These perspectives constitute an analysis of the deepening social, political and economic crises of New Zealand capitalism. Such perspectives applies the method of Marxism to these developments, seeking to uncover the trends and processes within and serve as a guide to action for all workers and youth who want to struggle for the socialist transformation of society.
Historical background
New Zealand is a relatively young country which came into
existence in 1840 with the signing of the Treaty of Waitangi. Prior to 1840 New Zealand was nominally administered from New South Wales. In
effect the treaty ceded sovereignty from the Māori tribes to the British Crown
hence becoming a fully fledged British crown colony which gained self
government in 1852 under the New Zealand Constitution Act.
In
1907 New Zealand become a
Dominion within the former British Empire, which was granted after New Zealand
rejected a proposal in 1901 to become a member of the Commonwealth of
Australia. This gave the country greater independence within the British sphere
of influence.
New Zealand became fully independent from Britain in 1947
with the passing of the Statute of Westminster Adoption Act. This permitted the
New Zealand Parliament full legislative powers, extra-territorial control of
the New Zealand
military and legally separated the New Zealand Crown from the British Crown.
New Zealand built its economy along capitalist lines exploiting
its rich natural resources and developing agriculture with the introduction of
private property rights through buying or confiscation of communally owned
Māori land by the Crown.
New Zealand was promoted by British Imperialism to potential
immigrants as "Britain’s
South Pacific farm". Indeed the differences between the two economies were to
be found in the fact that the New
Zealand economy was subservient to the needs
of the British imperialists. The economy was based and built initially on
primary produce (meat, wool, dairy) and later the development of manufacturing
utilising a capitalistic protectionist and highly regulated economic model.
In
effect by the twentieth century the state in New Zealand was playing a major
role in developing the economy. The home-grown bourgeoisie was too weak to play
an independent role. Therefore it had to base itself on the capitalist state,
which controlled the economy, effectively a form of state capitalism.
Building the Labour movement
Bourgeois
historians portray New
Zealand as a place where class conflict has
never really existed and that harmony between the classes was the norm in the
past and that this remains so to this day. However, such statements bear no
relation to reality, as the history of New Zealand is a history of class
struggle with the building of the trade union movement in the late 19th
century, the fight against the arbitration system and for militant trade
unionism in the early 20th century culminating in the great strike
of 1913.
This
was accompanied by the building of the New Zealand Labour Party and the
election in 1935 – during the Great Depression – of the first Labour government
led by Michael Joseph Savage. Savage’s Labour government introduced major
working class reforms in the provision of state housing and the founding
of the Welfare State, albeit within the confines of capitalism.
In
the post-war period we had the 1951 waterfront strike as well as heightened
trade union militancy in an attempt to stop the economic counter-reforms of the
1980s and 1990s and recently we had the supermarket lockout. All this clearly
illustrates the class nature of New
Zealand society and the conflicts within it.
By
the 1950s and 1960s New Zealand
had one of the best performing economies in the OECD, thanks largely to the
close economic links with Britain
in that period and its economy remaining relatively unscathed by the Second
World War and thus able to provide food to post-war Britain. This close economic
relationship came to an effective end in 1973 when Britain joined the common market
(EU); therefore losing its major guaranteed primary product export market.
Added to this were the effects of the first major post-war downturn in world capitalism
in 1973, which the capitalists tried to cover up as the "oil crisis".
Crisis of the 1970s
From
the viewpoint of capitalism the reforms of the previous period were no longer
affordable. This was reflected in the Muldoon National government of 1975-1984,
which attempted to maintain the economic model of the previous period, with the
introduction of wage freezes to allegedly curb inflation and keep prices under
control as import prices soared. "Think Big" government sponsored
infrastructure projects were implemented mainly around exploiting New Zealand’s
natural gas and the commissioning of the oil refinery at Marsden Point. The
signing of Closer Economic Relations with Australia allowed a common market
and free trade to be established between the two countries. These were a
desperate attempt to find easy access to new markets and to insulate the
country from the rising oil prices. Australia
is now New Zealand’s
biggest export market because of this. In other words this was an attempt to
pass the economic crisis onto the shoulders of the workers and pump prime the
economy using Keynesian methods.
To
illustrate the crisis of capitalism in New Zealand:
-
Between 1960 and
1980 New Zealand
went from being the 6th wealthiest country per head of population to
19th. Today New Zealand ranks 22nd
in the OECD! -
Between 1972
and1975 the terms of trade fell by 40%, e.g. 3 lambs had to be exported for
every 2 previously to buy the same quantity of foreign goods. -
By 1984 exports
to Britain
had declined to 10% of their post-war peak. -
Unemployment in
1966 stood at 10,000; by 1986 it had reached 100,000.
Without
doubt the Muldoon National government was a government of absolute crisis as on
the basis of capitalism it was unable to maintain the prosperity of the past
and it successfully undermined the living standards of New Zealand
workers. Muldoon drunkenly called a snap election in 1984 after the National MP
Marilyn Waring crossed the floor giving the opposition Labour Party a
parliamentary victory on nuclear free New Zealand legislation, which led
to the landslide victory of the Lange Labour government.
