Monday, July 12, 2010

Roger Kerr: Politics Should Be About Doing What Is Necessary

It’s often said that “politics is the art of the possible”, usually by politicians who know they should be doing something in the overall national interest but aren’t willing or able to do it. The contrast is with Winston Churchill’s statement, “It is no use saying ‘we are doing our best’. You have got to succeed in doing what is necessary.”

Governments and politicians are understandably concerned about reelection.

That can give a short-term bias to politics because it often takes time for the benefits of reforms to show up.

However, it does not follow that doing what is necessary – making changes that are important for the country in the longer run – costs governments elections.

A classic illustration was the Lange-Douglas government of the 1980s.

On coming into office in 1984 it had to implement far-reaching reforms to avert an economic crisis and restructure the economy.

These were inevitably painful in the short term. Yet in 1987 that government was re-elected with an increased majority.

This episode defied the conventional wisdom that governments cannot make major changes in a three-year election cycle.

Yet it is surely not hard to understand. Most people are not focused only on the short term, or even only on themselves. There is a deep well of realism and commonsense in the community. Voters can make sound choices when issues are put before them fully, simply and intelligently.

Journalists often assume that governments become unpopular if they depart from ‘centrist’ policies. But the political centre is not some fixed point.

In the early 1980s all New Zealand political parties more or less espoused the policies of Progressive Party leader Jim Anderton. His former party, the Alliance, was wiped out in the 2002 election. The political centre of gravity has shifted enormously.

Changes require political leadership. African-American author Shelby Steele recently contrasted the leadership style of presidents Ronald Reagan and Barack Obama.

He observed that Reagan “took principled positions throughout his long career that jeopardized his popularity … By the time Reagan became president, he had fought his way to a remarkable certainty about who he was, what he believed, and where he wanted to lead the nation.”

By contrast, Steele writes that Obama has shown “no willingness to jeopardize popularity for principle.” He came forward in American politics “by emptying himself of strong convictions, by rejecting principled stands as ‘ideological’ … he defines himself by a series of ‘nots.’ ”

In any area of public policy, the first step is to analyse what is in the longterm interests of the country. Then the task is to work out how to communicate and gain support for it.

Here politicians have an indispensable role to play. Without political leadership, entrepreneurship, skill and stamina, the task of achieving and sustaining change becomes extremely difficult.

Take superannuation. Currently governments in Europe and elsewhere are raising the eligibility age for public pensions, often in response to fiscal crises. In New Zealand, prime minister John Key has said the age will not change – another ‘not’ – as long as he holds that office.

His position is understandable. Superannuation has been a fraught political issue. The elderly are a powerful voting block. Yet there must be few voters who think the status quo can be maintained with rising life expectancy and a relatively smaller workforce. The political problem will get harder as time goes by. The political challenge is to work out how to do what is necessary – a decision even Australia has taken.

The astute French writer Alexis de Tocqueville noted that people do not want a revolution but they do want change. They know that steady improvement in their lives and their children’s requires ongoing change.

Unlike in the 1980s, New Zealand is not facing the need for disruptive change, but it is facing economic underperformance.

New statistics show that from 1986-96, as the benefits of earlier reforms materialised, New Zealand’s labour productivity in the measured sector of the economy grew by 3.2% a year, ahead of the 2% rate in Australia. From 1996-2008, with policy backsliding, the positions were reversed with growth rates of 1.9% in New Zealand and 2.3% in Australia.

The government’s goal is to raise New Zealand’s productivity in order to catch up to Australian income levels by 2025.

Time is not on its side. On current policies the income gap is projected to widen rather than narrow. Few recommendations of the 2025 Taskforce have been adopted and the government has not put forward an alternative programme.

Arguably, the last government lost office in part because of its failures in economic management. We must hope that the present government has absorbed that lesson. Politicians who are remembered favourably by history are those who commit themselves to doing what is necessary to improve their countries’ fortunes.

Roger Kerr  is the executive director of the New Zealand Business Roundtable.

No comments: