Austerity 2.0?
Say it ain't so.
Yesterday I read an article that stopped me in my tracks. The opening paragraphs jumped out at me. I felt focussed, a bit panicked. It was about the event that has shaped this country more than any other, certainly in my lifetime.
It shaped my views of the world, of what is right and wrong. Although it never would’ve occurred to me at the time it’s played a fairly major role in the fact that I now write for a living.
The article was written by Shane Te Pou, who grew up not far from me at roughly the same time. He was born in Kawerau in 1966, I was born 50km away in Rotorua five years later. We saw the same things happen to our country as we grew up.
Like Shane I lived through Austerity 1.0. Most of you can probably remember it well. The years of the late 80s and early 90s. A revolution begun by Roger Douglas, with Ruth Richardson putting the boot in to finish the job.
Shane writes in his article of the time before those changes. Of high employment, low crime, a greater sense of community. I remember that too, life seemed pretty good.
Perhaps I’m recalling things more positively than they were. Certainly in my memories summer was a whole lot sunnier than it has been lately. But from what I remember, growing up in the late 70s and early 80s was a simpler time, a better time.
All of my friend’s parents owned houses, by which I mean they had mortgages. They weren’t particularly flash houses and none of them would’ve been considered wealthy people by any measure. To be honest there weren’t really very many rich people.
But most people had the Kiwi dream - and they achieved that on a single income. Some of the mums in the families I knew worked part time, or volunteered, but I don’t recall any families having both parents work full time until I was older.
So we had our quarter acre. Room to play a game of backyard cricket, have a bbq, some even had a Para pool. There was plenty of space for a vegetable garden, although my parents were never that way inclined.
Most of us had about the same. Hardly anyone went on overseas trips, and going to a restaurant was a very rare experience. But our socialist utopia was about to end. Douglas and Richardson would see to that.
By the early 90s, when I was playing in bands around the Bay of Plenty and the Waikato, the small towns in the region were hurting. There had been redundancies and closures. Often the main employer in town was gone. People had no money, so other businesses started closing down. Shop windows were boarded up, and more people lost their jobs.
At the same time conditions for those in employment worsened, and the safety net for those who were unemployed was reduced.
With the changes came long term social problems. In his article Shane says “men and women in their 40s were made redundant and many of them never worked again. Their children also struggled to find work and, sadly, this trend continued with their mokopuna.”
Throw in alcoholism, violence, meth, and gangs on top, in towns with few opportunities, and we had a recipe for serious, intergenerational issues.
And do you know who complains the most about those issues today, and the people affected by them? The next generation of people like Douglas and Richardson - the very ones that caused the problems in the first place!
And what do they prescribe now that they have retaken power? More of the same.
Apparently we didn’t bleed the patient sufficiently the first time around. Now the leeches want more cuts.
Once again the target for that bloodletting is jobs. Those unprofitable, government jobs that cost so much to fund. The solution - cut them until things are better. If everything isn’t better, then there obviously haven’t been enough cuts.
Yes Austerity 2.0. It’s here now, and people voted for it. What a time to be alive!
Sadly many of those who will be most impacted voted for it without properly considering what would happen. Austerity probably wasn’t mentioned on Tik Tok, or whatever information source they used to guide their voting decision.
But it was all spelled out, clear and available to anyone interested. In fact I remember talking about the basic equation months ago. At its simplest it goes something like this:
REVENUE - TAX CUTS = SPENDING.
Now anyone who payed attention during the election knows that the plans from the parties now in government provided no significant increase in revenue. Despite Nicola Willis’ claims to the contrary.
We could all see that the estimated revenue from selling houses to foreigners was:
Going to be ruled out by Winston.
Wildly inflated, with no credible economist backing the numbers.
Although National did manage to find one obliging consultancy who were willing to pretend that they could in fact see the Emperor’s robes.
The coalition parties also committed not to borrow. All while providing tax cuts that would be so irresistible we wouldn’t notice all the other things they were doing.
Now they’re trying desperately to fill the revenue hole by encouraging people to keep on smoking. But the problem with smokers and holes is that before long they tend to go together. It’s not a great long term economic plan.
So, if you’re still following, they have no extra revenue, and no funds from borrowing, but they need a lot of money to pay for tax cuts. The only mechanism left is to slash government spending. Otherwise known as our mate - Austerity!
Oh goodie.
Late last year both ACT and National signalled that they wanted to see large scale redundancies in the public sector. They had no plans as such, no thoughts as to which services would be cut. Although we could rest assured that all of the thousands of people they’d be getting rid of were “back office” staff. The frontline people who actually do the useful things would remain magically untouched.
Yeah. Right!
