By Neil Ballantyne, via Reimagining Social Work
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 Blakeley 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.
Neil Ballantyne is a Wellington-based social work academic from Scotland. Neil writes for the Reimagining Social Work Collective, and this article has been republished with their kind permission. He is currently a PhD candidate at the University of Otago.