The
Lange Labour government 1984-1990 scandalously carried out major
counter-reforms against the workers. This showed the complete bankruptcy of the
reformist and pro-capitalist leadership who ended up carrying out the dirty
work for the bourgeois under what was to become known as Rogernomics
after the Finance Minister Roger Douglas.
The
policies included cutting trade barriers, privatising public assets, cutting
agricultural subsidies and controlling inflation through "sound monetarist
policies". In fact New
Zealand went from being a highly regulated
capitalist economy to a highly unregulated "free market" economy virtually
"overnight". All this was done with the excuse that the country was "broke"
when the incoming Labour government looked at the nations finances.
Bankruptcy of Labour leadership
Unfortunately,
the political bankruptcy of the reformists in the Labour Party around Lange,
who had no clear worked out socialist programme, policy or strategy to meet the
aspirations of New Zealand workers, capitulated to bourgeois ideology at its
first hurdle and allowed the pro-capitalist elements within the government
around Douglas, who dominated the cabinet, to carry out the most vicious
attacks on workers, in effect initially stunning the workers.
This
gave the green light to the bourgeois to further attack the living standards of
New Zealand
workers. Bitter struggles broke out and unemployment rose to 100,000 in 1986,
which was used to drive down wages in an attempt to maintain profitability. Rogernomics
represented a complete break with the post-war "consensus". There was a shift
from industrial capital to finance capital with the deregulation of the
exchange rate and the withdrawal of the government from playing a role in
building the productive forces of the economy. This was reflected in mass
redundancies in manufacturing industry; with approximately 76,000 jobs being
lost between 1987 and 1992.
The
divisions within the Labour Party came to a head following the stock market
crash in 1987 and the ensuing recession. Roger Douglas proposed a flat tax
which was rejected by Lange as it would mean serious cuts in government social
spending and put a halt to the counter-reforms. This resulted in the initial
resignation of Douglas, and eventually cost
Lange the premiership.
Interestingly
enough the New Zealand stock market has not recovered from its 1987 high and is
still 10-15% below that figure (based on the old NZSE index). The stock market
crash wiped out 60% of the value of the stocks and New Zealand’s was one of the worst affected
stock markets.
Split in the Labour Party
In
1989 there was a left split away from the Labour Party, which came to be known
as New Labour founded on "core Labour values", albeit reformist in nature,
around Jim Anderton MP (after he was defeated in his bid for the position of
party president), a vocal critic of the counter-reforms. This party later
merged with several minor parties to form the Alliance.
At
the time there was a huge groundswell of opposition within the Labour Party
which coalesced around New Labour, effectively pulling out of the party the
bulk of the left activists. The fact that Anderton was able to take such a huge
chunk out of the official Labour Party was a clear indication of the radical
mood that had developed within the New Zealand working class. Had the
party adopted a fully-fledged socialist programme it could have played a key
role in New Zealand’s
working class politics.
Unfortunately,
the New Labour Party, whilst to the left of Labour, had no clear socialist
programme, policy or strategy either. It gained initial support due to Jim
Anderton’s vocal criticism of the Labour government’s right-wing policies. But
at best it had a vague reformist agenda.
Initially
it raised the hopes of many within the New Zealand labour movement that
here at last was a genuine party of the workers. Unfortunately, New Labour, and
later the Alliance,
were transformed primarily into a vehicle for the political career of Jim
Anderton and not for the advancement of the socialist cause. By simply trying
to be a slightly more left-wing version of the Labour Party, with no
fundamental difference it eventually dwindled in force. With the Greens leaving
in 1997, it was only a matter of time before the Alliance split due to its watered down
programme.
This
confirms what we have seen many times in history (see the experience of the ILP
in Britain
in the 1930s). When two parties of the working class exist and there is no
major fundamental difference between the two, then with time the workers tend
to gravitate to the stronger one. The smaller force can maintain an independent
existence only if it adopts a revolutionary standpoint, thus justifying its
existence in the eyes of the workers.
As
the New Labour Party did not move in this direction, the end result of its
split from the Labour Party was merely to have removed the left from the party,
freeing the hand of the right-wing, and eventually burning out a whole generation
of militant workers and youth. Thus they handed the party – that had been built
up over many decades by workers’ struggles – to the right wing careerists and
the pro-capitalists elements within the party around Douglas.
Had there been a Marxist current within the Labour Party at the time of the
split, things may have turned out differently.
Labour defeat
The
Labour government was eventually soundly defeated in 1990 due to workers being
completely disillusioned and demoralised by the Labour government’s monetarist
experiment. The National Party attacked Labour demagogically from the left
during the election campaign with their "decent society" (One Nation
Tory/Muldoonism) manifesto.
Jim
Bolger’s National Party emerged victorious at the polls. The manifesto was
promptly abandoned when National won power on the pretext that the government’s
finances were in bad shape! The National Party continued with the
counter-reforms started by Douglas under the
auspices of the new Finance Minister, Ruth Richardson. These reforms became
known as Ruthanasia.
Naturally,
the party of the bourgeoisie carried out the monetarist programme to its next
logical step. The National government introduced what the Finance Minister,
Ruth Richardson, called "the mother of all budgets" which introduced major cuts
in social welfare spending, resulting in the setting up of food banks, soup
kitchens and so on, for people to charitably donate goods to beneficiaries as
they literally went hungry in a "first world" country. This was something not
seen since the Great Depression of the 1930s. There were also further
privatisations of state assets.
