... through a compact?

Press, 1 March 1989, Page 20

... through a compact?

In discussing the individual and the State, Mr Lange argued for co-operation based on the proposed compact between the Government, unions and employers. He saw that, since the Government had liberalised the economy, the country had a great need for citizens to fix their minds on the goals they wanted to achieve as a country. This, he said, was how economies such as those of Sweden and Japan achieved their success. Mr Lange commented there was an irony in the movement away from liberalising the economy towards this co-operation; but he seems not to have given great weight to it. What he is suggesting seems to amount more to a fundamental contradiction in the experience of the last few years. Ironies can be lived with; basic inconsistencies cannot. The Government chose, when it come to office and after the brief flutter of the Economic Summit, to expose the country to free-market philosophies and practices. It did not choose the Swedish or the Japanese model. It changed the character of New Zealand profoundly. That character might have needed changing in many ways, but the Government moved on so many fronts and so rapidly that it amounted to a revolution. This has not produced a sudden or coherent attitude among people on what they want to achieve. It has, rather, exposed the economic fact that the country as a whole could not afford to sustain familiar standards or ambitions in health, education, security in retirement, or in employment. Instead, it has produced considerable unease, emphasised law and order problems, created hardship and uncertainty. All this should inspire a concerted effort to rebuild and work for a common goal. Four years of loosening the economy and retreating from central management undermine the hopes for agreement. Much of Mr Lange’s reflections were directed at the notion of what it means to be a New Zealander. Until the Labour Government came to power, some of the fundamental questions about that notion had not been decided. There was, for instance, always a sense of egalitarianism, sometimes stifling to endeavour, but with some basically good aspects. Sir Keith Sinclair, in his “History of New Zealand,” captures some of the refreshing aspects of Jack discovering that he was as good as his master. If there was a New Zealand dream, it was of a country free of the class-ridden outlook of British and other European societies.

Yet that dream has not survived. The country is now much more sharply divided into the haves and the have-nots and some of the endemic poverty that plagued European and other societies is to be found in New Zealand. The Labour Government is not solely responsible for that occurring and, had earlier National Governments addressed New Zealand’s fundamental problems at the right time, and in spite of some pain, the revolution might not have occurred. However, it has occurred. People have lost jobs; the character of the Public Service has been changed; upheavals within industries and the Public Service have been the norm. Sometimes the Government has argued that the Public Service was simply subjected to the same type of conditions as the private sector; but many private sector firms would not have inflicted such uncertainties on their employees for such an extended period.

The Government altered the superannuation rules and has left hanging many questions about the future of individuals in their retirement. At least until the tax cuts, the ordinary person who worked for wages or a salary was not the beneficiary of the Government’s changes. The main beneficiaries were financial institutions. The Government has also imposed a new system of local government without satisfying many citizens that there will be any material benefits from this. In farming it removed support systems and the behaviour of the economy drove up interest rates and the exchange rate. Hosts of other changes have occurred. The result of all this has been that New Zealanders have had to change. They are tougher, more divided, more cynical. They are also likely to be much more sophisticated politically. They have had little cause to feel confident about their future. Of course, a lot of this went against traditional Labour Party sentiment and Mr Lange has several times himself voiced some of the anguish about the conflict between the sentiment and what he thought needed to be done. The Government cannot now pretend that nothing revolutionary has taken place and that a warm, fuzzy compact is the way ahead. It has engineered a revolution, perhaps ultimately for the best; but it has to live with the consequences. Trying to revive the slogans of all-but-forgotten 1984 summitry is likely to evoke cynicism now. The Government’s leadership, if it is reasserted in some compact, will have to be very persuasive.