In the first month since New Zealand’s October 17 election, the reformed Labor-Green government has shown its pro-business color, as it implements corporate elite demands for deeper austerity measures against the working class.
Prime Minister Jacinda Ardern last week flatly rejected requests from 59 organizations, including trade unions, charities and poverty action groups, to raise welfare payments before Christmas to tackle mass unemployment and impoverishment.
Through the Aotearoa ActionStation umbrella group [New Zealand], the group published an open letter saying the situation was “urgent.” Families are “pushed into poverty” by job loss under COVID-19, coupled with long-term stagnant salaries and high housing costs. The low level of welfare benefits means that “today, hundreds of thousands of children are limited by poverty, despite the best efforts of parents.”
The letter did not come from opponents of the coalition government but from allies who have campaigned for its re-election – and donated tens of thousands of dollars to Labor, in the case of trade unions – on the false premise that a “progressive” government would be open to pressure from the “left”. In the most amiable terms, the letter pleads for action to “help achieve your vision of making Aotearoa the best place to be a child.”
Ardern responded by ruling out increasing the core benefits. At a post-cabinet press conference on November 9, he stated: “It will not be a problem that is resolved in one week or one month or even one term.” Ardern had promised during the 2017 election campaign that he would lead a “transformative” government dedicated to eliminating child poverty and the housing affordability crisis.
The government’s Welfare Advisory Group in 2019 recommended an additional $ 5.2 billion a year for social welfare, with an immediate increase in main benefits ranging from 17 to 47 percent, and indexing benefits to average wages. The government supports indexation and increases benefits by just $ 25 a week, but rules out further increases as “not fiscally sustainable.”
Labor and Greens, now without NZ First as government partners, were reinstated after Labor won a majority of seats, including many in wealthy areas previously held by the conservative National Party. After two weeks of coalition negotiations, a deal with the Greens was secured to put a false “progressive” face onto the government’s agenda.
A great social crisis is happening. Labor’s pro-business response to the COVID-19 pandemic is similar to the response of other governments around the world. Tens of billions of dollars have been turned over to big businesses and banks, creating enormous debt that will be repaid through austerity and economic restructuring at the expense of the working class.
Radio NZ reported last week that nearly 23,000 people had reached the end of a COVID-19 income waiver payment, with no jobs to go to. Figures from the Ministry of Social Development (MSD) as of the end of October show that only 5,000 were transferred to job seeker benefits. Thousands more who are still looking for work do not qualify for benefits due to strict criteria.
The increase in the official unemployment rate to 5.3 percent in the September quarter is expected to worsen, while demand for food banks has tripled since last year. MSD recorded a 68 percent increase in children aged 16-24 who needed emergency housing assistance between March and June.
According to the new report, Now We Are Eight: Life in Middle Childhood, from the Growing up in New Zealand Study, nearly 40 percent of 8 year olds live in cold, moldy, and damp homes. About 20 percent of the families surveyed did not have enough money to eat properly. Nearly 15 percent of children change schools at least twice, mainly because they have to move between rental properties.
With the social outburst unfolding, concerns were aired in the media that the government was discrediting itself. Television presenter Duncan Garner warned in the AM Show on November 11: “Capitalism is just a place where the rich get richer. But do this wrong and you get a chaotic society. “He punished Ardern for refusing to repeal benefits, stating:” Despite all the slogans and words and kindness, what has Labor achieved over poverty and income at the bottom? Zip. “
Newshub editor Tova O’Brien told Guardian that despite Ardern’s “grand mandate,” the Labor Party’s “politically savvy” would sacrifice its fundamental values, and be motivated by its desire to stay in power. “
In fact, the “fundamental value” of the Labor Party is to safeguard the capitalist order, especially during times of crisis. Ardern’s “kindness” persona, while boasting that the Labor cabinet was the most “diverse” in representation of women, Maori and Pacific Islanders and gays, is being promoted assiduously as the government oversaw the further transfer of massive wealth to the rich.
The Greens issued a statement supporting increased welfare payments. Co-leader James Shaw described himself as “outraged” over rising house prices, calling Labor “irresponsible” for refusing to pay taxes on capital gains. This is an empty play. The Greens, in return for two ministerial posts, pledged to support the government.
The Reserve Bank last week extended its “quantitative easing” program, pledging $ 28 billion on top of the $ 100 billion it has committed to providing banks with loan funds at near-zero interest rates. The money has no strings attached. This is used to increase bank profits and raise house prices – which have risen 20 percent in the past year – through speculators lending. On Tuesday, Ardern flatly rejected calls for the government to step in and control the Reserve Bank.
The Green Labor Party’s pro-business trajectory exposed all of these, especially the trade unions and pseudo-left groups, who promoted them during the election campaign. Funded by the union Daily Blog, who now complains that Ardern “disappointed the Left,” previously glorified the possibility of the Labor-Green-Maori Party coalition as “New Zealand’s most progressive government ever,” poised to implement “radical reforms”.
Trade unions played a cynical role. A line-up led by the NZ Trade Union Council signed ActionStation’s open letter. Yet they have all suppressed any opposition among workers to attacks on jobs, wages and social conditions carried out under the guise of the COVID-19 pandemic, while lauding the government’s billions of dollars in giving to big business.
Following the announcement by Air New Zealand this month that 385 international cabin crew will be laid off, adding to the 4,000 cabin crew who have been laid off with union collaboration, the E Tu union launched a nationalist “Kia Kaha Aotearoa” petition, pleading with companies to stop outsourcing work abroad. .
Company CEO Greg Foran bluntly dismissed the suggestion as not the “best or most feasible business outcome.” A multi-million dollar share offer has been made to Foran and his executive team, which E Tu dutifully claims will “further undermine the airline’s recovery.”
While refusing to revoke welfare benefits, the Green-Labor Party government continues to give cash into the hands of the rich. The country’s major companies, now including the Fletcher Building and Fulton Hogan, have received millions of dollars from a COVID-19 “wage subsidy” scheme to increase profits while firing thousands of workers. Fulton Hogan not only announced an annual profit of $ 222 million, but also provided shareholders with $ 79.5 million in dividends, backed by $ 34.3 million in government subsidies.