According
to the Council of Trade Unions (CTU), since 1987 (under both Labour and
National) 40 state owned assets have been sold for a total of NZ$19.1 billion.
These included the Bank of New Zealand, Petrocorp, New Zealand Steel, Postbank,
Shipping Corporation, Air New Zealand (later renationalised due to it going
bust!), State Insurance, Tourist Hotel Corporation, NZ Telecom, State Railways
(the railway infrastructure has since been renationalised due to the shocking
lack of maintenance under private ownership!), and State Forests.
By
1999 these assets had an estimated value of NZ$35.7 billion. The state was
plundered and has provided a huge windfall for foreign capital at the expense
of the country as a whole and the working class in particular, who were made to
pay heavily for the crisis that was not of their making. On top of this, the
1990 National government "corporatised" the remaining state assets for further
privatisations in the future, as well as selling its majority stake in Auckland Airport.
In
1993 the National government introduced the Employment Contract Act (ECA),
abolishing collective bargaining and compulsory unionism. The then president of
the CTU Ken Douglas said, "Ruth Richardson was very clear, very blunt, very
honest about [the ECA’s] purpose. It was to achieve the dramatic lowering of
wages, very quickly, by allowing the high levels of unemployment to pull the
cost of labour down; that the market would determine and an oversupplied market
would reduce the price. The other reason, of course, was to de-unionise and
that’s why the government is in trouble with the International Labour
Organisation because the ECA doesn’t enhance or promote collective
bargaining."
Splits
in the National Party emerged in 1992 when Winston Peters left and formed New
Zealand First which reflected a section of the bourgeois who wished to go back
to a form of Muldoonism and in the 1993 election it won 8% of the vote and two
seats. New Zealand First is a right-wing populist and opportunist party and
also a vehicle for the political career of Winston Peters. Additionally, in
1994 the ACT party was formed around Roger Douglas and his supporters who
wished to carry out the monetarist agenda to its logical conclusions.
By
the 1993 election National was reduced to a one seat majority and Ruth
Richardson was sacked as Finance Minister with a massive swing back to Labour
which gained 16 extra seats. Workers had become radicalised by their bitter
experience and this was reflected in the trade union struggles, which because
of the poor leadership generally lead to defeats.
This
radicalisation could clearly be seen in the political struggles, resulting in a
close run election and increased electoral support for the Alliance which won 18% of the vote and two
seats. Throughout the 1990s trade union membership had fallen significantly by
nearly 50% as a result of the attacks and the ineffectiveness of the leadership
and splits in the movement.
Left-Right polarisation and return of
Labour
Clearly
society was polarising left and right and decisive leadership of the workers’
movement could have moved New
Zealand significantly in the direction of
socialism. However, the labour and trade union leadership was incapable of
understanding the nature of the crisis of capitalism. They did not understand
that what was lacking was a perspective for socialism in New Zealand.
In
their shortsightedness the problem was to be found in the first-past-the-post
electoral system inherited from Westminster.
They said that it was fundamentally flawed and that it gave rise to strong
government. According to this logic, the solution that would solve the problems
faced by workers would be the introduction of a proportional representation
system called "Mixed Member Proportional" (MMP).
This
insane form of parliamentary cretinism was adopted by the National government
as a way of granting reforms from above to stop workers’ discontent from below,
thus sending the movement down a blind alley. The first MMP government in 1996
was a National-led one with New Zealand First as a junior partner.
Fundamentally, nothing had changed politically as far as the workers were
concerned.
Now
we have a Labour led government that has been in office since 1999, led by
Helen Clarke. The Labour government prides itself at being one of the most
"business friendly" governments in the world and, according to the OECD, also
one of the most deregulated.
This
Labour government has benefited from the past period of economic boom, which
has meant that the government has managed to record modest surpluses. This
money has been used to improve the infrastructure and generally increase public
spending, and repair some of the damage done in the past period. This has given
it a certain stability, but the analogy that best comes to mind is that of
putting a sticking plaster over a gaping wound!
The New Zealand economy today
New Zealand is one of the most isolated countries in the world.
Its nearest neighbour, Australia,
is three hours away by aeroplane. It has a population of 4.2 million spread
over two long thin islands roughly the geographical size of the United Kingdom, and reminiscent in shape to Italy.
New Zealand has a highly deregulated economy, extremely reliant
on export for its economic survival. It is a long way from the big markets of America, Europe and Asia,
making it expensive and difficult to reach. Hence one of the reasons why
capitalists are constantly demanding lower wages. Without doubt, the small
domestic market is predominantly made up of micro-enterprises, and expanding
businesses can soon outgrow this market forcing companies to either to develop
their exports quickly and/or get taken over by larger multinationals. New Zealand is
thus tied lock, stock and barrel to the interests of world imperialism.
The
economy has been growing consistently in line with the world boom (GDP figures
below) that we have witnessed in the recent period. But the present boom is
based on the sweated labour of workers and low pay maximising profits,
rather than high levels of investment. In fact New Zealand suffers from low
productivity, as the capitalist do not re-invest in new machinery and
technique. It appears it has learned all the bad habits from its parent, Britain, with
regard to investment in plant and machinery, etc.
