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Saturday, September 24, 2011

Scrutinising Labour's policy

All political parties and policies deserve to be given close scrutiny, and critiqued as required. Some political policies have titles as strident, and meaningless, as headlines in the tabloid news. What lies behind them needs to be teased out. In doing this a balanced and informed approach is essential. One item in particular in Wednesday's Press showed little enthusiasm for the latter part of this approach.

In the Perspective section of the Press (page A19), there is a piece prominently headed Stinging criticism of Labour's generous Christchurch offer. In it the writer looks dismissively at Labour's proposals to intervene in the property market and make land available at "affordable" prices. He is similarly dismissive of the proposal to intervene in the insurance industry. The overall supposition is that the policy is broadly interventionist, would exploit almost war-like powers, likely to become messy if Labour were given the chance to implement it, and likely to annoy those unaffected by the earthquakes.

While the article is in the nature of a comment, rather than insightful analysis and perspective, that is no excuse for inadequacy. The arguments put forward in discussing or dismissing the proposals demonstrate no understanding of either the past or the present.

The Past

Nothing in Labour's Canterbury Earthquake Recovery Plan is unprecedented in New Zealand. Perhaps it is now unknown that New Zealand (and the Labour Party) has a rich, if not always glorious, history of government participation in the areas of land, housing and insurance. Much of the intervention of the past has been in the face of strong political and vested-interest opposition, and yet has worked when the chance was available.


Government support for, and provision of, affordable land and housing has been a policy platform for a number of political parties since the 19th century. Affordable land and housing for servicemen was a significant factor in the rural and urban development of New Zealand. Land was balloted by the government for those who returned from wars. Not everyone was successful, but a scarce resource was distributed as fairly as could be done. Those who preferred to settle in urban areas after WWII had cheap mortgages made available via the government. From the 1930s many families who could afford neither home ownership nor private rentals had housing provided to them by the government.

All of these were interventionist policies based on enabling principles. Various government agencies came into being for these purposes: the Department of Housing Construction (building state houses along with Fletcher Construction), State Advances Corporation (low cost housing finance and management of state housing), Housing Corporation of New Zealand.

As for insurance - New Zealand has had government insurance companies since the second half of the 19th century - State Insurance, now since sold, and EQC which remains. The reasons for which government insurance was set up in the 19th century exist again today, and the Victorians were no less market oriented then than the National party is now.

Omitting the experiences and successes of the past makes the article seem plausible. However, in light of what has been achieved in the past, it may well be that what is envisaged is achievable. True, the policy does not spell out the detail but, as is the nature of all initial announcements of political policy, they are designed to paint the big picture. An attempt at a balanced article would have traversed this.

The Present

As far as the present is concerned, the writer says that intervention would not be popular with developers faced with losing an opportunity for profit. Quite understandable, but is it really a big issue? Why? The article continues:
"Labour leader Phil Gough talked about 'price gouging' and 'profiteering' among developers, but new sections are usually more expensive simply because they are bigger and, compared with quake-hit suburbs, safer."
The first claim regarding price and size is a distortion of what is happening. For the amount being paid on land,  sections of a similar value are either unavailable or much smaller than those being abandoned in the Red zones.  Land of the same size is priced much higher than the value of that being left behind. In many cases sections can be both smaller and more expensive.

The claim that the sections now available are comparatively safer doesn't stand up to scrutiny: safety isn't an issue, stability is. Either way, not a single section is being sold with any guarantee that it is "earthquake safe", so how can the price reflect this?

The article

The article is headed in large bold type "Stinging criticism ..." as if this were the case. Despite this headline the article makes no mention of stinging criticism, let alone where it came from. As an aside, it is the biggest headline in the whole of that first section of the Press and so perhaps intended to be significant? Pity the content wasn't as substantial as the headline that accompanied it. Despite the shortcomings of this article, there was an example of much poorer political journalism in Wednesday's Press.

The editorial on page A18 called for more substance, and labelled Labour's policy as "a fine-sounding wishlist". Many of us would agree with these sentiments. However it is an odd observation to make, as all political parties turn out policies that are fine-sounding wishlists. The editor, after stating the Labour party has performed a useful service in putting forward ideas for discussion, then decrees that "This is largely driven by the party's poor showing in opinion polls".

It is both cynical and sordid to make the accusation that the policy exists primarily to boost popularity, rather than the result of any compassion or desire to help those who have suffered from the earthquakes and their aftermath. This is particularly so when aimed at a party that has a better history than any other of trying to help those in need. Unless evidence can be produced, such accusations should not be made. This tabloid-style approach to a complex and emotional subject ought to be left alone.

It is to be hoped this is not what our fare will be from now until the election.
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