Like every major Labour reform previously, National will angrily oppose income insurance from the opposition benches, then quietly adopt it in government.
Opinion: The relatively smooth accession of Christopher Luxon to the leadership of the National Party still leaves unanswered the question of what the National Party actually stands for today.
Much has been made of Luxon’s successful business background and his socially conservative views but neither they, nor some of the vague aspirations he has uttered since becoming leader, offer much of a clue about the nature of the National Party today.
This should not really be any great surprise – pinning down exactly what the National Party stood for at any point in time, other than the winning and retaining of power, has always been a little like trying to hold on to mercury. However, that difficulty has been as much a factor of its history as anything else.
It must always be remembered that National was formed out of the ashes of the old conservative (Reform) and liberal (United) parties in the wake of their coalition government’s landslide defeat by Labour in 1935. After that, the uneasy coalition of provincial and rural conservatives and urban liberals was brought together under the label of the National Party.
This happened for no other reason than their common opposition to the new Labour government, and the realisation that neither would be strong enough on their own any more to defeat Labour.
From the outset, therefore, National has been essentially the “anti-Labour” party, and nothing much has changed in the last more than 80 years.
In that time, National has initially opposed all the big reforms proposed by Labour governments, only to uphold most of them when subsequently in office.
When the Labour government proposed a comprehensive social security system in 1938, which Prime Minister Savage described as “applied Christianity” National staunchly opposed it. Senior National MP Sid Holland derided Savage’s description with the retort that social security was better described as “applied lunacy.”
Yet, just over a decade later, when Holland became Prime Minister at the head of the first National Government he vowed that social security was here to stay, his earlier criticisms notwithstanding.
Either shortly before or after it next comes to power, National will almost certainly announce that the social insurance scheme, or whatever fancy name it has been given by then, will be retained, possibly with a few modifications.
In the 1970s, National, under Rob Muldoon bitterly and strenuously opposed the Kirk/Rowling Labour Government’s commitment to universal superannuation in the form of the contributions-based New Zealand Superannuation Scheme. But, when in power after 1975, National kept the idea of universal superannuation, but, short-sightedly, changed it to the taxpayer-funded scheme we have today.
During the 1980s, National fought Labour’s anti-nuclear policy strongly, warning it would leave New Zealand without allies, and destroy the long-standing relationship and goodwill built up with United States.
But, just before the 1990 election, National leader Jim Bolger announced that National no longer planned to repeal Labour’s nuclear-free New Zealand legislation that it had railed against in 1987, nor resume visits by nuclear powered or armed warships from America or Britain.
It was the same in the early 2000s – John Key slammed Labour’s Working for Families tax credits package as “communism by stealth” and National also opposed Labour’s Kiwisaver proposals. In government after 2008, Key and Finance Minister Bill English, however, ensured both Working for Families and Kiwisaver became cornerstones of the government’s social assistance programme.
So, when Finance Minister Grant Robertson recently announced his planned new social insurance income protection scheme, with the backing of the trade unions and the more grudging support of employers, it was no great surprise that the National Party opposed it. Luxon was following the reactive line of virtually all his predecessors in such circumstances.
Likewise, over time, and assuming the current Labour government can for once succeed in implementing a major policy commitment, National’s opposition can be expected to soften. Either shortly before or after it next comes to power, National will almost certainly announce that the social insurance scheme, or whatever fancy name it has been given by then, will be retained, possibly with a few modifications.
The picture that emerges from this history is that National is a party of cautious and pragmatic reform. While not necessarily opposed to change, National will only commit to changes that are in place and are popular – it is not, nor ever has been, a party of bold or unexpected change.
Those looking to the Luxon leadership to usher in a new sense of vision and purpose of what the modern National Party might look like will be disappointed.
National is not about to go through a period of fresh new thinking about what it means to be a conservative party today, the way Britain’s Conservatives did under David Cameron between 2005 and coming to office in 2010, even if the wheels have fallen rather spectacularly off that chariot since then. Rather, National is likely to focus on consolidating its traditional approach, albeit with new marketing. The Luxon led National Party is not about to carve out a bold new approach to conservative politics and thinking.
Instead, National’s calculation will be based on just doing enough to unseat a Labour government likely to be still bogged down by the post Covid-19 environment, the currently overheated housing market, and the shortage of affordable housing, complicated and controversial still-to-be-completed reforms in health, education, resource management and local government, and rising inflation and debt levels.
Given National’s record as New Zealand’s most successful election-winning party of the past 70 years, it will not want to trouble the winning formula of the past with too much unnecessary new thinking.
Meanwhile, work on the income insurance scheme will continue.
Unlike National, Labour governments like to mark their time in office by significant social policy achievements. So, the current government will already be eyeing up the social insurance scheme as its legacy equivalent of Kiwisaver.
However, it is not clear how much progress will be made by the time of the next election. Experience from other countries that have moved in similar directions points to complex problems establishing the delivery systems required for such a scheme.
New Zealand has the good fortune of already having in place, in the form of Accident Compensation, a social insurance scheme for personal injury, which works well. Expanding this to encompass income protection insurance as the government proposes should not prove to be an insurmountable task.
Beyond the delivery structure, issues remain about the financing of the proposed scheme. The proposal to impose a personal levy on employees, similar to the personal injury compensation levy currently in place, makes sense, but questions will arise about the size of that new levy which is likely to be far more substantial than the personal injury compensation levy.
There will also be equity issues about those who will be able to contribute to the scheme and those who will not. As with all reforms of this type, the debate ahead will be intense and complex. For its part, National has already homed in on what it sees as an Achilles heel, deriding the plan as little more than a poorly-designed tax grab.
As it did with social security, the nuclear-free legislation, Working for Families and Kiwisaver, National will bitterly oppose at every stage the implementation of the social insurance plan.
It will describe it in many extreme and ominous terms along the way, the “tax grab” jibe being but the first. There will be dire warnings about the intrusions it will make into individual lives and choices.
But should Labour succeed in implementing the policy this term and people respond positively to it, expect National, true to form, to announce sometime immediately before the next election that it will not repeal the plan should it come to office.
And that will confirm that the Luxon-led National Party is no different from its predecessors.
For National, politics has always been primarily about winning and retaining office. Whatever else he may do while leader, Christopher Luxon is not about to change that.