What the 90 days and Hobbit legislation ‘reforms’ tell us about Labour in power

NZ Capitalism Ltd’s smiley new manager

by Phil Duncan

When Helen Clark led Labour into government in 1999, little was on offer for workers.  True, to the left of Labour was the Alliance Party which wanted the introduction of paid parental leave and forced this on Labour as part of the price of coalition, Helen Clark having said initially that it would be introduced “over my dead body”.  However, overall, Labour had been engaged in ensuring workers did not have any high expectations of the incoming government – thus there was no way of workers being disappointed and possibly looking left.

All Clark and her party had to do was sit out enough terms of National in the 1990s – three, as it happened – and rely on people getting bored with the traditional Tories and turning to the new, shinier Tories of the Labour Party.  Moreover, the National-led government came apart in the middle of its third term, with Shipley overthrowing Bolger and with New Zealand First going into parliamentary meltdown – NZF leader Winston Peters entered a major ruck with Shipley and many of his MPs decamped to keep National afloat.  Clark could comfortably walk into power over the rubble.

Altered political landscape

In the few weeks run-up to the latest election Clark fan/acolyte Jacinda Ardern faced a somewhat altered political landscape.  In countries such as the United States and Britain several caitalist politicians, most especially Bernie Sanders and Jeremy Corbyn, had articulated a kind of new social contract that involved increased spending on health, education and social welfare.

However, we should be wary about assuming that politicians in the capitalist world now have to make significant promises to workers.

In other capitalist countries, such as Canada and France, elections were won by Justin Trudeau and Emmanuel Macron without any such promises to workers.  Indeed, Macron had been an architect of anti-working class austerity policies and attacks on unions in France, where he served in the government of the French equivalent of the NZ Labour Party.

Elsewhere in Europe, and in the United States itself with Trump, openly very right-wing governmments continue to attack workers.  In Germany, the Christian Democrats had to ally with a more right-wing anti-working class party in order to be able to form another government.

Moreover, Sanders and Corbyn didn’t win.  Even more importantly, their promises were entirely within the framework not only of capitalism but also the oppression and plunder of the Third World.  They both support the cops, the military forces of their own imperialist states and favour the whole ‘deep state’ apparatus so necessary to maintain ruling class power in their countries and the power of their ruling classes over much of the rest of the world.

NZ Labourites’ problem

Here in New Zealand, the Labourites faced a particular problem, however.  They lagged well behind National in the polls and each poll seemed to bring fresh bad news.  They needed something shiney to attract voters.  So dull and dour Andrew Little was replaced by shiney and smiley Jacinda Ardern.

Ardern managed to pull off quite a trick – she promised, well, not much really, while giving the appearance of promising big, sweeping changes.  This was partly done by gushing about “values”, smiling a lot, being good at social media – especially selfies.  It was partly done because people read into her gush what they wanted to – and there is some, limited mood for change.  Gushing about change as a kind of general category was the way of avoiding precision about what the changes would be – and you could continue to gush, even as you retreated on stuff like tax policy.

At the same time, there is a general mood of passivity, of people not wanting to take action themselves.  This played into Labour’s hands too.  You could be part of the exciting world of “let’s do this” without actually doing anything – well, anything other than placing two ticks on a ballot paper, something you could do in your own house while watching television on your personal computer or i-phone.  Then Labour would “do this” for you.  But what exactly would the “this” they would be doing consist of?  Especially considering the last thing Labour wants to do is raise workers’ expectations.

The back-tracking has already begun

Well, the back-tracking in relation to workers’ rights began almost straight away.

Take the 90-days legislation that National introduced in 2009 and that Labour said they would abolish.  The National government legislation allowed employers to take on workers for 90 days and lay them off at the end of that ‘trial period’ without having to give a reason.  Employees then had no recourse when laid off at the end of the 90 days.  National argued this was an important way of tackling unemployment, especially youth unemployment.

However, year in and year out, there was actually no evidence that the law was having any notable impact on joblessness, including youth joblessness.  A report commissioned by Treasury itself reported in June 2016 that the claims just didn’t stack up.  As economist Isabel Sin, co-author of the report noted,  “In terms of overall hiring, we couldn’t find any effect. We can’t say zero effect, but there was no economically significant effect on the numbers of hires that a firm made. . .

