Building a Responsible Society

June 1998

Lecture 2
The Rt. Hon. Helen Clark
Leader of the Opposition
June 16, 1998

Definitions

My thanks go to the St Andrew's Trust for its initiative in organising this lecture series on Building a Responsible Society.

For the sake of clarity, let me begin by defining the meaning I will give to the terms "responsible" and "society". "Responsible" I interpret as being morally accountable for one's actions. With respect to "society", I contend that it is more than the sum of its parts; that is, it is more than an aggregation of individuals. A society, to me, is a social community whose members have obligations to one another.

The title of this series of lectures implies that we do not presently have a responsible society. If we had one, we could more properly be debating how to maintain it, or how to build an even more responsible one. But deep down I believe many New Zealanders acknowledge that we are not the responsible society we once were. Further, I believe there is a yearning in this country for rebuilding a responsible society for the new millennium.

What Has Gone Wrong?

So what has gone wrong with New Zealand? Certainly governments have lurched from one model of economic and social policy to another, and then another, leaving the citizenry more confused and alienated than before. We have been through waves of so-called reform, all promising much and delivering little. Those indicators of social exclusion of poverty, homelessness, poor health, unemployment, levels of imprisonment, educational under-achievement, and family dysfunction all tell their own story.

And surely even the most rampant supporter of New Right economics must pause for thought now on seeing the current account deficit back where it was twelve years ago and economic growth at a low ebb despite years of restructuring.

We are not a happy country. Our economy is failing and our society is failing along with it. But the good news is that it doesn't have to be that way. Nor do we have to choose between Muldoonism and the "rogernomics/ruthenasia" prescriptions. There are fresh approaches and new waves of thinking. Britain today under the Labour Government is buzzing with new ideas and excitement as it seeks a new balance between the needs of the global economy and the needs of its people for opportunity and security. Their enthusiasm is infectious. Here in New Zealand we in Labour are also embracing a "third way" appropriate to our conditions.

Rebuilding and Roles

So how do we begin this now huge and pressing task of rebuilding a responsible society? And what is the role of the state, of communities, and of individuals in building it?

Today's new right politicians in National and Act have their focus firmly on the role of the individual. If individuals act responsibly, they believe, then somehow New Zealand as a whole will function. There is little acknowledgement from them of the role the state must play in creating the climate and the conditions within which each of us can act responsibly. In their nirvana of the no tax, minimal public service society, each of us is somehow expected to claw our own way to self sufficiency. Some residual provision may be targeted to the poor, but those who see merit in building society wide provision in the common interest are simply dismissed as self interested and greedy. Personally I find these views morally repugnant and less than honest in their presentation. No advanced society, indeed no responsible society, has developed on the basis promoted by these ideologies.

Interdependence

For me and for Labour, there is and must be a mutual interdependence between the state, communities, and individuals. Each has a right to expect responsible behaviour by each other.

The state's expectations are clearly set out in law and in its enforcement of that law. But the state today does not meet its mutual responsibilities. Under the present regime it is intent on shedding responsibility to communities and individuals who are neither resourced nor equipped to accept it. Non-governmental social service organisations experience the frustration of that daily. And note now the moves in the Fire Service to downsize and place more responsibility on volunteers who have themselves lives to live and jobs to attend to.

The State

A responsible society for me will be one in which the state is active, not as a repressive and paternalistic force, but as a leader, a facilitator, a funder and a substantial provider in the social area, a partner, and a setter of fair rules of the game.

The state in that responsible society will also accept an active role in economic policy. It will invest in the education and upskilling of people and in the national infrastructure. It will back innovation, research and development. It will promote and market New Zealand and its products in partnership with business. It will work with regions and localities as they develop their own economic strategies. The state will do these things both because it cares about fair outcomes and because it knows that only the state has the power to intervene to achieve those outcomes. Markets do not deliver fairness. It is not their function nor are they capable of it.

The roles I have outlined for the state are for me at the heart of the third way which New Zealand must develop for itself. The state cannot and should not attempt to be an all knowing prescriber of the truth which crowds out individual and community initiative and entrepreneurialism. Its role in modern society and in a global economy is undoubtedly more complex, but let there be no denying that it has a role in leading us forward.

New Zealand faces very clear choices in the road it takes from its present predicament. The pure market model has failed, but National and Act are offering more of it. New Zealand has not yet privatised, deregulated, commercialised, and imposed user pays and tax cuts to the extent the ideologues are pressing for. Their eventual destination would be a state of anarchy, were it not for the residual requirement to levy taxes to fund prisons and policing for the large criminalised underclass their policies create. Their route offers a bleak future indeed.

Nor is a return to the past a viable option. What was damaging to New Zealand by the 1980s was that so little had changed since the 1950s. We retained an economy frozen in time. We relied on full employment to underpin living standards, and when it disappeared there was no effective response forthcoming. Our social policies had ossified. Alas, there is no golden age to return to.