Ironically,
the Labour Day public holiday in New Zealand celebrates the winning
of the 8-hour day. Today most workers work more than 8 hours a day! New Zealand has
a tight labour market and a low official unemployment rate. However, a lot of
work is casual and even someone working one hour a week is classed as employed.
Therefore the official employment figures mask gross underemployment. The
average annual wage in New
Zealand is just over NZ$24,400. However, in
the rural areas it can be much lower. For example, in the Far North district
the average wage is NZ$19,200 which reveals the disparity between the urban
centres and the rural areas.
Wage
levels are generally well below those in Australia
and this has resulted in a steady trickle of workers migrating across the Tasman Sea to work. A Treasury analysis in 2005 showed
that wages between the two countries were more or less comparable until the
late 1980s, but New Zealand
wages had fallen to 60% of Australian wages by 2002.
The
economy is now beginning to falter with the sub-prime mortgage crisis and the
credit crunch beginning to have an effect here, and there is also the added
effect of high oil and food prices. A serious recession is not ruled out in the
short to medium term which will be devastating for the economy as it is
controlled mainly by foreign multinationals that will have little economic
interest in saving New
Zealand from the worst excesses of an
economic downturn. The first winds of recession have been felt in New Zealand
with the collapse of 13 finance companies over the past 18 months with millions
of dollars lost to investors.
Foreign
ownership has grown enormously since deregulation and according to the
"Campaign against foreign control of Aotearoa" direct foreign investment
increased from NZ$9.7 billion in 1989 to NZ$82.7 billion in 2006. The biggest
foreign owners in decreasing order are Australia,
USA, UK, Singapore,
Japan, Holland,
Hong Kong, Germany,
Switzerland and Italy. Between
1997 and 2006 multinationals repatriated NZ$50.3 billion in profits of which
32% was re-invested mainly in take-overs and acquisitions rather than in
actually developing the productive forces.
GDP
2007-2008 3.1%
Forecast 2008-2009 2.9%
OECD ranking 22nd
The
Reserve Bank of New Zealand
(which is independent of government) has a monetary policy based on "price
stability", which is defined by the Labour government in the Policy Targets
Agreements with the Reserve Bank as keeping inflation at 1-3% on average for
the medium term through the setting of the Official Cash Rate (OCR). In January
2008 inflation stood at 3.1%. In 2007 the OCR was raised four times by the
Reserve Bank of New Zealand
(by 0.25% each time) in an attempt to keep inflation under control. If they are
to maintain this policy then further hikes in the OCR will be necessary!
To
date the OCR has been raised to 8.25% (the highest in the OECD) in a crude
attempt to curb inflation and dampen down the overheated housing market. It is
quite common for mortgage rates to be set at 9.25% and above. The effect of the
credit crunch will be to drive these rates even higher as credit becomes more
expensive. This will no doubt increase mortgagee sales as people default on
their mortgages. There are already signs that the housing market has reached a
plateau.
House
prices are now beyond the means of most workers in most areas of the country.
It is estimated now that workers need at least 5 to 6 times the average salary
to even start thinking about buying a home. In fact on average 49% of
disposable income goes on mortgage payments.
To
illustrate this point further the New Zealand Herald (21/01/08) reported
that according to Demographia, an international business survey, New Zealand has
the least affordable housing in the world. The report went on further to say
"…wages are so low and house prices so high that it takes 18 years and 6
months of a household’s entire annual income to pay for a home… The measure
is based on median house prices compared to median wages."
This
is unsustainable and indeed it is a bubble waiting to be burst. Workers who do
not own their own home have to rent privately at high market rates from
landlords as state housing is grossly underfunded and the remaining stock which
has not been sold off will generally only house the most needy. The kiwi ideal
of owning a quarter acre section is now a dream for many workers and home
ownership figures have consistently gone down.
As
a consequence of deregulation, the level of private debt is at an all time
high. Private debt is over 106% of GDP and household debt as a proportion of
household disposal income rose dramatically from 48% in 1990 to 114% in 2003.
There is no reason to suggest that this figure has improved since then. In fact
the Reserve Bank in 2007 put this figure at 155%. Most workers are struggling
to make ends meet in a country which is supposed to be booming!
Investment
in property in New Zealand
is at an all time high as people invest for capital gain and for retirement
incomes rather than in stocks and shares. There is an aversion to share-holding
even 20 years after the crash, and poor government superannuation add to this
tendency. The National government in the 1990s gave generous tax concessions to
the housing investors and there is no capital gains tax, something that has not
been reversed by Labour. These factors have fuelled the housing bubble to the
dizzy heights it has reached.
Due
to a high OCR the NZ$ is riding high on the foreign exchanges and is sucking in
speculative "gambling" on the currency. This year the currency passed the
US$0.80 mark, not seen since the country had fixed exchange rates. The currency
remains in the NZ$1-US$0.75+ range and is high against all other major
currencies. This is having a negative effect on exporters, who realistically
would like to see the NZ$ at about the US$0.70mark, which the market
consistently fails to deliver to them!
