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Whoa, Canada! Don’t Make Our Mistake in New Zealand

Out of frustration we tried electing right-wing populists. Now things are worse.

Craig Renney 27 Jan 2025The Tyee

Craig Renney is the economist and director of policy for the New Zealand Council of Trade Unions, and writes in a personal capacity.

Greetings from the other side of the world. News that you will be having an election soon has reached New Zealand’s distant shores. We see your prime minister has resigned. If Canada follows the current global trend, then very likely a change in government will follow.

We find the mood in your country familiar. Popular anger is directed against incumbents due to the rising cost of living. People are mad about crime, immigration and “wokeness.”

I’m not here to tell you how to vote — as a British-born Kiwi it wouldn’t be right for me to tell Canucks what to do. My plea is to not fall for the same populist policies being peddled in many countries, including my own. Policies that not only have failed but have left many worse off. Please examine the evidence carefully before you make your choice.

Who tax cuts really helped

The Canadian opposition is focusing on what it claims is poor fiscal management. Cutting taxes (including your carbon tax), addressing the national debt and managing the deficit are headline issues. This attempts the oldest trick in the book — doing more with less. Somehow, “axing the tax” will make the job of balancing the books easier. All of this is necessary despite Canada having the lowest net government debt-to-GDP ratio of any G7 economy.

New Zealand tried this recipe in October 2023 when a right-wing government swept to power on a similar wave of populist anger. The results so far? Government debt is now forecast to be higher. The deficit is getting worse, and GDP has fallen at its fastest rate since 1991. Unemployment is increasing rapidly, particularly among young people.

The big winners have been higher-income earners who benefited disproportionately from tax cuts, and landlords.

Property investors saw the return of several tax advantages lost during the previous government. Rental property laws were relaxed, returning the right to evict without cause. Building code requirements for items like home insulation in new homes are being scrapped. Sadly, rents are now rising at among their fastest rates in our consumer price index on record. Compounding this, the government has stopped building any new social housing. In New Zealand, our own housing crisis, particularly for the poorest, is getting worse.

Offloading vital support to charities

Your Conservative leader Pierre Poilievre hasn’t committed in interviews to maintaining current child care, dental care or pharmacare policies. The biggest beneficiaries of these programs are low-income Canadians. Instead, Poilivere claims, “I have always believed that it is voluntary generosity among family and community that are the greatest social safety net that we can ever have.”

I have heard this before — it’s a version of the “Big Society” idea floated by Conservative Prime Minister David Cameron in the United Kingdom. Community and charity institutions should deliver social services. In New Zealand, we are hearing the same rhetoric from our new government, with “community providers” being involved in the delivery of welfare and housing.

In reality, time and again this naive faith in charity leads to people falling through the cracks. Independent analysis in the United Kingdom shows that “the Big Society has not reached those who need it most. We are more divided than before.” In New Zealand child poverty targets have been watered down by the new government so that they magically become more “achievable.” It’s simply a smaller state in new clothes.

Vague promises, empty slogans

The “Canadian dream” is said by Poilievre to be slipping away. Blaming the current government, he repeatedly vows to “take back control.” These slogans are simply repackaged from elsewhere, hiding an old story. That story is less investment in health, education and welfare. More free-market solutions, leading to higher unemployment and higher levels of inequality.

Yet nothing in the current mix of policies from the opposition solves any of the fundamental problems facing Canadians — just as our New Zealand conservatives (the National Party) had no real answers for the similar challenges in our society.

Making the government deficit marginally smaller won’t build any affordable housing units — which is the real solution to rising rents. Indeed, there’s no proof that austerity will make the deficit smaller, anyway — as our experience in New Zealand shows.

Cutting taxes on capital gains for the wealthiest won’t make the cost of living cheaper for Canadians — it will simply increase inequality.

Taking action on climate change isn’t “directly responsible for food bank usage and children going hungry” as has been claimed by Poilievre. Poverty and low incomes are the problem, not carbon pricing.

Canadians, take back control of your own vote. No matter how angry you are after the last few challenging years of pandemic, inflation and uncertainty, think twice about whether the simplistic rhetoric from Conservatives offers any real solutions to any of those problems. And please don’t make the same mistakes we have in New Zealand.  [Tyee]

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