She made headlines for her response to Christchurch. Less noticed is the way this young PM’s radical plans are shaking up her country’s economy and societyby Max Rashbrooke / March 27, 2019 / Leave a comment
The terrorist attack in Christchurch, which left 50 dead in March, thrust New Zealand into the spotlight and its prime minister, Jacinda Ardern, into a task that no political leader relishes. “One of the roles I never anticipated having, and hoped never to have,” she said, “is to voice the grief of a nation.” Yet she did just that, and in a manner that won plaudits around the world.
Where others might have threatened vengeance, Ardern centred her attention on the victims, emphasising that these Muslim “brothers, daughters, fathers and children… were New Zealanders. They are us.” She also showed a steelier side, promising to change gun laws and hold tech giants to account for helping spread the assailant’s propaganda. But she refused to give him the attention he craved or refer to him directly, insisting: “We in New Zealand will give him nothing, not even his name.” One British newspaper headlined its account of her speech with the words “Real leaders do exist,” while the US civil rights group NAACP said she showed “dignity, grace, [and] courage.”
This wasn’t the first time that Ardern had captured the world’s attention. During the first year of her premiership, she became only the second elected leader in history—after Pakistan’s Benazir Bhutto—to give birth while in office; last autumn, she took her baby daughter, Neve Te Aroha (the latter means “love” in New Zealand’s indigenous language), to a meeting of the UN general assembly. That, together with her strong feminist views, was enough to make her a figurehead for the global anti-Trump movement.
But few of the American or European progressives who have briefly clocked Ardern as a face of hope in dark times will know much about what she is trying to do at home. Between extraordinary events, New Zealand is generally absent from their newspapers and bulletins. That’s a pity. This is a nation that in the 19th century earned the nickname “the social laboratory of the world,” and that under the Labour premier could—just maybe—take on that mantle once more.
New Zealand may be a sparsely populated country miles away from most “western” nations, but it has often blazed a trail. In the 1890s, for instance, it was the first country in which all women won the right to vote. And as a small and open economy, it has had to move with the times faster than most. In the 1930s and 40s, it was one of the earliest to adopt a comprehensive, “cradle to grave” welfare state. In the Keynesian years after the war, it was the ultimate full employment economy: in many years, the total number of jobless would round down to zero in the official reports. In the disruptive 1970s, it suffered a particularly intense bout of the convulsions gripping much of the planet, before—in the 1980s—subjecting itself to a super-high-voltage form of libertarian shock therapy. Top tax rates were halved, benefits slashed, public enterprises disposed of rapidly and at fire-sale prices. Regulations were pared back to the point where some industries were regarded internationally as “Wild West” territory.
Changes that were introduced only gradually over the long neoliberal era in western Europe and the US were rammed through at a pace unmatched anywhere outside the post-Soviet bloc. Although the jolt of competition and reduced subsidies invigorated many cosy and over-protected sectors, overall the results disappointed. New Zealand witnessed the fastest rise in inequality in the developed world, child poverty soared and it showed signs of being a sick society, too: respiratory illnesses that other rich nations had long ago banished were particularly prevalent. If in much of the world, it took the financial crash of 2008 to expose the need for a rebooted political economy, in New Zealand that need should have been apparent much earlier.
In 2017, then, Ardern inherited a country long overdue for serious change. Yet this was not consistently reflected in the political mood. The previous government, led by the conservative National Party, had held power for nine years by largely sticking to the centre and downplaying the social and environmental problems piling up around them. It was helped along by Labour’s incompetence and internecine warfare while in opposition. And although concern about inequality, costly housing and dirty rivers mounted, many New Zealanders somehow still regarded the country as being “on the right track.” National actually won the largest share of the vote—44.5 per cent—at the 2017 election, a stunning result for a party so long in power. Labour only took power thanks to the support of two smaller parties.
Consequently, argues the conservative commentator Liam Hehir, the Labour government “hasn’t inherited a crisis” in the political sense. Its ministers lack the “inflection point that would allow them to drive through anything radical.” The impetus for change, then, has had to come from the prime minister herself and her ability to detect—and shift—the public mood.
Yet just two years ago it was hard to imagine her in the top job, let alone a subject of international interest. In early 2017, Ardern was the children’s affairs spokeswoman for a Labour Party entering its ninth year in opposition. Unable to win a constituency seat at the preceding election, she had got into parliament thanks only to New Zealand’s party list top-up system. When she rose to the leadership of the party just two months before polling day, she remained a policy enigma: thoughtful and given to convening long meetings of experts, but seldom driving any dramatic change in the party’s position or dominating the debate. Before the election, she had no time to stamp her mark on a party that probably did not, in its heart of hearts, expect to win.
In sum, few knew what to expect from Ardern when she became New Zealand’s youngest-ever prime minister. But in a reversal of—say—Theresa May’s political arc, leadership has so far revealed not her flaws but her strengths. Exuding a kind of relentless positivity, Ardern is a savvy communicator who can talk about climate change but also helm tourism ads joking about the way New Zealand is left off world maps. The very public challenges she has faced in juggling work and motherhood have added to her personal standing, especially with women.
