The Effects of the Crisis

Despite optimistic statements by the Prime Minister at his weekly press conferences, the impacts of this economic crisis are serious, and the efforts of the government to combat it appear to be funnelled into two main directions. They are trying to reduce their expenditure as far as possible, as part of a process of winding the economy down, and they are trying to stifle dissent within the country, as this dissent is primarily a reaction by people to the various attempts by the government to lower their living standards, and fight for their rights. Thus, despite the various statements in economic jargon the government has largely abandoned the attempt to resolve the present economic crisis by orthodox Keynsianism.

The attempts to reduce government expenditure, as part of the process of winding the economy down, can be evidenced in a number of ways. One clear example, and one which is dear to students' hearts, is in respect of their bursaries. The continuing failure of the government to establish a bursary system which keeps up with the cost of living, year by year, is blamed on the country's economic situation. It has not even been seen as fitting to raise the bursary for 1977, to the level relative to the cost of living that it was, at the time of its introduction, at the beginning of 1976. Students are therefore one group who have been paying for the economic crisis.

Another example is with the recent government proposals to cut back on the domestic purposes benefit. Throughout last year, the government kept on referring to women on domestic purposes benefits who were engaging in de facto relationships, and on the basis of these attacks, managed to successfully depict beneficiaries as bludgers who were in receipt of a benefit form the state to which they should not have been entitled. It is interesting to note that, in its report, the Domestic Purposes Benefit Review Committee could find no evidence of such wide-scale abuse of the benefit, but, despite this, the government's denigration of beneficiaries was successful, with the results that the cutbacks in the benefit were able to be made politically acceptable, Similar policies are also becoming evident with other groups who are on Social Welfare benefits, one such group being young unemployed people.

The example of the domestic purposes benefits shows how the government is using campaigns of abuse to attain economic objectives. This process is taken one step further with their policies ot trying to stifle dissent, dissent by people who wish to protest against cuts in their living standards.

The best example of this is with the relationship between inflation and the new industrial legislation that the government brought in last year. As part of its economic policy to combat the crisis, the government has been attempting to hold down wage increases, so that wage earners will have to pay a greater share of the cost of the crisis. Not unnaturally, the organised trade union movement, throughout last year, increasingly took action against these policies of the government, and the mounting levels of industrial unrest were used as a reason by the government to introduce new laws to restrict the abilities of the trade union movement to work to protect its members (see NZUSA's booklet, "Labour's Leg Irons", available from your students' association). Although this new legislation may not yet have used, its existence is nonetheless a real threat to trade union organisation.

Government attacks on other minority groups, such as the Maori and Polynesian people, can be seen in a similar light. The government's intention is to divert people's attention away from the economic crisis as the cause of their problems.