By Chris Trotter*
Watching Jacinda Ardern interacting with Labour Party conference delegates always riled me. Her easy manner, self-deprecating humour and uncanny knack for pitching herself perfectly to her audience’s mood, always struck me as too unclever by half. The fault was mine, of course, I was looking constantly for evidence that Labour had attracted an effective politician who hadn’t yet swallowed – and had no intention of swallowing – the neoliberal Kool-Aid. To my ears, at least, Jacinda wasn’t the one. “Yeah, yeah, yeah,” I’d acknowledge wryly, “she sure can talk. But what does she actually say?”
Watching the live broadcast of the Prime Minister’s press conference on Saturday afternoon (14/3/20) showed me, yet again, how seriously I had misjudged Jacinda Ardern. There, again, was the easy manner and the self-deprecating humour, More importantly, there was that same uncanny knack for pitching herself perfectly to her audience’s mood. This time, however, the audience was the whole nation, and its mood was one of anxiety – bordering on naked fear. Seldom has New Zealand had more need of a leader who “sure can talk”. Moreover, no one listening could dispute that the things she was saying were important. Really important.
The unfolding Covid-19 Pandemic represents the most serious threat to New Zealand since the very real possibility of Japanese invasion in 1942. That threat was averted by the intervention of the United States Navy; first in the Battle of the Coral Sea, and then over the tiny Pacific island of Midway, in May and June of 1942. No such assistance can be expected from the United States on this occasion. Indeed, watching President Donald Trump’s press conference on Saturday morning inspired only feelings of dread and intense sympathy for the American people. Uncle Sam is not about to sail to New Zealand’s rescue in 2020. This time we are going to have to save ourselves.
For the first time in 80 years, this country is going to have to put itself on something very close to a war footing. The decision to effectively shut down the New Zealand tourist industry will dam-up one of the economy’s most lucrative income streams and cut off the flow of dollars to a host of other sectors. If tens-of-thousands of New Zealanders are not to lose their jobs, a truly massive injection of public funds – initially in the form of wage subsidies – will be required. How long this solution will remain fiscally sustainable, however, is a question that must be testing the conventional wisdom of Grant Robertson and his advisers. Holding up close to a quarter of the economy will cost a huge amount of money.
The wartime governments of Mickey Savage and Peter Fraser paid for the Dominion’s soldiers, sailors and airmen by raising taxes and selling (very aggressively) war bonds. The eye-watering cost of raising and maintaining an army, navy and air-force was, however, greatly assisted by the United Kingdom’s insatiable demand for meat, dairy products and wool. Guaranteed income: from taxes, bond-sales and agricultural exports; made the ongoing and massive expenditures of World War II feasible. Are these same options available to us in 2020?
The short answer is: they must be. As a nation, New Zealand simply will not get through this crisis in one piece if it fails to answer the urgent need for an immediate and massive redistribution of wealth from those whose financial position is reasonably secure to those whose position is not. This is more than a matter of straightforward social justice. Covid-19’s effects will be made much more severe by placing a significant portion of the population under acute financial stress. The virus kills those whose immune system is compromised: increased stress equals increased death.
There is one fiscal measure that could free-up tens-of-billions of funds to help carry New Zealanders through the crisis. Rather appropriately, it involves the Accident Compensation Corporation.
At present, ACC is a fully-funded scheme. It did not start out that way. Originally, ACC was a pay-as-you-go scheme, which collected “only enough levies during the year to cover the cost of claims for that particular year”. It was transformed into a fully-funded scheme in 1999 to accommodate the National Government’s plans to privatise accident compensation.
I have it from the mouth of no less an authority than the scheme’s architect, Sir Owen Woodhouse, who confirmed for me at a function in 2012, that returning ACC to pay-as-you-go would free up the tens-of-billions of dollars amassed over 20 years to satisfy the ideology-driven requirement to fully-fund the scheme. When I asked what use he would make of such a vast sum, he suggested refilling the coffers of the EQC – emptied out by the Christchurch earthquakes. Covid-19 is not an earthquake, but its deadly consequences will test New Zealand no less severely.
Getting us through the Covid-19 crisis will require the Ardern-led Coalition Government to step away from the conventional neoliberal “wisdom” that has dictated the policies of successive New Zealand governments since 1984. The Finance Minister, Grant Robertson, will have to overcome his innate caution and reach well outside the Treasury box for innovative solutions to the crisis.
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If it is wise, the National Party Opposition will also step out of its comfort zone: setting aside all political negativity and offering its full co-operation to the Government. A shrewd Simon Bridges would remind the Prime Minister that the last time New Zealand faced such an existential threat, Labour and National joined forces in a wartime coalition. Surely, the scale of the threat posed by Covid-19 requires no less? Politicians of every stripe should set aside their differences for the good of the country. Naturally, many in National would be fearful that such a gesture would leave them invisible in Jacinda’s shadow. But not co-operating with the Government leaves National facing an even bigger threat. Being seen as a bunch of opportunistic and unpatriotic wreckers.
Regardless of whether the Government and the Opposition rise to the occasion, the Covid-19 Pandemic will leave in its wake a profoundly changed New Zealand. The central fact of this country’s history, that only the New Zealand state is large enough to guarantee the welfare and safety of its citizens, will have been demonstrated beyond rational refutation. The social solidarity called forth by the crisis will lay bare the narcissistic sociopathy at the core of neoliberal thought. Employers and workers will once again acknowledge the symbiotic nature of their relationship. And, the direct personal experience of being caught up in vast historical events beyond their control will give younger New Zealanders a new perspective on what it means to be human and vulnerable.
Finally, the carefully nurtured belief that the state is not only the enemy of efficiency and effectiveness, but also of individual freedom and initiative, will be laid to rest. Far from being exposed as the people’s enemy, the present crisis will cause the state to be recognised for what, historically, it has always been: the institutional expression of human interdependence: the place where everybody comes together and nobody gets left behind.
This is the shift which Jacinda Ardern, with her undisputed empathy, and her uncanny sense for the needs of the moment, has the opportunity to both inspire and oversee. If she is able to lead the New Zealand people successfully through the dark valley of the Covid-19 Pandemic and out the other side, then her party will at last be in a position to shake-off the neoliberal monkey on its back.
As the Federal Government intervened decisively in the financial crisis of 2008-09 to rescue the commanding heights of American capitalism, the cover of Newsweek magazine itself made headlines all around the world. Seeing the head of the Auckland Chamber of Commerce make common cause with a representative from the First Union, to secure massive state support for Covid-19 afflicted businesses and their workers, I couldn’t help recalling the words emblazoned on Newsweek’s front page:
“We are all socialists now.”