The
tertiary sector (service sector) is dominant within the economy representing
approximately 69% of GDP, showing how parasitic the economy has become. In fact
most banks and insurance companies are foreign owned and generally Australian
owned with most of the profits going overseas.
Manufacturing
represents approximately 27% of GDP. However the manufacturing base is starting
to diminish further as manufacturers relocate work to the low wage economies of
China or Thailand as in the case of Fisher and Paykel and
other such companies who argue that wage costs are too high in New Zealand to
effectively compete on the world market! Foreign owned companies have resorted
to closing down the factories they own in New
Zealand and import goods in their place as in the case of
the Palmolive factory in the Wellington
region or they just blatantly asset strip.
The
chief executive of the Manufacturers and Exporters Association (MEA), John
Walley, highlighted the decline of manufacturing in New Zealand in an article in the Herald
on Sunday (20/01/08). He states: "…In 1989, manufacturing employed 21 per
cent of the workforce. By last year that number had fallen to 14 per cent and
manufacturing was no longer the largest employer in New Zealand. Of our total number of
exporters, only 56 have export earnings more than NZ$75 million, 157 export
more than NZ$25million, 592 export more than NZ$5 million while 1965 export
more than NZ$ 500,000…"
This
is the logical conclusion of unbridled capitalism that was unleashed here in
the 1980s with the manufacturing base shrinking yearly. The cheerleaders for
imperialism say that New
Zealand can only compete doing the quality
high-end manufacturing. However, one only has to look at China to
understand that that is precisely what they will be doing in the next period,
putting this form of manufacturing at risk too.
The
primary sector accounts for approximately 6% of GDP and contributes over 50% of
total export earnings. The primary sector plays a fundamental role in the
economy. Apart from the dairy industry most of the sector is struggling under
the high NZ$ as commodity prices have fallen. The dairy industry has had record
payments for milk solids due to high world milk commodity prices as land
overseas is turned over to growing biofuels, in particular in the USA, as well as increased demand for dairy
products in Asia. The dairy industry is being
portrayed as "white gold".
To
illustrate the above point with regard to the state of New Zealand’s primary
sector the chief executive of the MEA in the same article quoted above, went on
further to say "…If commodities are our future, we will be much poorer,
comparatively, than now. In the 1950s, the price for a tonne of exported wool
was roughly equal to the price of a car, our meat export receipts equated to 18
times the volume of pharmaceuticals, while 1kg of milk fat equalled 4 per cent
of the average wage. Today we need to export five tonnes of wool for each car,
our meat exports provide five times the value of our pharmaceuticals and that
kilo of milk fat equates to only 1per cent of the average wage…"
The
bleat from the primary industries (and other sectors too) is that New Zealand
farmers etc., don’t receive any government subsidies and that the EU and
American farmers do and therefore have an unfair advantage. Like the emperor
with no clothes they parade the world stage advocating that other trading
blocks should remove their subsidies and deregulate their primary sectors in
the interests of New Zealand
capitalism.
The
primary sector is going to be affected by the major trading blocks with further
moves towards protectionism, as can be seen by the food miles and carbon
footprint debates in Europe singling out New Zealand produce as a bad
examples to consumers. Fundamentally we have seen a "corporatisation" of the
farming industry as economies of scale have been introduced to maintain global
competitiveness. This will be heightened further if the Fonterra dairy
co-operative members vote to partially float on the New Zealand stock exchange. This
proposal from the Fonterra board is a Trojan horse claiming as it does that it
will give "Kiwi mum and dad investors" a chance to own a slice of the co-op!
This will demutualise the co-operative and remove the dairy farmers from
ownership who will become subservient to the needs of giving a return in
profits to the shareholders.
Additionally,
they argue that they need the dollars to
invest to build diary plants in Latin America and the Far
East. All this will achieve over time is close down the industry
here as it will not be able to compete. The capitalists do not like the fact
that the co-op is New
Zealand’s most successful business.
As
we have seen, in the past New Zealand
was Britain’s
so-called "South Pacific farm". All that has changed since then is that it has
become world imperialism’s "South Pacific farm". New Zealand exports raw materials
and imports finished manufactured goods which have doubled in price since 1990
which causes problems with the country’s balance of payments.
A
serious recession in the economy will mean that foreign owned companies will
either not invest further in New Zealand
or pull out and move to larger economies such as Australia
or the Far East or their own country of
origin. This is because of the relatively small market within New Zealand.
Such a market as this can easily be catered for from overseas. It is not as if
there are any barriers to stop them doing so! This will potentially mean high
unemployment like in the late eighties and early nineties. The right-wing
so-called "neo-liberal" economic experiment in New Zealand has failed. Certainly
workers, in particular the youth, will be looking for concrete answers to the
problems they will face, and therefore the genuine ideas of Marxism will find a
strong echo here.
Current Situation
The
state apparatus is building up its weaponry to use against the working class.
The use of the Terrorism Suppression Act against various activists arrested in
2007 in dawn raids by paramilitary style police, and the recent amendments to
the Act are a warning to the labour movement of what is to come as the
capitalist crisis unfolds. Already Helen Clarke has mooted the need for a
domestic Terror Act, as the individuals arrested could not be charged with
terrorism! A future National government would introduce this with glee if asked
to do so.
