Brexit brings home bitter truths

David Shearer – 

I do not think anyone truly expected the United Kingdom to vote to leave the European Union. It was an earth-shattering result that will mean uncertainty for months and possibly years to come.

Since that vote, I have been asked many times what Brexit will mean for New Zealand.

First, as a small island nation, we rely on our international relationships for safety and prosperity. In general terms, it works in our favour when larger powers take a co-operative, rather than isolationist approach.

Lost voice

For example, with the UK leaving the EU, we will lose the valuable voice and influence inside Europe that we have relied on for many years.

We had this voice because of our historic and cultural ties with Britain.

Now that Britain will be more isolated, it will be up to us to grow our own relationship and influence with the nations of the European Union – no easy task.

This leads me to trade. New Zealand’s trade volume with the EU is several times larger than our trade volume with the UK. We have begun negotiations on a trade deal with Europe and will now need to open a completely separate deal with the UK.

Backward step

New Zealand has long enjoyed access to EU nations with its beef, dairy and sheep meat. That will need to be renegotiated between Britain and Europe and there’s a risk that the new terms may not be as beneficial to us.

More broadly though – and quite apart from the global economic uncertainty over the coming months and the inevitable cost to Britain – it is a step backwards.

The EU is the world’s largest economic bloc.

By leaving, Britain will lose an important influence.

Europe too will lose. Britain is a nuclear-armed country, a permanent member of the UN Security Council and has the closest relationship with the US. It was willing to stand up against threats when human rights were violated. Europe benefited from those connections.

Important lesson

We benefit from a strong Europe. It has acted as a balance to the other blocs of China, Russia and the US – and one that shares similar principles and outlook in many areas as we do in New Zealand.

But there is another enormously important lesson that we need to take from Brexit, I believe, and that is political.

The UK vote showed that a growing group of people, disgruntled by the country’s leadership on basic issues like pay rates, housing and jobs.

It is playing out elsewhere too, in the support that Donald Trump and Bernie Sanders are able to attract – people fed up with politics as usual.

Underlying issues

The same underlying issues are in New Zealand.

This was highlighted last week by a Statistics New Zealand report which showed that the wealthiest 10% of Kiwis now hold close to 60% of wealth – and that share is increasing.

In contrast, the bottom 40% of households control just 3% of wealth.

Unequal societies are much more expensive – we all pay more in health costs, prison costs, unemployment, housing and policing social problems and crime. Along with that comes a frustration that no matter how hard people work, they just cannot get ahead.

There is also a growing fear in New Zealand about rising levels of immigration putting stress on housing and infrastructure such as roads, and the job market.

Matching immigration

Immigration should be matched with what New Zealand can handle – our first thought must be our own citizens. We should seek out the immigrants we need, and turn the flow up and down in step with what New Zealand’s job market and infrastructure can accommodate.

Nor should immigration be used to drive down wages.

There is no faster way to undermine faith in our government than have them working hard and getting nowhere.

I do not believe New Zealanders have reached the same level of anxiety that produced the Brexit result in the UK, but we need to take care that we do not become a society of haves and have-nots.

David Shearer is an elected Member of Parliament from Mt Albert in Auckland and Labour Party’s spokesman for Foreign Affairs. Please read our response to the above article, ‘Journalists aware of Questions ban’ and other related stuff in this Special Report.

 

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