While politicians, pundits, and the media tell stories about politics, economics, and society as if they were distinct spheres of influence, the working people of Aotearoa are acutely aware they are not.
We have a firm grasp of the fundamentals of political economy: that politics, economics, and society are closely interwoven. We feel this in the conditions of our working lives, our powerlessness, our pay cheques, the rent we pay to landlords, and the rising debts we owe to the banks and credit companies. We see it in the government’s massive cuts to the public sector and their plans to remove the living wage from our lowest-paid government workers: office cleaners, school janitors, and catering workers.
Our whānaua feel political economy in the risks posed to our children by the reckless abandonment of speed limits and the miserly, mistaken experimentation with a perfectly adequate, if too limited, school lunch programme. (By the way, if the coalition government was serious about improving educational outcomes, they ought to attend to Finland’s successful approach, including its universal school meals programme as an “integral part of the curriculum”).
When, for whatever reason, we cannot work, we feel political economy even more acutely in the meagre levels of income support, the unaffordability of healthy food, the increase in beneficiary sanctions and surveillance, restricted access to emergency accommodation, and the coalition’s preference to build prisons rather than homes.
We understand political economy because we know the coalition government’s arguments about the need to reduce national debt are a ruse, an excuse, to reduce the public sector, lower social protections and reshape the economy away from the interests of those who live off work, to those who live off wealth. And we know that the interests of those who live off wealth lie in lower taxation, deregulation, the protection of private property and social control of the poor.
We see political economy unfolding in the coalition government’s champagne summit for the world’s most significant international investment funds, asset managers and infrastructure companies that opened in Auckland this week. The New Zealand Investment Summit welcomed local and overseas investment companies worth NZ$6 trillion to consider how they might finance infrastucture and public services in Aotearoa.
As the Financial Times put it:
New Zealand has long welcomed billionaries looking for a bolt-hole in challenging times and is now extending that welcome to global investors as it seeks to convinve them that it is a safe haven for their money in an era of greater volatility.
In his speech Prime Minister Luxon revealed his vision of how to create a prosperous New Zealand:
I know the only way we will raise incomes, lift New Zealanders’ standard of living, and fund the quality public services we rely on is by unlocking more investment, more innovation, and more entrepreneurship.
The political choice of the coalition government is not to raise finance by issuing government bonds at reasonable interest rates, or consider local investments from superannuation or ACC funds.
Nor are they interested in rasing funds by introducing a progressive tax system in spite of the fact that a recent report on New Zealand by the IMF (not known for its anti-capitalist tendencies) recommended options including “a comprehensive capital gains tax, a land value tax, and judicious adjustments to the corporate income tax regime”.
On the contrary, the solution is to bend over backwards, to invite international capital to the table to invest. These companies include Canada’s Brookfield Asset Management, Global Infrastucture Partners (owned by Blackrock) and Serco amongst many others. The government invites both Public Private Partnerships (PPPs) and completely private investments in infrastructure and government services (including health, education and prison services).
To make the prospects more appealing to these investors—driven as they are by the bottom line of shareholder profits—Luxon outlined how the coalition government has been preparing the ground by deregulating and abandoning planning laws and introducing the Fast Track regime to give consent to projects that are regionally and nationally significant. As he put it:
In short, if you want to build a wind farm, a highway, a quarry, hundreds of new homes, or any other regionally or nationally significant projects, we are busting down the doors to make it happen faster and cheaper.
Making things happen faster and cheaper so that those who live off wealth can more easily exploit those who live off work and make future governments indebted to overseas companies. He went on to outline the government’s intentions to completely replace the Resource Management Act (an Act introduced to promote the sustainable management of natural and physical resources) and to eliminate barriers to investment in fossil fuel energy generation including offshore oil and gas exploration.
And, emphasising our open door to billionaire investors looking for a bolt-hole, he added that from:
April 1 this year, individuals who invest at least $5 million in New Zealand will be eligible for an Active Investor Visa, with a pathway to residency after three years.
All of the above, we are told, will translate into:
…higher wages, more jobs, more money in Kiwi wallets, and more resilient businesses that make an even greater contribution in the community
But of course, it won’t. It will translate into more profits for the investment company’s shareholders and a long list of potential harms including:
- a growing dependence of our government agencies on overseas capital for the next twenty or thirty years;
- the repatriation of profits from the finance repayments at inflated interest rates to overseas investors;
- the exploitation and harm of New Zealand workers in increasingly deregulated industries, building infrastructure driven by the profit motive;
- the growth of private health, education and prison services with public sector effectiveness values displaced by the for-profit efficiency values;
- lack of private sector accountability (for reasons of commercial confidentiality) to citizens for the planning and management and delivery of private services.
The working people of Aotearoa have been here before. We have lived experience of the corporate exploitation of our public services and government finances in the 1980s. We know what faster and cheaper services look like, and we do not want them. We don’t want dodgy capitalist finance companies building our infrastructure or public services. We don’t need the kinds of planet destroying and carceral projects proposed by the coalition. We do not need more prisons, motorways or oil and gas fields. Nor do we need billionaires or their bolt-holes!
Resources
For a progressive critique of capitalist investment companies and financialization see the RNZ interview with Grace Blakely and her book Vulture Capitalism.
For an excellent discussion of the problems with PPPs see the explainer by Patrick Reynolds and his interview with Bernard Hickey.
For a progressive introduction to the economics of the real world, with an analysis of who wins and who loses, see former foreign exchange trader Gary Stevenson’s YouTube channel: Gary’s Economics.