Our challenge is to build anew and to state clearly objectives around which our nation can find common cause. So what might those objectives be and how might we reach them?

Values

I believe there are three predominant values in our culture upon which rebuilding a responsible society should commence. One is a strong belief in opportunity. The second is a strong belief in justice and fair play. And the third is our quest for security—both for individuals and their families, and for the nation from the economic winds which buffet it as a small trading economy overly reliant on commodity exports.

Objectives

Based on those values I propose the following as core objectives for the socially responsible government I will lead:

that education shall be regarded as a right, not a privilege
that access to health care will not be determined by the size of a family's cheque book
that no child shall go hungry and no family go homeless
that work, education, training or other meaningful activity will be available to all
that there will be dignity in old age
that when adversity strikes people will be supported
that people's rights to fair play in the workplace and the community will be protected
that the government will contribute to the nation's economic security through the leadership, partnership, and investment roles I outlined earlier.

Indeed, implicit in everything I have said today is my strong belief and Labour's strong belief in the responsibility of government. Of course that is not to say that individuals and families do not have responsibilities. Clearly they do. But the extent to which they can take on those responsibilities is very much set by the wider policy framework and by the economic and social climate on which government has so much influence.

The Code

Many saw in the Coalition Government's proposed code of social and family responsibility an attempt by the government to shift the blame for failure away from itself and on to families.

The draft code set out general expectations with which few would disagree. The problem is that socio-economic status has a lot to do with the extent to which parents can support their families, keep them healthy, and send the children to school ready to learn. Preaching about the desirability of these expectations has a hollow ring when government policies have stripped away many of the supports which used to make New Zealand a great place to bring up families.

I count myself fortunate to come from a family which has not known unemployment and in which I and my three sisters all have tertiary education. For sure, we and our parents have played a considerable part in that outcome. But so has wider government policy conducive to it, and so has good luck. Some families don't have much luck, and these days a substantial minority are trapped in second and third generation deprivation. There is no point in blaming them for that. Yet present government policy does so by implication through the judgemental nature of the proposed code and the new workfare and work testing policies. There is a strong point in building again the structures which gave opportunity and genuinely encouraged and supported individual and family responsibility.

Social Cohesion

But for me and for Labour, social responsibility does not begin and end with how we address economic and social disadvantage. We are concerned overall to promote and protect those structures, institutions, and policies which promote social cohesion. We believe there is provision which should be made on a society-wide basis. Most importantly that provision is to be made in the areas of health, education, and retirement income.

Last week in this church Mrs Shipley outlined a very different approach. She and her party now favour tightly targeted state spending. Needless to say with the ever lower tax levels they wish to achieve, residual spending on a few would be all that could be afforded in time.

The outcome would be an even more sharply differentiated and unequal society than we have already developed. That is to be abhorred, not encouraged.

I believe that New Zealand should continue with a pragmatic mix of universalism and targeting as we have hitherto. Social security benefits and state housing must be targeted to need. New Zealand Superannuation is now and should remain universal, although many will seek to make voluntary private provision above that base payment. Public hospital care and health services should be free, but primary medical care free to all is hard to fund on present structures.

Education should be free from early childhood and through primary and secondary schooling.

Costs for tertiary education must be kept low so that they are not a barrier to entry.

If National is now proposing to target state spending on low income groups, then user charging in the public health system and public schools and means-tested New Zealand Superannuation would become the order of the day. I challenge National to campaign openly on those policies and explain the inevitable consequences for ordinary working families. Those families would be largely targeted out of public funding and find the tax cuts they received did not cover the costs to them of user pays for basic services. Present public spending in these areas is redistributive to families and children, the sick, and the retired. That is the way it should stay.

Targeting

Let me deal with just one more of Mrs Shipley's homilies about targeting. She says that low income people should not pay more tax to support better off people who could afford to pay their own way. No reasonable person would want low income people to pay more tax, but many reasonable people would say that better off people should not pay less tax while our health, education, community services and our infrastructure are in crisis.

Mrs Shipley is adamant that she can meet her family's needs for educational and other social expenditure. So she can on the substantial salary package which goes with her job and so no doubt could I. But we enjoy incomes which are confined to a tiny minority of New Zealanders.

More user pays and targeting would inevitably very adversely affect large swathes of middle income New Zealand households which have difficulty now in saving after paying their mortgages and meeting their families' needs. I believe that we should continue to distribute some of the costs of raising and educating children, who are, after all, our future, through the tax system and across the life cycle, so that families with children and teenagers do not get swamped by unreasonable financial pressure.

Partnerships

My address today has staked out for Labour a very different approach to social policy from that which drives National and Act. We see the building of a responsible society involving government, communities, and individuals. Let me include business in that too. Many in business willingly play a role beyond serving the narrow interests of their shareholders and are to be commended for so doing. Without that, we would all be the poorer.

