Category: neo-liberalism

Student politics + evidence vs. inequality

SPD U Can be part of the solution

I’m somewhat embarrassed to say that 5 1/2 years after graduating from the University of Canterbury, I’ve got myself embroiled in student media/politics again. But this time, instead of contributing to Pun Network News or trying (unsuccessfully) to bring down the UCSA status quo, I’ve responded to a face-palm-worthy Canta article defending inequality. I take aim at all-too-common, evidence-free, essentially religious arguments for inequality and capitalism. You can read it here.

I’m not embarrassed to have my article appear in a new alternative publication, Counta, set up by a group of students fed up with the anti-intellectualism and political illiteracy of mainstream student politics/media at Canterbury at the moment. Counta were happy to publish the response when Canta declined.

I’m also not embarrassed to say I was inspired to respond by a lot of evidence and research suggested by friends in MarxSoc, which enabled me to put together a well-researched response I’m pretty happy with.

So, although there’s plenty of disturbing, disappointing and depressing stuff happening in student politics at Canterbury, there’s also some encouraging signs in informed student resistance, and awesome groups like Students for Participatory Democracy, FemSoc, MarxSoc and UC POLS. These groups make me want to get embroiled in student politics again. If you’re at Canterbury (as a student or a staff member, like me), I recommend you check them out.

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MMP strategy and the big parties: Self-interest, hypocrisy and anti-democracy

Gatecrash
National: Self-interest

In the last few days, many have noted National’s blatant self-interest in ignoring the Electoral Commission and maintaining the MMP status quo. The Commission suggested lowering the threshold to 4% and removing the “coat-tailing” exception, but National refused to do so because they wanted to continue having cups of tea with John Banks, Peter Dunne and (if needs be) Colin Craig. And now their chickens are coming home to roost with the Internet Mana strategic alliance. (In theory, the Conservatives and ACT could follow suit – but I’d argue there’s less common ground between Jamie Whyte and Colin Craig than between Kim Dotcom and Hone Harawira)

Labour: Hypocrisy

Certain Labour members (edit: though not Louisa Wall) are taking a far more critical view of coat-tailing and strategic use thereof. Many have (rightly) criticised Labour for being anti-strategic, anti-small-parties and anti-anyone-further-left-than-them. Some have also (wrongly) suggested they’re hypocrites for not consistently criticising “coat-tailers” on the left and right. In fact, they are consistently criticising coat-tailers – condemning both Epsom and the Internet Mana alliance as “rort[s] of the system,” “ruse[s]” and “scam[s],” and proposing to get rid of the rule that allows them.

So they’re not being inconsistent. But they are being hypocritical, by condemning coat-tailers in the first place – for at least four reasons.

Firstly, because until Jim Anderton retired, they happily let him win Wigram for another party, and received him and any coat-tail buddies he could bring with him into the Clark governments.

They’ll no doubt say the difference is voters “genuinely liked” Jim Anderton (and their ex-buddy Peter Dunne), whereas Epsom voters only vote for the ACT candidate because they want to see his party represented. Perhaps this is true. But under First Past the Post, millions of voters across the country voted for Labour candidates not because they liked the candidate, but because they wanted to see the party represented. And still under MMP, many Green/Mana/etc supporters vote for Labour local candidates because they prefer a Labour local MP to the only other realistic alternative.

So they’re also hypocritical because they’re happy for Labour voters in Wigram or Green voters in Wellington Central to vote strategically for another party’s candidate, but not National voters in Epsom (or Labour voters in Te Tai Tokerau, for that matter).

Thirdly, they’re hypocritical because they call the “cup of tea” strategy a “rort” and in the very same press release endorse their own “reverse cup of tea” strategy: Labour voters voting for National’s Paul Goldsmith in Epsom. The only way this can possibly be ethically coherent is if they see all local seats as “rightfully” belonging to the same party that won the most party votes in that electorate (ie, always either National or Labour)… but in that case they’d have to give up most of their 22 electorate seats from the last election (some examples). And, of course, it would be pointless having a two-tick system if that was how it worked.

Lastly, they’re hypocritical because what is a political party but a strategic alliance of disparate factions and individuals, with some common purposes, banding together to pursue those purposes in elections and government? There’s at least as much diversity of views within Labour or National as there is between the Internet Party and Mana, and considerably more in-fighting (so far). But Labour have inherited a respectable and safe “major party” status that will never be described as an unholy “rort,” due the historical accident of being descended from a party that once represented the labour movement. This means that by condemning Internet Mana, they’re condemning a “sin” they’re not “tempted” by. Like National but unlike anyone else, they’ve never had to work doubly-hard for each vote, by first convincing potential voters a vote for them won’t be wasted. They’ve never had to resort to creative MMP strategies to provide this assurance. Blinding themselves to the privilege the system gives them, they blame the parties the system doesn’t privilege for taking the opportunities available to them.

