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National’s dilemma – business as usual is failing them.

Written By: - Date published: 9:52 am, July 6th, 2020 - 99 comments
Categories: climate change, covid-19, Economy, Environment, jacinda ardern, Politics, science, todd muller - Tags: ,

Audrey Young’s take in Granny Herald to Jacinda Arden’s weekend speech was interesting. “No ordinary Labour speech by Prime Minister Jacinda Ardern“.

Centring an election campaign on recent tragedies may seem like a potential problem for Prime Minister Jacinda Ardern.

How far does one go in pitching one’s party brand, Labour, as the best to lead the recovery from the ravages of the global pandemic, Covid-19?

The answer, as evidenced Ardern’s speech to the Labour Congress, is not much.

With the exception of obligatory references to Labour at the start and finish, it was largely so non-political it could have been given in the bluest of blue constituencies.

And she is right, and not in a bad way. The intent of the Labour party is unchanged. It is a center-left party dedicated to making sure that the benefits of our economy are shared far more widely than National would normally prefer.

However these are not normal times. National if it was capable of getting into the treasury benches would have to do virtually the same basic economic policies because at present if any significiant number of us fall badly in the covid-19 world economy, then we will all fall into a deep recession and fall together.

This leaves very little room for the kinds of politics of envy and moralistic blame and spite that are the fundamental bedrock of every National campaign since I started looking at politics in 1975. After all it is bloody hard to blame people for losing their jobs because of a virus hitting the viability of their employers.

It was not a speech usually required of Labour leaders to motivate the foot-soldiers to get out and campaign. With Labour in Government, and polling so high it could govern alone, no extra motivation is needed and big new policies can wait.

Ardern’s was the speech of a Prime Minister, making a few adjustments to Government policy to take effect in three weeks, policy that has been signed up to by New Zealand First and the Greens.

For that reason alone, it would have been wildly inappropriate to have made it too party political. It had to be prime ministerial and that will suit Ardern and Labour this election.

I did like this

That doesn’t mean there wasn’t material in Ardern’s speech worth criticising. Her so-called five-point plan was not a plan.

For instance, point two of the five-point plan is “jobs, jobs, jobs.”

Others are “investing in our people;” “preparing for the future”.

These are slogans, not plans.

In other words, what she is complaining about (there really hasn’t been any doubt of Audrey Youngs’ political leanings) was that it read exactly like statement of a National based government going into a next election and not stating exactly what they will want to change. 

As Audrey Young points out…

Ardern has said she will govern right up to election day in September, and this is what she means.

It is going to be an ongoing problem for Muller, but it is not a problem for her.

In other words, Jacinda Ardern is forcing National to declare what they would actually want to change, why, and to convince a *lot* of voters that it is way better than what is happening now. This is going to be extremely hard without their usual fear and envy political toolkit, and when the future is uncertain and fuzzy.

Covid-19 isn’t going to be the last global pandemic or even the last potential one of the next decade. By making ourselves a dominant part of the world ecology and pushing to the ecology of other species so heavily with our population growth, we’re making ourselves a target for every opportunistic bacteria, fungi, prion and virus in the larger microbiotic ecology.

That is before we look at the risks of rapid global climate shifts that we haven’t seen during the entire time that we have been building our civilisation. In geological terms (my first degree was in earth sciences) the last 10,000 odd years has been a magic time of stability. Arguably it is what has allowed us to move from the hunter-gather societies that we see in the anthropological record to the agricultural settlements that show the beginnings of our current most prevalent worldwide cultures.

But the business as usual of the last 10,000 years is increasingly no longer as possible as it was previously. The risks have markedly increased over recent decades.

As someone who has been involved in private business my entire long working life, who has a MBA, and who has been involved in politics – I’m always impressed in a bad way at just how self-deluded business people are about the applicability of their skills to government. Essentially it is a very rare business person or manager who can jump the transition because it requires more far imagination than a simple profit and growth chaser (the essential business skills) can muster.

We currently have the example of Donald Trump in the US displaying just exactly how useless self-professed business people are at running a crisis – compared to here where we have someone who is actually trained and competent in governing and public service. What has been even more noticeable than here is the way that he killed the services dealing with potential risks within a year of inauguration, like pandemics, and gave important areas like the management of wilderness areas like National Parks to reward cronies who wanted to destroy them. This isn’t a aberration. It is just a more extreme version of the standard short-term approach of business people turned politicians.

