ECONOMICS Pedigree Dogs Politicians

What does Helen Clark have in common with Richard Prebble, George W Bush and Margaret Thatcher? An urge to create an ownership society. The Cato Institute in the United States provides us with description, prompted by President Bush’s advocacy. “An ownership society values responsibility, liberty and property. Individuals are empowered by freeing them from dependence on government handouts and making them owners instead, in control of their own lives and destinies. In the ownership society, patients control their own healthcare, parents control their own children’s education, and workers control their retirement savings.”
Hence your columnist’s surprise, on hearing Clark tell us of her Government’s aim. Her Government is developing new savings initiatives, she explained, both to help New Zealanders build up their assets and security, and to reduce the nation’s reliance on the savings of others.
“Asset ownership is important for enabling people to participate fully in society,” she enthused. “Assets provide families with greater security, control and independence.”
Mind you, there was strong hint of Clark wanting to redistribute our assets. “The more evenly assets are spread in community the more social cohesion there is at national level, the more all New Zealanders can benefit from economic growth.”
Yep. That’s more like Labour government policy.
And there could be no doubting Clark’s Government will intervene to encourage us to build our assets. “Establishing saving habit will be the single biggest factor in lifting the saving rate,” she said. “That’s why this Government will take active steps to help people establish that habit.”
There are plans to crank up our rates of home ownership, too – further intervention. “The mortgage insurance pilot introduced in September 2003, was this Government’s first step back into this area of policy,” she said. “How to encourage savings which could lead to home ownership is under consideration now.”
Establishing savings to reduce the need to borrow for tertiary education or training is also likely to be an objective for many families.
“We are developing policy to encourage coordinated lifetime approach to savings,” she summed up. “We know that the building blocks for confident and secure nation are confident and secure families. An ownership society, in which every family has stake and sees future, makes our country strong.”
Let’s go back year. On 2 February 2004, Richard Prebble delivered his “State of the Nation” speech in Auckland.
Home ownership was among his concerns, too.
“Once we led the world in home ownership,” he said. “Now home ownership, especially in Auckland, is to many working families an impossible dream.”
Moreover, most working families once had health insurance. Large numbers belonged to superannuation schemes saving for retirement or had annuity life policies.
New Zealand had been property-owning democracy. Prebble was keen to restore it: “ACT has vision of an ownership society. nation where the average family does own their own home, has health insurance and is saving in superannuation scheme for their retirement. ACT has the practical positive policies to achieve what is still the Kiwi dream – an ownership society. I think that is the real issue of 2004.”
Maybe George W Bush was tuned in to the speech. His re-election campaign was peppered with calls to create the ownership society, and in his inaugural address he told the nation, “We will widen our ownership of homes and businesses, retirement savings and health insurance.”
The centrepiece of Bush’s ownership society is the privatisation of at least some of Americans’ Social Security contributions. Under his pension plan, citizens literally would own more of the assets being accumulated for their later years – the ownership society. Similar policies on health and education are on his agenda.
Twenty years earlier, Britain’s Margaret Thatcher was promoting much the same philosophy.
Privatisation was not word she was particularly fond of, she said in one widely reported speech. “But how much hope it offers and how great the benefits it brings.”
Private ownership – of companies, of homes, of property of every kind – goes far deeper than mere efficiency, she said.
The great reform of the 19th century had been to make more and more people voters. “The great reform of our time is to make more and more people owners.”
She didn’t refer specifically to an ownership society but she did advocate “popular capitalism” and she talked of leading “a crusade to enfranchise the many in the economic life of Britain”.
As you can see, the ideas Helen Clark now is promoting have fascinating pedigree. right-leaning conservative pedigree.

Bob Edlin is regular contributor to Management.

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