Fixing the real problem

These days, Anderton is representing a dead fake building instead of Wigram, and Dunne is serving casinos instead of Clark… there’s no small parties left Labour actually likes. So, very nobly, they’re proposing to enact the Electoral Commission’s suggestions if elected.

But these high-minded condemnations and proposed solutions misdiagnose the problem entirely. The problem is that the threshold built into our MMP system stops it being truly proportional. It stacks the system against small and new parties, threatening to waste their votes and making them work far harder for them… thus creating the need and incentive for the so-called “rort” strategies.

That won’t change by getting rid of the coat-tailing exception, or even by lowering the threshold from 5% to 4%. We’d still have small parties banding together – only they’d be doing it to get across the 5% (or 4%) threshold, like the original Alliance. And we’d still have artificially skewed results – like the Labour voters who vote NZ First to make sure they get above 5% (or 4%), or the voters who shy away from small parties because they’re worried they won’t reach 5% (or 4%), often leading to a self-fulfilling prophecy.

The only way to stop disadvantaging small parties and incentivising “dodgy deals” is something neither National, Labour or the Electoral Commission suggest, but the most evidence-based/least reactionary submittersinternational experts and bloggers across the political spectrum do: make MMP fully and straightforwardly proportional, by eradicating the threshold system that causes these problems in the first place. 1% of the votes, 1% of the seats – end of story. No need for the controversial coat-tailing exception, nobody’s vote robbed of effect because the party wasn’t big enough, and no need for creative strategies to negotiate coat-tailing versus wastage.

The Electoral Commission acknowledge that lowering or abolishing the threshold “would be a solution more consistent with the principle of proportionality that underpins the MMP system”… the only reason they won’t do it is because of a fear of a “proliferation of small parties.” Yes; you read that right; a supposedly independent commission are biased towards large parties, considering them “safer” than small parties; even though there’s no evidence high thresholds or few parties brings stability. And, of course, both big parties agree with them – neither of them suggest lowering the threshold below 4%.

The stupid thing is, at the moment we do have a proliferation of small parties; but we also have a proliferation of the strategies Labour condemns, because that’s basically the only way small and new parties can get in. If the Electoral Commission get their way, there may be less opportunities for small parties and their strategies, but (as they admit!) this would come at the cost of true proportionality. Is this anti-democratic knee-jerk response and anti-proportional threshold rule really worth it?

Housing crises are great for Brownlee’s net worth

10041146Graph from The Press

A quick recap on the NZ and Christchurch housing affordability crises:
– 80s-present: NZ housing affordability worsens throughout the neo-liberal era (p. 13-14, 68-70).
– 24/1/2011: Auckland, Christchurch, Wellington and Tauranga house prices assessed as “severely unaffordable.”
– 2010-2012: Canterbury earthquakes reduce housing supply and increase rental housing demand.
– 20/3/2012: National and Gerry Brownlee decide to leave the market to sort out the Christchurch housing crisis.
– 18/6/2012: Brownlee suggests rent rises in Christchurch aren’t “astronomical” compared to other cities.
– 29/6/2012: Brownlee and John Key deny there’s a housing crisis in Christchurch.
– 7/7/2012: Brownlee says he can only see positives in Christchurch’s skyrocketing rents.
– 29/10/2012: John Key rules out a capital gains tax like most countries have, simultaneously showing just how out of touch he is.
– 27/8/2013: Housing is now less affordable in Christchurch than Wellington.
– 14/5/2014: Christchurch rents projected to hit Auckland levels in January 2015. Housing Minister Nick Smith suggests “the real problem” is not enough rental accommodation for tourists.
– 15/5/2014: The Budget offers a pittance and cuts for housing, and worse for Chch.
– 19/5/2014: An OECD report finds New Zealand has the most over-valued houses in the developed world. Key, true to form, disagrees with the OECD, and tries to spin the news as a positive as more people are entering the “housing market.”

A consistent theme emerges in the current government’s attitude to these developments: (a) there’s no crisis – if anything it’s a good thing, (b) if there is a crisis, the market will sort it out by itself (because dog-eat-dog individual selfishness systems are great for the vulnerable, eh).

It’s tempting to say they’re simply idiots, but it’s better to ask which groups in society are they representing, and which aren’t they?

For most groups in society, the above information amounts to a housing crisis nationwide, and particularly in Christchurch. But for one group, rapidly rising rent and house prices doesn’t amount to a crisis, but an opportunity for increased profit. This is the group that treats housing as an investment, not somewhere to live: rental property investors.

