On May 5 this year the Government announced that it had completed negotiations with Toll Holdings to repurchase the rail and ferry business sold by the Bolger National government in 1993. For some, this has been seen as a great blow against the post-1984 neoliberal onslaught, characterised by a string of restructuring and asset sales carried out by successive Labour and National governments.

There is no question that the decline of rail in New Zealand has been a sorry tale. Prior to the 1984 election, Richard Prebble toured the nation, stopping in at railway workshops around the country, promising to “Save Rail”. Once in power, he revealed what that actually meant. NZ Rail slashed staff and services. Thousands of workers, and many communities, were devastated by the reforms.

In 1993, the rail network was sold for $328.3 million to Wisconsin Rail, which did virtually nothing by way of infrastructure investment. Eventually they bailed out, and Toll Holdings took over the reins.

Toll continued the tradition of spending as little as possible on infrastructure. Rather than invest in new locomotives, old engines have been brought out of retirement – retrieved from museums – to keep the system working. While Michael Cullen has voiced his opposition to state subsidies to industry, the government is repurchasing TranzRail for the inflated price of $665 million plus a commitment to an undisclosed level of debt. This is estimated, according to the New Zealand Herald, to be $235 million above its book value. Certainly Toll NZ have shed no tears over the deal.

The state could hardly do a worse job than private enterprise has done. But is the buyback really a progressive move that the left should be celebrating as a victory? Karl Marx’s close friend Frederick Engels would not have said so. Speaking of state ownership during the nineteenth century in Germany, he said:

But of late, since Bismarck went in for State-ownership of industrial establishments, a kind of spurious Socialism has arisen, degenerating, now and again, into something of flunkyism, that without more ado declares all State-ownership, even of the Bismarkian sort, to be socialistic. Certainly, if the taking over by the State of the tobacco industry is socialistic, then Napoleon and Metternich must be numbered among the founders of Socialism.

This kind of state ownership is purely a measure intended to save the business from collapse, as when the New Zealand government bought back Air New Zealand only to continue to run it in precisely the same manner. State ownership on the part of capitalist governments is carried out solely to protect an element of the capitalist system when it is in trouble or when it is impossible for private capitalists to run it at a sufficient profit.

There may be some benefits from the buyback. The government may spend some money on infrastructure, which the private owners proved unwilling to do. It may be that the state will take a more responsible approach to safety. If this happens, it will be a good thing.

What will not happen, though, is the any of the kind of socialist control that nationalisation must involve to be truly progressive. Such a socialist nationalisation, where workers control the economy and the profit motive is replaced by production in the interests of human need, can only be brought about through revolution. It will not come about through the actions of a capitalist government like the current Labour-led one. The state has proved perfectly capable, through the SOE model, of applying capitalist principles to state-owned companies. This is the model the newly renationalised rail network will operate under.

The New Zealand-China Free Trade Agreement (FTA) signed on April 7 is the first free trade agreement China has made with any developed Western country. It is an historic deal for the Chinese government in its push to be fully accepted into the capitalist club.

The deal is historic for New Zealand too, for the simple reason that China’s economy is by far the largest that New Zealand has ever signed such an agreement with. With a growing middle class already numbering over 100 million, China offers a huge market for New Zealand businesses, particularly for luxury goods and services.

Reaction to the FTA has been mixed. Opponents of the agreement have ranged from the Green Party on the left, to New Zealand First on the xenophobic right. The CTU, eager to cosy up to Labour in the lead-up to an election that Labour is uncertain of winning, has come out in support of the agreement.

The critics of the FTA have claimed that the agreement in some way condones the poor human rights record of the Chinese government. This objection has become more strident with the recent Chinese crackdown on Tibetan protests.

The New Zealand government and the FTA’s supporters have countered with the point that New Zealand trades with all sorts of countries with all sorts of human rights records. In fact, government-led boycotts of countries over “human rights abuses” have a dubious record, with the independence of small, weak countries often being threatened by countries in the imperialist world on spurious grounds.

Fear of job losses

Attacks on the FTA over China’s human rights record are not the main issue, however. Criticism of the FTA from the left has largely been around the threat to jobs that the agreement might represent.

Helen Clark has stated that the agreement will not cost any jobs. However, this statement was made within the narrow context of the employment of skilled workers coming to New Zealand on temporary work visas. The bigger fear is that jobs in sectors such as the clothing industry will be threatened by an influx of cheap imports following the removal of tariffs. These jobs are important to many small towns which have been seriously affected by the restructuring of the last two decades.

The reality of course is that this process is taking place anyway. Tariffs on imported goods are so low already that New Zealand manufacturers cannot compete on price. Ironically, though, within 24 hours of the FTA being signed, the New Zealand clothing manufacturing company Norsewear was talking up the receipt of a huge new order, which the company linked directly to the signing of the FTA.

In announcing the deal, Norsewear’s General Manager Sandra Shilling said:

This is the biggest single order we’ve had in the history of the company… What I can tell you is that for each of these products, the Chinese have ordered three times the annual numbers we currently produce. The good news is that means more jobs for New Zealanders as all the product will be manufactured locally… The export potential is absolutely mind-boggling. We are talking in the multi-million dollar region so it’s all systems go for us right now.

Norsewear’s announcement notwithstanding, the threat to jobs is distinctly possible, and such job losses must be opposed if they are announced.


“Influx” of Chinese workers?

The other issue which has raised concern is the capacity for skilled Chinese workers to come to New Zealand on temporary work visas.

The CTU has given the skilled worker clause a guarded seal of approval, stating that in their view there should have been no consideration of migration in the agreement. CTU vice-president Sharon Clair responded to the signing of the agreement by commending the placing of a cap on the number of Chinese workers allowed into the country. The cap, she said, has allayed union fears of a huge influx of Chinese into the country. This “influx” was, of course, never going to be allowed.

Now that the agreement is a done deal, the CTU’s response is to advocate strong industry standards. “What needs to happen now is for industry standards to be developed to ensure skilled workers from China coming into New Zealand are not exploited and do not find themselves being paid, for their skill, the minimum wage.”

Surely this should have been a basic principle for the union movement already? But behind the remark is the fear that Chinese workers will drive wages down for “Kiwi” workers. This is the old “yellow peril” hysteria reinvented for the 21st century.

The cap written into the FTA is 1800 workers under the scheme at any one time, and a maximum of 100 in any one sector. Currently, according to the government’s own figures, there are 85,000 people from all over the world working in New Zealand on temporary work visas. So the agreement allows into New Zealand a number of skilled Chinese workers equivalent to barely 2% of the current number of overseas workers, and then under very strict conditions.

The unions should not have left it until this late in the day to decide it is worth protecting the pay and conditions of overseas workers, whether they come from China or anywhere else.


Workers’ solidarity the best protection

Overall, New Zealand is not the victim in this FTA. New Zealand is not Colombia. In third-world countries like that, opposition to free trade by imperialist countries can have, and often does have, a clear anti-imperialist and progressive character. New Zealand however, is an imperialist country, if only on a small scale, and China is still a third-world country, despite its phenomenal growth over recent years.

Imperialist countries maximise profit by exporting capital across international borders while simultaneously denying the right of workers to cross those same borders in search of jobs. It is in the greatest interest of New Zealand workers to unite with Chinese workers, rather than with New Zealand employers or their capitalist governments, to ensure their rights.

When it comes down to it, the only really meaningful gains workers ever make are those that are won in struggle. We can react to the panicked warnings about the coming of the “yellow peril” in different ways. We can buy into the panic, and support the calls for our own Great Wall to keep the Chinese out, whether it is Chinese goods or Chinese workers. Or we can approach this as internationalists.

The first choice might appear the easiest – just call on the government to keep the foreigners and their cheap products out. But the better approach is the internationalist one.

This means we need to build strong, militant, democratic unions in New Zealand that workers want to join. These unions need to reach out to the overseas casual workers who come here and work, and link with militant unions overseas.

It means the difficult task of unionising the low-paid Chinese workers who are already here, often working for below-minimum wages under the table in the fast food industry.

It means making connections with the struggles of workers in China fighting for better wages and conditions. Ultimately it is only because Chinese workers are able to be employed for 50c an hour in China that there is the potential for fear amongst New Zealand workers of an influx of low-paid Chinese workers coming to New Zealand to work.

