The missing word is…

The most astonishing aspect of David Shearer’s first major speech since winning the leadership of the Labour Party last year was what was NOT in it.

I’m not talking about policy detail. It’s easy to agree with most observers that it’s too soon for such announcements from a leader who wants to “rebuild” the party and win the 2014 election.

So no, the missing word was not policy but INEQUALITY.

This is the elephant which occupies New Zealand’s living room. It’s the beast which stalks our streets from Otara to Remuera and every point between.
It’s the single most important political issue facing the country but Shearer gave not a nod to its existence. Labour and National have been studiously avoiding the elephant for decades. They pretend it’s not there and walk miles in any direction to avoid confronting it.

Inequality is now so obscene that the richest 1% own more than three times as much as the poorest half of the country. And it’s rapidly getting worse. The richest 150 New Zealanders (Prime Minister John Key included) last year increased their collective wealth by $7 billion – and most of that was untaxed. The rest of us pay tax on every dollar we earn and every dollar we spend through income tax and GST but in this country where hundreds of thousands of children live in poverty, the more you earn the less tax you pay. GST is particularly iniquitous with low-income New Zealanders spending 14% of their incomes on GST while the rich spend just 5%.

But the new leader of the Labour Party – a party forged in the struggle against injustice and inequality – ignored the elephant and focused on the ants. Read it here but not on a full stomach.
Shearer tells us his speech is about “vision” and says
“If I had to sum up what we need to do in one sentence I’d say this: we need to make a new New Zealand.That’s what the next Labour government will be about”.

That was as good as it got.

In it Shearer signalled that while Labour’s modest 15% capital gains tax will be retained the party will almost certainly drop changing GST and making the first $5000 tax free as well as abandoning plans to increase income tax on earnings over $150,000. It is also likely to drop its policy to extend the child tax credit to the children of beneficiaries.
For Labour this is a move back towards the hard right – now referred to as the “centre” – where the party has been since 1984.

A friend of mine summed it up saying that Labour’s little shuffle to the left before the election had had failed in the party’s eyes so it’s back to basics – the same brutal free-market policies which have enriched the 1% at the expense of the rest of us.

My prediction from the election was that Labour would finally see the need to reinvent itself and a new leader would make a break with the past and significantly shift Labour policy to the left. How wrong I was. I mistakenly thought Labour would want to introduce policies which would begin to address the gross inequality and massive social dysfunction the country faces.

I was stupid to think Labour might have the courage and self assurance to break from its stultifying neo-liberal past.

But no, Labour is not on an elephant hunt. The best guide to where the party is going under Shearer was the welcome his speech received from the likes of the New Zealand Herald. This was not a speech to cause sleepless night in Remuera or Parnell. It has brought comfort to the 1% rather than any hope to struggling New Zealanders.


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