5 replies on “On political economy and billionaire bolt-holes in Aotearoa”
Brilliance. Sincere appreciation for this clarity and illumination in a darkening time. To add for timely invitation, let’s include the implications for social activism, in Hospicing Modernity, see V.M.de Oliveria’s excellenct guidance. Perhaps this and your excellent analysis lead us to reinform ‘essential ethics’ in our social work competencies
Thanks Merrill, the silence of mainstream media on these issues is appalling. Thanks also for the reference to Oliveria.
Thankyou Neil; I am happily relieved that someone else sees this very real threat to the lives of ordinary NZers. I would like to draw your attention to this youtube video- Walking Streets of Madagascar’s Biggest Slum by Indigo Traveller.
This has huge relevance to what NZers may be fighting against. The video paints a chilling picture of what can happen, and indeed is happening to ordinary people globally, as increasingly city officials both elected and unelected conduct social policies of criminalization against populations their governments and business community refuse to provide housing for.
Housing/essential service providers’ industries increasingly make fortunes by price gouging the provision of housing and other basic essential services for the ‘ordinary citizens’, and see circumnavigating Living Wage regulations, opposing the establishment of social housing complexes, and advocating for rises in pension age eligibility as a victory.
It unlikely we will see these business entities offering employment to older workers en masse….and increasingly many countries offer universal entitlements to old age pensions, free health schemes or living wages at levels which ensure basic wellbeing under pressure from intense political opposition and criminal attacks.
I will leave NZ’s readers to join the dots. NZers are greeted everyday with “post truth” narratives. “Post-truth” politics (also called post-factual politics) is a political culture in which debate is framed largely by appeals to emotion disconnected from the details of policy.
“Post truth” is identified by methods of delivering a message that differs from traditional contesting and falsifying of truth by rendering it [truth] of ‘secondary’ importance, or, of little or no importance at all. By the repeated assertion of talking points to which factual rebuttals are ignored.
The messages we are given regarding “homelessness” is no exception [and] The recent distracting arguments and fiasco over the access to food for I assume, both staff and students on school grounds is another shining example of this.
Regarding homelessness, in the 1980s, NZ discarded the social policy of institutionalization. This was not popular amongst the well off NZ communities towards less well off NZers, and only selective provisions were provided for alternative services for the people ‘set free’ from institutionalization, which were often punitively given, and accessible only after hard travail.
NZ’s PTB’s attitude towards this reflected Scrooge in Dicken’s story- to effect of “Are the jails full?” Cleverly disguised however by their conditioned support of Charity.
For example; recently there was a charity which provided rainwear and shoes for students from less well off NZ households. A friend pointed out to me recently that it caused a lot of anguish for the recipients because the charity insisted on prominent branding of the clothing they provided resulting in the recipients experiencing such a profound social environment of “othering” that many rejected these garments preferring to do without, and endure lessons sitting in wet clothing. As you can imagine, this provided the grounds for further condemnation and othering of the recipients by providers as ‘ungrateful delinquents’.
Compare this to the current school lunch fiasco…What component of supply makes it imperative that school food needs to be provided ‘free’? Ethically, the provision of a free school lunch should be a private matter between recipients and provider. But this requires the providers to ‘sacrifice’ all that social capital which may secure the political and philanthropic support to justify that nice juicy government funding allocation.
Current narratives about homelessness in NZ are littered with similar narratives. Life in most of the charity provided housing throughout Western democracies, such as shelters and hostels are only one step off being in Jail, from imposing constant negative identities about unruliness, drug abuse and violence upon an increasing number of people who are ordinary citizens. It is a constitutional embarrassment that many people who experience homelessness are simultaneously employed in low wage jobs.
“Homelessness has a caste system” as explained recently by a 71 year old University educated Canadian woman in answer to a question about why “Some Portland homeless villages are struggling to reach full capacity”. She goes on to say; “Two arms, two legs, and a brain; and enough health.
That’s better odds than some people. It means thinking on your feet. Remembering that nobody is coming to the rescue. Doing without. And setting side the most dangerous trap of all – pride..
The most obvious route is also the most dangerous. I can’t live in a squat or an encampment. Too dangerous for an old woman. I don’t get that option. Ironic, isn’t it? And I can’t stay more than 2 weeks in a shelter, though I can change municipalities. Staying in my car isn’t safe. And let me tell you, I’m not cut out to live in an institution where it’s sometimes one step above a jail.
So unlike my homeless brothers, I must be waitlisted before my finances are audited, and the change in my purse becomes their business.
I only went to a food bank once. It was standard issue back then and it wouldn’t have kept a monkey alive. But there’s a lot of good nutrition out there if you are careful. I was lucky to dodge many of the traps though. I don’t have an active drug or alcohol habit. I don’t smoke.
What surprises me the most about these homeless fellows media describe is their appetite for self destruction….I am taking the unpopular view. The homeless men in my town do very well indeed. But in the US, [ A private health system] a medical crisis could literally be the death of me.”
And don’t get me started about the NZ Kainga Ora eligibility criteria. If you can barely afford rent then how can it be possible to afford home and contents insurance, or save for a home deposit? Just so you are aware; this is the 2nd attempt to post, sorry, I dropped the mouse and the info I posted disappeared in to the ether unedited. Hopefully it won’t come up to confuse anyone as a second posting…you are welcome to edit if you need to.
Kia ora Jayne, absolutley agree. As a child of the British welfare state in the 50s and 60s my father had as secure job in a nationalised industry (British Steel), I was looked after by the NHS, taught in public education, given a grant to go to university, and spent my first nineteen years growing up in well maintained local council housing with a generous garden. It wasn’t close to socialism, and there were many problems and issues, but by God the working class were far more secure.
Thankyou Neil. Too often the protagonists of these business social models label ordinary ethical governance as ‘socialist’.
What is worth watching is the myriads of citizen journalists who are touring the hidden corners of the world with little more than a backpack, cellphone and digital camera. This is where you will find the real news.