“We looked at people who’d been on a benefit recently, people who’d particularly received unemployment benefit, recent migrants to the country, people who’d been out of work for a year or more, young people under 25, Māori and Pasifika under 25 and people who’d left education in the previous year.

“And for none of these groups did we find that the person hired was more likely to be one of these types of people.”

Given that even Treasury was saying this, repealing the 90-day law would not be hard to justify, even in capitalist economic terms.  And, of course, in government in the early 2000s Labour had opposed National MP Wayne Mapp’s private members’ bill for a 90-day trial period.

Additionally, both NZ First and the Greens are against the existing 90-day law.  So you might think it would be easy for Labour to just scrap it.

But no.  They are merely revising it so that an employer has to give a reason for terminating someone after 90 days and the worker will have recourse to action through the employment court.  But it’s not difficult for an employer to find fault – or to make up a reason.  And how many non-unionised workers – which the bulk of workers, especially in small private workplaces are – are going to be aware of their rights and prepared to go to an employment tribunal?  Especially young workers and others without much experience of the NZ workplace or confidence in their rights.

The year after the first stage of National’s 90-day legislation was introduced into workplace practice, the “Hobbit law” was passed by National and its friends in the Maori Party, ACT and United Future.  The Employment Relations (Film Production Work) Amendment Act 2010 took away some rights of people working on movies in New Zealand.  Essentially, it took away the right of workers employed as “contractors” on film sets to become employees, and therefore be entitled to the rights of employees.  It made film-workers “contractors”, meaning they could not bargain collecitvely or have entitlements which employees have.  The legislation was passed at the behest of this country’s own spoilt brat film director Peter Jackson and his pals in Big Hollywood.

Labour and the Greens voted against this legislation.  Now, Labour in government is reforming rather than repealing this legislation too.  Labour minister Iain Lees-Galloway claims that simply repealing this reactionary legislation would be unsatisfactory for all parties, including the union.

So out goes the manifesto promise that the Hobbit law would be repealed in Labour’s first 100 days, and in comes the policy of setting up an advisory group which will develop legislation for the film and televison industry!

While Labour lied about repealing the legislation in its first 100 days, Lees-Galloway is no doubt telling the truth when he says, “My message to the international film industry is that New Zealand will remain both a premium hub of film craft and innovation, and as easy to do business with in future as it is today.” (See here.)

(For an in-depth piece on the whole Hobbit law saga, see Bryce Edwards’ article in today’s NZ Herald, here.)

What are they doing?

So what is going on?  Surely a government even half-serious about real change could abolish this anti-worker legislation without apology?

And there’s the rub.

Labour itself is an anti-working class party.  It is utterly, utterly committed to managing the capitalist system and that requires continually sending the ruling class the message that they are a safe pair of hands.  In fact, that they are better managers of the system than National.

Labour is also keenly aware of the need to stymie workers taking action on their own behalf.  So establishing and strengthening mechanisms which tie workers into the state – like employment tribunals – is vital.

While the flakiest elements of the economic right have been scaremongering about the ‘socialism’ – and even ‘communism’ – of Jacinda Ardern and the new Labour-led government, the much smarter mouthpieces for the material interests of the capitalist class are very relaxed about things.

For instance, Michael Barnett, head of the Auckland Chamber of Commerce – and usually a weather vane of the socially-liberal smart money – stated on Q&A on October 28 that the new government represents “an exciting oportunity to do things differently”.  As political scientist Jennifer Curtin noted on the programme,  Labour chatter is “not an anti-capitalist discourse”; it is, as she noted, all about partnership.  (It should also be noted that National under Key and English were very partnership-oriented too; indeed, when he became National Party leader, English specifically mentioned working with trade unions as partners.  And, as Matthew Hooton has rightly noted, the Key-English government was to the left of the Clark Labour-led regime that preceeded it.)

Labour finance minister Grant Robertson made Labour’s orientation clear too, on the same episode of Q&A.  He stressed that Labour’s plans for a somewhat more interventionist government is not about “bigger government”; it’s about expanding the partnership with capitalist businesses that is so essential to keeping capitalism on the road these days.

Robertson also reported that he had recently attended the Mood of the Boardroom event, along with 150 CEOs.  These CEOs, he said, were worried about inequality, wanted targeted government spending, told him they didn’t need tax cuts, and were worried about multinationals not paying their “fair share” of tax.

Even allowing for a certain amount of spin, Robertson was probably fairly accurately reporting on what he found at the Mood of the Boardroom gathering.  The simple reality is that National, after nine years, had lost enough confidence among those who sit in the boardroooms for them to be happy enough with a change of government.

People on the left often focus one-sidedly on how capitalism attacks workers, as if the capitalists spend a lot of time in the boardrooms, on the golf courses and at conferences and dinner parties working out how to screw workers over more.  But this is not how capitalism works.

Capitalist profits come from surplus-value and the rate and mass of surplus-value depend on a number of factors: the use of new plant, machinery and production techniques, the gains of research and development, a contented workforce, and also the numbers of people in employment in jobs which create surplus-value or help others create it.

Unemployment is useful to capitalists in a downturn, as they can use it to drive wages down.  However, outside of a big recession, unemployment represents a loss – in fact, a substantial cost – to capital.  All those workers who could be creating surplus-value, just sitting around consuming benefits which, even though cruelly low, are still funded out of surplus-value.

The ruling class, being smart folk, have two main parties – Labour and National – and can switch back and forth between the two, all the while maintaining the pretence that we have a democracy which offers real choice.

A lot of the time, of course, things just tick along and they have no need to go all-out for either party.  The 2017 election was one of those times, whereas in 1984 and 1987 they strongly backed Labour, in 1990 they strongly backed National, and in 1999 they had a preference again for Labour.  While the ruling class didn’t express a strong preference either way this year, Labour did offer certain things the ruling class, especially its business section, favour.

The capitalists, certainly the ones who actually matter, want more people in jobs (which requires help from the government), more money for R&D (which requires help from the government) and a population that will be kept happy enough to create surplus-value without a load of rucks (which also requires help from the government).  Labour can often do those things better than National, just like in a downturn it can attack workers more effectively than National.


At the same time, Labour also remains completely committed to the imperialist club and maintaining and strengthening NZ’s place in it.  Thus big cuts in immigration, the strengthening of the military capacity of the NZ state and the continuing plunder of the Third World.

Meanwhile the Labour-voting liberal left continues to enthuse about the government of gush and pretends it will make changes that it has no intention of making, even on issues like the 90-day and Hobbit legislation.  And, given that it can’t even outright repeal these pieces of legislation, imagine what might well happen if the economy should run into problems.

As we keep saying, we need a new workers’ movement and a new and genuinely anti-capitalist left.



  1. Their whole approach is to dabble and slightly modify things (they are doing the same with TPPA and Charter Schools), tinkering with the same machine rather than smashing the machine itself. No wonder the political class and commentariat talk about ‘ rearranging the settings’ as if the system was a boiler. The interesting thing is the way they managed to sell the idea to the electorate that this somehow constitutes substantive change. In addition to the PR skills you mentioned and the new face, theres also the vague feeling of boredom that sets in after 9 years. Anything suddenly looks new and fresh in those circumstances. Theres also a generational or historical consciousness aspect, people seem unaware that older techniques of working class solidarity, direct action and so on once existed and are still viable and necessary.

  2. I thought it was interesting that, even after nine years of National, Labour couldn’t get more votes than National, but still came in well behind.

    Yeh, what they have so far pulled off is to change minor stuff that they can do without upsetting business interests and then use the bullshit machine to pretend these are significant changes. But it’s really something that the small things are just so small. Like, you’d think it wouldn’t be hard for them to follow through on their promises on the Hobbit law and the 90 days legislation. But even those fairly small things, that even a pretty crappy reformist party could do, aren’t being done.

    Just shows how abject Labour is in its subservience to the ruling class and show it has a safe pair of hands to manage the interests of the ruling class.

    Plus there has been a lot of non-specific gush about “change” which can fool the gullible and a section of younger people who haven’t seen Labour in government before. And those younger people, as you say, don’t have the experience of more effective forms of political activity like the ones you mention.

    How long the Jacindarella Spell will be able to work will be interesting. I tend to think the shine is already becoming tarnished. But then I’m ever the optimist. . . !

  3. From Hansard: Trevor Mallard described the 90-day law as a “shameful piece of legislation”. He said “This bill is absolutely unnecessary.”

    Phil Goff said, “I do promise to repeal what the National Government is doing. It will be gone as one of the early steps of the next Labour Government in 2011.”

    Others were appalled, horrified, etc.

    The Hobbit law was repeatedly described as completely unnecessary by Labour members in the House.

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