spinofflive
Jim Bolger, photographed at his Waikanae home by Rebekah Parsons-King.
Jim Bolger, photographed at his Waikanae home by Rebekah Parsons-King.

PoliticsApril 21, 2017

Neoliberalism has ‘failed’ and the ‘model needs to change’ – Jim Bolger, PM who oversaw mother of all budgets (WATCH)

Jim Bolger, photographed at his Waikanae home by Rebekah Parsons-King.
Jim Bolger, photographed at his Waikanae home by Rebekah Parsons-King.

In the third of Guyon Espiner’s extended interviews with former prime ministers for RNZ, Jim Bolger, who led the National Party to power in 1990 pledging to return the ‘decent society’ to New Zealand, criticises the prevailing economic orthodoxy, saying it has led to a dangerous gap between rich and poor. 

Bolger defends the record of Ruth Richardson, who as finance minister introduced what she called the ‘mother of all budgets’, saying they had been blindsided by a Labour government which bestowed them ‘an economy that was heading towards bankruptcy’. He says, however, that subsequent governments have failed to protect core New Zealand values of fairness under neoliberal economics, and ‘demonstrably that model needs to change’. He goes on to say that while the Employment Contracts Act was essential to curb industrial action debilitating the country, union membership was now lower than is healthy, with unions ‘probably too small now to have the influence they should have’.

The prime minister who oversaw the Sealord deal and the ‘fiscal envelope’ says it was essential for New Zealand that the crown pursue settlements with Māori, and that he and Doug Graham, then minister in charge of treaty negotiations, had privately discussed the idea of an upper house with a 50% Māori composition. He has a few choice words for Don Brash, too, invoking another Donald, who lives in Washington, and noting the ‘absurdity’ of the Hobson’s Pledge campaign. And he calls on his National Party successors to boost the refugee intake: ‘The government knows my views on that.’

Bolger also recalls the ‘huge disappointment’ of the 1997 coup, hatched while he was overseas, that saw him replaced by Jenny Shipley. While MPs hoped to improve their electoral fortunes, the tactic had ‘failed’ in the examples of Shipley, Geoffrey Palmer and Mike Moore, prime ministers who came to power without a general election mandate, says Bolger. ‘The public obviously doesn’t buy that argument.’ Tempting though it might be to regard that as casting shade on Bill English, it bears noting that Bolger – as Espiner told the Spinoff a fortnight ago – was speaking before the new PM got the nod: on the very day, in fact, that John Key resigned. 

Here Espiner reflects on the conversation, which you can watch below.


Scroll down to watch the interview. View the interview with Geoffrey Palmer here, and with Mike Moore here; review the series as a whole at RNZ. The Spinoff’s interview with Guyon Espiner about the project is here.


I think Jim Bolger might be about to spark a debate. Two debates actually. One on our economic settings and the other on race relations. He says neoliberalism has failed and suggests unions should have a stronger voice. He says Treaty of Waitangi settlements may not be full and final and that Māori language tuition should be compulsory in primary schools.

It was striking, sitting in Jim Bolger’s Waikanae home for the third episode of The 9th Floor, just how many of the issues he grappled with in the 1990s are still alive and being debated rigorously today. Adding to that sense of history was the fact that John Key resigned while we were discussing with Bolger what it was like to be a third term National prime minister.

Jim Bolger, photographed at his Waikanae home by Rebekah Parsons-King for RNZ

There was a little bit of personal history for me too and we’ll come to that. But first the policy. Bolger says neoliberal economic policies have absolutely failed. It’s not uncommon to hear that now; even the IMF says so. But to hear it from a former National prime minister who pursued privatisation, labour market deregulation, welfare cuts and tax reductions – well, that’s pretty interesting.

“They have failed to produce economic growth and what growth there has been has gone to the few at the top,” Bolger says, not of his own policies specifically but of neoliberalism the world over. He laments the levels of inequality and concludes “that model needs to change”.

But hang on. Didn’t he, along with finance minister Ruth Richardson, embark on that model, or at least enthusiastically pick up from where Roger Douglas and the fourth Labour government left off?

Bolger doesn’t have a problem calling those policies neoliberal although he prefers to call them “pragmatic” decisions to respond to the circumstances. It sets us up for the ride we go on with Bolger through the 1990s, a time of radical social and economic change.

Judge for yourself whether or not they were the right policies but do it armed with the context. Bolger describes his 17-hour honeymoon after becoming PM in 1990. He recalls ashen faced officials telling him before he was even sworn in that the BNZ was going bust and if that happened nearly “half of New Zealand’s companies would have collapsed”.

The fiscal crisis sparked the Mother of All Budgets and deep cuts to the welfare state. Some believe this was the start of the entrenched poverty we agonise about to this day. How does the man whose election slogan was “The Decent Society” feel about that now?

