Labour's opening ploy this election year combines heart and smarts, but the return of univeralism is fraught with political risk
If you go last, you'd better go biggest: That was the pressure Labour was under today with its state of the nation speech – the third of the main three parties to address voters at the start of this election year – and it didn't disappoint. Call it bribery or bravery, Labour's half a billion dollar per year Beststart package puts National's $150m teacher pay scheme and the Green's $90m a year school hub plan in the shade both politically and fiscally. Only hours after the announcement was made there's no doubt this policy had cut-through – people are paying attention.
Peter Dunne has already labelled the package a bribe, and it sure has the feel of the 2005 Labour government's interest-free student loan scheme about it. Labour is sending a clear message to voters that if it wins the election, they will notice it in their hip-pocket. And that kids are its top priority (the policy is in line with the recommendations by the Children's Commissioner and his expert advisory group, but isn't for all kids up to age six as they suggested). And that families' choices, even the typically conservative choice for a mum to stay home with her baby, matter.
It's a strong opening play by Cunliffe and shows a mix of heart and smarts. Yet it's by no means a sure-fire slam dunk.
Best Start's headline act is a $60 a week payment for the first year of a every baby's life. Well, 95 percent of babies. All households earning $150,000 or less will get the payment, which will be the first time in almost a generation that many of the country's top earning families will receive a government payment.
As a policy it trumps the other parties' in scale and focus. Research screams that the first few years of a child's life are the most important and that's where you'll get the best bang for your buck. In that regard, it's a smart place to spend. Labour can argue that while National's schools policy helps to pick up the pieces, it's building the fence at the top of the cliff. So a) it's a vote-winning handout and b) it's likely to do some real social good. Tick and tick as far as Labour's concerned.
Which is all the more reason to wonder why Labour put that all at risk by not targetting it at just the poorest, or even just the poorest and middle-income New Zealanders. In a country where the median household income is just $68,000 (and the average income is $85,000), Labour has opted to make the payment to those on more than double that.
So the two big questions: Why not end the payment at $100,000 rather than $150,000? And, can we afford it from 2016?
It's a heck of a policy decision that speaks to a change in philosophy amongst Labour's leaders. Working For Families – the big legacy policy of the previous Labour government – was highly targetted according to income. This thinking is more in line with the first Labour government.
Consider the debate that must have been had – universalism versus redistribution. Both are core ideals to such centre-left parties, but giving welfare to all means, by definition, you're not taking from the richest and redistributing to those most in need. As taxes have been cut and times have been hard, governments have tended to abandon pthe ideals of universalism, yet it seems Labour wants to bring them back.
Cunliffe tried to talk up the policy as aimed at those "most vulnerable children" and as "relieving the pressure on middle-income New Zealand". And when you look at the boost to the number of free early education hours, free antenatal classes and the like that's true. But the $60/week payment means only the richest five percent of households miss out, so the redistribution is minimal. This is a blatantly untargetted payment, up against a National government which is very big on targetting (in part stemming from advice from the likes of Sir Peter Gluckman).
So why would Labour go all-but universal? Cunliffe hinted at two reasons in the his stand-up interview with media after his speech. First, he said it offered those higher income families more choice. That's stealing the language of the right (just as National's education package last week stole of the left's language) and backs up the suggestion that Cunliffe has to tack to the centre this year to claim votes.
On the other hand, he also said payments to even higher income earners would "build a shared understanding" of the policy. I take that to mean he wants this policy to be sustainable. If it becomes valuable to even National-leaning voters it's a policy, like Super for example, that future governments won't feel able to cut. That's an older left way of thinking.
One reason Cunliffe didn't mention, but I think is useful to him, is that it makes for a clear distinction between Labour and National. It stresses Labour's central message this year, that it would govern for the many (even the well-off), not the few.
But it's a real punt with a large sum of money, which opens him to claims of fiscal recklessness and concerns that we as a country just can't afford it even if we'd like to.
It opens up a fascinating debate, but it's a debate about poverty and helping kids, which is where Labour wants it to be focused.
On the other hand, it allows National to stress how it is the more responsible and trustworthy economic manager. Already Steven Joyce is fretting about higher taxes and interest rates as a result of Best Start. (Which raises the question of whether National will stick with that message and back itself as a responsible party or whether it will now feel the need to match Labour with a "bribe" of its own, presumably in the form of a tax cut. That would undermine it's "where's the money coming from?" argument, but would go some way to counter-acting the hip-pocket votes Best Start is likely to win).
What's more, National hasn't even got onto the "where is the money going to go to?" bandwagon yet. Just wait for them to start warning of this untargetted money ending up being spent on cigarettes and Lotto for the parents.
Just how Labour is able to deal with these counter-arguments in the next few weeks will tell us a lot about its chances come the election.