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20 February 2006 Big Business needs to put
apathetic policy to the sword
Worrying I might not be gainfully employed in January, Roger Kerr asked me to think back to how New Zealand was 20 years ago; about the Business Roundtable's role in the changes over this time; and how New Zealand looks from an overseas perspective. It's proved a more enjoyable task than I'd thought. Although I've been back briefly over the summer for the past four years, New Zealand hardly makes the front pages of the Anglo-American print media I'm addicted to, and inevitably one loses contact. I'm conscious of that and also Tom Stoppard's line about Russia that one must be careful about becoming a spurious expert about any place just because it has an airport. In a talk at the University of Auckland last November I spoke of the New Zealand to which I rather reluctantly returned in 1965. Smug, colonial, the extensive barriers to contact with the rest of the world. Life was highly institutionalised; individual expression was subsumed by unions, business, trade and sporting associations. Discourse between groups was limited and lacking in spontaneity. Competition was artificial and people seemed content. And yet gradually over the next 20 years our options were foreclosed, our disengagement from the rest of the world became a trap and people came to see life as we'd known it had run its course. Few understood why ... nor what was in store. In 1984 I'd recently bought into Lion, when New Zealand, jolted by crisis, embarked on a political programme that allowed the country to rejoin the world a freer and more secure place. Threats and opportunities were transformed, many companies took advantage of the new freedoms, some did not cope well, and others lost the plot. The Business Roundtable had recently been established, based on foreign models of chief executives' organisations. I was offered my predecessor's place and willingly accepted, interested to sit with older men but no women, and in the early days I didn't see it offering anything especially different - a group established to put forward the interests of Big Business. Big Business in those collusive days, with some good reason, was not a popular place to be. Sir Ron became chairman and I worked with him in finding a fulltime executive. Felicitously for us, we hooked up with Roger Kerr and - 20 years on - New Zealand is a different and better place. The "old model" of self-interested lobbying was out and, no doubt like what happened in Eastern Europe after the fall of the Berlin Wall, everyone was scrambling for new stabilities. There were, I believe, only two groups that handled these changes well. Not surprisingly, both supported the Government's free market thrust: Federated Farmers under Peter Elworthy and the Business Roundtable under Sir Ron and Roger. As Roger Douglas himself subsequently said, without the support of groups like the Business Roundtable outside Parliament, New Zealand's comprehensive reform programme may well have foundered, so that alone justified its existence. After all, there's nothing inevitable about history; individuals do make a difference. How was the Business Roundtable in that period? Stimulating, smaller, there were more major industrial companies and fewer service organisations than today, no doubt reflecting economic changes over the past 20 years. My memory is that a lot of the older CEOs were confused by the political changes but in the main were supportive if often silent. There was a feeling New Zealand was undergoing a revolution, that it was exhilarating and that, if sensible and robust policies were developed, the Government would be supportive of promoting them. Ministers were open and collaborative - about 180 degrees from where things are now. For nearly 10 years New Zealand was an exciting place to be, witnessing and participating in an extraordinary surge of thinking and activity after largely writing itself out of the world script. With Ruth Richardson's ouster after the 1993 election the scene changed, few further reforms advocated by the Business Roundtable got implemented, and those that did - like producer board reform and ACC - took an eternity to materialise. Our frustrations grew, and perhaps we made them a bit too obvious at times. In hindsight it shows the necessity for political leadership; without it momentum was lost. While MMP has made policy formulation and execution more complex, I believe the Business Roundtable's presence and vitality, with the support of other business organisations today, has helped to minimise policy slippage. It has been a tough, largely thankless task, faced with an apathetic and often hostile media and, until recently, low-quality, timid leadership by the main opposition party. The National Party has seldom been the party of reform, nor has it ever been especially interested in promoting freedom but rather a "soft porn" version of socialism. I've now been resident in the UK for four years. My overall impression is how good life is for most people in New Zealand. I misread the sustainability of the Douglas/Richardson reforms, although I don't believe the country can continue to run on autopilot forever. To read the Herald, New Zealand is a contented, multicultural, high-tax-paying society, at peace with itself, untroubled by the outside world, and self-satisfied with its institutions. The major debate in the Herald since my return has been whether or not exotics should be retained in Queen St. And yet, the fact that high emigration rates continue, and that a Labour Government presiding over a buoyant economy barely scrapes back into power, indicates that not all is rosy in spite of the Herald's lobotomising attempts to portray it otherwise. While a lot has been made by the Prime Minister of New Zealand's reform fatigue, I don't subscribe to it. The third way, so keenly promoted, must be the shortest-lived political philosophy in thousands of years of human thought. I would hope the Labour Party could rethink its directions. The Business Roundtable is apolitical and interested in policies, not politics. We were seen - wrongly - as aligned with Labour in the 1980s. Mike Moore has recently said: "Isn't it good that the last two governments have not changed the fundamental reforms of the 80s?" - despite the earlier rhetoric about "failed policies". Labour could easily adopt more reforms and policies like Labour parties in the UK and Australia. It has taken decisions to scrap the carbon tax and reduce business taxation, but only under duress: it has a long way to go. If Labour does not do these things, how else does the National Party win other than by clearly identifying itself with policies the Government cannot or will not replicate? I don't believe a losing party will reverse its fortunes merely by adopting policies and slogans of the party that keeps beating them. And surely there is an enormous list to choose from: mal-performing public institutions, an over-extended welfare state, and the mindless political correctness that is consuming the country. As well on the economic front it's hard to think of any area, be it over- taxation, employment or regulatory policies, that isn't going to be destructive of enterprise over time. In the UK after the July bombings, multiculturalism - all the moral equivalence stuff - is going out of fashion. There's a new assertiveness of Britishness and of traditional values of justice and freedom, the very things that attract migrants to our societies. There's also a much greater appreciation than in New Zealand of the importance of being prepared to defend and fight for values so different from those around us, rather than turn from traditional allies we've worked with successfully in the past. Yet overall New Zealand seems in remarkably good shape to me. The country is well positioned post the 1984 reforms, low-skilled secondary industry has largely gone, we have extensive natural resources and high-grade temperate agriculture. Europe being eclipsed after 500 years hegemony, the CAP's imploding, the growth of China - these are the big developments and they're all positive for New Zealand. In fact, after 10 years' drift since the early 1990s one can only believe that supportive rather than destructive government policies would propel New Zealand into the top half of the OECD pretty easily. Our problem, it seems to me, arises from the ease of life, and a media unwilling to focus the community on the inevitable impact of current policies on our place in the world. The contrast with Australia is striking. There much of the media is far more pro-reform, conscious of the need for Australia to stay competitive and dynamic, and so are the community and political parties in general. Here the absorption with domestic life, and a Government determined to shelter citizens from being in control of their own lives, enhances the probability that over time the country will drift into another crisis or just gradually lose competitiveness as we did in the decades prior to 1984. The Business Roundtable's role is to keep the faith, to raise the awkward and difficult issues, and to keep them before the public, media and politicians. It's a role many find unappealing, and it doesn't lead to popularity, but it is necessary and it does work. At least next time we'll know what to do. Douglas Myers is a member of the New Zealand Business Roundtable. |