Radical statism built New Zealand, and only radical statism can restore it, Chris Trotter argues

By Chris Trotter*

The radical impulse is to be treasured; without it individuals accommodate themselves to the status quo and societies stagnate. New Zealanders were once renowned globally for their willingness to embrace and implement radical reforms. So much so, that the country was hailed as the “social laboratory of the world”.

But New Zealand’s last great burst of radicalism came in the 1980s and 90s. Our “quiet revolution” (as political journalist Colin James called it) is now more than three decades old.

The world is much changed since New Zealand’s years of radical reform. Indeed, the rising tempo of this global transformation is prompting a growing number of New Zealand economists, business leaders, public servants and commentators to insist that another burst of radical reform is needed urgently.

According to their grim analyses, New Zealand is stumbling blindly into a future overstretched by unsustainable obligations and overburdened by ruinous debt. Every year that passes without action, they argue, the cost of inaction rises.

A day of reckoning cannot be avoided. Either radical changes will be made by us, or they will be made for us.

The problem with this argument is that the radical changes being called for are neither radical, nor changes. What this clutch of agitated Cassandras is calling for is not a departure from the ideas and practices underpinning the status quo, but their intensification.

What New Zealanders are being invited to endorse and endure is more of the same – only nastier. Unsurprisingly, the “experts” advancing this argument are reluctant to say the nasty parts out loud.

Their stance on New Zealand Superannuation, for example, is driven by what they argue is its manifestly unsustainable generosity. There are too many Baby Boomers. They are living too long. The country can’t afford them.

To deal with this demographic problem a number of solutions are offered.

The age of eligibility for NZ Super must be raised to somewhere between 65 and 75 as quickly as possible.

The formula for calculating the quantum of NZ Super must be changed with the aim of reducing its pressure on the public purse.

The recipients of NZ Super must be means-tested.

There is something odd about these proposed solutions to the superannuation problem.

For a start, a big majority of the Baby Boomers are already drawing NZ Super.

With the Boomers’ generational boundaries extending from 1946 until 1966, there are only about five more years to go before every Boomer is 65 or older. Which means that even if every citizen signing-on for the pension in 2029 lived to be 100 (which, don’t worry, they won’t!) the whole Baby Boom generation will be gone by around 2064.

In the years after 1966, the years in which the Baby Boomers themselves started having families, the number of children being born in any given year began to decline. The parents of the Baby Boomers typically had 3 or 4 kids, the Boomers themselves 1 or 2.

The Boomer’s kids, “Generation X”, might (emphasize might) have one child. What’s more, they generally wait much longer to begin a family than their parents and grandparents.

Once the “pig in the python”, the huge demographic bulge of the Baby Boom generation, has been excreted from the population, the number of people aged 65+ will decline steadily.

Which is ironic. All the nasty solutions proposed to solve the affordability problem of NZ Superannuation will be felt not by the Boomers, but by their children and grandchildren. All that nasty, ageist, anti-Boomer fury of the Gen-Xers will end up falling on themselves.

It will not be pretty. When its victims are elderly, poverty takes on a particularly hateful aspect. There is a reason the civilised nations of the world erected comprehensive social support mechanisms for their older citizens. The dreadful circumstances of the aged poor are a moral blight on any society that refuses to address them.

It is certainly no accident that prior to the creation of New Zealand’s welfare state, its politicians and business leaders were guided by economic theories indistinguishable from those that were presented as new and radical in the 1980s and 90s.

Nor is it accidental that the most successful aspect of the policy revolution of the 1980s and 90s is not in what it created, but in what it destroyed.

By almost any measure, most New Zealanders are worse off in 2026 than they were in 1986. Whether measured by the purchasing power of Kiwis’ wages and salaries; the percentage of them owning their own homes; the length of time they are forced to wait to see a doctor and/or receive treatment in a hospital; the reading, writing, and mathematical skills with which their children are equipped at primary school; the quality and reliability of their nation’s basic services; the ability of their government to commission, design, build, and pay for major infrastructural projects; and, most importantly, their nation’s ability to retain the skills, enthusiasm and commitment of its best and brightest citizens; New Zealand is failing.

The solutions promoted by those contemplating this failure, and calculating its impact on New Zealand’s future, are in no way radical. Indeed, they are simply a reiteration of the same old prescription: spending cuts, deregulation, privatisation, user-pays. Policies which, for the past forty years, have been presented to New Zealanders as the only rational way of running their economy and governing their society.

Expunged from the nation’s memory is the radical truth that made New Zealand possible. That in a thinly populated, geographically challenging country located at the ends of the earth, the only realistic driver of economic development; the only reliable protector of the population; and the only institution with the power and resources to create and preserve other institutions – is the New Zealand state.

That was the one truly radical aspect of the reforms of the 1980s and 90s: the ruthlessness with which the reformers set about dismantling and disempowering the New Zealand state. Not only did they transfer all key financial, industrial and infrastructural institutions and enterprises into private hands, but they also persuaded New Zealanders that it was only through such transfers, only by ending state intervention, that the country’s future prosperity could be assured.

Forty years later, as New Zealanders survey the extraordinary record of failure in housing, health, education, infrastructure, and the environment, and contemplate how it might be rectified, only a tiny minority would argue that the solution to New Zealand’s problems lies in the state.

Even when the only way to ensure that the old are properly cared for is by reassuring the young that the society into which they have been born is equally committed to their welfare.

Even when the only feasible source of such reassurance is the state.

Even when radical statism built New Zealand, and only radical statism can restore it.

*Chris Trotter has been writing and commenting professionally about New Zealand politics for more than 30 years. He writes a weekly column for interest.co.nz. His work may also be found at http://bowalleyroad.blogspot.com.