Why Andrew Little's a credible contender for the Labour leadership

Not so long ago, 3News managed the unprecedented feat of broadcasting a political piece that made me sit bolt upright in my chair, my ears and eyes straining to take in every detail.

What was it, you ask? Andrew Little putting his hat in the ring for Labour's leadership contest.

And why, exactly, would a failed electoral candidate from the bottom of Labour's list going for the top job excite the hell out of me?

Simple. When he stated his policy priorities, in marked contrast to David Cunliffe and other leadership contenders the last time around grandstanding about a Pasifika TV channel and the like (not a bad idea, but hardly headline policy for wider New Zealand) ... Little went straight in and proposed Labour dropping its Capital Gains Tax; abolishing its callous policy of raising the retirement age to 67 for workers; and striking out the NZ Power policy it shared with The Greens.

I'm a fan of axing every one of these ideas (as is New Zealand First) ... and so is the average Kiwi voter!

At last, somebody heading for Labour's top job who's *actually committed* to fixing the ruinous policy dysjunction between what Kiwis want and what Labour's policy hackitariat wants!

Predictably, the reaction from some on the left was not exactly rosy.

I'll address arguments against a Capital Gains Tax in a future blog (because this requires some depth); but for now it's enough to point out that i) pushing a Capital Gains Tax makes your party /unelectable/ for many voters. David Lange grasped this wisdom when he correctly characterized a CGT policy his future-ACToid mates were pushing for back in the 80s as a neoliberal bridge too far for voters and electoral death for Labour (in no small measure because you're taxing the middle class's hard-won retirement savings) ii) a CGT doesn't necessarily deflate a property speculation bubble, as proven by each of Portugal, Ireland, Greece and Spain having both CGTs and property bubbles. This is particularly the case in New Zealand where widespread property speculation exists in large part because people are averse to playing the stock market and being burnt *again* like they were in '87. Merely making property a less attractive investment destination won't necessarily help without corresponding measures to create or secure other investment opportunities. This is actually one of the government's stated reasons for asset sales (blech!) iii) There are other, better solutions to both the housing affordability issue and the increasingly regressive taxation structure we have here in NZ. The state massively increasing the supply of housing by building more of them itself; and political parties finally getting serious about cleaning up billions of dollars in tax evasion/avoidance while adding a few more tax brackets up top in the several hundred K-zone are just the beginning of the alternatives.

So yeah. Little getting Labour to FINALLY ditch the Capital Gains Tax policy that Labour's been shackled to for two elections will most likely be pretty positive for them in electoral terms. The tens of thousands of middle-class Kiwi voters who've deserted Labour for parties which *aren't* queuing up to tax their retirement savings might have one less reason to stay away on polling day.

The second thing Little suggested was that Labour ditch its ruinous policy of raising the retirement age. This is AWESOME. I think I was cheering at the TV when this was announced.

I make no secret of the fact that I have *never understood* why Labour thought it could outfox National by being hard-hearted neoliberal-inclined "competent" fiscal managers. Yes, they can point to a very positive history of being able to deliver surplus after surplus during their last term in government ... but the points they gain with one part of the electorate by being able to demonstrate that just because of their party colours they ain't going to have the nation's books perpetually *also* in the red are eclipsed and countermanded by all the points and votes they LOSE with many other parts of the electorate by being seen as prepared to sacrifice the living standards and historic right to retire at 65 of older New Zealanders in order to deliver same.

It doesn't especially matter that Labour announced its policy wasn't going to take effect for some decades (meaning *my* generation will be among the first who are expected to retire later to pick up the burden of our parents' generation). Older people heard "raise the retirement age", and saw the values calculation Labour had made of prioritizing neoliberal considerations of fiscal restraint over social democratic considerations of looking after our older people - and voted accordingly. I'm sure that NZ First's non-negotiable coalition bottom line of #KeepIt65 helped us to pick up many thousands of disgruntled and disaffected Labour voters in the same way that our opposition to Labour's Capital Gains Tax policy did :)

The third leg to Little's leadership edits is the move away from the Labour-Greens joint policy of NZ Power. This is positive from a number of angles. While it was pretty cool to see Labour and The Greens issue a shared policy, and I would speculate that if Shearer had been allowed to continue in the Labour leadership there would have been more attempts by Labour and the Greens to co-ordinate policy so as to present a viable alternative government to National ... the complexities associated with explaining to voters how NZ Power was actually going to work, along with a perception that Labour had some-how been taken for a ride by yet another slightly fringe idea from the Green Party definitely didn't help Labour's cause.

The two things that stand out for me about this policy alteration from the New Zealand First perspective, are that: i) this now leaves the door open to Labour adopting NZF's policy of a comprehensive #Renationalization of those assets privatized by National; while ii) in 2006 David Parker penned a Cabinet Paper which set out in no uncertain terms that Labour then considered an amalgamated (and #Nationalized) SOE running generation a la NZF to be a better structure for the electricity market than a "single buyer" option a la NZ Power.

So ditching NZ Power hopefully leaves Labour open to adopting better (and more NZF compatible lol) policy that's less fiddly to explain to voters while also delivering more positively charged results.

All taken together, a Little-lead Labour party (as opposed to the various iterations of a "little-lead" Labour party that we've had for several years previously) is therefore something of a threat to NZ First. It's no secret that we've benefited hugely and immeasurably from Labour's continual string of gaffes and policy that seems to be almost calculated to offend vital parts of their traditional constituency (like the middle class and people worried about being able to live with dignity in retirement); so were these things to come to pass, I would definitely expect some of NZF's 2014 vote to go from being in the black to in the red as they slide back over to Labour.

But a more sensible and electable Labour party may also be good for NZF in that it provides us with a straight-out-the-gate potentially more amenable coalition partner whom we're not going to have to browbeat with a slipper over fundamental incompatibilities like their quixotic desire to raise the retirement age and/or lose elections.

It will also be more positive for New Zealand - both because the policy's more sensible; and because, thanks to being more electable, they might FINALLY get a chance to implement some of it!