Given the number of public servants who live there, and the uncertainty over which of them would still have a job in 2024, Wellington experienced the biggest shopping slump in the country on Boxing Day, with a 10.8 per cent drop in spending.
That’s the added kicker with Austerity. It doesn’t just impact those who lose their jobs. It creates fear and uncertainty, and a reluctance to spend money. Which is only natural when you don’t know if you’ll be next.
So the economy slows down, businesses fail, and more people lose their jobs. But there is a silver lining. Because people aren’t spending, inflation goes down - which is great for those who have savings and assets.
On Sunday, David Seymour, our deputy Deputy Prime Minister, gave a State of the Nation speech at the NZ Yacht Squadron. While much of the speech was taken up with him explaining that he wasn’t a racist, everyone else was, he also bemoaned the efforts of the three governments we’ve had since Austerity 1.0.
“Over the last quarter of a century, the Clark, Key, and Ardern governments have all eroded the simple idea that you are the person that makes the difference in your own life. There's been a cultural shift towards the idea that if there is a problem to be solved, or if life is to get better, the people in Wellington will do it for us.”
Or in other words those three governments did not undertake a neoliberal programme of austerity, and now Seymour would like to start one up again. To finish the work of Douglas and Richardson.
It’s not like people weren’t already worried or struggling with everything else going on. The cost of food and other basics, the unaffordability of housing, the large rates increases coming, etc.
Now throw thousands of job cuts on top of that and it’s getting harder by the day to understand what the new government means by getting “Back On Track”. It feels like those who are making the decisions, Seymour, Luxon, and Willis, are out of touch with the day to day realities of ordinary people.
We all know the Mood of the Boardroom survey that’s used to criticise left wing governments and policies, regardless of how well they’re performing. Well recently the Mood of the Workforce survey gathered 2000 responses. People speaking up as to how things are outside the boardroom. Outside the New Zealand Yacht Squadron.
“The survey found more than two thirds of working people felt the new government's policies would make it harder to meet cost of living pressures - and three quarters said it would be harder to get a fair pay rise.”
“It showed people were feeling insecure at work, and were worried about job security and the wellbeing of their families.”
I find it hard to see how anyone could read those words, think of those people and their families, and feel like this was getting “Back on Track”. Unless that slogan meant a return to the work of Douglas and Richardson in the first place.
Because that seems to be the future they want. Only the most basic of safety nets available, beyond that it’s survival of the fittest. I’m alright Jack, you worry about you.
If there’s one thing we learnt from Austerity 1.0 it’s this. When people are down and out, when they can’t find a job or afford to pay their bills - what do the people in charge do? That’s right, they blame them.
They put the boot in and tell them to make better choices. Having created the circumstances that resulted in people losing their jobs they tell them they must take any employment, however poorly paid, however impractical in terms of location or transport. Otherwise they are the problem.
The coalition no doubt has the solution. If people feel they’re going to be worse off taking a job that’s seasonal, has no guaranteed hours, requires a private car, or for whatever issue, then clearly the problem is they have it too good.
I’m sure under Austerity 2.0 the coalition will change the equation to help people make decisions more beneficial to the economy. It’s simply an added bonus that some will benefit from the supply of labour at a wage that is insufficient to live on.
Still, it’s only fair. No one makes “donations” to political parties without a reason. Why shouldn’t they reap the rewards of their investment?
I’m joking, of course.
There are people and communities that still feel the damage of those cuts today. The changes of the late 80s and early 90s altered our society forever, and for most people it wasn’t for the better.
Now the people in charge want to take it further. Forcing wages lower, and people into more debt or possibly even losing their home. A home someone else can pick up for a bargain and perhaps rent back to them for more than the mortgage was costing.
The people who voted for this, well, I hope they didn’t know what they were doing. Because some of us have seen this one before, and I don’t think they’re going to like the ending.
Some quintessential 90s. The album this track comes from was released five months after Bolger decided the country had finally suffered quite enough Ruth Richardson. Do take it easy with the Hacky Sack though, you’re not as young as you used to be.
More worryingly is the kind of roles they're targeting eg Office of the Clark which is responsible for providing advice and generally providing checks and balances on over-reach. Removal of Regulatory impact statements was a chilling harbinger. These clowns are REALLY dangerous 😳
And it doesn't work. The employed public servants end up as contractors doing their old job for more pay (no security). This has to happen to keep the wheels on the bus, never mind the train on the track. So gradually it all ramps up again, nothing is better. If they really wanted things to get better longer-term, instead of demanding 15% budget reductions from government agencies, they should give them a bit more to enable a cut to the consulting budgets! Lived through it. Can read the tealeaves.