2008
is the year of the triennial parliamentary elections which are expected to be
held in September or October. Prime Ministers can theoretically call elections
whenever they like. But, because the maximum term is so short compared with
most other countries, in practice early elections are rare.
It is highly likely that the National Party will win the
election either with an absolute majority in parliament or as the largest
party, forming a coalition with minor parties if it is able to do so. The
opinion polls at present suggest that they could govern on their own, but this
far out from the election it is also highly likely that some of the minority
parties will make a comeback and win 5% of the vote needed to win seats in
Parliament putting the need for a coalition on the agenda. The election of a National
government will no doubt raise the level of class struggle as they attempt to
cut back the public services and bring in further pro-market policies with even
more attacks on workers’ rights, together with more privatisation of state
assets, whilst there is still relatively high employment and major skill
shortages.
There
is a general mood for change after nine years of Labour government, which at
best has given minor reforms to workers such as significantly increasing the
minimum wage from the 1999 level to NZ$12/hr, Working Families Tax Credits and
some improvements to education and health and the infrastructure – all possible
so long as capitalism can afford it.
A
major issue for the election will be taxation. Tax is levied on the first
dollar earned and the tax bands have not been increased since Labour came to
power even when it has been sitting on record surpluses thanks largely to the
boom in the world economy. With most workers on individual contracts with no
annual rises; tax cuts in a low paid economy look appealing, as it is a
de-facto pay rise. In fact the government cut business tax in last year’s
budget! The Labour government has now promised tax cuts but this is too little
too late. In fact abolition of the ECA instead of amending it and moving back
to effective collective bargaining would have answered the Tories’ call for tax
cuts.
The Labour Party
The
Labour Party was formed in 1916 and it advocated nationalisation of production
and exchange, the right of recall of MPs and proportional representation. Today
the Labour leadership wishes to forget its own past.
After
nearly nine years in power Helen Clarke’s Labour government is facing defeat in
the polls. The Labour government and its caucus pride themselves for the fact
that their government is one of the most business friendly in the OECD and that
deregulation was "a good thing that just went too far". The Labour Party is a
former shell of itself, as can be seen by the composition of the parliamentary
party which comprises of "professional" people.
The
timidity of the Labour leadership is shown time and time again when confronted
with the interests of big business, which it tries its best not to upset. The
Labour leadership is far removed from the reality which workers face day to
day, and the Labour government has served the interests of big business well.
The lack of clear socialist policies is leading the Labour Party to defeat as
it encourages workers to stay at home and not vote.
Despite
the rottenness of the leadership and its past crimes against the working class
there is still tremendous loyalty to the Labour Party, which received 41.1% of
the vote at the 2005 election. Labour would have a chance of winning a fourth
term if it had the socialist policies to win the confidence of workers and
carry out meaningful reforms in the interests of the working class. It still
has three trade unions affiliated which are the EPMU, SFWU, and Dairy Workers
Union and has close association with the CTU. This shows that the working class
does not abandon lightly the party it has spent years building up and supported
despite the leadership.
Radicalisation
of the working class and a further upswing in the class struggle in the coming
period will at some stage be reflected in opposition currents within the ranks
of the trade unions. This will lead to a vomiting out of the old right-wing
leadership, who will be replaced by leaders who are more in tune with the needs
of the rank and file. At a later stage this will inevitably have an impact on
the Labour Party itself. The party will be pushed back to the left as workers
attempt to use it as a vehicle to express their needs. This will lead to a
rediscovering of the roots of the party and the struggle for genuine socialist
ideas.
This
process will be reinforced by an electoral defeat of the party. The present
right-wing leadership has justified its domination of the party with the ideas
that they keep National out. But once they lose the election this idea will no
longer hold. The ranks will look for an answer and an alternative.
This
process will take some time to work its way through, and to many may seem
almost impossible. But the question has to be asked: where else can the workers
go? The whole history of the working class movement in New Zealand and
internationally demonstrates that the workers return again and again to their
traditional mass organisations, once they move in a decisive manner.
National Party
The
National Party was formed in 1936 out of the United Party and the Reform Party
to create one Tory Party to combat the victorious Labour Party after the 1935
general election. In 1949 it won the elections on a manifesto based on the
principle of the private ownership of production, distribution and exchange.
After
being defeated in the 1999 general election by Labour the National Party
suffered its worst ever general election defeat in 2002 winning only 27 seats,
as it argued for further "neo-liberal" policies and further anti-working class
legislation. The National Party made a comeback in the polls – after its leader
Don Brash made an extremely inflammatory racist speech against Māori at Orewa –
but in spite of this, in the 2005 general election National lost again, but
only narrowly. It had promised to cut public spending and borrow money for tax
cuts.
That
led to the removal of Don Brash as leader of the party. Since then the fortunes
of the party have improved under John Key. Inspired by the British Conservative
leader David Cameron, John Key’s maiden speech regarding the development of an
underclass in New Zealand
and referring to his "humble beginnings" in a state house brought up by his
mother and being an affable person represented a political change in style and
did gain a certain echo as the polls show.
