OPINION: Trade unionist and disillusioned millennial leftist Justine Sachs says we need to give the Labour Government credit where it's due after yesterday's $12.1 billion coronavirus relief package announcement.
The coalition Government has finally done something big and transformational. After being elected on a platform of change and then proceeding to under-deliver again and again, it was unexpected. It only took a global pandemic and an earth shattering economic crash that some are saying could rival the Great Depression.
Yesterday, the Government announced a huge $12.1 billion dollar package to counter the Covid-19 crisis. With a recession battering New Zealand's economy, the government had little choice but to take decisive action. The question for many progressives was whether the coalition government would put forward a response which met the gravity of the moment.
Precedent would tell us no. While the coalition Government had run on a platform of transformation, it had in its first term failed to rise to the occasion when it came to tackling big issues such as the housing crisis, climate change, the cruelty of our welfare system, and our ailing public services. All of these problems require political will and bold progressive solutions. Unfortunately, all the government seemed to bring to the table were piecemeal solutions that frittered around the edges of the problem. There appeared an unwillingness to confront the fact that our economic system is predicated on the rich getting richer and the poor getting poorer.
As such, the coalition Government's first term has been a cowardly one. Seemingly out of fear of backlash, the government were more interested in placating business interests than being transformative champions fighting for working-class New Zealanders. There was little reason to suspect anything would change now.
To make matters worse, the response from other major countries had so far demonstrated a failure to meet the challenge of Covid-19. Australia introduced a stimulus package that is barely worth the paper it is written on, pledging tax relief and hand-outs to businesses and not much else. Newsflash, Scott Morrison: you’re not going to save the Australian economy from the biggest crisis in a generation with flimsy tax incentives — but I digress.
I did not think the coalition Government had it in them, so colour me surprised and relieved. The Government seems to have shaken off the constraints of so-called fiscal responsibility and put forward a spending package that is substantive. The spending package amounts to 4% of GDP, well above the packages put forward by the likes of Australia (1.2%) and Britain (0.6%). It is, as Grant Robertson pointed out yesterday in parliament, “the largest in the world on a per capita basis”.
I don't say this often, so here it goes: the Government made a good decision. The $12.1b dollar package includes wage subsidies, further funding for the healthcare sector, permanent increases to baseline benefit levels, and tax relief for businesses. The wage subsidies mean that people unable to work because of the pandemic will receive $585 per week if they are full-time, and $350 per week if they are part-time. For workers whose jobs would have been at risk if the whole country was required to go into quarantine, this is no doubt a lifeline.
The government has also indicated that the spending package is “just the beginning” of their Covid-19 response. For those of us who were dreading the inevitability of being abandoned by an absentee government interested mostly in governing for the wealthy few, this marks a change in course. A government actually taking care of its citizens? For millennials like myself, who have never experienced the warm embrace of the state intervening on our behalf, this is completely new. As a friend remarked: “It feels strange and alien, almost like the Government cares about me and wants to make sure I am able to live”.
What has brought about this change in the coalition Government? It is difficult to say. I have a few theories — perhaps the ghost of Michael Joseph Savage has possessed Grant Robertson. Maybe Norman Kirk came to Jacinda in a dream. Either way, the world is an apocalyptic dumpster fire right now, and business as usual simply won’t cut it. I, like many others, are grateful that the coalition Government has recognised this and acted accordingly.
Make no mistake: the package is far from revolutionary. Benefit levels are still below the poverty line. Most of the package is going to business relief, and not directly in the hands of workers. In all likelihood, we need to seriously start thinking about a universal basic income, rent and utility freezes and nationalising key sectors of the economy. Still, it’s a good start. When Grant Robertson stood up in Parliament yesterday to announce the package, he invoked the legacy of the first Labour Government and took time to condemn austerity. Times of crisis necessitate action by the state, where other major governments have abdicated responsibility to their citizens, the coalition Government has shown leadership. This is the first time in my lifetime that I actually see a meaningful distinction between Labour and National.
It is impossible for me or anyone else to predict what New Zealand and the world will face in the coming months. What we do know is our current system is inadequate and unable to respond to the scale of the problem. This package won’t save us, let's hope rather that it marks a humane turning point in New Zealand politics.