Tony Ryall last week redistributed some money from the generally sick to cancer patients. Hekia Parata redistributed some from teacher numbers (class size ratios) to training and testing the teachers (but not pay them more). Welcome to zero-new-spending budgeting, a 2010s redistribution mechanism.
There are much bigger redistributions to be decided — and bigger ways to make big decisions.
The big good news last week was not in ministers’ manicured marketing of upsides, designed to slide round the traditional media which the cabinet now thinks an enemy. It came on Friday in the first of two final reports from the Land and Water Forum of around 60 interest groups ranging from greenies to dairy farmers and including iwi.
Friday’s report was on how to set, measure and manage limits to taking and polluting water: objectives, parameters and mechanisms. It left undecided where exactly the Environment Court fits. And there is second report to come, on allocation of rights to use water, what those rights entail, how they can be transferred and at what price. But it is a thoroughly detailed plan. And that there is a report at all is remarkable.
Water is this country’s principal natural comparative advantage, the basis of much of tradables sector Bill English wants to grow. It has been incompetently managed, in fact plundered and polluted by the plunderers. Lakes, rivers, streams, ponds, wetlands and aquifers have all been misused.
So the forum’s report is important in substance. It is also important as process. Federated Farmers and Forest and Bird at the far ends of the spectrum of interest groups have publicly backed it, along with many others. So, too, have government ministers, Labour, the Greens and the Maori party. The word is that similar consensus and party backing is close on the allocation report.
In short, on a matter of vital importance to economic and social life there is a real prospect of settled policy that can transcend changes of government. Think if this “collaborative” process had been applied to climate change. Think how it might be applied to superannuation and health policy which are heading towards unaffordability in the 2020s and on which it would be prudent to start now to work up a consensus. The Land and Water Forum has taken three years for its consensus.
This way of doing big policy is new to New Zealand: it involves ministers mandating a forum and refusing to deal separately with interest groups which then stand to lose more outside it than in. It is far better than focus groups, on which National and Labour spend much of their own and your money.
There is another way of growing durable policy: a groundswell from below. What might become an example of that will be unveiled on Wednesday when the Service and Food Workers Union (SWFU), along with around 50 community, union and church groups, launches a campaign for a “living wage”.
The concept is simple: a household should have an income on which, in return for conscientious work, it can live in modest comfort and give its children a good start. This principle lay at the heart of the conciliation and arbitration system which governed workplace pay from the 1890s to the 1980s.
That was in essence a redistribution of income from employers and shareholders to employees. Since the 1980s and particularly since the 1991 deregulation, the transfer has been the other way: shareholders, owners, managers and professionals have done far better than those on wages, many of whom are now on or close to the minimum wage on which English admits he could not live. Ryman announced a bumper profit last week, in part on the basis of ultra-low wages.
New Zealand now has the twenty-third highest income inequality out of the 30 “developed” countries in the OECD (Organisation for Economic Cooperation and Development). The SWFU wants the government and councils and publicly funded organisations, through purchasing leverage, to emulate the London Council and require suppliers to move over time to paying a “living wage” well above the minimum but still modest. It wants good firms to volunteer to do that.
There are complications. In 1890 very few households had two incomes. Now many do and so would get two “living wages”. And in a world locked into what some economists call “hyperglobalisation”, can businesses pay “living wages” and stay competitive? Even in rich Australia, this question is being asked outside its super-rich mining areas.
But what are the politics of paying a large number too little to live on, when some at the other end do better and better? Will that over time lead to a version of Europe’s rising populism and unrest?
A small-c conservative dislikes unrest. A small-s social-liberal seeks equitable outcomes. Might there develop over time a basis for a meshing of those objectives — that, is a political consensus?
That is why the SWFU’s initiative is politically interesting. It might be the start of a different redistribution.