Peter Dunne
Wellington, October 11, 2024
In the early days of the fourth Labour Government then Finance Minister Sir Roger Douglas frequently described the government’s sweeping reform approach as moving so quickly on a variety of fronts that it was impossible for the Opposition to keep up with the pace of change. But a few months later, then Deputy Prime Minister Sir Geoffrey Palmer was acknowledging that the government was suffering from “speed wobbles.”
Dismantling Cornerstone Policies
When it took office at the end of last year, the current National-led coalition government swiftly set about dismantling as many of the cornerstone policies of the last Labour government as quickly as it could in what looked like a none-too-subtle attempt to remove as many vestiges of Ardernism as possible from the national political landscape. What had been known as “blitzkrieg” under the 1980s Labour became “scorched earth” under 2020s National.
Both approaches were panned by critics of the day and sparked typically circular debates about the need to curb the executive powers of governments to act this way. Predictably, these calls died down as those governments settled into their work and people adjusted to the changes being made. Equally predictably, Opposition parties of the time promised not to behave that way when they next came to office.
However, in a recent interview, Labour’s Finance Spokesperson (and potential future leader) Barbara Edmonds showed a refreshing honesty. In a remarkable affirmation of the French maxim “plus ça change, plus c’est la même chose” (the more things change, the more they stay the same) she said Labour has learned from the current government when it comes to managing economic reform. She said, “‘do it early is probably a lesson.” In her view, an incoming Labour-led government should go early and go hard, so there is time for things to settle in before the public next heads to voting booths. Her candour was reminiscent of Douglas’s approach forty years ago.
Quickly Clearing the Deck
So, those looking to a future Labour-led government to slow down the pace of change seem set to be disappointed if Edmonds has her way. She clearly intends to be just as ruthless in quickly clearing the decks should she become Finance Minister as Douglas, Ruth Richardson and now Willis were before her.
However, Edmonds was somewhat less specific about her policy intent. That is hardly surprising at this stage of the electoral cycle, nor is it inconsistent with past practice. After all, Douglas did not reveal his full hand until after the 1984 Election, arguing the sudden calling of the “Schnapps” election and the largely concealed parlous state of Muldoon’s controlled economy prevented a full election policy roll-out before the election. Likewise, Willis argued that she was constrained by potential coalition negotiation concessions, although she was adamant her tax cuts programme would proceed in some form.
The only clear policy hint Edmonds has given – in contrast to the waffling coyness of her Leader Chris Hipkins – is that the capital gains tax Labour has previously campaigned on unsuccessfully in 2011 and 2014 (and which both Ardern and Hipkins ruled out as Prime Minister) is firmly back on Labour’s agenda. After all, why else would she in the same interview have claimed that many business leaders privately support ANZ Bank CEO Antonia Watson’s recent public call to introduce a capital gains tax, and pleaded that she now needs them “to say that publicly?”
Shortly after he became Finance Minister in 1999, Sir Michael Cullen described the role as akin to that of a Managing Director. Other Ministers were like Branch Managers, he said, with the Prime Minister being like the Board Chair. Over the years, governments of whatever political hue have become defined by the policies of their Finance Minister.
Labour to Reintroduce Policies
From Rogernomics to Sir Bill English’s “compassionate conservatism,” it has always been the same. It is the Finance Minister who puts the stamp on a government’s policy style and approach. In that regard, it could be argued that Edmonds’ interview comments were as much about making this point clear to her own colleagues, as they were remarks for the wider public.
While Edmonds’ comments have revealed how she would approach the role of Finance Minister were it ever to come her way, they have also made it more difficult in the short term for Labour to criticise the government’s pace of change. And her acknowledgement that Labour did not always get it right on key policies – like fair pay agreements which she says Labour remains committed to reintroducing, although not in their original form, or social insurance that she is silent on – makes it that much more difficult to criticise National’s abandonment of those policies.
But overall, Edmond’s admiration of the speedy way the current government went about its early changes simply confirms that a future Labour-led government will perform just the same as the current government. Therefore, the National-Labour political merry-go-round looks set to carry on, the way it always has done.
Peter Dunne was a Minister of the Crown in the Labour and National-led governments from December 1999 to September 2017. He lives in Wellington and writes a weekly Column.
