Social Democracy: What it really means for NZ
Weekly Column by Dr Muriel Newman
The latest workplace stoppage statistics show that strike actions have increased six-fold over the last twelve months.
In the year ended June, 24,000 workers were involved in strike action, causing a loss of 58,000 days and $7 million in
wages, up from 4,000 workers striking for 9,000 days with $1 million in lost wages last year.
Back in 1990 before the labour market was deregulated, New Zealand lost some 300,000 days a year in strike action. After
the Employment Contracts Act was introduced and employers were able to negotiate directly with their employees, the
number of days of lost productivity reduced dramatically. These new statistics show that fears of widespread union
action as a result of the re-regulation of the workplace through the introduction of the Employment Relations Act were
not unfounded. Labour has ensured that the union movement is once again in control of the workplace with unencumbered
access, monopoly power to negotiate collective contracts and the ability to call multi-employer strikes.
As a self-proclaimed social democratic party, the union movement is the Labour Party's second major organisational
component. Traditionally, in return for receiving a proportion of union membership fees directly into party coffers,
social democratic governments use legislative means to ensure high rates of unionisation. Their aim is to offset the
power of businesses over their workers. As a result, while employers provide the capital, take the risk and think they
are in control of their business, it is the union movement that increasingly has the power to direct and dictate.
According to the International Encyclopaedia of Government and Politics, social democratic parties seek to legislate
socialism into existence by extending control over economic activity. They favour mechanisms such as the nationalisation
of industries to ensure public ownership by the democratic state. Their fundamental objective is the replacement of
private enterprise with state ownership of the means of production and distribution.
Social democracy has been described as the third way, a half-way-house in the global struggle between the political
totalitarianism of communism on one hand and the so-called economic inequalities and social injustices of capitalism on
the other. Essentially, the goal of social democratic governments is social and economic reform designed to benefit the
less privileged through the redistribution of wealth and the development of an extensive welfare system.
Historically, support for the social democratic movement has come from the working class. Over the years however, the
sophistication of the working class and their upward mobility into the middle classes has left fewer voters dependent on
political parties or unions for information. This has led social democratic parties to substantially abandon their class
appeal and instead direct themselves at the wider electoral market. In an interview with TIME magazine in August 2000,
Prime Minister Helen Clark was asked how her government would go about restructuring the country. She said: "We've set
modest objectives that are achievable. They're not flipping the society back to pre-1984, but they're about moving
forward in ways more familiar in Europe under social democratic governments". Two years on, in light of the fact that
many New Zealanders believe socialism takes a country backwards not forwards, it is surely time to assess Labour's
progress in developing its socialist agenda.
Once elected, Labour wasted no time in embarking on its programme of wealth re-distribution by increasing taxes, fees,
charges, levies, tariffs and duties. They re-regulated and unionised the workplace, and they have more draconian
legislation in the pipeline. ACC, Air New Zealand and to some extent rail, have all been nationalised with the rest of
the rail system firmly in sight. The telecommunications industry has been regulated, tertiary education centralised at
the expense of private providers, the state has been brought back into the business of banking, and through a generous
corporate welfare system disguised as regional and business development partnerships, the state has widely infiltrated
Labour has successfully extended the welfare system: benefits have been increased and the 'domestic wage' - a core
feminist socialist objective - has been introduced through the back door by removing work testing of the Domestic
Purposes Benefit. As a result many in the welfare system are now far better off and more secure than low-income workers.
Labour has also responded to the changing nature of its working class voting base by effectively ignoring their plight
and instead generously investing taxpayers money in selected interest groups - Maori and Pacific peoples, beneficiaries,
the elderly, students, as well as new class allies such as the technical intelligentsia and those involved in arts and
Measured against the social democratic standard of introducing socialist legislation, Labour has certainly made
progress, but surely a nation's prosperity and well-being is a more important measure.
The reality is that Labour has failed to deliver a higher standard of living to New Zealand families, in spite of
enjoying unprecedented levels of economic success. Under Labour, economic growth has fallen well short of the four
percent needed to improve our living standards. By pursuing its socialist agenda, Labour's historical legacy will be one
of low-income families struggling to make ends meet and of deepening child poverty.
You can view the archive of Columns at the ACT website http://www.act.org.nz/