Looking at both parties previous and current policies, we can observe the impact of the ideologies they have adopted on their policy making. The National party in the last 20 years has driven policies from a neo-liberal viewpoint, focussing on minimal state intervention. The Labour party, in contrast, is looked at as being the flagbearer for social democracy (Eichbaum & Shaw, 2008), and their policies are influenced from this ideology. An ideology is a coherent set of ideas and values. Ideologies justify specific policies and support specific groups; such as social or economic.
It extends into an assessment of the existing state of social and economic affairs, and a political strategy for shifting from one to another (Eichbaum & Shaw, 2008).
Social issues, and the way in which policies are created and explained, will be shaped by the values and ideas of those who have the most political influence on society at the time. These ideas are commonly grouped into political ideologies. Political ideologies are the groups of ideas and ethical values, based on the core behind, and the solution for, social and economic problems (Duncan, 2007).
They are both normative and politically motivated. Political ideologies are normative in the sense that they hold values about human nature and how society should live their lives, and politically motivated in being supported by political interests (Duncan, 2007).
Political parties base their actions and policy making on the ideology they have adopted. The two main ideologies shown through New Zealand policy are neo-liberalism, and social democracy. There is a political distinction drawn between these two ideologies, left and right-wing parties.
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The right-wing party National, implements their policies under a neo-liberal ideology. The more left-wing party Labour, implements their policy under a more social democratic group of ideas. Neo-liberalism promotes the value of a free market, individualism, and a minimal state. To neo-liberalists, a free market is best for economic growth and distributes wealth fairly. An individual is better off by means of their own efforts, and satisfying their own needs. This then develops the capability to trade with others, which is an important idea of the neo-liberal ideology (Belgrave, Cheyne, & O’Brien, 2008).
By leaving individuals to their own needs doesn’t distribute wealth fairly in the end as not all individuals are the same. Individualism or freedom means that citizens care for their own needs, as they are the only ones who make the best decisions. The exercise of individual freedom in relation to private property is an important part of the neo-liberal ideology, and the state should do as much as possible to ensure this freedom is not restricted (Belgrave, Cheyne, & O’Brien, 2008).
In a neo-liberal view, this freedom is often referred to as negative freedom, opposing the social democratic view of positive freedom.
Neo-liberalists don’t see policy as distinct from economic policy. This is because under the ideology of a neo-liberal idea, if you get economic policies right then social policy should follow. Neo-liberalists also believe in having a minimal state. A state should only focus on the core actions such as policy making and the courts. The state has a responsibility to ensure that laws which are put in place to allow the market to operate more effectively are applied in a way that prescribes no discrimination (Braman, 2003).
The overall aim of neo-liberalism is to reduce the size of government in economic and social life. Neo-liberalism has had the greatest impact on public policy in New Zealand over the past 20 years. An example of this ideology in policy making in New Zealand history would be The National party in the 1990’s. National significantly reduced the state’s role in the labour market, and introduced markets in public housing and education. A more recent example is the current National government and their benefits policy. In 2008 National focussed on getting beneficiaries into employment.
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National’s leader John Key announced that they were committing to a benefit policy that would act as a safety net, but encourage beneficiaries to go out and source other forms of income (Key, 2008).
This is a neo-liberal idea in the sense of having minimal state intervention. The plan to put in place a tax system that encourages people to work hard and not rely on the welfare state, and the continuing of shrinking the size of government sees that the future intentions of the current National party is going to carry on down a neo-liberal road (Key, 2008).
Social democracy is a political ideology which embraces both socialism and liberalism (Belgrave, Cheyne, & O’Brien, 2008).
It is not a tightly sealed set of political values and beliefs, but a set of several. Social democracy contrasts with the ideology of neo-liberalism by identifying market failure rather than government intervention (Eichbaum & Shaw, 2008); this is why it stands for a balance between market and the state. Its main values lie more within the socialist belief, but it highlights a key liberal view on individualism and individual freedom (Eichbaum, 2006).
Social democracy regulates certain areas of economic activity, and develops the operation of the welfare state. This reinforces the key idea behind social democracy of everyone being of equal opportunity (Duncan, 2007).
The state has a role, and is used as an instrument of social change (Belgrave, Cheyne, & O’Brien, 2008), and this is the general view that social democrats have of the state. They acknowledge that inequality and capitalism exist, and this justifies the need of a welfare state. The welfare state is the key instrument for guaranteeing wellbeing.
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Social policy is concerned with particular areas of public goods, which are those that are supplied to citizens in need or dependent. Education, health, housing, and income support are examples of these (Belgrave, Cheyne, & O’Brien, 2008).
Redistribution of wealth and opportunity is a desirable purpose, and the outcome of this policy should end in a more unified society (Belgrave, Cheyne, & O’Brien, 2008).
Social democratic policies would not have lasted very long without an economic theory to explain them.
Failure of the classic neo-liberal economic policy which was based on self-equilibrating markets, in the era of the Great Depression, allowed British economist John Maynard Keynes to then proposed the Keynesian theory. For an economy to reach a point of equilibrium – where demand equals supply, it needs to be helped along the way and will not accomplish this if left to its own devices (Belgrave, Cheyne, & O’Brien, 2008).
Keynes suggested that to reach the right equilibrium governments need to put money into the economy when needed, which will result in growth and higher employment (Eichbaum & Shaw, 2008).
Full employment was the objective of Keynesian economics and this was important to the welfare objectives of a social democratic state (Duncan, 2007).
Higher employment then boosts demand so the cycle can then continue. Overall this showed that it was ok to provide welfare. Some benefits are universal, but this doesn’t mean we all would have to use it (Eichbaum & Shaw, 2008).
This connects to the social democratic ideology of having an equal balance between the market and the state. In New Zealand, the Labour party’s ideology of social democracy influences the way they construct policies.
Labour’s ideological backgrounds are visible in the basics set out in its constitution. The principals are underlining the facts that resources in New Zealand are there to benefit all equally, and in economic relation, there should be a fair distribution of wealth and opportunity (Eichbaum & Shaw, 2008).
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In the early years Labour introduced a series of measures which have become fundamentals of New Zealand society and culture. In 1935, for the first time, healthcare became affordable and accessible to all.
The 40 hour week was also introduced and this benefited workers, as well as reducing unemployment (Belgrave, Cheyne, & O’Brien, 2008).
This is a very social democratic value of equality and equal distribution. On more recent terms, the 5th Labour Government lead by Helen Clark still produced policies reflecting social democratic ideas. The party committed to supporting families as best they could, with funding going towards achieving the best education and health systems available (About Labour, 2008).
Labour also drove towards supporting older New Zealanders and valuing the importance of Maori, Pasifika, Asian, and anyone else who called New Zealand home. These policies relate hugely to the idea of equality and fair distribution, which are fundamental values of social democracy. Labours adopted political ideology impacts the way they have made policy in the past, and still impacts their policy making today. These two political ideologies prove through New Zealand history and past political structure, that ideologies have a big impact on policy making.
The policies implemented by National have been driven by the values and ideas of neo-liberalism. These policies focussed around reducing the size of government and therefore having a minimal state. Labours policies are drawn from the social democrat ideas. Social democracy is aimed at applying the values of equality, redistribution, and social responsibility (Eichbaum & Shaw, 2008).
The Labour party focuses their policies around equalising wealth and opportunity, and supporting the range of citizens in this country equally. In conclusion, this shows how policy making is implemented through the ideologies.