But what makes her government of such interest isn’t only the symbolism but also the sense that it offers sorely needed progressive substance. After all, the centre-left is globally in retreat. Germany’s Social Democratic Party is on the floor, the French Socialists can no longer mount a credible presidential candidate, and their traditional counterparts in Greece, the Netherlands, Ireland and Italy are all somewhere along the spectrum between ailing and dying. The great progressive hopeful of a year or two ago, Justin Trudeau, has proved disappointing, and Scandinavia’s social democratic behemoths are on the back foot.
In contrast, Ardern’s popularity, allied to her determination to change the direction of politics for the long-term, at least looks impressive. What, though, does her agenda amount to?
A kind of idea
With the complacent assumptions of the centrist “Third Way” espoused by Tony Blair, Bill Clinton and New Zealand’s own Helen Clark having been blown away after the financial crisis, the Ardern administration came to office without any obvious template. By 2017, the left was in some places talking in a newly punchy language, but it was still struggling to come up with an alternative that goes beyond speculative ideas about what “post-capitalism” might look like.
So where does Ardern stand? She has said she strongly believes in “the values of human rights, social justice, equality, democracy and the role of communities.” But who doesn’t? She has also, however, called capitalism “a blatant failure” for allowing high levels of homelessness, and bonded with Winston Peters—the leader of New Zealand First, a populist party in her governing coalition—over his decidedly non-Third Way attacks on neoliberalism. Chris Hipkins, an Ardern lieutenant with multiple briefs including education, likewise insists that the aim is not just “tinkering around the edges of the neoliberal model.” Rather than being content with fixing a few “market failures,” ministers recognise that “the state does have a role in public services, that public service is different from the market, and that market decisions don’t always apply in the public sector.”
But for all that Ardern may occasionally attack capitalism, there is no indication that she seriously contemplates an alternative. She is more in the mould of a traditional social democrat, happy to retain the spur of the profit motive so long as it is made subservient to the interests of people and planet.
So what, really, is new? She stresses kindness as a governing virtue, which might sound hopelessly vague but represents a distinct break from the macho slant of New Zealand politics. The nearest thing to a coherent ideological framework for her worldview is probably the wellbeing philosophy espoused by the Nobel laureate Amartya Sen. Her government is attempting to use wellbeing—people’s ability to lead lives “that they have reason to value,” in Sen’s formulation—to displace GDP as the central measure of progress, and is promising to introduce the first “wellbeing Budget.”
That sounds nice enough—but it’s not so long ago that David Cameron spoke about General Wellbeing (or GWB) being more important than GDP, and apart from a few new and quirky official statistics, nothing much changed in an administration ultimately dominated by austerity. Could Ardern’s wellbeing agenda prove as hollow, or will she follow through?
A record in reviews
When Ardern and her allies took power in October 2017, they followed the template for energetic reformers set by FDR, announcing a “First 100 Days” so packed with policies that public servants scrambled to keep up. Ministers passed a family support package, extended paid parental leave to 26 weeks, and introduced bills to lift minimum standards for rental housing and ban foreigners from buying existing homes. They also made the first year of tertiary education free, reversing a decades-long trend towards higher student fees.
All this was achieved with relative ease—but since then the road has been rockier. Falling business confidence has dominated the headlines, scandals have consumed political attention, and Ardern was forced into a defensive and carefully staged “reset” speech in September 2018 and the creation of a business advisory council to placate employers. The government also appears addicted to reviews. In just over a year it has launched dozens of expert panels, working groups and the like. Some of them represent a valid way to consider complex issues; others are an attempt to outsource hard political decisions.
Ardern, of course, operates within many constraints. She is in coalition with two smaller parties, balancing the Greens’ left-wing demands against New Zealand First’s nostalgic nationalism. The latter, sitting in the political centre, has more bargaining power—and wields it freely. It has forced Ardern to water down her ambitions on union rights, made it harder to clean up the country’s massive dairy pollution problem, and has nixed plans to revoke punitive “three strikes” justice policies.
But Labour has also tied its own hands fiscally. Mindful that voters regard Labour-led governments as financially irresponsible, in 2017 the party (together with the supposedly more radical Greens) signed a set of “Budget Responsibility Rules.” These pledges limit public debt in the same way that various UK Treasury rules have often done, but also curb “core” public spending, restricting social ambition even if there is a willingness to increase tax. These rules are a purely political device; the Greens’ new co-leader, Marama Davidson, describes them as “arbitrary restrictions that hamper us from fully restoring public services.”
Nonetheless, within external and self-imposed limitations, the government can point to progress on its designated priorities. On child welfare, Ardern’s signature issue, the government has set a target to halve deprivation rates within a decade, while increasing tax credits for working households and introducing an annual, universal payment during a child’s first year—much of which will sound familiar to students of Britain’s Blair and Brown years. (Ardern briefly worked in Blair’s Cabinet Office in 2006.) But other elements of inequality are also in this government’s sights. New Zealand’s tax and welfare systems are one of the weakest in the developed world when it comes to reducing the imbalance between rich and poor. Facing exactly the same problems of wealth inequality as Britain, Labour is steeling itself to propose a tax on the gains people make from selling assets, which could raise up to $6bn a year in the long run—but which faces enormous opposition from business.
