SocialismToday           Socialist Party magazine

Socialism Today 124 - December-January 2008-09

New Zealand Labour loses general election

NEW ZEALAND’S Labour government, led by Helen Clark, was kicked out of office in the general election on 8 November. The conservative National Party, led by John Key, secured 45% of the vote while Labour won only 34%.

Under New Zealand’s mixed member proportional system, parties must secure either 5% of the nationwide vote or a local electorate seat to enter the 122 seat parliament. Since this system was introduced in 1996, neither the Labour Party nor the National Party has secured an outright majority and has had to rely on minor parties to form a coalition government.

The National Party now has 59 seats, with five for the hard-line, neo-liberal ACT New Zealand (which emerged from the Association of Consumers and Taxpayers in 1993). United Future, a Christian conservative party, adds one seat, making a conservative coalition of 65 seats. Labour has 43 seats, the Greens eight, and the Progressive Party one, leaving a joint opposition of 52.

The main backdrop to this election was the economy. New Zealand slipped into recession earlier this year, bringing rising inflation, rising unemployment and the collapse of the housing market. Consumers have been hit hard with soaring petrol and food prices, pushing spending down.

For most of its time in office, Labour oversaw a growing economy fuelled by high export prices and a booming share market. The ruling class in New Zealand has been well serviced, with profits up and wages stagnant. With the unfavourable economic circumstances, however, the incumbents struggled to portray an image of good economic management. As the recession started to bite, many voters questioned Labour’s ability to see them out of bad times.

Clutching at straws, Clark campaigned around the issue of ‘trust’ in her leadership. Even though her personal approval ratings were high, this was not enough to stop the big swing against her party. After conceding defeat, Clark resigned as Labour leader, although she stays in parliament after retaining her Auckland seat.

While this campaign was perhaps one of the dullest on record, the dominating theme from the National Party was ‘a time for change’. Key, a multi-millionaire former foreign exchange dealer with Merrill Lynch, even cited Barack Obama’s victory in the US as a mandate for a different approach to dealing with the global financial crisis. The National Party ran a populist campaign with a new and fresh-faced leader. If there was any similarity to the Democrats in the US it was that Key, like Obama, was skilful in calling for ‘change’ while not explaining exactly what that change would be.

There are no real differences between the National and Labour parties. They are out-and-out capitalist parties, with the minor differences more about style than substance. To win, the National Party had to take on many of Labour policies, including pledging not to sell the state bank and maintaining the superannuation scheme. Key accepted Labour’s 20-year-old anti-nuclear policy and approved its decision not to send troops to Iraq.

ACT party leader, Rodney Hide, dubbed the National Party ‘Labour-Lite’, saying Key was "adopting socialist policies in order to get elected and that the country needed tougher right-wing policies". While hardly a socialist, Key did try to play to the popular mood and parroted Labour at every turn. The very fact that Hide mentioned ‘socialism’ shows that even sections of the ruling class recognise that socialist ideas will gain ground in the coming period.

The contradiction between what Key has been forced to tell the electorate and what ACT wants him to do, will come back and haunt him. ACT will want to push ahead with slashing government spending, privatising state-owned businesses and creating "competitiveness in the health, education and welfare sectors". The infamous Sir Roger Douglas, now 70 – former Labour finance minister and architect of 1980s ‘Rogernomics’ (free-market ‘reforms’) – is returning to parliament as an ACT MP! This is sure to set the cat among the pigeons, as ACT will want to push the National Party further to the right, while Key will be under pressure from the electorate not to shift rightwards.

The Greens were the only small party to cross the 5% threshold, gaining 6% of the vote and increasing their MPs from six to eight. The Maori Party added one, so it now holds five of the seven ‘Maori seats’ – a special category giving positions to Maori representatives in parliament. The Maori Party leaders said they will discuss the possibility of a role in the government. These comments show the limits of this party and, if this comes to fruition, it will severely damage its reputation among New Zealand’s most oppressed group.

The right-wing, anti-immigration party, New Zealand First, lost its presence in parliament, receiving 4.3% of the vote. The leader of this peculiar racist party, Winston Peters, was accused of lying and corruption, and this damaged the party significantly.

As expected, the small left parties – Alliance Party, Residents Action Movement, and Workers Party – received very small votes. There was a lot of pressure on voters, including from some union leaders, not to vote for them. The same arguments of ‘lesser evilism’ that are used by the union leaders in many countries (vote for ‘social democrats’ to keep Tories out) were used in New Zealand. The Alliance Party is a shadow of its former self, when it won 10% of the vote and 13 MPs in 1996.

The downturn has seen big shifts take place among layers of working people. With no mass workers’ party, this shift, for the most part, was away from Labour and towards the National Party. This does not mean that New Zealand society is moving to the right. On the contrary, more and more people are now opposed to privatisation, free trade and attacks on workers’ and civil rights. The problem is that with no genuine mass alternative on offer workers were forced to exchange one capitalist party for another.

While the change in government will see no fundamental change in policy, Key has vowed to move urgently to inject life back into the failing economy. He pledged to invest millions of dollars in roads, school building and broadband internet cables. He also pledged to cut income taxes. To do this, he will have to take the government further into debt.

Key will also be under severe pressure from his coalition partners, ACT, not to carry out these policies and to push further to the right. The National Party is between a rock and a hard place. Either it sticks to its election promises, jeopardising its relationship with ACT, or it moves to off-load the burdens of the recession onto working people, and see its credibility disappear rapidly.

The one saving grace for the National Party is that the trade union movement is totally unprepared for the period ahead. Some sections of the ruling class would prefer that Key moves quickly to take advantage of the weakness of the unions. Others see Key’s skilful and ‘soft’ approach as necessary to ensure that workers are not provoked into struggle.

Practically none of the unions have any worked out strategy to fight against cuts to jobs, wages and conditions, which will be part of life in New Zealand as the financial crisis gets worse. While only a few unions are officially affiliated to the Labour Party, most still mistakenly put their political hopes in it. Their unwillingness to politically break with Labour has only served the interests of the bosses, forcing workers to fight with one arm tied behind their back. One thing that the 2008 election showed was the domination of the bosses’ parties in official politics – and working people’s desperate need for their own political representation.

As the shine wears off the National Party win, more people will begin to see that exchanging one bosses’ party for another is not going to improve their lot. The call for the unions to break with Labour, and for the formation of a mass workers’ party, will become more popular.

While it is inevitable that Key will enjoy something of a honeymoon in office, it is not ruled out that it could be short, considering that the recession is already being felt in the real economy. The volatility of the international situation can also play a big part in the direction the government takes. While New Zealand is geographically isolated from the rest of the world, it is fully integrated into the global economy and is not immune from the vast political changes that are taking place. We can expect more politicisation and radicalisation in New Zealand in the not too distant future.

Anthony Main

Socialist Party, (CWI Australia)


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