Monday, March 11, 2013

Lew on the asset sales debate

The folk who write at Kiwipolitico describe themselves thus:

The kiwipolitico collective
We share environmentalist, and centre-left/left-of-centre perspectives and values as well as an abiding interest in public policy and the political process. Within this broad frame, we are very diverse. Some of us are more green than red, and some more red than green. Some have party allegiances, and some don’t. Regardless, we are committed to providing an independent, critical commentary on political issues in New Zealand and overseas.

And Lew at Kiwipolitico has written a lengthy and thoughtful piece on the asset sales debate. Under the heading The left's lose-lose SOE strategy, Lew opines:

If it wasn’t already over on the night of 26 November 2011, the argument about the popular legitimacy of the government’s plan to partially privatise selected state-owned enterprises was finally put to bed when the pre-registration website for the Mighty River Power float fell over shortly after it went live. Whether this was a result of intentional underprovisioning to generate buzz or genuine organic demand doesn’t matter: within 24 hours 100,000 people had pre-registered interest in buying shares. That’s about one-third of the signatures opponents of the scheme took seven months to collect to force a citizens initiated referendum. The battle over whether these assets will be sold has been well and truly lost, and expending more political firepower on it is futile. The left needs to start organisaing around how they will be run.
This episode highlights two separate failures of strategy; one from the 2011 election, and one for 2014 and beyond.
Salience
Labour mistook asset sales for a high-salience issue and tried to run a campaign on it, when in reality too few cared enough for it to work. I have no reason to disbelieve the assertion that most people don’t want the assets sold. But the evidence of the election, the sluggish uptake of petition signatures, and the general lack of traction gained by the Labour party, for whom this has been the only coherent policy frame since the election, show that it is not an issue about which people are strongly exercised.

This strategy worked quite well for NZ First, and to a lesser extent the Greens, both of whom have the luxury of being able to appeal to a smaller base who care more strongly about a narrower range of issues. But it didn’t work for Labour, and the recognition that what works for parties of a relatively activist mindset doesn’t work for a broad-based, moderate mainstream party is long overdue. It failed. Time to move on.
Mandate
The notion that the government, having spent the entire year 2011 campaigning on it, lacks a mandate to proceed with asset sales is utter nonsense, as I wrote when the campaign kicked off. Labour and the Greens have decided the mood of low-level dissatisfaction with the plan that failed to win them the election will be sufficient to derail the policy now that it is on the move. They have decided that a citizen-initiated referendum, which worked so well for the opponents of the Section 59 repeal, is their best tool. Andrew Geddis wrote brilliantly about the problems with this in June last year, and here I essentially restate one of his arguments — that the Greens and Labour should be careful what they wish for. Both Labour and the Greens rely on the maxim that what’s right is not always popular. By insisting that policy be popular to be passed they risk painting themselves into a corner when next in government.

Plenty of bad policies are popular — three strikes, scaremongering about immigration, and most of the government’s welfare reforms are good examples. Despite what Josie Pagani might say, all are inimical to Labour and Green politics. How can they oppose these policies, if they’re so popular? Conversely, how can they insist on passing unpopular policies? Many of these are more central to the Greens than to Labour — the Greens are not a popular party; they poll just above 10%, so why are they embracing populism? Their policy agenda relies on making the electorate eat its greens, so to speak. Emissions control legislation, for example, will be deeply unpopular if it’s remotely effective. Likewise public transport and urban development policies, whose upfront costs are large and immediate but whose benefits are long-term and gradual, will be incredibly hard to pass if they insist on gaining the support of car-reliant suburban villa-owners.
Whether they “win” the referendum or not, at best Labour and the Greens will be vulnerable to legitimate accusations of hypocrisy whenever they propose policy that is merely somewhat popular, as opposed to being very popular. They will have demonstrated that consistency doesn’t really matter, and that could do deep harm to their long-term credibility. Worse yet, they could stand rigidly by their new-found populism and only propose policy that a clear majority of the electorate wants. Both strategies do more for NZ First than they do for Labour and the Greens.

When an advocate for the parties of the Left says that "The battle over whether these assets will be sold has been well and truly lost, and expending more political firepower on it is futile", it's time to take notice. Thus far however, both David Shearer and the co-leaders of the Green Party seem not to have grasped the futility of the present campaign.

But Lew isn't done, even going as far as to suggest a new strategy for the Greens and for Labour; read on:

The discussion has changed
The left has lost the argument about asset sales. Barring some sort of deus ex machina it’ll go ahead and will probably be a net vote winner for the government. But the apparent mismanagement of Solid Energy has given Labour and the Greens an opportunity to reframe the state-owned enterprise discussion, away from who owns these businesses to how they are run.

Both parties must be reluctant to do this, given that many of the bad decisions were made under the previous Labour government, and much of the lost money was poured into “green” tech like biofuels. But it is a necessary shift if the left is to own some of this debate. Regardless of what occurred before 2008, that things got so much worse under the current government, and that this was apparently a surprise to the shareholding minister is a serious failure of governance, and the public deserves answers about it. It’s a good opportunity for the left to highlight the point that there are good government managers and bad government managers, and that they will be the former, not the latter. The Greens have begun to do this by arguing that the government’s policies and directives to Solid Energy — including the lignite strategy, and changes to the Emissions Trading Scheme — effectively kneecapped the company.
Labour and the Greens should take the initiative and reframe this SOE debate now. If they persist with beating the dead horse of ownership, the risk is that the government will strengthen its case that the state simply isn’t fit to own businesses, paving the way for the rest of the SOEs to be sold as soon as they can secure a mandate to do so. The only alternative I can see for the opposition is a pledge to re-nationalise the sold assets. If they’re going to do that they need to get on with it — if they reveal this policy after the Mighty River Power float goes ahead the risk isn’t the argument that the state shouldn’t own businesses; it’s that Labour and the Greens are parties of big-government kleptocracy, trying to turn Aotearoa into the Venezuela of the South Pacific. 

We agree. As we blogged last week, it's time for a clear and unequivocal statement from David Shearer as to what Labour plans to do when (not if) shares in Mighty River Power are sold to private owners. Does he have the political will to make a commitment to buying back all the shares that are sold? And where will the money come from to achieve that?

David Shearer must act on this before the 2014 General Election. Just as the country went to the polls in 2011 knowing exactly where the parties now in the Parliament stood on the issue of partial asset sales, voters need to know what Labour intends to do should it be able to form a government next year. Forced acquisition of shares without a mandate from the electorate is totally unacceptable.

This is an excellent post from Lew, and one that the parties of the Left ought to take notice of. Whether they will or not is, of course, a very different story.




4 comments:

Quintin Hogg said...

As I read it the lignite strategy is/was a green strategy.

While it did not meet with the approval of say Bsprout, or Robert whats his name becasue of the alleged damage it would have done to the environment, the projects failure shows how unreliable green energy projects, which include wind, can be.

my view is that hydro is a serious option in the south island and judicious use of geothermal in the north to suppliment existing supply sources.

Then there is nuclear which is unpalatable for some, but not me.

Watt Sisnum said...

"As I read it the lignite strategy is/was a green strategy."

Do you read with you butt-cheeks, Quintin?

You're delusional.

Quintin Hogg said...

Well thats the well thought out-coherent response which I anticipated.

Grant McKenna said...

Personally I hope that Labour keeps the issue of partial privatisation alive, as it will kill them.