Labour rebel Jim Anderton calls for return to proven policies

Press, 13 July 1985, Page 19

Labour rebel Jim Anderton calls for return to proven policies

Although he is widely considered to represent the Left in the Labour Government, Jim Anderton is calling for no radical socialist changes of direction — simply a retreat from the present “free market” policies which he warns are leading to terrible economic and social inequalities, and a return to the planning and controls which have worked for Labour Governments in the past. He considers the economic policies of the Finance Minister, Roger Douglas, to be a dangerous “high wire act” which is hurting lowincome people right now — an impact which, lie says, is not well understood by either the politicians who devised the policies or their professional advisers in Treasury. People are already living in poverty — he sees it in his own Sydenham electorate — and he says they cannot wait out the “medium term” until things, possibly, get better. Because of this Labour needs to change economic direction as a matter of great urgency, Mr Anderton argues. “How much more urgent can it get than when working people are not getting enough money to pay for the essentials of life?” Mr Anderton calls for a fourpronged approach, concentrating on • Economic growth; • Stability through a prices and incomes policy; • Employment; • Import controls to correct the overseas balance-of-payments problem. He finds it extremely difficult after a lifetime of political activism, committed to policies that he firmly believes in, to be a propagandist for policies about which he does not have conviction. He chose to speak out after Timaru because he felt he could not continue to try to represent behind closed doors the viewpoint of an electorate which has significant economic problems. He had reached the point when he had to acknowledge publicly that he understood the position of beneficiaries and low-income

workers in Sydenham and was doing something about it. He believes it is beneficial to the political process to have members of Parliament on both sides of the House representing alternative viewpoints, but he adds that he should not be compared with the National rebels, Mike Minogue or Marilyn Waring, because he has served his time in the organisation of his party at every level, which they have not. On policy matters, he had always been prepared to speak out strongly, against his political friends'such as Bill Rowling, and those who would not be considered quite so friendly, such as Roger Douglas.

“I don’t think that I’m serving either the political process that I believe in, or myself, or the people I represent by suddenly changing to a kind of establishment game player.” Mr Anderton says that if policymakers fail to determine the impact of significant economic changes — which invariably mean social changes, too — then they have no right to make them. He believes, in fact, that the policy-makers and their advisers in Treasury do not properly understand the impact of present policies. Part of the problem is the “appalling” lack of social survey

statistics on income levels, the poverty line, and the effect of such changes as price rises, wage freezes, and open' market policies. “What level of understanding have we got about the impact that those policies will have — not in the short, medium, or long term, because that is economic terminology — but impact on people today, tomorrow, next week, next month? “That’s what we should know about. It’s easy to say we have to go through this in the medium term. ‘We’ being whom? What is it that we’re asking you to go through?” Mr Anderton keeps case files on constituents who come to him for help. He quotes the case of a lowpaid worker whose disposable income, including family care and family benefit, is $45 short of his family’s minimal living expenses. Another, a superannuitant, has an income of $lO4 a week and her rent is $llO a week. “I have to say in a situation where someone is $45 a week worse off every week, that there is no medium term. The medium term is now. I could give you hundreds of instances like that.” He questions whether the Government’s economic direction will, in the end, bring about the kind of permanent rise in living standards that is claimed. He says that export-led growth, for example, which is a major policy of the Government, makes New Zealand vulnerable to changes in the international market-place over which New Zealand has no control. He looks back to the time when New Zealand said it was not prepared to let its economy rise and fall on the whim of the international market-place. To achieve stability, some entrepreneurial highs had to be sacrificed, and not all our eggs were put in one basket. “The main thrust of employment should be in developing resources that are under our control domestically, so that at worst we can keep our own people employed creating products that we can buy here ourselves and that give us the benefit of whatever resources we

have here, such as cheap meat and dairy products.” Mr Anderton says New Zealand should not be trying to put cheap labour into exports so that we can become internationally competitive in those. areas, because that will actually lower the standard of living of New Zealanders. Trying to become the free-marketers of the world will leave the world remarkably unaffected, and leave New Zealand vulnerable in the economic jungle of the international economic community. And yet that, he contends, is a main basis of the Government’s policy. Mr Anderton compares lowering the standard of living now so that we can get to a situation of permanent improvement later to asking an army to climb over the Himalayas to get to Nirvana on the other side — “but you don’t supply the army with too much coldweather gear and oxygen, and some of them don’t make it.” He agrees with Roger Douglas’s view that the Government must have a total package of economic policies, and not work on an ad hoc basis. He also agrees with the objective — that everyone should have a permanently higher standard of living. “Roger has — or his policy has — set about doing it by an exposure of New Zealand internally and externally to market forces. Interest rates are allowed, in fact almost encouraged, to find their true equilibrium.

“Whatever level of interest people are prepared to lend money on, the interest rate rises to that. Whatever rent is required to be paid for people to make what they consider to be their legitimate profit out of housing is allowed to rise to market levels — so-called.” But while interest rates, rents, and prices are being determined by market forces, the other side of the

coin is wages, says Mr Anderton. “That’s where the difficulty starts to show itself in the free market. Because, if there was a really free market out there, the workers would be able to bargain freely for whatever wage increases they could get. If the market-place was the great arbiter of everything that it’s meant to be, then you’d really let it rip with wages too, and then it would be a self-balancing situation.” He sees some economic truth in that, but says the problem is with the social truth of it. Those with most clout would negotiate high wages and those with little influence would not, resulting in considerable social inequality. The inequalities in terms of reward for services rendered in the jungle-type society are so “out of

kilter” that the question of what kind of society the Government is trying to produce becomes quite fundamental. “Do you want a society where there are enormous inequalities of income, where the rich can contemplate buying a house for a couple of million dollars on the beachfront in Auckland, and the poor can’t actually pay their rent in Sydenham? “If you want that, then the market-place will bring you that kind of society. It can’t operate in any other way. That is not a criticism of the market-place; it is an accurate description of what it is. It is there to make a profit.” The so-called market-place resolution of these problems is an entrepreneurial resolution, not a social resolution.

Jungle-type society