratively, “printing money”).

    It may not be the first option to come to mind but it is not as way-out as it seems. Many governments (including the current UK and US governments) have “printed money” from time to time – and banks do it all the time, lending money that they do not have, and thereby creating most of the money in our economy out of nothing. If it’s all right for them to make billions from doing so, why shouldn’t governments do it in the public interest, and so get the economy moving?

    There are, of course, many other proposals that offer an alternative to the failed orthodoxy. Here, in 400 words, are a few suggestions, which – if implemented – would go to make up a coherent programme.

    · Put beating unemployment centre stage by investing in much-needed infrastructure projects, so as to raise demand and create new jobs –a virtuous circle which would also help retailing, and private sector investment and productivity.

    · Get the exchange rate down to improve competitiveness so that higher demand is met by New Zealand, and not foreign, industry; do so by ending the use of high interest rates and over-valuation as counter-inflation tools and focusing instead on the real cause of inflation – excessive and irresponsible bank lending for non-productive purposes. As soon as foreign speculators are denied an interest rate premium and an unearned capital gain, the dollar’s value will fall.

    · Remove the balance of trade constraint on expansion by boosting exports through improved competitiveness, so cutting the interest and profits paid to overseas lenders and owners; this will allow us to expand while paying our own way, so reducing the need to borrow overseas or to sell our key assets to foreign owners.

    · Encourage saving and exports rather than consumption and imports by promoting further saving through tax breaks, and – since imports will become comparatively more expensive than domestic production – reduce the incentive to spend on cheap imports at the expense of New Zealand jobs and production

    · Tackle the government’s deficit by collecting a sharply increased tax take as a more buoyant economy generates much greater tax revenue

    · Reduce widening inequality by discouraging excessive salaries, introducing a fair tax system (including a capital gains tax) and stopping the destructive insistence on inflicting the cost of the recession on those least able to bear it – the low-paid, the unemployed, and beneficiaries.

    · Expect improved competitiveness, productivity and profitability in the private sector to stimulate increased investment, especially in skill training, education, and research so as to utilise fully our potential human capital and achieve an economy that reaches its full productive potential.

    · Develop a close understanding of and support for Maori aspirations, given that Maori offer an important potential stimulus to new development and seem to have leaders with a better understanding than pakeha – on issues like asset sales – of what the country needs.

    · Ensure that new investment is encouraged to develop advanced – and particularly environmentally friendly – industries based on green technologies.

    This is all just common sense; none of it is revolutionary. It would rescue us from recession and set us on the right course for the future. It would optimise the market’s strengths and minimise its weaknesses. Don’t let anyone tell you there is no alternative.

    Bryan Gould

    27 February 2012

    This article was published in the NZ Herald on 29 February.

  • What Do Maori Know That We Don’t?

    So, now we know. When the Prime Minister said last year, in respect of the proposed sale of the Crafar farms to the Chinese, that New Zealanders would not want to be “tenants in their own land”, it was a statement “full of sound and fury, signifying nothing.”

    The Prime Minister tells us now that it would be – and in that case presumably always has been – illegal to stop the sale; he thereby reinforces a pattern that has become all too familiar – a pattern of broad assurances designed to allay public concerns on various issues, followed by periods of obfuscation, and then explanations as to why the assurances could not be acted upon.

    So, for example, the government was to insist that the recovery of the bodies from the Pike River mine must be an inescapable commitment from any new owner; it now seems likely that will mean no more than that new owners must have a “plan” to be implemented (only if possible) at some indeterminate date in the future.

    And so too, expectations are now being scaled down in respect of the commitment – so often trumpeted as confirmation of the government’s financial rectitude – to return government finances to surplus by 2014. That, we are now told, is in doubt because the global economy has – in a way that had somehow escaped the attention of the forecasters – proved to be in a parlous state.

    And what of the assurances repeatedly given by the Prime Minister that the public assets his government now proposes to sell will somehow remain in New Zealand hands? Is it now not clear that we will in due course be told – when the assets have passed into foreign hands – that it would have been “illegal” to discriminate against foreign bidders?

    There are of course many points that can be made in respect of those asset sales. Who can doubt, for example, that – just like an individual – a government that sells off an income-producing asset in order to spend the proceeds should be regarded as behaving somewhat imprudently. How, in other words, does the government propose to make good the hole in their finances when they no longer receive the income from the assets they have sold?

    And the more we are assured – for the purpose of raising their market value – that the assets offer an investment that is secure, long-term, virtually inflation-proofed, and guaranteeing a good return, the more the question is begged – wouldn’t that investment be equally valuable and attractive in the hands of those who currently own them?

    It is of course true that the New Zealand capital market would be enlarged, at least in the short term, if a major new range of investments became available. But we should surely pause to wonder why our capital market is so small and weak. The answer is that most of what were once New Zealand assets of comparable size and stability have long ago passed (via privatisation) into foreign ownership; and the further sale of what remains in public ownership seems certain to add to that longstanding trend.