In government in the past, Labour has worked in partnership with communities in many areas. In health, there were elected boards, community committees, and service development groups of stakeholders. In state housing there were citizens' allocation committees and forums for discussion between the Housing Corporation and community housing groups. Social Welfare worked with district committees and Tomorrow's Schools involved communities in the management of schools.

We will be seeking partnerships like these again and seeking new ways of involving citizens in the determination of priorities and ways of delivering policies for their own communities. In Britain now there is much excitement about the rise of civic and social entrepreneurs who develop imaginative ways to meet social needs. Their approach is described as risk-taking, innovative, and rule breaking, and it gets results. I can think of so many visionary community leaders and organisations in this country who would just love to be let off the leash and supported in promoting more effective ways of getting results from public funding. In this sense I look forward not just to promoting a third way of doing things, but to letting a hundred flowers bloom.

What must reinforce the building of a responsible society again is the restoration of growth, hope, and confidence in our economy. Our goal must be for an inclusive economy offering opportunity to all who seek a place in it.

Human Capital

It is easy to get depressed about the global economy at the moment. We are not doing particularly well in it. But my message is that we can if we are smart. Our greatest asset is our people—our human capital. Most of the growth in advanced economies is based not on the production of commodities on which New Zealand is so dependent, but on the application of knowledge, technology, and ideas. Advanced economies are dematerialising, as services gain sway over manufacturing. If New Zealand is to grow the wealth we need to sustain good social and public services, we too must move our economy up the skills and technology ladder.

But we won't achieve that by government standing aside and hoping for the best. As a nation we have to invest in infrastructure and in education and skills. It is here that economic and social policy intersect. The high cost of tertiary education and training is holding New Zealand back because it discourages participation. Labour will, through a mix of lower fees, better allowances, and a fairer loans scheme, make it more affordable. This is the responsible course to take for the future. If we don't take it, it is not only mediocrity which threatens us, but also national poverty and growing inequities between rich and poor.

I have been immensely cheered by the optimism of Professor Robert Reich, former American Secretary of Labour, who has been visiting New Zealand at the Labour Party's invitation over the past few days. He is adamant that his country can be fully employed if there are active market interventions to give people the skills the world economy needs. How much more positive an outlook that is than present government policy here to direct the unemployed to pointless makework to fill in their time!

In the new knowledge economy it is impossible for governments to pick winners. But by investing broadly in education, science and research we can create the winners of the future. We can back the networking and clustering which brings together in partnership educational and research institutions, companies, venture capital, and other public and private inputs. New economic sectors will develop through networks which channel knowledge, ideas and people, as well as goods and money. The new economy will be extraordinarily dynamic, and it will require dynamism from all of us, our government, and our policies to get the most benefit from it.

Health, Education, ACC

Let me be specific too about other areas of Labour policy. Our priorities are to build on the values of opportunity, security, fair play, inclusion, and participation. To those ends we will return to elected representation in health decision-making and abandon the business model of health care. It will be our objective to meet the needs of people for hospital treatment through the public health system. The surgical booking system is deeply flawed and cannot be administered successfully in anything like its current form. Elective surgery should not as a matter of principle always make way for more urgent treatment as it would under present government policy. Parallel lists for elective surgery should be tackled.

The divisive experiment in bulk funding schools will cease, and the funding released will be ploughed back into schools on a fair basis. It isn't fair to give more money to schools which play the bulk funding game than to those who refuse. The priorities for the reallocated funding will be operational grants, equity funding, and support for students who are falling behind in their learning.

We will restore income-related rents for state tenants so that state houses can again house those they were built for.

Private insurers will not be able to compete with the Accident Compensation Corporation. It will remain as a comprehensive social insurance scheme as envisaged by the Woodhouse Commission.

Industrial relations legislation will be changed in order to promote collective bargaining and require bargaining in good faith. Unions will receive legal recognition. upskill unemployed people and to support their placement in real jobs. In areas of high structural unemployment we will also back community based enterprises creating work which does not displace other workers or small businesses.

The Future

I am excited by the future New Zealand can have if it chooses. I am depressed only by those who think the future lies in the past or in the discredited hands-off, pure market model. I believe that through policies of inclusion, based around our values of opportunity, fair play, and security for all, we can again build a responsible society in which we are all proud to live. I urge New Zealand to opt for that future, where we move forward together as a society, meeting our obligations to each other, so that we become again our brothers' and our sisters' keepers. I know we will be the happier for it as a nation.

Subheadings were added by the Editor.

The Lectures

[Lecture 1] Rt. Hon. Jenny Shipley
[Lecture 3] Prof. Jonathan Boston
[Lecture 4] Prof. Lloyd Geering
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