Scoop Election 08: edited by Gordon Campbell

Gordon Campbell on David Cunliffe’s State of the Nation speech

January 28th, 2014

In the world of thankless jobs, being the Leader of the Opposition is right up there. It involves being the eternal suitor – always trying to look strikingly different on one hand but credibly reliable on the other, while being unable to make a shred of meaningful difference for a year or more. In the world attuned to political speed dating, the election cycle seems like forever. Add in the fact that the media that you’re relying on to convey your love notes to the electorate is more interested in what is good politics rather than what may be good policy, and the process becomes even more daunting. And alas, the more that you earnestly profess the nobility of your intentions, the less enticing you tend to become. Before you know it, the voters start thinking about pinning the poster of another dream date on their bedroom walls.

What I’m suggesting is that people can tire pretty quickly of windy rhetoric. And so… and for all the above reasons and more, it was hard to escape a sense of feeling slightly underwhelmed by David Cunliffe’s speech in Auckland yesterday. For a speech billed as a State of the Nation address, and touted as the launch pad for Labour in 2014, it was a little lacking in reach. The fresh content was limited almost entirely to Labour’s early childhood education policy, a solid package that sat oddly with the fanfare preceding it. Face it. If the world really is going to hell in a handbasket right now – as the first part of the Cunliffe speech indicated – then pouring money and resources into the learning needs of three and four year olds is a very long term solution.

I know, I know…it was meant to be emblematic (and it was) and there will be more of the other stuff later. Or so the Labour faithful must be hoping. Supposedly the speech was going to contain a raft of new policy on teacher incentives too, at least until John Key stole the thunder on that front by getting in first last Friday. Presumably these details will be coming later as well. As a consequence however, the handwringing in yesterday’s speech about income inequality – when it came devoid of the merest detail about how Labour proposes to create an economy that will not generate more of it – came perilously close to sounding like opportunism. Very soon, Cunliffe is going to have to put up or shut up about the alternative economy he has in mind.

Those caveats aside, the early childhood “Best Start” education policy was not only admirable in intention but represents a smart and judicious investment of taxpayer resources that would be likely to reap social and economic benefits now, and later. As I’ll explain later, it is also a policy that has bi-partisan appeal. In the US (see below) both Republican and Democratic policy makers, liberals and Chicago school economists alike, are getting behind these kind of policies. The key details of the Labour plan are here: http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11192646

Labour leader David Cunliffe has set out a policy to give most parents of new born babies a payment of $60 a week until that baby turns one, while those on middle and lower incomes will continue to receive the payment until the child turns three. Cunliffe also set out a raft of other measures for parents of young children, including free antenatal classes for all first time mothers, and extending early childhood education subsidies from 20 free hours a week to 25 hours.

The package includes Labour’s prior commitment to extend paid parental leave from 14 to 26 weeks. As for the costs:

The total package is expected to cost $147 million in its first year, 2015-2016, rising to $528 million by 2018/19. The child payments have been costed at $151 million in the first full year they apply of 2016/17, rising to $272 million by 2018/19.

The package will be as nigh on universal, and in that respect is in line with a Labour tradition of universal childcare measures from the decades well before Rogernomics. The first year payments will kick in for all household incomes of less than $150,000 a year, which Labour estimates will reach about 95% of children less than a year old, or about 59,000 households in all. The longer term payments for those on middle and lower incomes would cover about 56 per cent of one and two year olds and will be phased in. It will apply to children born after April 1 2016.

These proposals draw on advocacy by teacher unions and by research reports on child poverty. As Cunliffe noted in his speech, the measures being advocated stand in marked contrast to the reductions (in say, teacher qualification requirements and funding) being pursued in this area by the Key government. More to the point, they are also consistent with recent research and advocacy by James Heckman, the Nobel prize winning Chicago School economist and long time admirer of Milton Friedman…Only last week, Business Week magazine carried a highly laudatory piece on the aspects of Heckman’s work that demonstrate the proven benefits to the economy of the state heavily investing in early childhood education.

Focused, personal attention paid to the young children of poor families isn’t some warm, fuzzy notion, he argues. It’s a hard-nosed investment that pays off in lower social welfare costs, decreased crime rates, and increased tax revenue. And he has the numbers to prove it. He calls this the Heckman Equation, and shares it relentlessly in public lectures around the country and the world. “The argument is not just an appeal to the poor,” he says. “We’re saving money for everyone, including the taxpaying middle class and upper class. Right now they’re supporting prisons, health, special education in schools. The benefit is broadly shared…It’s something that would actually accrue to the whole country.”

So if Cunliffe’s right wing critics want to portray the Best Start policy as some soft hearted liberal indulgence, they need to face the fact that the strongest global advocate for policies like Best Start is a Chicago School former colleague and admirer of Friedmanite economics, and its tradition of empiricism. Moreover both the Obama administration and right wing Republican governors at state level are currently investing heavily in early childhood education.

Fifteen governors, more Republicans than Democrats, included new money for early childhood education in their budgets in 2013. In all, states are now spending $400 million more on pre-K than before the economic downturn. Secretary of Education Arne Duncan, who meets with Heckman often, says much of this activity can be credited to Heckman’s work. “You have this Nobel prize-winning economist and not some soft-hearted someone like me,” says Duncan. “It’s incredibly powerful.”

Finally, if there is one caveat here it is that the social (and thereby economic) returns on the investment in this area do tend to be skewed somewhat by the gains in crime reduction. This returns decline as one goes up the socio-economic ladder. Yet it is the universalist elements in the policy that make it good politics. In that respect, the investment in early childhood education may have scored a double: good policy, and good politics.

ENDS

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    1. 5 Responses to “Gordon Campbell on David Cunliffe’s State of the Nation speech”

    2. By Kat on Jan 28, 2014 | Reply

      The choice has been made pretty clear this election year for voters.

      The mind numbing right wing ideology of more Key & co……

      Or a progressive coalition of the left for the 99%.

    3. By Lord Francis Sausage on Jan 29, 2014 | Reply

      I would add, anecdotally, the proposed Best Start child payments will certainly help the families targeted. Being able to count on a little bit of extra financial help with the kids certainly makes life a little less stressful.

      Let’s see something on employment laws, lifting the minimum wage and job creation next please.

    4. By Dan on Jan 30, 2014 | Reply

      On this topic, here’s some hard data on what happens when you try to solve the problem of poverty by giving poor people money.

      http://opinionator.blogs.nytimes.com/2014/01/18/what-happens-when-the-poor-receive-a-stipend/?rref=opinion

      Turns out it works pretty well.

    5. By Myles on Jan 30, 2014 | Reply

      Cunliffe’s right wing critics don’t give a shit about some economist in the US. Nor do most commentators (those who will help shape public opinion). They mostly care more for NZ outcomes, references and politics. Using international research is too left field when you can use local gut-feelings. Easier to understand too, less reading required. As an example of this see the Quantitative Easing debate last year.

    6. By Dan on Jan 30, 2014 | Reply

      Myles you’re probably right. I’m of the opinion that people who think with their gut have shit for brains.

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