Teresa and Hilary

The other day some friends talked about Auckland’s homeless and how awful the conditions must be sleeping rough.  Auckland’s Spring was having an identity crisis, reverting to the chills and rain of Winter, dallying briefly with its sunnier  self – then plunging into yet another sodden bout of seasonal recidivism. So these comfortably housed friends were right – how ghastly it must be to live day after day on the streets or crammed in  the hothouses of cars at night.

How did we get to this point at which  homelessness is so overwhelming, but at the same time beginning to slip down the news agenda? How could it be fixed they asked? They shook their heads sadly, but history has some  answers… They do however involve what I thought was that pariah of modern thought – state intervention and the massive state housing plan Labour embarked on when it became Government in 1935.

The policy of the Government in 1931 was described by the Encyclopedia of New Zealand as ‘on the whole un-enterprising and perhaps unenlightened in the Keynesian sense of the word. As elsewhere the chief concern was to balance the budget…’.  And so according to one survey 83,000 people lived in overcrowded or substandard buildings and there was a shortage of some 20,000 homes… Sound familiar?

Today the estimated number of children living in material poverty is by a wobbly  political consensus, 150,000. Homelessness  is  everywhere  and outside the figures and the political mud-wrestling over housing, are the uncounted number of young Kiwis who can no longer afford a first home.

Only Government can fix problems so widespread and with such dire implications for future generations – and back then it did. Between 1937 and 1979 the new Welfare State built 101,192 houses for rental and sale. But then came 1984, free market dominance and ‘trickle down’, a theory which suggested that if  business and the wealthy profited,  eventually a dribble of wealth would reach those further down on the social ladder. How kind.

All those PMs and their Finance Ministers of right and left who pushed this agenda must now feel almost as betrayed as an entire country was in 1984.   Because last month in the first Presidential debate, Hillary Clinton declared that trickledown hadn’t worked and proposed a modern day heresy – higher taxes on the rich.

Worse news came for the trickle-down theorists.  Research by the International Monetary Fund, which is no economic ‘wet’,  also concluded that ‘wealth does not trickle down from the rich to the poor.’

‘In fact, CNN reported, researchers found that when the top earners in society make more money, it actually slows down economic growth. On the other hand, when poorer people earn more, society as a whole, benefits.

The researchers calculated that when the richest 20% of society increase their income by one percentage point, the annual rate of growth shrinks by nearly 0.1% within five years. This shows that “the benefits do not trickle down,” the researchers wrote in their report, which analysed over 150 countries.

By contrast, when the lowest 20% of earners see their income grow by one percentage point, the rate of growth increases by nearly 0.4% over the same period.’

Then,  a final nail in the coffin: New British PM Theresa May addressed the  Conservative party faithful last week with a message that  really belonged to the Left. And it put Government – yes, that modern institutional pariah – squarely at the forefront of fixing the numerous social crises caused by allowing the Market to dominate social policy making.

It was also a shrewd step towards winning the political centre ground. But May did speak with passion and conviction and this is part of her speech, though some  skepticism is useful. Her party is after all, the Establishment of the Establishment. Still, her comments reflected a political awakening of sorts and one that is happening in other countries which have been through the New Right Experiment.  Here’s part of her speech:

“…today, too many people in positions of power behave as though they have more in common with international elites than with the people down the road, the people they employ,  the people they pass on the streets. But if you believe you are a citizen of the world, you are a citizen of nowhere, you don’t understand what the very word citizenship means.  

So if you’re a boss who earns a fortune but doesn’t look after your staff; an international company which treats tax laws as an optional extra… a director  who takes out massive pensions while knowing that the company pension scheme is about to go bust,  I’m putting you on warning… it can’t go on any more.  A change has got to come and this party is going to make it.  

My plan is for a Britain where everyone plays by the same rules and every person has the opportunity to be all they want  to be. It’s a plan to tackle the unfairness and injustice that divides us so that we may build a new, united Britain rooted in the centre ground. It’s a plan which means Government stepping up. Righting wrongs. Challenging vested interests. Taking big decisions. Doing what we believe to be right. Getting the job done.

Because that’s the good that government can do. And it’s what I’m in this for. To stand up for the weak and stand up to the strong.

And to put the power of government squarely at the service of ordinary working-class people.  Because too often that isn’t how it works today.  Just listen to the way a lot of politicians and commentators talk about the public.

They find your patriotism distasteful, your concerns about immigration parochial, your views about crime illiberal, your attachment to your job security inconvenient. They find the fact that more than seventeen million voters decided to leave the European Union simply bewildering.

Because if you’re well off and comfortable, Britain is a different country and these concerns are not your concerns. It’s easy to dismiss them – easy to say that all you want from government is for it to get out of the way. But a change has got to come. It’s time to remember the good that government can do.

Time for a new approach that says while government does not have all the answers, government can and should be a force for good; that the state exists to provide what individual people, communities and markets cannot; and that we should employ the power of government for the good of the people.

Time to reject the ideological templates provided by the socialist left and the libertarian right and to embrace a new centre ground in which government steps up — and not back — to act on behalf of us all.

Providing security from crime, but from ill health and unemployment too. Supporting free markets, but stepping in to repair them when they aren’t working as they should.  Encouraging business and supporting free trade, but not accepting one set of rules for some and another for everyone else.

And if we do — if we act to correct unfairness and injustice and put government at the service of ordinary working people — we can build that new united Britain in which everyone plays by the same rules, and in which the powerful and the privileged no longer ignore the interests of the people.

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Paul Smith

Paul is a veteran journalist, non-fiction author and writing mentor. He has also served on boards ranging from TVNZ to UNESCO.