How Labour could have invested in new language

Little noticed in Helen Clark’s reshuffle was her promotion of Pete Hodgson — to the post of minister of innovation in all but in name.

Mind you, she didn’t actually draw attention to it until her keynote speech on Saturday at the Labour party’s conference when she said he was “in effect” minister of innovation.

Consequently, she missed a sales opportunity and scored a negative for Hodgson in the media, which billed his shift from health as a demotion. Actually, as was obvious on the day (and as Clark confirmed when asked directly later that day), his new job is at least as central to the government’s programme as the old.

In fact, before the 1999 election, when Hodgson was in charge of development policy, it centred on innovation. But science and tertiary education were separated out and Jim Anderton turned the new portfolio of economic development into a “jobs machine”.

Development policy thus shifted from “smarter” to “more”. “More” is impracticable with 3.6 per cent unemployment. So Hodgson finally gets the 1999 portfolio mix (though broadband stays with David Cunliffe till he finishes restructuring telecommunications) and gets to do his 1999 policy — maybe.

The “maybe” is because research, science and technology (RST), which is an important (though, of course, just one) ingredient in innovation, has not starred in the past eight years. Under Hodgson himself, then Steve Maharey, government spending on RST has fallen as a percentage of GDP to far below the OECD average and Michael Cullen’s new tax credits for business research and development will only partially reverse that, if businesses’ and accountants’ anecdotes of innovative reclassification of existing spending are accurate.

The 1999 logic is powerful: real wage rises are driven by productivity increases. More of the same lifts volume, not productivity. Innovation applied by smart firms does lift productivity. (Which in turn presumes smart managers. Outgoing economic development minister Trevor Mallard told a conference committee the quality of senior management is “just about the worst in the world”.)

Parties need to innovate, too. Is Labour innovating?

One ingredient is fresh thinking. That involves fresh people and fresh perspectives.

Labour’s conference had many new faces, including many under 40. Its ruling council is young by most large organisations’ standards. Its lineup of potential new candidates looks passable to good.

And, unlike timorous National, Labour’s conference still debates policy.

But is it modern policy? At the conference the Alliance (old Labour) was back in the fold and back on show: Jill Ovens representing the Service and Food Workers Union (and reporting its delegates posting tax cuts No 3 on their wishlist) and husband Len Richards in a fracas with protesters. Also, left commentator Chris Trotter, formerly linked with the Alliance, was central in the on-stage chorus for Labour’s un-catchy new campaign song.

And there was much talk from Clark and Michael Cullen of traditional Labour values, especially “social justice” and “fairness”.

But then came Evan Thornley, an multi-millionaire, now parliamentary secretary to Victoria’s Labor Premier. Thornley was over to reinforce the launch of a local Fabian Society.

The original Fabian Society was set up in Britain a century ago to develop policy ideas for the Labour side of politics. They were to be gradualist, not revolutionary.

The Labour side here has made several false starts at this over the past quarter-century. On Sunday, before 34 delegates, Clark’s husband, Peter Davis, himself the author of two books of essays on social democracy when young, pitched the new bid.

Thornley made three big points.

One was to trace Labour policies to the Scottish Enlightenment of the eighteenth century and claim for Labour the “moral sentiment” side of Adam Smith (whose other side, markets’ “invisible hand”, is a catchcry of the right).

Second, Thornley recast social services spending as “investment” which produces a measurable return.

The now departing Steve Maharey used to argue for this language and even got some concession from the Treasury: invest in educating people and keeping them well-housed and healthy and you get more productive economic contributors and a better functioning society.

Every now and then Clark dips her toe in this water and did again on Saturday. Cullen’s speech avoided the notion altogether.

Which highlights Thornley’s third point: that the right has over the past 40 years been miles better than the left at producing what look like fresh ideas and, more important (he said), making them saleable by changing the language of politics. It is time the left recaptured the marketing high ground, he said.

Some attempt has been made in the party, not least by likely new MP Clare Curran of Dunedin. But Clark and Cullen stick mainly to the old language.

What if they had got modern — innovated — eight years ago when fresh in office? Maybe the 2008 election would be about tax cuts versus investment.