How come Michael Cullen, who looks like the sainted Michael Joseph Savage, 1930s benefactor of the disadvantaged, is called Grinch and Scrooge? What got into his political DNA?
Cullen has spent massively on the very things Savage and his first Labour government cabinet made everybody’s birthright: education, healthcare, affordable rental housing and sustenance in adversity and old age.
He has also delivered huge tax credits to families at the time they most need it, when the kids are at school.
He should by rights be not just Savage’s lookalike but his political heir.
And in truth he is –but the picture is blurred because he has to do more than Savage and under much more complicated constraints. Being Labour in Savage’s time was black and white. Being social democratic now is a palette of greys.
Start with Cullen’s upbringing in what he calls a working class household. That was certainly not the elite in Savage’s day or Cullen’s parents’. But in today’s world Cullen is definitely of the elite, the product of the educational meritocracy that arose out of the universal access to higher education initiated by Savage’s comrade, Peter Fraser.
Cullen claims the inheritance. He described himself in a recent speech as a “social democratic finance minister”. In a much less grumpy frame of mind in the past few months as his health has improved, he has been re-articulating what social democracy means in a modern world.
In telling that story, Cullen steers clear of theory — “I am acutely conscious as a practising politician that I don’t get much time to read broader works” (of theory). Detective novels are his relaxation read.
Cullen prefers “values” as a distinguishing mark of parties and politicians. He shares that preference with Prime Minister Helen Clark and with the now flawed Tony Blair.
But in Cullen there is nothing of Blair’s slickness.
He says that though the two major parties fight over the centre, try to cover off weak points and therefore “converge towards the middle”, they do that from bases of “profoundly different values”.
Or you might call them “principles”. “The fundamental principle that governs my belief is that each individual has intrinsic worth and that intrinsic worth is equal”.
Plenty could agree with that, including liberals or even conservatives.
But Cullen takes it in distinctly social democratic directions, some of which “aren’t terribly popular in the present era. For example, in penal policy it means you always have some hope for redemption and rehabilitation”.
Equal intrinsic worth doesn’t mean everyone has the same abilities. Wealth is not a reflection of worth. His own high-IQ “intellectual, analytical brain” “doesn’t make me intrinsically worth more. That’s a matter of luck, in genetics, in the fact that my parents tried to get me a decent education and encouraged me.
“That’s luck and I took advantage of it. It doesn’t say to me that I have a right to treat someone else as if they are not worth anything, not participating in society, not contributing.”
Anger then twists his voice as he interprets Don Brash’s promise of tax cuts to “reward hard-working New Zealanders” as implying that “those who were not going to get much were somehow less hard-working than those were going to get a lot”.
“It’s such rubbish. It’s so profoundly wrong. It’s so demeaning of people, many of whom work intensely hard for long hours at jobs neither you nor I nor Don Brash would want to do for a moment.
“We do jobs we like doing and get paid well to do them. We’re bloody lucky. We’re not worth more.”
Actually, Brash intended “hard-working” to apply to all who would have got his tax cuts and to imply they deserved them. But Cullen the social democrat receives that phrase through different antennae — which underscores his point about the different values.
So what is he after?
In a word, “participation” — “in society, in employment, in the obvious social benefits of a modern society in terms of education and so on”.
That’s well-tried language. The 1972 Royal Commission on Social Security, which laid the foundation for the great expansion of the welfare state from the 1970s, made ability to participate the objective of social assistance.
Participation, Cullen says, “has become as important as the traditional social mobility argument” of Savage’s day. Then “the focus was on how working class people could become middle class people”.
Education and other redistributive tax and social policies opened those pathways. But that turned out not to be the end of the social democratic project.
Many — including some groups, such as Maori — have not made it to the middle class, Cullen says. There are new and more complex mobility challenges, compared with Savage’s time.
Cullen’s answer goes to the core of his economic policy. It is to “move the whole of society rather than the individuals within it” — in plainer language, “a rising tide lifting all boats” through upskilling and a higher-value economy.
Here he is at variance with the liberal right. “This is not trickle down. In fact, there is a very, very strong natural tendency in our society towards a quite modest level of trickle down”. Government remedial action is needed.
An elite has done very well while others, including, Cullen insists, “the broad range of the middle class”, have not. That does not work in a small society like this one which has “strong tendencies to come apart through ethnic and cultural differences and increasingly strong regional differences”.
How to counteract that “fissiparous” tendency? “Health care is a very important binding concept”. The lion’s share of new spending in Cullen’s budgets has gone to health.
And if the economy is to be upskilled, the right spread of skills is needed. Hence Cullen’s decision to take the tertiary education portfolio. The past emphasis on university education — “to jump directly into university education and white collar employment” — has, he says, created an economic downside, the undersupply of trades and technical staff, and a social downside by devaluing “some of the crucial rungs on the social ladder” which works against a sense of participation among those people.
It also creates an anomaly: Labour’s student loan policy favours the middle class, the antithesis of Savage’s aim to eliminate privilege.
Cullen doesn’t dispute that but counters by saying he deals with social provision on the basis of need, regardless of social origin. That is classical Labour. Targeting, he reckons, undermines social cohesion.
These factors generate much harder challenges for Labour than for National “for which, as long as one can avoid things becoming too glaringly nasty, it’s OK”. The “natural tendencies of modern societies are quite contrary to the social democratic vision. They tend to use up all the resources, to increase inequality, to concentrate on the individual rather than the broader social concerns.”
Such “natural tendencies”, if true, suggest Labour’s role is interregnums between periods of National rule, as from 1949 to 1999.
Nevertheless, Cullen has put down markers from which he reckons a future National government is unlikely to stray too far: a superannuation consensus, a long-term fiscal perspective which “preserves choices around an equitable framework”, a level of government spending from which he thinks National will not be able to cut more than 2 or 3 per cent in share-of-GDP terms (5 per cent at most), the beginnings of policy to tackle climate change at the front end to avoid sudden large costs later.
Cullen sees “economic transformation” as a continual process. It is not enough to put a set of policies in place and pronounce the job finished — a mindset he imputes to the 1980s/90s reformers.
Not only is the economy never “transformed” because by definition more is needed to keep the boats rising. Policy settings, too, must be constantly revisited and revised to respond to changing circumstances. There is no one set of perfect policies, he says. And there must be sticks as well as carrots — “in real life you don’t get change using just carrots”.
And that means the government must be actively involved, alongside the players, especially to increase international penetration through exports and offshore activity. That needs companies to be bigger — 100-200 staff instead of 10-20 — and state activity to “deliver bulked up presence in various key markets”. High among his priorities is more government people on the ground in Shanghai and other crucial markets.
If you are looking for the theory Cullen says he hasn’t got, his line is consonant with new growth theory developed by Harvard economist Dani Rodrik (Business Herald June 28): the private sector doesn’t always pick winners and government muscle can make the difference.
Which is the point for a social democratic finance minister who is not there simply to dole out money for colleagues’ pet projects but to lift all boats and must do that by promoting the whole economy.
It’s much more complex than cutting taxes and reducing regulation. But Cullen is a brainbox who thrives on complex conundrums.