Labour Leader Andrew Little is now clearly steering his party to the centre of New Zealand politics.
On Friday night in Clive with the new deputy, Jacinda Ardern, sharing the stage, he set out the first stages of what POLITIK understands will be a joint fiscal policy agreed with the Greens and expected to be unveiled later this month.
The Greens will have to make huge concessions to agree to it.
Their economic policy at the last election proposed shifting the emphasis from income taxes to a capital gains tax and so-called eco-taxes – levies on things like water, fish caught commercially, minerals mined and pollution and waste.
But on Friday night Little announced that Labour believed all its spending promises — and there are several – could be contained within the present fiscal path.
In fact, he said, Labour’s projections were based on a more conservative estimate of future surpluses than the Government.
“Every commitment that we have made so far and any commitment we make between now and the election will be on the basis that we can fund it out of existing tax revenue,” he said.
“Right now the Government books are pretty healthy; they are generating surpluses.
“The last Labour Government generated nine surpluses; this Government generated one last year, and they are on the cards to generate one this year of roughly one billion dollars.
“And the commitments we have made assume lower levels of surplus this year and in the years ahead.
“I will not be making commitments that we cannot fund out of existing tax revenue.
“We’re not putting taxes up; we are not introducing new taxes.
“We are going to fund everything out of what we already have.”
In essence what Little is saying is that rather than spend the growing surpluses on tax cuts he would put the money into health, the police, education and housing.
But he goes further and on Friday night revealed a scepticism about some left wing sacred economic cows like the minimum wage, the living wage and a universal basic income.
The Hawkes Bay should be fertile ground for Labour.
The region may look wealthy but away from the vineyards and orchards are some depressing statistics.
Last December’s Household Labour force survey shows an 8.1% unemployment rate for Gisborne/Hawkes Bay (and Hawkes Bay is thought to be higher than Gisborne). But the rate is the highest in the country.
And its median income is the second lowest in the country.
Many jobs in the horticultural dependent region are low skilled and low paid.
A questioner told Little that when he was picking apples, he had to fill four bins each containing two to three thousand apples to make the minimum wage each day.
“That’s hard work,” he said.
But when Little was specifically asked what he would do to solve the growing gap between rich and poor he revealed a scepticism about the effectiveness of raising the minium wage or introducing a living wage or a universal basic income.
He said that one in five households spent more than 50% of their income on housing costs and that the average household, after they had paid their housing costs, last year was only ahead by $365 and that did not include any adjustment for inflation.
“The average household last year went backwards; incomes are not keeping up with the real cost of living.
“The big really difficult gnarly question is lifting incomes.
“It’s not just the bottom 10 per cent; it’s 60 per cent of households.
“We’ll manage the minimum wage, and we’ll do it responsibly but lifting the minimum wage is not lifting wages.
“Then people say well, what about the living wage.
“We’ll work with the living wage campaign and do what we can, and we’ll work with central and local government.
“But that’s not going to lift sixty per cent of people’s wages.
“We have to find a way to put that upward pressure on wages again.”
He was asked about Labour’s commitment to a universal basic income.
“It’s not our policy,” he said.
“We’ve said it requires close examination, a lot of work, because it does have implications for tax.
“We are going to have to think about it at some point.
“It’s not immediate. It’s in the future, but it’s not a top priority right now.”
After the meeting, the MPs and Little were surprised by audience reaction on two issues — mental health and superannuation.
Though Little’s section of his speech where he dealt with delays in the health system, the audience kept up a sotto voce murmuring of agreement.
But when he got onto to the question of youth suicide the murmuring became louder.
“How is, in a country as great and beautiful, as peaceful as New Zealand we have one of the highest teenage suicide rates in the develop world?” he asked.
“How does that happen. What are we doing wrong?
“Why cannot we give support to our young people when they need it most.
“I’ve heard some pretty distressing stories from parents about trying to get help for their adolescent kid’s access to the support they need.
“And it’s not there.
“We have got to fix mental health.
“And when you find out that what this Government has done is underfund the health system to the tune of $1.7 billion over the last six years we have to say it is not right.”
On superannuation the Labour leader found himself caught.
On the one hand, he dismissed the Government’s announcements last Monday as simply a bargaining chip designed to get Winston Peters in support of National as a Government.
But he got applause when he said that Labour would not touch the conditions for super and they would resume contributions to the Cullen fund.
Before Little spoke the new deputy leader, Jacinda Ardern introduced him.
“Victory for Labour will be when we build a country that is proud again of where it stands on the international stage,” she said.
“But more importantly proud of the way it treats its own citizens.
“And it may seem like a simple concept, but I’m absolutely committed to the idea of bringing connectivity and kindness back to our Government.”
She got applause for that.
It was a good night for Labour.
It marked the return of Napier MP Stuart Nash to the front bench and presumably the Leader’s trust after a long period of being out in the cold for his perceived right wing views within Labour.
The candidate for Tukituki, Anna Lorck, displayed the ebullience for which she has already acquired a reputation.
But most importantly Little connected with the audience. Most were undoubtedly Labour sympathisers but what the meeting showed was that the party has re-connected with its base.
And what the size of the audience showed was that both Nash and Lorck have got real organising ability.
For Andrew Little, not a bad night.
