Don Brash's 2025 Taskforce Report is purely retro New Right. I can't see how we are going to catch up to Australia in per capita income terms with the policy mix that Brash and his taskforce allies are suggesting.

It's all back to the 1980s and 1990s with calls to reduce government spending; privatise state assets; full labour market deregulation; means testing of education and health entitlements; more benefit cuts; and all this undertaken for the sake of a 20 percent flat tax rate. I was relieved that the Brash-led National Party didn't win the 2005 election. I think we all missed out on having Brashnomics imposed upon us and what a good thing too.

I have to applaud John Key for repudiating the report at the outset. But this is not to say that the government could, as the PM has hinted, pick out some aspects of the report for the implementation. They might, for example, justify the 2010 Budget's inevitable slashing of public spending and signalling of further tax cuts as being the National Party's response to the report. At this stage, though, Key has shied away from a complete re-run of Rogernomics and Ruthenasia as this would automatically sink National's electoral chances overnight. Right now, this government wants to remain popular and win a second term and they don't want to do anything to upset that prospect.

However, if National does get a second term? Will they seek to go the full hog in implementing the taskforce's recommendations? If history is any guide, the Fourth Labour Government in 1987 used their second term to further extend economic reform. While the current National administration has been timid about implementing a radical right agenda in its first term, it could go for broke in any second term.

And as to the policy prescriptions on offer? Haven't we been down this road before? In the late 1980s and early 1990s, this country endured a prolonged recession during the restructuring process which saw thousands of people become unemployed and average working people become poorer. Our per capita income and productivity levels slid below OECD averages due to the combined effects of mass unemployment and labour market deregulation. Lower taxes only benefitted the wealthiest New Zealanders and from what I can recollect, there was no trickle down effect.

While the Australians did deregulate their banking and financial services sector, float their currency, privatise some assets and rein in government spending, they did not go as far as New Zealand did in, for example, cutting social welfare benefits, deregulating their labour market or slashing taxes to very low levels. They were sensible in retaining spending on economic and social infrastructure, research and development and industrial assistance. While the Howard administration did deregulate Australia's labour market, this was an all too brief affair as Kevin Rudd's Labor Government was elected in 2007. After this victory, Rudd's government overturned the Howard 'Work Choices' reforms which imitated New Zealand's Employment Contracts Act of the 1990s. Very clearly, Australians (as illustrated by the ALP's victory) did not want to take the path that we have trodden towards being a low wage hell hole.

The comparatively sensible approach taken by the Australians is the main reason as to why they have grown and we haven't. In this respect, I would like to cite the experience of my Australian-based sisters. Both of them have lived in that country with their partners for well over a decade now and have done very well for themselves. When they decided to start families of their own, they were assisted by the federal government's generous universal child benefits. When they were both working, they benefitted from good wages negotiated by strong unions. Their partners are still on good pay rates right now too. Their health care system has not been systematically butchered in the same way that New Zealand's has and they were able to give birth to my wonderful nieces and nephew in high quality public hospitals.

Although my sisters and their young families yearn to come home, I doubt that they will, at least in the forseeable future. I very much doubt whether that they would come home even if the New Right policy mix suggested by the 2025 taskforce was implemented. After all, they presently live in a country which levies higher taxes than we do.

Overall, I agree with my Alliance Party comrades who condemned today's report as a "waste of space."  It suggested nothing new and simply relitigated all the failed policies of the last two decades. No country in the world has prospered (let alone ours) under such a policy regime. I understand that the last nation to introduce low flat tax rates, Ireland, was the worst hit by the recent recession. Their unemployment rate now stands at 20 percent and their per capita income levels have dropped precipitously. Once again many young Irish people are fleeing abroad in the same way that they did during the 1970s and 1980s in search of better job prospects.

That will continue to be the case for New Zealand too. This will be for so long as successive governments continue with New Right policies which have entrenched poverty and inequality. There is a better way as articulated by the CTU's alternative economic plan and the policies advanced by the Alliance, Green and other left parties.

We have to take a more progressive, Keynesian economic policy path in order to drive us up to where Australia is now, not down. 

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