All
this is possible, however, because of the bankruptcy of the Labour leadership,
and not because of any special appeal that Key may have. John Key’s background
as an investment banker and his links to big business reveal the true nature of
the man as the policies leaked below show.
National
has let slip that it will introduce the "six-week rule" (whereby employers can
sack workers for no reason in the first six weeks of employment), further
privatisation of state owned enterprises and market rates for GP fees. The true
colours of the National Party as the party of big business are beginning to
come through.
Once
the manifesto is released and becomes clear it will no doubt have a negative
effect on their polling rates as workers still remember the 1990s and do not
wish to go back there. If National fail once more to win an outright majority
and Labour’s vote is significantly reduce, this could open up the possibility
of a coalition to govern. But this would prove extremely unstable under the
economic climate that is presently developing.
A
National government would also be a government of crisis as the downturn in the
world economy sharpens. The party is already riddled with internal division,
before even getting into power. These divisions are reflected in the number of
leaders of the opposition that there have been since Labour came to power. As
the party of the bourgeois, they reflect the impasse of capitalism and have no
unified view of the way forward in New Zealand. The divisions within
the party reflect the divisions within the ruling class itself. In fact the
party cannot play any independent role and is subservient to the needs of the
major world imperialist powers.
The Alliance
The
Alliance was formed in 1991 out of the New Labour Party, Democratic Party
(formerly Social Credit Party), Mana Motuhake and the Green Party, and later by
a small splinter group from the National Party called the Liberal Party who
were opposed to the privatisation and deregulation of the state.
The
Alliance had a vague left reformist programme which gained initial support due
to the radicalisation within the labour movement and the rightward shift of
Labour This allowed it to gain 10% of the vote in the 1996 election securing 13
MPs under MMP, and in 1999 it became a coalition partner with the Labour
government.
The
Alliance (as
with New Labour before it) was a rainbow coalition of left political views and was
used as a political vehicle for the parliamentary career of Jim Anderton. Once
in government it became indistinguishable politically from Labour after
managing to secure minor election pledges as part of the coalition deal. That
explains why traditional Labour voters who had voted Alliance eventually swung back to the Labour
Party.
This
explains why the Alliance
has subsequently split. The first to go being the Green Party in 1997, and then
New Labour became Jim Anderton’s Progressive Party in 2002. The Progressive
Party now has managed to get an electoral pact with Labour not to contest Jim
Anderton’s constituency! This confirms what we said above: all Anderton was
concerned about was his own personal seat and career. He cared little to the
many activists who looked to him, hoping to find a genuine alternative.
To
all intents and purposes, the Alliance is now
finished, having gained only 0.07% of the party vote in the 2005 general
election and losing the recent 2007 Mayoralty in Auckland under the auspices of City Vision to
ex-National MP John Banks. The Alliance
has ceased to be a political party, in the official sense, as it has less than
500 members.
The Green Party
The
Green Party traces its origins back to the Values Party set up in 1972, which
merged with other environmentalist groups in 1990 to form the Greens. After
flirting with the Alliance
in the 1990s it has consistently been elected to Parliament under MMP securing
over 5% of the vote.
The
party portrays a left image of itself and does have influence among some of the
youth who are concerned about the environment. The right-wing nature of the
Labour government also adds to the perceived radicalism of the Greens. The
Green Party will be present in the next parliament due to the strong
environmentalist activism in the country. It puts forward a utopian left-wing
economic policy, progressive social policy, and participatory democracy, but
fails to explain how under capitalism any of this will be achieved!
With
a change in the political climate the Greens are flirting with the National
Party and it is not ruled out that they could allow a National government in.
If this happens it will certainly be the beginning of the demise of the Greens.
The Māori Party
The
Māori Party was formed in 2004 as a direct result of the Foreshore and Seabed
Act which brought into Crown ownership New Zealand’s territorial waters,
which Māori claim they own. The Party was founded by ex-Labour MP Tariana Turia
and Pita Sharples. In the last general election they won 4 out of the 7 Māori
seats and 2.12% of the party vote. In effect this was a protest vote over the
poor consultation with regard to the Seabed and Foreshore Act
The
party is at times naive and as can be seen when National introduced the private
members Bill giving the bosses the right to fire anyone in the first 6 weeks of
employment. Pita Sharples supported the 6-week proposal on the grounds that it
would be easier for Māori to get jobs! Sharples abandoned this political line
when he was curtly reminded by Māori workers that they knew "the colour of his
bum". The Māori Party MPs do not have universal appeal for all Māori. They
represent a "wealthy" educated elite within the Māori.
It
is likely, however, that they will win Māori seats in the forthcoming general
election. But like the Greens they are flirting with the National Party and may
allow a National government in. There is no way that the interests of the Māori
can be defended in an alliance with National. National will continue the
attacks on the working class, and this includes the Māori workers. If such a
scenario materialises this party will enter into crisis and eventually implode.
Other Minority Parties
Generally
speaking the minority parties have emerged from splits from the major parties. New Zealand
voters get two votes, one for an electorate MP and one for a party. Parties
must win at least one first past the post constituency seat, called an
"electorate" in New Zealand, or at least 5% of the party vote to gain
representation in Parliament. Party list seats are added to any electorate
seats to give each qualifying party a share of the parliamentary seats
approximately in proportion to the party’s nation-wide share of the party vote.
