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New Zealand:The problem with Labour

John Minto (via Unity Blog)

A friend once said to me that the problem with Labour was it never charted a true course. Instead it was “5 degrees to the left in good times and 20 degrees to the right in bad times”.

At the time I thought this was an overly cynical view but 30 years and two Labour administrations later I appreciate it’s fundamental truth.

I thought of this when I once read Minister of Finance Michael Cullen’s comments to a parliamentary select committee where he called for “wage restraint”. He was backing up Reserve Bank Governor Alan Bollard who had earlier in the week warned that he would need to put up interest rates if workers received “extravagant” wage increases.

Cullen then went further saying “You can’t expect wage and salary increases to compensate you for what are major shifts in relative prices over which we ourselves have no control. If we try to compensate ourselves for those then there is a serious risk that we move into a more strong inflationary cycle…”

However the recent facts point to where the problem lies and it’s not with workers’ wages. The official inflation rate for the year to March 2006 was 3.4% but over the same period wages increased by just 3.1%. In other words working New Zealanders are continuing to go backwards and suffer cuts in their real take-home pay. At the same time those on the biggest salaries received increases well above the inflation rate. Alan Bollard himself received a 7% rise – a $30,000 increase, while Cullen received an 8.1% increase – up $18,300.

When talking extravagant these men need to look in the mirror.

Wealthy New Zealanders continue to race ahead while the average wage has decreased in real terms by 20% in 20 years.

A good example are our cleaners. Just a few weeks back the largest contract for cleaners in the country was settled for a two-year term. These workers have received just a 35c per hour increase this year and will get a 35c increase next year. Unlike Michael Cullen, these low-paid workers are effectively getting a pay cut because again their pay increases are less than the rate of inflation.

Under Labour these cleaners had a right to expect a better deal. Not just because Labour claims to represent the interests of people on low incomes but because no less than seven current Labour MPs were once officials of the Service and Food Workers Union which represents cleaners. These MP’s (Lianne Dalziel, Mark Gosche, Sue Moroney, Taito Philip Field, Dave Hereora, Rick Barker and Darien Fenton) may have entered parliament with the most honourable intentions towards working New Zealanders but have failed to stem the slide in wages, let alone chart a new course for the economy. From a distance their union work seems to have been simply a stepping stone into parliament with their commitment to the low-paid left on parliament’s steps.

Labour can’t used economic excuses for the failing to address the plight of working New Zealanders. The party has overseen six years of strong economic growth but working New Zealanders have continued to slide further behind. Is Labour’s real role just to keep working New Zealanders quiescent and pliable? It seems so.

There has been barely a ripple from Cullen’s comments. National are hardly going to complain when their business backers are those who will benefit the most from wage restraint but similarly outside parliament. Carol Beaumont of the Labour aligned Council of Trade Unions described Cullen’s comments merely as “unfortunate”. She said it was unfair to expect workers to “magically deal with inflation by themselves”. True enough but hardly a voice ringing in support of those who can’t earn enough in a 40-hour week (or even a 60-hour week) to support their families.

Once upon a time Labour MPs would have led the charge for low-paid workers but Labour now expects, as a matter of course, that those on basic wages will continue to make sacrifices to keep high income earners like Cullen and Bollard in clover.

What about CEO salary restraint? What about politician salary restraint? What about profit restraint? Or dividend restraint? Or even price restraint? What about sharing the economic pain?

Instead Labour talks only of wage restraint. This party is a vivid blue imitation of what it once was. It’s entire purpose now appears to be to keep National out of power rather than driving forward and charting a new economic direction so desperately needed across our middle and low income communities.

It has now charted a course which is 90 degrees to the right even in good times. The problem with Labour grows by the day.

4 Com:

Renegade Eye | May 27, 2007

Atleast in NZ you have a labor party, however deformed. In the US, we have no electoral voice even in caucuses. The Democratic Party is a bourgeoise party.

Good blog.

Dave Riley | May 27, 2007

Yes...and no. While I agree with you absolutely about the nature of the US Dems, the NZ Labour Party -- like ours here in Australia -- is a bourgeois workers or labor party. And that primarily refers to the fact that as a liberal type party it is still bourgeois in its role and ideology despite its working class adherents.

The New Zealand Labor Party has set the benchmark which these social democratic parties in the UK and Australia have followed as though a recipe.

At stake is how much pressure their link with the organised working class is under.

UNITY | May 28, 2007

Actually, our analysis is that NZ Labour is fast ceasing to be a "workers' party" in any sense of the term. The people who maintain its political direction and an increasing proportion of its funding and activism are a liberal middle-class layer who have marginalised the organised working class. To the extent that trade union leaders still play a key role, it is a subordinate role to the professional "cuckoos in the nest".

We wouldn't call it a "liberal bourgeois" party, solely for the fact that there is no "liberal bourgeoisie". This middle class layer accept neoliberal economics but have a definite shift towards liberal social causes (feminism, gay and indigenous rights, and even green issues) to a degree that you just don't see in the bourgeoisie proper.

Dave Riley | May 28, 2007

UNITY:We wouldn't call it a "liberal bourgeois" party,solely for the fact that there is no "liberal bourgeoisie".

DAVE RILEY: Good point. But my reading was I guess that it referred to its programatic usage rather than to an existing class preference. But then I don't see these 'social causes' as patented liberal markers. I accept them on their own merits & dynamic recognising that full womens liberation, or gay rights or environmental sustainability is not attainable under capitalism. So they aren't simply or intrinsically 'liberal' but can have a very significant dynamic in terms of the demands that they raise and the sort of campaigns they foster.

So I wouldn't be too keen to engineer a hierarchy which separated them off as only impacting on a 'middle class" layer. A worker can be gay, a feminst, a Maori and concerned about the environment. That doesn't make their engagement liberal or middle class because they may see these as their core political struggles.

What they can realize too is that this LP is not where those issues are going to be fought for.

I'd also extend your logic in regard to Venezuela and make the point that is solidarity with Venezuela a "liberal social cause" or something else? I mean, you can''t have it both ways by playing with labels.

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