At the Liberal Democratic Party’s National Conference on 24 January, Sir Roger Douglas gave a presentation that included a discussion of ACT NZ‘s approach to presenting its policies, most of which are fundamentally the same as those of the LDP.
An approach that I found intriguing argues that traditional welfare state approaches to poverty, health care, education and pensions have resulted in second class citizens. It can be found in a publication called No Second Class Citizens (summary available here.)
Sir Roger is a former Labour MP who, as Finance Minister, radically transformed the New Zealand economy, cutting tariffs and subsidies, reducing labour regulation and privatising or corporatising many activities. As he says, his goals have never changed.
The goals I have today are the same as those I had when I was in Labour. I am just as concerned today as I was then about poverty. I am just as concerned today as I was then about opportunity. I am just as concerned as I was then about second class citizens. But where I have changed is what I see as the cause of second class citizenship.
Second class citizenship, he says, is caused by the welfare state.
New Zealand has two classes of citizens. And we have two classes not because the Government isn’t doing enough for the poor, but because what the Government does for the poor denies them choices, destroys the incentives they have to get ahead, and subjects them to political abuse.
We have created a system that taxes and regulates opportunities for most out of existence, and destines many to poverty.
And yet, nearly everyone still believes the only solution is more of the same.
On the very goals that the welfare state has sought to achieve, no one could genuinely argue that it has succeeded. Even the modern day proponents of the welfare state, be they in National, the Greens, or Labour, all know it has failed.
But they think they have the solution. They think the solution is more money. I have never heard a politician from those parties come across a problem that they believe could not be solved with just more money. That is why, regardless of who has been in power, the budgets for welfare, education, and health have all shown an almost inexorable growth.
His solution, and where ACT and LDP policy differs from all the other parties, is to return control of money to individuals to enable them to run their own lives. That means less expenditure by governments on behalf of individuals, and more expenditure by individuals on behalf of themselves. Specifics include lower taxes, individual health insurance and education vouchers.
This solution, of course, is not novel to anyone on this site. The main difference with Sir Roger is that he expresses it in terms that reflect concern for those left behind.
An emphasis on fewer negatives rather than more positives, perhaps.
I’m wondering whether a similar approach would work in Australia, given our perceptions about egalitarianism. What do you think?