Is NZ's PM... a Socialist Dreamer

[Rorschach]

Ardern's social laboratory for the world
By Peter Hartcher
6 March 2018 — 12:31am

Jacinda Ardern has a list of promises for improving the lives of lower-income people. This is pretty standard stuff for a fresh centre-left government. But one of her approaches for achieving it is not. The new Prime Minister is planning a world first that could once more make New Zealand a social laboratory for the world.

"We are establishing a living standard framework," she tells me. "We are looking beyond economic markers." Her government is not junking the traditional economic measures - debt and budget targets, for instance, will remain. But, Ardern says: "If we are increasing GDP and increasingly seeing environmental degradation and social suffering, it's hard to say we've succeeded", referring to gross domestic product, the conventional measure of the monetary value of an economy's output. "We have given Treasury to fiscal 2019 to have a framework ready" for measuring national progress on all three fronts - raising income, yes, but also improving environmental and social goods.

This approach has been hugely fashionable among progressive economists in the last decade. Fathered by the Indian economic philosopher Amartya Sen and mothered by governments in Britain and France, their progeny have so far been stillborn. Because no government has implemented "wellbeing economics" in any meaningful way.

The Australian Treasury designed a wellbeing framework some years ago. But as Nicholas Gruen of Lateral Economics puts it: "It didn't make any difference to anything - it was a pretend framework and they then got rid of it." Gruen advocates that governments use the wellbeing approach. He's constructed an Australian wellbeing index for Fairfax Media that will be updated next week. He says that to ignore the wellbeing of citizens is to overlook the main game: "For example, there is three times as much human capital in Australia as all other types of capital, including natural capital."

Done properly, a wellbeing framework could "transform the way government works".

So how would a real one work? The NZ Prime Minister volunteers this example: "The best indication of the way we want to work is that we've put in place child poverty levels" that she wants to achieve. "Our budgets will measure progress against that. So that gives some idea of the sort of accountability framework that we want to put in place." It's a proposition that reminds me of the adage that I've seen fitness coaches quoting: "What we measure, we improve."

But it has to go further than mere measurement. Ardern has promised to make NZ "the best place in the world to be a child". She has set the goal of approximately halving child poverty in 10 years. She has given herself the new portfolio title of Minister for Child Poverty Reduction.

And while she avoided Bob Hawke's impossible dream, his 1987 promise that "no child will be living in poverty" within three years, she still has the same core problem - how to make a difference. It's not embroidery for her. The very reason she went into politics at age 17, she says, was to do something about child poverty, and she's already introduced a bill to the NZ Parliament to try to achieve just that.

She has set clear targets; her mechanisms for achieving them are vague. Her government's proposals were accurately criticised last month by the then opposition leader, Bill English as being "so high level and general that they refer to no one in particular, and no one will be held responsible for any lack of progress". Much of the solution will have to come from her government's larger social program - promises to raise the minimum wage, cut doctors' fees, build new "affordable" housing, increase many types of welfare payments and family tax credits. How all this comes together remains to be seen.

A big political question is whether this social policy agenda is enough to give her government real purpose. After all, she leads a centre-left government, and this type of political party is becoming an endangered species around the world. In the US the Democrats are in a crisis over their philosophy and purpose, riven between Bernie Sanders socialism and Clintonesque centrism and still reeling under the impact of Donald Trump populism. Britain's Labour Party is in a similar existential crisis.

In Europe, social democratic governments have been thrown out of office in four countries in recent months. In France the Socialist party's collapse was so abject that it polled just 6 per cent, the same as its Greek counterpart. The weekend's Italian election, based on exit polls, will throw a fifth European centre-left government out of power, reducing it to a third force after the right-wing populist Five Star party and the centre-right coalition. Only five of the 28 nations of the European Union will be under centre-left management as a result. "Social democracy, the most influential force in European politics for decades, is dying," mourns Politico's Matthew Karnitschnig. Is it just a matter of time before the labour parties of Australia and New Zealand fall into the same crisis besetting social democratic parties everywhere else?

Ardern is being careful to try to occupy so much of the middle ground of NZ politics that she offers no easy avenues of attack from the right. For instance, she is making dramatic cuts to NZ's immigration intake. While offering to take 150 asylum seekers from Manus Island, her government pledged to cut the total immigration intake of 70,000 by some 20,000 to 30,000 a year.

And she's being "fiscally careful" in the words of leading NZ journalist and economic policy analyst Colin James. "She's taking a slightly slower track" than the previous government to reach the same target of net national debt of 20 per cent of GDP. "They say there are holes in social services, especially health, and I think that's right." Ardern was once president of the International Union of Socialist Youth, but how much of her thinking today is socialist? "Not much," says James.

If Ardern can sensibly pioneer a way to transform modern economies from GDP-centric systems to ones that put human wellbeing at the centre in a systematic way, she might do a lot more than improve living standards in NZ. She just might revitalise the vision and purpose of social democracy everywhere.

Another adage about the importance of good measurement systems is the old sports one: "A good scorekeeper beats a good player." Ardern, however, has to be a good scorekeeper and an effective player to achieve her government's ambitions.

[freediver]

My macroeconomics lecturer went on about the same issues back when I was in uni.

[The Mechanic]

Lets see how many Immigrants and fake reffo's she floods their small country with...

[sprintcyclist]

................... her government pledged to cut the total immigration intake of 70,000 by some 20,000 to 30,000 a year.
.................

good, make it -20,000 a year.

[Black Orchid]

And make sure those 30,000 don't use NZ as a spring board into Australia.

[Neferti]

And make sure those 30,000 don't use NZ as a spring board into Australia.

Agreed. However, I thought "they" had done something about that? At least they are deporting the NZ crims!

[Black Orchid]

And make sure those 30,000 don't use NZ as a spring board into Australia.

Agreed. However, I thought "they" had done something about that? At least they are deporting the NZ crims!

WE are deporting the NZ criminals but I haven't heard a word about NZ stopping all those country shoppers who enter NZ with the sole extent of coming here.

[The Mechanic]

And make sure those 30,000 don't use NZ as a spring board into Australia.

Agreed. However, I thought "they" had done something about that? At least they are deporting the NZ crims!

WE are deporting the NZ criminals but I haven't heard a word about NZ stopping all those country shoppers who enter NZ with the sole extent of coming here.

she's already tired that with the fake reffos on manus...

and nearly 45% of the crims that Dutton has sent back to NZ have reoffended already...

he's got my vote..

[Black Orchid]

Dutton is the only one out of both major parties who is deserving of representing Aussies imo.

The lefties only hate him because he will cut immigration and send those who offend off to where they belong. Which is where they should be ... out of here!!

The simple fact is that we just cannot sustain all these immigrants who only come here to go on disability.

The ONLY ones who bleat and moan are in states other than NSW and VIC. By the time it spreads to the minor states it will be impossible to turn back.

[Outlaw Yogi]

Ardern will wreck NZ just like Rudd and Gillard wrecked Oz.
If Kiwis fail to sort it out we'll have an English speaking Venezuela just across the Tasman.
NB: Socialism despite an ample crude oil resource in Venezuela has reduced living standards and the economy to an extent that chicken eggs are now currency and fiat currency is toilet paper.