Gerry Brownlee and many other National MPs are in this group of people. Most of Brownlee’s rental properties are in his own Ilam electorate, where rents in one suburb (Aorangi) rose by 51% in a year. I think this is a pretty important conflict of interest at the best of times, but even more so amid the housing crisis Brownlee and his party are determined to ignore.

I recently wrote to Brownlee, essentially asking him to clarify the question I asked in an earlier blog:

How much passive income does Brownlee get for his properties, and how much has it gone up since 2010 and him subsequently “letting the market sort out” the housing crisis?

If you’re interested, here’s Brownlee’s response. My attempt to name-drop the Official Information Act backfired – it turns out this info isn’t available under the OIA because it’s not government info. So the public don’t get any more detail than what’s listed on the register of pecuniary interests. I asked if he’d answer my questions anyway, as a goodwill gesture to one of his constituents… I’ll let you know if he replies.

If National win this year’s election, it will be because of personality and PR. If they lose, it will be because of housing. It’s the biggest issue in Brownlee’s electorate and the country. While National are denying, blaming and doing nothing, Labour are making supply-side and demand-side action on the housing crisis the centre of their campaign.

A quick word on tax cuts

coma cartoonNational has announced their first budget surplus, after plunging us into debt for the last five years.

They’ve also hinted that at some stage before or after the election campaign, they may announce what makes all our hearts instinctively leap, at least before we think about it: tax cuts. This would mark the first changes to tax since 2010, when they shifted the tax burden from the rich onto poor and middle-income earners.

Mana’s John Minto has an interesting reaction. He says tax cuts are a great idea, and suggests shifting the tax burden back again: abolishing GST and tax on the first $27,000 of income, and paying for this by finally taxing the unproductive untaxed income of the 1% – capital gains and financial transactions.

Something tells me a party of property magnates and investment bankers is not going to propose those kind of tax changes – any recovery-era tax cuts will presumedly be along similar lines to their recession-era tax cuts.

Does this strike anyone else as a little strange? Not just because they’re promising tikka masala before the chickens have hatched (the surplus is tiny, and only a projection based on fudged numbers, disguised cuts and abandoning Christchurch).

The main reason it’s strange is that when we were heading into rough financial times, they thought the appropriate thing to do was to cut taxes on the rich. And now in healthier financial times, they again think the appropriate thing to do is to cut taxes (presumedly again on the rich). Never mind the fact that they haven’t paid off their debt from the last tax cuts and tough economic times yet.

The truth is that they’re not responding to the economic climate at all. In tough times or healthy times, they’re pushing a philosophical agenda to let the rich continue getting richer while paying lower taxes, and reduce the social safety net to pay for it. Bill English recently let this agenda slip in a recent speech to the party’s Southern Region conference. They’ve already let public goods and services drop from 35% of GDP to 30% – one of the lowest rates in the OECD – and they intend to reduce that even further, to 26% over the next six or seven years. This is not what NZers want.

The obvious solution is not to let them rule for the next six or seven (or three) years.

This is why we need a living wage

we_told_them_the_wealth_would_trickle_down

More free healthcare for kids and extended parental leave are both great ideas in the Budgetstolen from Labour of course but I’m still glad they’re doing them.

Nonetheless, this can’t seriously be called a “family focussed” budget while they’re still doing next to nothing about the housing affordability crisis, the jobs crisis, child poverty and inequality.

Perhaps (though only perhaps) it’s more fair to say that they’re not ignoring these issues; they just have faith in the magical power of the market to solve them all.

But their own numbers show that’s working about as well as Brownlee’s “let the market sort it out” worked for the Christchurch housing crisis. Yes, the economy is growing again, but that growth isn’t making its way into the pockets of ordinary workers. From 2014-2018, they’re forecasting 14.2% GDP growth, but only 4% wage growth.

In fact, this supports Thomas Piketty’s inequality thesis quite nicely: the natural and inevitable movement of capitalism is for wealth to accrue to the already-wealthy. In other words, you can’t solve inequality and poverty just by growing the economy. You need more radical interventions, as Piketty suggests. Mana’s tax policy – shifting the tax burden from poor and middle-income earners to the unproductive, untaxed income of the 1% – is a good start. Another much-needed policy is a minimum wage that allows people to live with dignity in society – the calculated Living Wage. This would mitigate against inequality across the board and end working poverty.

We can no longer use tough economic times as an excuse. We can afford these measures; we just need to decide to prioritise them, instead of letting our economic growth accrue to the unproductive parasite 1%.