There is so much to the Bolger years. The first MMP government with Winston Peters, the economic growth of the mid-90s, the birth of Te Papa and the first big Treaty Settlements.

Indeed Bolger is at his most passionate speaking about Māori issues. He has a visceral hatred of racism and explains the personal context for that. We asked him whether future generations will open up Treaty settlements again – given Māori got a fraction of what was lost – or whether they are genuinely full and final. He says it is a “legitimate” question and “entirely up to us”. If Māori are still at the bottom of the heap “then you can expect someone to ask the question again because it means that society has failed”. He is also scathing of former National leader Don Brash’s Orewa speech on “Māori privilege”. “It wasn’t anywhere near as bad as Trump but it was in that frame.” Of course Don Brash never made it to PM, replaced by John Key in 2006. Gone by lunchtime was the political phrase popular at the time.

When we returned to Bolger’s house after our lunch break, Key was gone, too, one of those rare times when “shock resignation” is an accurate headline. Bolger was buzzing as we talked long into the afternoon, feeling fate had settled in with him on the big chair in the lounge of his stately home.

I felt it, too. My first day as a political reporter was Bolger’s last day as an MP. I was asked to cover the valedictory for The Evening Post, a task I felt hopelessly ill-prepared for. In his parting words to parliament in April 1998, Bolger looked up at the Press Gallery and invited us to “take out your quills and bury me one final time”. We’ve done the opposite here, I hope, and dug up the past for The 9th Floor. It’s 19 years later – almost to the day – and I think we’re all a little bit better prepared to look at his legacy.


This content is brought to you by LifeDirect by Trade Me, where you’ll find all the top NZ insurers so you can compare deals and buy insurance then and there. You’ll also get 20% cashback when you take a life insurance policy out, so you can spend more time enjoying life and less time worrying about the things that can get in the way.

This election year, support The Spinoff Politics by using LifeDirect for your insurance. See lifedirect.co.nz/life-insurance

Keep going!
A combination of pictures created in London on April 18, 2017 shows British Prime Minister and Conservative Party leader Theresa May (L) speaking at a press conference during a European Summit at the EU headquarters in Brussels on March 9, 2017 and Britain’s main opposition Labour Party leader Jeremy Corbyn (R) speaking on the fourth day of the annual Labour Party conference in Liverpool, north west England on September 28, 2016. 
British Prime Minister Theresa May called today for an early general election on June 8 in a surprise announcement as Britain prepares for delicate negotiations on leaving the European Union. / AFP PHOTO / JOHN THYS AND Paul ELLIS        (Photo credit should read JOHN THYS,PAUL ELLIS/AFP/Getty Images)
A combination of pictures created in London on April 18, 2017 shows British Prime Minister and Conservative Party leader Theresa May (L) speaking at a press conference during a European Summit at the EU headquarters in Brussels on March 9, 2017 and Britain’s main opposition Labour Party leader Jeremy Corbyn (R) speaking on the fourth day of the annual Labour Party conference in Liverpool, north west England on September 28, 2016. British Prime Minister Theresa May called today for an early general election on June 8 in a surprise announcement as Britain prepares for delicate negotiations on leaving the European Union. / AFP PHOTO / JOHN THYS AND Paul ELLIS (Photo credit should read JOHN THYS,PAUL ELLIS/AFP/Getty Images)

PoliticsApril 19, 2017

Facing an opposition in disarray, May will seek a big mandate for a hard Brexit

A combination of pictures created in London on April 18, 2017 shows British Prime Minister and Conservative Party leader Theresa May (L) speaking at a press conference during a European Summit at the EU headquarters in Brussels on March 9, 2017 and Britain’s main opposition Labour Party leader Jeremy Corbyn (R) speaking on the fourth day of the annual Labour Party conference in Liverpool, north west England on September 28, 2016. 
British Prime Minister Theresa May called today for an early general election on June 8 in a surprise announcement as Britain prepares for delicate negotiations on leaving the European Union. / AFP PHOTO / JOHN THYS AND Paul ELLIS        (Photo credit should read JOHN THYS,PAUL ELLIS/AFP/Getty Images)
A combination of pictures created in London on April 18, 2017 shows British Prime Minister and Conservative Party leader Theresa May (L) speaking at a press conference during a European Summit at the EU headquarters in Brussels on March 9, 2017 and Britain’s main opposition Labour Party leader Jeremy Corbyn (R) speaking on the fourth day of the annual Labour Party conference in Liverpool, north west England on September 28, 2016. British Prime Minister Theresa May called today for an early general election on June 8 in a surprise announcement as Britain prepares for delicate negotiations on leaving the European Union. / AFP PHOTO / JOHN THYS AND Paul ELLIS (Photo credit should read JOHN THYS,PAUL ELLIS/AFP/Getty Images)

By the logic of politics the real surprise was that the UK prime minister hadn’t called a snap election earlier, writes the Guardian’s Richard Adams.