Opinion
polls seem to indicate that the votes of the minor parties appear to be going
to the National Party (51% of the vote ) with Labour holding on to about 35% of
the vote (figures as of December 2007). It is expected that some of the minor
parties may gain in the polls as we approach the elections and National’s
policies become clearer to the electorate. It is likely that the Progressives,
United Future and ACT will win electorate seats and there is a possibility that
the New Zealand First may not secure 5% of the vote. Fundamentally, they will
have little significant role to play except that of "King Maker" along with the
other minority parties of either Labour or National. In spite of everything, it
is still a two horse race between the party of capital and the party of labour!
Māori
The
Māori are the indigenous people of New Zealand and arrived here from
around 1200 AD onwards via the great Polynesian migrations. Today the Māori
have been proletarianised and make up a significant section of the workforce
and the trade unions.
With
the Treaty settlements due and Māori assets handed back to them from the Crown,
big business is looking to exploit the Māori further and there is an attempt to
create a professional Māori middle class, a privileged layer upon which the
bourgeois can lean and thus allow this capitalist exploitation of the majority
of the Māori to take place.
The
bulk of the Māori workers have always traditionally looked to the labour and
trade union movement, which is more closely aligned to their historical cultural
beliefs and is also perfectly logical as most of them are workers and often the
most downtrodden. Thus they have traditionally supported the Labour Party. It
is quite clear that with the correct approach the best of Māori workers can be
won over to the ideas of Marxism.
Trade Unions
The
trade unions are recovering from their low point of the 1990s and are
rebuilding both in the private and public sectors. Membership stands at 340,281
in 2006 which is about 100,000 more members than at the low point of 1999.
The
trade unions have led offensive strikes in the past period over pay and
conditions and collective bargaining rights. We have had the EPMU’s 5% for 2005
and Unite’s "supersize-my-pay" which saw the effective unionisation of fast food
outlets like McDonald’s. This brought a whole section of youth into trade union
activity and forced the bosses to abandon youth rates. Further examples are the
NDU, Maritime Union and SWFU disputes.
The
CTU’s 39 affiliated unions cover 89% of the total union membership and it has
recovered from the disastrous split in the 1990s. These splits were due to the
frustration of the left with the right-wing leadership. This move,
unfortunately, played right into the hands of the bosses as can be seen in the
decline in membership in that period. The splits instead of providing an
alternative, merely contributed to weakening the unions, while removing some of
the most militant layers, thus strengthening the hand of the right-wing
bureaucracy for a period.
A
National government would enter into collision with the CTU as it would repeal
the 2004 ECA amendments which gave the unions limited collective bargaining
rights. Unfortunately, the present leadership is moving in the wrong direction.
The President of the CTU is looking towards "social partnership" rather
militant trade unionism to defend its membership.
The
trade unions are a key area of work in the building of the ideas of Marxism.
Under the conditions that will unfold in the coming period, a slowing economy,
rising inflation and a right-wing government directly attacking the working
class, we can expect growing militancy on the part of the workers. This will
lead to a further strengthening of the unions. As a new layer comes into the
unions there will inevitably be conflict between the rank and file and the
bureaucracy that sits at the top. In these conditions a Marxists tendency
working patiently in the mass organisations of the working class can make
important gains recruiting the best militant trade unionists. This will prepare
the ground at a later stage for the building of a serious left opposition
within the unions.
Youth
The
winning of youth to Marxism is crucial as they are the key to the future. Today
young people in New Zealand
have grown up in the conditions of a "deregulated" economy and, like the youth
of many other countries, face huge student debts, low paid jobs, and
fundamentally a future with no hope. This generation can expect to be worse off
than their parents’ generation. Many will never have the possibility of owning
their own home, especially true after the huge increases in house prices seen
over recent years.
Despite
having never known anything other than the current system and having not been
presented with alternatives, most young people instinctively realise that
capitalism presents a dead end for them and for the society they live in. There
is a general questioning of this society by a significant section of youth, who
are looking for answers.
Many
already have a strong understanding of how capitalism is failing their
generation, but they have not yet been presented with a socialist alternative. They
have had either the openly right-wing leadership of the Labour Party,
indistinguishable from a conservative party, the antics of Anderton, or a few
tiny groups on the fringes of the movement imbued with a sectarian outlook.
This
is where a genuine Marxist tendency can play a crucial role. We must win the
most radical youth to the ideas of Marxism. We must educate them in the
perspectives, methods and ideas of Marxism. The youth is the starting point of
our work. They are he most radical and open layer of society. By systematic
work on the university campuses and within the new young layer entering the
trade unions, we can win the best over to the ideas of Marxism and build the
tendency.
Conclusion
This New Zealand perspectives document
is to be read in conjunction with the World Perspectives documents of the International
Marxist Tendency. This will help build the forces of Marxism in New Zealand.
The ideas of Marxism will inevitably gain ground in this country in the coming
period as the crisis of capitalism unfolds internationally and impacts on the
situation in New Zealand.
The building of the revolutionary tendency is key to the socialist
transformation of society in New
Zealand and the world. Forward to
international socialism!
May 2008