National’s Governing for (Crony) Capitalists – Not Capitalism

WHY IS THE NATIONAL PARTY doing so much for landlords, property developers, trucking, and construction companies, and so little for everybody who isn’t already pretty well-off? It’s as if protecting landlords’ investments and building apartments and roads now constitute the whole of National’s policy objectives. Even their most faithful supporters in the farming community are being neglected by National’s present crop of leaders. What has happened to the National Party?

The late Bruce Jesson used to say that while National governed for capitalists, Labour governed for Capitalism. Jesson’s suggestion: that National was so firmly locked inside the logic of the private sector that it struggled to see the broader capitalist picture; was a shrewd one. Certainly, no politician with even the most rudimentary grasp of the public interest would consider doing today what made National Cabinet Ministers of the past so notorious: ensuring that the gravel roads leading to their farms (so many of them in those far-off days were farmers) received a generous topping of bitumen.

But, how different, really, is seeing nothing wrong with sealing a seemingly random collection of rural roads at the public’s expense, from accepting a $1,000 per week government allowance for inhabiting a property one already owns, mortgage-free? The first example might have fallen under the heading of ministerial discretion, the second remains a perfectly legal ministerial entitlement. Real effort was – and is – required to bring these “entitled” National Party grandees to a more realistic understanding of their responsibilities.

Christopher Luxon’s problem with his Wellington accommodation allowance reflects his background as a corporate leader and property investor. Such perquisites are taken for granted at the CEO level, and very few, if any, eyebrows arch upwards when they are accepted. Luxon and his ilk float freely in the gravity-free milieu of the privileged. For these types, getting reacquainted with solid ground can be a fraught process.

At least when National was the party of the farmers its leaders’ feet remained firmly rooted in the soil. Drawing one’s wealth from lamb-sales, wool-clips, and cow’s milk is very different from watching property and share prices surge. Farmers are intimately connected to the real world. The best one can say about money is that it is a representation of the real world. Which isn’t the same thing – not at all.

So who are these capitalists on whose behalf National is governing the country? Predominantly, they are the capitalists involved in building houses, apartment buildings, and all the ancillary infrastructure that goes with property development. Not far behind them are the capitalists who use and build New Zealand’s roads – the trucking companies and the big civil-engineering firms.

What little understanding of Capitalism’s priorities National does possess is reflected in its support for the extractive industries of mining, oil and gas, forestry, and fishing. The party’s perception of these industries’ importance is sharpened by the quantum of their donations to its campaign funds.

That said, the number of these “crony” capitalists is insufficient to sustain an electoral party. National needs a Party Vote approaching 40 per cent to have any hope of governing the country in coalition with the other parties of the Right. (Forty-eight per cent if it seeks to govern alone.) But, to achieve these sorts of numbers, National needs to make a plausible pitch for the support of close to half the population.

To forge the necessary synergy between National’s capitalist cronies and its electoral base, its strategists have targeted those older New Zealanders in possession of their own, mortgage-free, homes – along with one or more rental properties. These voters may continue to make their homes in the leafier suburbs of New Zealand – electorally-speaking, National has long been the party of the better-off suburbs – or, they may have joined the burgeoning number of ageing Kiwis living in retirement homes and villages.

A great many of the people living in retirement communities will be cashed-up beneficiaries of the housing boom. As such, they have no interest whatsoever in Adrian Orr lowering the official cash rate. The higher the interest rates, the greater the return on their savings. They have no interest, either, in Wealth or Capital Gains taxes. When the time comes to sell the family business, they have no inclination to cut the Tax Man in on the deal. Certainly, National did not lose any votes by relieving these older landlords of Labour’s pesky tax deductions.

That these older-voters-with-money have children and grandchildren also works to National’s advantage. With more and more young people relying upon the Bank of Mum & Dad for the deposit on their first house, any measure depleting the Bank’s deposits is unlikely to be welcomed. Then there’s the touchy subject of their inheritance. Mum & Dad don’t live forever. These voters-waiting-for-a-legacy are not likely to support any party promising to impose an Inheritance Tax.

This just leaves those Kiwis who want nothing more than to become the owners of the big mansions that feature on the front pages of the real-estate supplements. The sort of people without whom Lotto would go broke. “Aspirational Voters”, that’s what the political scientists (and the election campaign specialists) call them. The people who are never tempted to swap their avarice for a commitment to social justice – or even for a capitalist system that works! In their eyes, equality merely makes losers of us all. They may not be winners – yet – but by voting for National they at least get to feel like winners.

It’s just possible that National’s Simeon Brown has cottoned on to the fact that these aspirational voters – especially the blokes – also feel like winners when they’re tearing down the highway in a gas-guzzling SUV. Nothing shouts “Freedom!” like a fast car. Not something that’s generally observed of buses and trains!

So, that’s National: the party that governs for capitalists – large, small, and aspiring. As proof of their commitment to the avaricious, they have promised, and are absolutely determined to deliver, tax-cuts. To pay for these, National is perfectly willing to: defund the Police; keep the NZDF on its knees; run the risk that Foot & Mouth Disease will get past overworked border security staff; downgrade KiwiRail and the inter-island ferry service; pare back public transport; see another generation of Māori and Pasifika children grow up poor, malnourished and angry, while they stand back and watch the public health and education services – those time-tested ladders out of poverty – fall apart.

It’s not the pathway to a thriving and profitable capitalist society. Capitalism works best when the state encourages it to lift the whole population to a level of comfort and security that makes increased productivity more than a pipedream. Historically speaking, that’s been Labour’s goal – and achievement. More to the point, when National’s been intelligent enough to follow Labour’s lead, that’s been its achievement, too.

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Chris Trotter is New Zealand’s most provocative leftwing political commentator, with 30 years of experience writing professionally about New Zealand politics. He identifies as a “libertarian socialist” and now writes regularly for the Democracy Project, producing his column “From the Left”.

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