In the end Theresa May’s decision to call a snap election was a surprise but not a shock.

A surprise because May herself had repeatedly and unambiguously ruled out calling an election, and still had more than three years left to run in the current parliament’s five-year term. But not a shock because, well, have you seen the opinion polls?

By the logic of politics the real surprise was that she hadn’t called an election earlier. Her main opposition in England is in impotent disarray: Labour tied to its Jeremy Corbyn-shaped albatross, and the Liberal Democrats reduced to a ghostly rump after being deservedly crushed at the last election less than two years ago. The polls unanimously give the Conservatives big double-digit leads over Labour, including a trio of surveys out over Easter. To her right May has no rivals after the Brexit referendum result ended UKIP’s entire reason for existence.

So why not call a snap election? For one thing, politicians are instinctively cautious around calling elections, probably because their jobs are on the line and the outcome is inherently uncertain. British political history is filled with examples of prime ministers not calling elections when they should have. Jim Callaghan might have mitigated the worst of Thatcherism had he called one in 1978 rather than waiting a year. And Gordon Brown famously dithered after taking over from Tony Blair, foolishly allowing speculation to run rampant and then backing off the idea of a snap election via an odd TV interview. He never recovered.

Hence Theresa May’s secrecy, which succeeded so well that the hour and a half before her announcement on Tuesday morning was packed with speculation ranging from May’s health, possible hostilities with Syria and/or North Korea, to the Queen’s abdication.

Strategy aside, May had good tactical reasons to call an election. Taking power after the Brexit “leave” victory and David Cameron’s resignation, she has never been rid of the “unelected” jibe. And of course Brexit looms above all else: a post-referendum election victory would silence the Remain resistance inside and outside her party. Hence the Daily Mail‘s front page the next day, egging May to “crush the saboteurs” of Brexit – a group that includes judges, apparently.

But there were also reasons to steer away from the ballot box. One is that the longer Corbyn is leader of Labour, the worse that party seems to do. A crushing Tory election victory and Corbyn will surely step down, possibly to be replaced with someone who has a functional grasp of how politics works. But leave him there a couple of years and Labour could be destroyed.

After the announcement a couple of other pieces of speculation emerged. One was the prospect of legal action being taken over Conservative election expenses in 30 seats at the last election. By that account, May’s move is to distract. It’s not impossible but that idea comes close to conspiracy theory.

The other speculation was that Brexit – the single issue that will define this election and everything else in the UK for the next few years – compelled her to clear the decks and get re-elected now, before the Brexit shit hits the fan of reality.

What happens next will be a relatively long election campaign – encompassing the local government elections in early May, and then on to the general election itself. The Conservative Party is edging close to the high 40%-plus mark in opinion polling, which could presage a landslide. Britain’s first-past-the-post system privileges a major party that can win 47% or 48% of the vote in England. Suddenly whole swathes of seats will fall in to its lap.

The campaign will be a second referendum on Brexit, whether Labour and the Tories like it or not. Labour will try and make it about the National Health Service, but probably fail. The Liberal Democrats are likely to emerge as the voting receptacle for many of the 48% who voted to remain in the EU. But worst-case (or best-case) scenarios of a Tory landslide may not come to pass. The election may see Labour voters disaffected by Corbyn return to vote for the party anyway. Ukip and pro-Brexit Tories may stay home, through overconfidence (this is clutching at straws). The Greens may see their vote taken by Corbyn’s Labour outflanking them to the left. And the polls may be off, as they usually are in UK elections – two years ago all the polls were convinced of a hung parliament. The final outcome was a comfortable Tory majority.

Most likely though is a Conservative victory by wide enough margins to give Theresa May her “hard” Brexit, especially over immigration. And the snapping then will be Britain’s ties to Europe being broken.

As an aside: New Zealand would do well to temper its optimism regarding post-Brexit Britain. For all the talk of a quick and easy trade deal and some sort of special relationship, it’s worth making two points. One is the disorder and confusion at the heart of government in London – nothing is going to happen fast. The other is that Britain’s farmers have been quiet for decades now, their mouths stuffed with EU gold. But they will regain their voice. And when they do they will complain long and loud about agricultural imports from New Zealand. The clock cannot be turned back to 1973.


This content is brought to you by LifeDirect by Trade Me, where you’ll find all the top NZ insurers so you can compare deals and buy insurance then and there. You’ll also get 20% cashback when you take a life insurance policy out, so you can spend more time enjoying life and less time worrying about the things that can get in the way.

This election year, support The Spinoff Politics by using LifeDirect for your insurance. See lifedirect.co.nz/life-insurance

But wait there's more!