New Zealand workers must identify first and foremost as workers, in common cause with workers in China and elsewhere. This is a vital ingredient in the building of a meaningful response to the machinations of the capitalists, whether they be in favour of protectionism or of free trade.

Below we reprint an article from the October 2007 issue of The Spark which looks at the nationalist crusade against foreign ownership of Auckland airport in greater detail:

Auckland Airport – New Zealand’s left shows its national chauvinist colours

- Nick Kelly

The announcement a few months ago that Dubai Aerospace Enterprise was to buy a controlling share of Auckland International Airport brought to the surface the national chauvinist attitudes of the left in New Zealand.

Currently, most of the shares in Auckland International Airport (AIA) are owned by New Zealand capitalists. In the year ending 30 June 2006, AIA made a profit of $103.2 million. How much of this profit created by workers at Auckland Airport ended up in the hands of those workers? By contrast, how much ended up in the hands of a small group of New Zealand capitalists? There’s not much doubt about the answers.

However, for many on the New Zealand left, none of this is a problem – unless the capitalists involved are from overseas.

The Green Party was quick to show its nationalist colours over this issue. When the bid by Dubai Aerospace was dropped, Green MP Sue Kedgley called it a victory, claiming New Zealand cannot afford the economic, environmental and security risks of letting control of our main aviation gateway pass into foreign hands.

Kedgley has also put up a Bill in parliament to limit foreign ownership to 25 percent in key strategic assets. Were this Green Party Bill to pass, the people who would benefit would be the New Zealand capitalist class – making it clear which class the Green Party really serves.

On the right, the New Zealand First leader Winston Peters also spoke out against foreign bidders trying to buy the airport, describing Auckland Airport as one of the country’s prime assets. Peters is a hypocrite. It was he who, as Treasurer in the National-New Zealand First coalition government, supported and then signed papers to sell off Auckland Airport in 1998 – then weeks later broke off the coalition over the a similar sale of Wellington airport.

But it wasn’t just the capitalist parliamentary parties using the airport bid to espouse national chauvinism.

The August issue of Struggle, the newsletter of the Organisation for Marxist Unity, asked its readers the following questions:

How does it help the New Zealand economy if tourists to New Zealand end up landing at a foreign-owned airport, travelling in a foreign-owned campervan, and visiting foreign-owned iconic tourist sites and spending money which will simply go back to the overseas owners?

The question that the Workers Party poses in response to these questions is:

How does it help the working class if the left sows illusions that somehow New Zealand capitalists are preferable to those from overseas?

New Zealand is a junior imperialist country. The majority of workers in New Zealand are employed by New Zealand-based capitalists. The New Zealand capitalist economy is not dominated by foreign capital as in semi-colonial countries such as Thailand. Therefore it is totally incorrect for leftists, and particularly those that call themselves Marxists, to focus on opposing foreign capital and (by logical extension) preferring NZ capital.

The Workers Party position is that workers need to build a movement that fights capitalism as a whole, not just that which comes from other countries. This isn’t an ultra-leftist position – it is the only honest message that Marxists can take to the working class.

The Struggle article is just one of many examples of national chauvinism in the New Zealand left. The Coalition Against Foreign Control of Aotearoa (CAFCA) is an organisation that describes itself as “progressive nationalist”. It regularly puts out publicity and runs campaigns against what it sees and increasing foreign ownership of the New Zealand economy since deregulation in the 1980s. One of its activities is the Roger Award (named after former Finance Minister Roger Douglas), given every year to the worst foreign capitalist in NZ. Whilst these awards do help to expose some of the filthy practices of some of these companies, they also foster illusions about New Zealand capital and policies of protectionism.

The Workers Party did not support the proposed takeover bid by Dubai Aerospace Enterprise, which has since been dropped. Nor, however, do we support the airport’s current New Zealand capitalist owners. We believe that as a Marxist-Leninist party our job is to build an independent working-class party that fights for socialism and an end to capitalist exploitation. Building such a movement is not possible if you are siding with one capitalist over another, or backing a perceived lesser evil. Auckland Airport should be run by and for the working class majority, and this cannot be achieved through siding with sections of the capitalist class.