    We can, of course, expect a familiar response from the Prime Minister to the latest difficulty to arise in respect of asset sales – the belief that new private owners will not accept obligations under the Treaty of Waitangi in their management of what were public assets. John Key will assure Maori that they will lose nothing from removing those statutory obligations – and by the time they discover otherwise, it will be too late.

    But the Maori stance on asset sales is instructive for another reason as well. Iwi have declared their intention of investing in the assets. They are clear that they will invest for the long term. They will hold their shares in trust for future generations. They will take seats on the boards of the enterprises so as to make the most of the influence their shareholding will give them.

    Most people, I guess, would nod in approval of all of these propositions – but they constitute, of course, the clearest possible statement of the argument for not selling the assets in the first place.

    The advantages sought by Maori are precisely the advantages currently enjoyed by all of us but which the asset sales would deny us. So, why is something that is clearly so valuable to Maori apparently of no consequence or value to the rest of us? The Prime Minister might be asked for an answer.

    Why are Maori able to look to a leadership that takes the long view and has a proper sense of its obligations to the common interest and future generations? Why do the rest of us have to make do with a leadership that looks at worst to an ideological prejudice against public ownership and at best to a short-term boost to the balance sheet that will quickly be outweighed by the all-too-familiar burden of paying the profits across the foreign exchanges to overseas owners?

    Bryan Gould

    1 February 2012

  • To Sell Or Not To Sell

    It is I suppose inevitable, in the run-up to an election, that any comment on an issue of public interest – like the excessive deference paid by the media to the Prime Minister, or the proposed sale of publicly owned assets – should be seen by party hacks exclusively in terms of the inter-party battle.

    But since it is clear that, on the sale of public assets, concerns extend across voters of all persuasions and include many supporters of the government, I hope that a discussion of that issue will not be seen just as party-political posturing. It is too important for that.

    The first point to make on the issue is that – if we adopt the analogy with a private household often (and usually wrongly) favoured by commentators – an individual who proposed to sell off an income-producing asset so that he could spend the proceeds would be regarded as behaving somewhat imprudently. In this respect at least, the analogy holds and a government is surely no different.

    The point need not be laboured, since it is made forcefully by those who are the most enthusiastic supporters of the proposal. No one can blame the fund managers for salivating at the prospect of a new range of investments that are secure, long-term, virtually inflation-proofed, and guaranteeing a good return.

    But the more they hype the advantages of such investments and proclaim their keenness to get at them, the more they beg the question – wouldn’t those investments be equally valuable and attractive in the hands of those who currently own them?

    And, since the current government says that their top priority is improving their own finances, how do they propose to make good the hole in those finances when they no longer receive the income from the assets they have sold?

    The suspicion must be that the loss of income will in due course be made up by further sales of public assets. And, since the new private owners will be keen to attract yet more capital, the proportion of equity in public and therefore New Zealand hands can be expected to diminish in any case.

    It is of course true that the New Zealand capital market would be improved substantially, at least in the short term, if a major new range of investments became available. But we should surely pause to wonder why our capital market is so small and weak. The answer is that most of what were once New Zealand assets of comparable size and stability have long ago passed (via privatisation) into foreign ownership; and the further sale of what remains in public ownership seems certain to add to that longstanding trend.

    The architects of the proposal have struggled to find any convincing way to allay these obvious fears. It is noteworthy that we hear little now of the so-called “Mum and Dad” investors; they are thought to be all too likely to sell off their shareholdings (perhaps once they have collected the bonus shares) to the highest (which usually means foreign) bidder.

    But the government has nevertheless had some success in finding supporters for its proposal – and not just the obvious candidates in the investment industry. Perhaps the most significant of those who have come out in favour of asset sales have been iwi, who have proclaimed their intention of joining forces in order to invest in this new range of assets.

    The Finance Minister, Bill English, attached such importance to obtaining this endorsement that he went especially to Ngaruawahia to make his case. He might have benefited, however, from listening to the detail of what Tukoroirangi Morgan had to say afterwards.

    The spokesperson for the iwi group was clear as to what Maori aims were. He said that Maori would invest for the long term. He said that they would hold their shares in trust for future generations. He said that they would seek a seat on the board so as to make the most of the influence that their shareholding would give them.

    Most people, I guess, would nod in approval of all of these propositions. But the noteworthy point about them is that they constitute the clearest possible statement of the argument against selling the assets in the first place.

    The advantages to Maori spelt out by Tukoroirangi Morgan are precisely the advantages currently enjoyed by all of us but which the asset sales would deny us. So, the question that must be answered by Mr English is – why is something that is clearly so valuable to Maori (an assessment that he seems happy to endorse when it suits his purpose) thought to be of no consequence or value to all New Zealanders?

    Why have Maori been able to look to a leadership that takes the long view and has a proper sense of its obligations to the common interest and future generations? Why do the rest of us have to make do with a leadership that looks at worst to an ideological prejudice against public ownership and at best to a short-term boost to the balance sheet that will quickly be outweighed by the all-too-familiar burden of paying the profits across the foreign exchanges to overseas owners?

    Bryan Gould

    1 September 2011