My latest NBR opinion piece can be found at https://www.nbr.co.nz/node/231503 , or below.
Judging by the polls, things are not looking great for the right. Labour and Greens are still on course to gain a majority next election. Most of us don’t buy National’s denial that it has a policy problem. That it just needs to find a popular leader. To the extent people vote with their wallet, Labour’s persistent high support level makes sense. Many low income Kiwis feel capitalism has not served them well. Since they have little capital. Home ownership is out of reach. They own no shares. And National gives the impression of not giving a damn. Of having worsened these problems during its previous time in office. Which it did.
To add insult to injury to the ones left behind, folks who have investments can tap into decent yields a phone call away from the likes of Fisher Funds. Yet even those yields are small when compared to the huge capital gains in our property market. A struggling, hard-working nurse would likely consider this state of affairs to be unfair. With justification. And that feeling typically leads to left-leaning voting.
Which provides a possible answer to the woes of the Kiwi right. It lies in a policy the Conservative Party implemented in the UK. What was it? Ownership. Margaret Thatcher once stated how her Conservative government had pioneered sweeping changes that “turned hundreds of thousands of families into property owners” and “Britain into a nation of shareholders”. She argued that “The transformation ownership of assets effects on a society is wholly positive, because it gives people a stake in prosperity and trains them to take control of their own lives”.
Of course our present political leaders loathe any type of economic policy that could be remotely associated with Thatcherism. Although our PM worked for Blair’s pro-market New Labour Party, she has distanced herself from it. Yet some startling evidence has recently been found regards factors that influence voting behaviour. It backs up Maggie’s point. Folks who own assets tend to hold beliefs more favourable to the workings of free markets, like the view that individual prosperity is available to anyone who works hard to achieve it.
An example comes from a group of desperately poor families who built shanty houses on public land near Buenos Aires. The Argentine government surveyed the land and granted titles to some of the squatters. The ones who gained ownership became more right-wing in their views.
In our context, these ideas suggest the Opposition may do well to propose ways that enable the disenfranchised to become owners. Every family should have a stake in the success of this country. So how can ownership be enlarged?
One way would be to widen Kiwi Saver to include all workers. Everyone should own shares via these accounts. For low earners who don’t have the funds to establish their accounts, the billions of dollars currently paid in public subsidies to high earners & as corporate welfare could be diverted into them. These existing subsidies include those paid to the wealthy for their children to attend university, for their winter energy bills & to favored industries like racing and movies.
A global index fund free of fees should be offered as an investment option on such accounts. By doing so, National would prove it has no hidden agenda, like handing commissions to bankers, since exorbitant fund fees undermined the success of past savings-based pension reforms in Chile. Regards lifting homeownership, the party should show it sides with Kiwis by dumping its objection to Labour’s foreign buyer ban on residential property.
Which brings us to the present government’s greatest vulnerability. Namely its need to keep people dependent. The fact that the home ownership rate is at a 70 year low, falling from 75% in the 1990s to less than 65% today, is serving it well. Fewer owners, together with the loss of independence and individual autonomy that it brings, generates more support for left-leaning parties. It cements support for higher taxes, especially capital taxes, and higher benefits.
Yes, Labour would deny such a stance, but there’s plenty of evidence that speaks otherwise. The government has already tried to slap a capital taxation regime onto owners. And the PM often emphasizes how much welfare benefits have been increased. Decision-making powers, especially regards health-care, are being more centralized. Involvement of private owners, like general practitioners and pharmacists, in the vaccine roll-out has been low and slow. Privatization is a dirty word for this government. After all, Labour attacked privately operated, publicly funded, charter schools. Yet President Obama called them “incubators of innovation”, many benefitting black American children from poor families.
All told, standing for an ownership society may open a path to power for the Kiwi right. It would address the fundamental cause of the lack of control that many disenfranchised Kiwis are currently feeling about their lives.