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Matt McCarten: Can the PM keep extremists under lock and key?
Herald on Sunday, 1st March 2009
The job summit on Friday was a great public relations exercise. It seems the goodwill towards John Key never ends. We've had the longest honeymoon that any government has had in our lifetime.
The initiative to be seen to be doing something about the impending economic recession is golden publicity for Key. Having all of the major economic players being seen to be helpful in coming up with possible solutions is clever politics with little risk. After all, if business, local community and trade union leaders have been part of the discussion then it's very hard for them to criticise the outcome. Key, on the other hand, gets to own all the credit.
Whether or not the summit has any practical effect won't be known for some time. But it needs to come up with only one or two high-profile initiatives that can be adopted by the Government for the summit to be considered a success.
Even if nothing much happens, business and union leaders won't want to call it a failure, given they've been a part of the process.
However it does seem a bit rich that we have our captains of industry now calling for the Government to intervene in the economy to minimalise their financial losses. Only a few months ago these same businesses were screaming for corporate tax cuts for themselves and demanding that Government needed to get out of the way. Now, with a straight face, they are asking for Government help to use taxpayers' funds so they can cut their workforces and subsidise their losses.
Trying to spin that getting their employees to take an unpaid day off a week is somehow altruistic on their part is insulting.
They then expect the Government to cover the workers' cut in pay. No free-market talk now, it seems.
It appears that when there are profits to be made, those rewards go to shareholders and senior management, yet when those profits are reduced or there is a loss, the workers are automatically expected to take the hit.
Over the past decade, New Zealand companies have made record profits while their employees have barely kept up with inflation.
It would be a good gesture for shareholders to not take a return over the next couple of years to ensure that their loyal workforce are at least able to keep their jobs and maintain their existing incomes.
But the goodwill and commitment to New Zealand by some of the summit participants will be tested soon enough. Some of the business leaders attending the summit have already announced that they are outsourcing work to other countries where they can employ cheap labour.
Even Government departments, such as the Defence Force, are in on the act of outsourcing work overseas. Actions speak louder than words so I'll be interested now to see if these institutions reverse their earlier decisions.
The idealist in me wants to be convinced that this is not some cynical political talkfest to cover up the fact that businesses are making a grab of taxpayer funds to subsidise their losses while, at the same time, they think it acceptable to shift parts of their production offshore to reduce their wage costs.
I remember when Labour Prime Minister David Lange called a similar summit after the 1984 election. It was successfully hijacked by neo-liberal ideologues who used it as a launching pad to implement a privatisation and deregulation agenda. There are some parallels now and we must be vigilant that the same failed agenda isn't resurrected.
Even the dimmest of us know that if this Government goes through with more tax cuts and at the same time agrees to subsidise employers' losses, it won't be too long before our public debt blows out and becomes unmanageable. As sure as day follows night, we'll have the right-wing advocating that there is no alternative but to sell off our assets and cut back on public services.
The feedback from the summit is that behind the scenes, some right-wing ideologues have made a concentrated push towards a deregulation agenda. They even had the cheek to attempt to strip workers of some of their more basic work rights on the pretext that this was necessary for economic recovery.
Many New Zealanders have expressed a high level of trust and confidence in Key. His actions to date suggest that he is a practical and pragmatic politician, not obviously driven by any particular ideology.
A big test for him is whether he will use his pulpit to keep the right-wing extremists in check. Be under no illusion they will use the impending crisis to carry out Rogernomics Part II if they can.
You may think I'm scaremongering but if you believe that all that right-wing dogma is a thing of the past then consider what the architect of Rogernomics is doing now.
Roger Douglas' storm trooper unit, the Act Party, has five MPs (including himself) in a support deal with the National Government.
New Zealanders should keep a very careful eye out that the old neo-liberal warhorses and their true believers don't use the economic crisis to hijack the country again. The first time was a tragedy for New Zealand. But a repeat would be truly farcical.