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2008 is an important year for us all, not only because it’s election year but because, internationally, many great issues will come to the forefront. 

An election in the US will mean a new Administration, thus new political fashion, and the Chinese juggernaut will continue to roar ahead.  We have enjoyed the most sustained period of global economic expansion in history, beating off the 1950’s and 1960’s.  It’s not hard to be in Government in these good times, however the global trading system which has under-pinned this success is stalled.  The Doha Development round, which I launched as Director-General of the World Trade Organisation, is still deadlocked.  A successful trade round offers much for global growth, stability, and progress.  Africa would benefit in agriculture alone by more than 5 times all the aid and debt relief put together.  

The ‘R word’, “Recession”, is being talked of in the US because of the global credit crunch due to the sub-prime mortgage fiasco.  Morgan Stanley warns that growth could halve in Japan, and Europe will slow down.  One-fifth of China’s growth is based on exports, and her main markets will ease back.  I’m the worst person to write of recession having predicted 5 of the past 2 recessions, and have cleverly trapped my own investments in a weakening US dollar.  The weakening US dollar may persuade Middle East states to move from the dollar to a basket of currencies.  The US Council on Foreign Relations suggests such a move would be “a meaningful psychological shock and difficult transition for the world to accommodate.”  Events outside our nations shape our economy and expectations.  

Politicians have less control over events than they let on.  New Zealand has strong surpluses as do now most countries.  While India and China will continue to grow, they cannot yet replace the consumers of the US, Japan, and Europe in maintaining global growth.  However, all politics is local.  NZ has a strong balance sheet.  it’s stunning how the debate is now about how to spend the money.  I come from a generation when every election mantra was “Where’s the money coming from?” for election promises.  We finally beat Muldoon asking, “Where’s the money gone?”  It went in corrupt subsidies, licensing and protection rackets, to reward phoney capitalists and prolong our economic agony.  

All should read the latest biography on Keith Holyoake to understand how handouts to business was based on ‘Socialism for The Rich and Capitalism for The Poor’.  NZ unwound those policies in the 1980’s.  And now we are reaping the benefits of tough reforms.

In an epic denial of cause and effect, politicians today darkly reflect on the failed policies of the 1980’s while changing few of these ‘pillars’ of progress.  But doing little means going backwards and losing a thousand people a week.  Watching Australia and other countries enjoy productivity increases twice ours, means every year we get poorer relative to others.  Labour can boast of low employment, falling welfare rolls, few industrial disputes, a welcome savings plan, and record investment in health and education.  Money doesn’t always solve the problem, efficiency and productivity from investment does.  However, National’s implicit promise to cut these investments doesn’t ring true and should scare those who hold our public health and education systems as precious.  When Tony Ryall talks of health issues, am I the only person who hears the theme music from the ‘Jaws’ movie? 

The National Party, with its generic, geriatric sense of self-confidence and entitlement, says little and what it does say, other than “me, too” or  “I’m Labour with tax cuts” doesn’t inspire confidence.  They are not really that arrogant, they just know they are better than us.  Noting that in the US, candidates who seem authentic, seem to win, the National Party has established a high-powered committee to study authenticity.

Australian Labour won well, arguing against the Conservative’s industrial relations policy which NZ National promise to return us to.  They are still fighting this battle from the 1990’s, their class war, which I’m proud to report we won.  It’s over, but here’s a splendid wedge issue that National will lose on.  If some of them were any dumber, you would have to water them twice a day.

The Government has made a monumental mistake, born of its traumatic experience with the Brethren’s odious behaviour, and used a sledgehammer to crush a few nutters with its Electoral Finance Act.  It’s dreadful and will do the opposite of what its authors want.  It will provoke all sorts of people to test the law.  It’s the obligation, even duty, of all good citizens to tease the powerful in a democracy, hell, I’m tempted.  It’s silent on disclosure, which is the key point of transparency and our courts will have to decide what this rushed, ill-conceived law, so similar in its process through our Parliament to the anti-terrorism law means.  A laughable new defence, unique in legal jurisprudence, was suggested in Parliament, called the Law of Commonsense.  I laughed so much my morning coffee came through my nose, a real thigh-slapper.  This law of commonsense is already being tested when a blogger was approached by the Electoral Commission because he’s published an anti-Government webpage for his personal details.  What if he refuses?  As a bloke at my corner dairy said to me, “If they will do anything for a fourth term, what will they do for a fifth term? “

All this is unnecessary, unfortunate, and is spinning out of control, and confirms in the people’s minds a picture of a cornered Government lashing out.  NZ’s political problems are systemic.  It’s MMP, stupid!  It’s not who wins the election, it’s who forms the Government.  Only twice last century did any single party win enough votes to govern on its own.  Much power will be in the hands of the Maori Party, which is an electorate-based party, doesn’t have to break the 5% threshold and is authentic.  Winston Peters maintains the fiction he’s not a member of the Government, a ‘first’ in history anywhere for a Foreign Minister and made his reputation attacking foreigners.  He will run an anti-Maori Party, anti-Maori separatist campaign.  Ironically, Labour can then do a deal with these opposites with more ease and grease than National.  NZ First and the Greens, who are on record as opposing open trade and a China deal, will be faced this year with making a decision on a NZ/China trade deal.  Now it’s getting interesting.  I still think there’s more than a 50% chance of a Labour, NZ First, Maori Party, Green coalition.  As we have learnt under MMP, with first Jim Bolger making Winston Treasurer, then Helen Clark making Winston Foreign Minister, that the first principle is to have no principles ..... whatever it takes.  To form a government you may need to agree to ban plastic rubbish bags or allocate all Government Maori expenditures into a separate track, overseen by Maori MP’s in the name of self-sufficiency, self-reliance and devolution.  Whatever will happen, and it will, 2008 will provide much mirth and sport. 

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