Housing in New Zealand is among the least affordable in the world, yet also of poor quality, especially in the private rented sector. Here ministers have seized the moment. They are consulting on greater protection for renters, and have begun ramping up public housebuilding programmes, using the government’s balance sheet to purchase homes from developers and sell them on at affordable prices. While KiwiBuild’s infancy has been fraught, the scheme is at least in line with voters’ ambitions. Meanwhile, thousands more council homes are being built.
A strong thread of feminist thinking runs through the approach. The government has vowed to eliminate gender pay imbalances in the public service, and has passed a law making it easier for women working in traditionally underpaid occupations—such as social care and education support—to apply to be paid just as much as equivalently qualified men. Meanwhile a law put forward by a Green MP, Jan Logie, has created a world first by allowing victims of domestic violence to claim up to 10 days’ paid leave from work.
In contrast with New Labour in Britain, which kept most of the Thatcher/Major restrictions on unions, Ardern is reversing many of the previous government’s curbs on collective bargaining. She also plans legislation allowing workers who have won good terms and conditions with one employer to get those conditions spread right across their industry, a legal tweak that could have big implications by ending the old “race to the bottom” on standards.
Critics point out this still leaves a good deal unaddressed. The government has not got to grips with the gig economy and other forms of painfully precarious work. The policies needed to halve child poverty are far beyond those that ministers have considered. Nonetheless the planned direction of change is clear.
Much the same can be said on the environment. Ardern has called climate change “our generation’s nuclear moment,” a reference to the nuclear-free policy stance that New Zealand adopted in the 1980s and which remains a source of national pride. The government is consulting on targets for going carbon-neutral by 2050. Transport funding has shifted away from road building and towards light rail, buses, cycling and walking. Again, though, there are unanswered questions: in particular, it is unclear how the government plans to square the problem that half its emissions come from farming, a sector that is one of the most powerful and difficult to reform.
Hovering behind many of these debates is a dilemma as to what the state should do. It is the perennial question for left-leaning parties in particular, and yet one most of them are currently unable to answer. US Democrats can’t seem to decide whether government exists to fight for the ordinary person against the plutocrats or simply to bring everyone into the warm embrace of progress and enhanced productivity. In the UK, meanwhile, Corbynism is still battling to put modern flesh on old bones. It talks about new, deeply democratic ways to run public utilities, yet struggles to suggest anything much more concrete than old-style, top-down nationalisation.
Ardern, in contrast, is trying to do something quite different. Where other leaders might emphasise state ownership and the distribution of resources, at the front of her mind is always that question of wellbeing. And while the language will sound nebulous to sceptical ears, it fits the ambitions of a younger generation seeking a well-rounded life and career.
Move slow, and shake things
In her pragmatic and often under-theorised way, Ardern wants to reset the terms of political trade. But even if change is far-reaching, it will not be rapid. Her ally Hipkins stoutly defends the idea of “radical incrementalism.” Previous governments have, in his view, adopted one of two models: “crash-through” change in the 1980s, when New Zealand out-Thatchered Thatcher, or the muddle-through of more recent administrations, which have shied away from spelling out any end goals, lest it frighten the horses.
Radical incrementalism, on the other hand, involves small steps towards an explicitly transformative goal. “If we want to make a long-term shift, we have got to do that in a considered and deliberative way,” Hipkins says. “You can,” he insists, “do big change, and bring people with you, if you explain what that big change looks like.” The Ardern administration, in other words, is gambling that the public will relax once they see that the initial moves don’t bring disaster.
This approach is not uniformly popular: Davidson, the Greens’ co-leader, is clearly worried that the change will be more incremental than radical. But Labour’s internal polling suggests it has the pace of change about right, and that going any faster might have voters in next year’s election flocking back to National’s steady-as-she-goes approach.
In the end, Ardern’s other great impact on the political landscape lies in the realm of emotion. Values like compassion have often looked weak compared to the anger and fear whipped up by right-wing populists. But Ardern seems to be finding a language to articulate the idea that compassion is in fact strength: that it is only by looking after each other that we can build strong communities and, in consequence, a more resilient society and economy.
This is an administration that remains a work in progress. Its ambitions are bold, but its cautiousness raises the risk of disappointment. If it doesn’t win a second term, it will have left barely a mark on the pages of New Zealand’s political history. But if it gets another three years, the Budget Responsibility Rules—which Hipkins carefully describes as “guiding this term of government”—will probably be loosened, the public will have relaxed, and the path will be cleared for bolder plans.
And that, in the end, is Ardern’s pitch to the New Zealand public, and to the world: give us power for long enough, and we will deliver real, transformational change. If she succeeds, it could become a model for other countries—including Britain—to follow.