Skills at looking at the 2-3 year forward viewed cycle common to most business simply isn’t that relevant to an economy that requires 20 year plus investments. Children take decades to train. Sewerage systems last at least fifty years. Making sure that there is housing and infrastructure for migrants and housing is a process that takes a decades. Business people aren’t used to those timescales and they seldom manage to start to think that way.

In New Zealand, we have a prime example of this. Just consider the basic failures of the John Key government looking backwards. There are virtually no changes for the better. We wound up with an economy that was ever more focused on a highly risky industries. Most of the Key government economic initiatives look exactly like robbing parts of the future economy like providing sufficient housing or urban transport in favour of providing highways for tourists (who we no longer have) and more commuters to swell traffic problems in rural and small urban areas with National voters. There was reason that National’s RONS program was known as ‘Roads of significance to National’.

Tourism was a large export growth industry. One that is not only subject to the vagaries of disposable income in other countries, but also the cost of aircraft kerosene, and the ever present risk and well warned about risk of spreading epidemics. That is why it has been running in a nasty boom and bust cycle for decades.

It is also why we have now had to post a guarantee to bail out Air new Zealand for the second time. For the same reason – our real and reliable export / import economy requires a reliable air-freight service. We don’t have capacity to stock everything we need, and we have have perishables and goods that need to be delivered in a more timely fashion than the weeks it takes on sea freight. We can’t rely on offshore businesses to provide that service because they have no need to do so in times of stress – which is when we really need it. Like in the middle of a pandemic with no payloads of tourists.

Financing our schools and tertiary education with overseas students was great for the Key government balance sheet. It means that they could underfund the education that create basic skills required for our future economy so that they could give taxcuts and RONS to current taxpayers. Of course that does just kick the risk down to our now taxpayers now who will have to front up with support to prevent our educational institutions from disintegrating from the chronic underfunding of the sector. It will have been far cheaper in the long run to have not

But basically business people are extremely poor handlers of real risk. Things like epidemics, global recessions, and pandemics are simply concepts that their ever optimistic small focus minds prefer not to deal with. After all that will always be someone else’s problem. This is a direct consequence of the short time horizons of most managers and even business owners these days. They rarely think of where their business will actually be in a decades. They focus on the current plans over the next few years. Professional managers are typically always looking to their next job, and how the current one will look on their CV when they apply for it.

Not of course there are people who are focused on long term governance and decade long policy making in the National party. Bill English comes to mind. But that isn’t where the focus of the National party is. They love the short term fixes of the meaningless ditherers like John Key, and throw out the contingency planners of the future like Bill English.

It is almost a pity that Bill English is really the type of person that the times demand. Todd Muller doesn’t currently have it, and it seems unlikely that he will have time to develop it.

But it is what I have always seen in Jacinda Arden beneath communications skills. It has been fascinating seeing that expose over this current term in parliament as she and her caucus mature in government. My only quibble, which I expressed after Andrew Little stepped down in 2017, was that she may not have had the skills required at the time to express it. I’m really happy to find out that I was wrong.

Poor National – they really don’t know what they’re facing. They still seem to think of politics as being business as usual.

99 comments on “National’s dilemma – business as usual is failing them. ”

  1. Byd0nz 1

    Thumbs up LPRENT.

  2. Just Is 2

    Great analysis, really great.

    National has NEVER had a vision for the future of NZ, it has always been about gaining power at any cost and constructing policies that are heavily slanted towards benefiting their electoral donors.

    As history shows quite emphatically, NZ has never been in a better position on any metric after any term of a National Govt.

  3. KJT 3

    At their best, National can be reasonably competent middle managers of the things that others have built. Showing the background of many of them.

    It has been disastrous when they have tried to do any more than that.

    Attacking other parties policies without a clue how to do any better, along with the "Born to Rule" sense of aristocratic entitlement, the totally callous attitude to anyone "not in our class old boy", and their large dose of Dunning Kruger, gives all of us a "Moral obligation" to keep them away from any positions of power for as long as possible.

    • Just Is 3.1

      Here, here, I second that

    • tc 3.2

      Or theyll flog it off as they come in as owners not middle managers.

      • Just Is 3.2.1

        Yep, the usual scenario is to indicate to their members their intentions so they can all invest in some unknown business that they intend to sell the Govt business to, it's a technique used in many countries and wide spread in Australia

    • envy from across the Tasman. PM and followers : )

  4. Adrian 4

    I'm sending this to my "in-their-twenties ' kids as it is a brilliant bit of writing. Thank you.

  5. Sacha 5

    Great post, thanks @lprent

  6. The main difference is National often manage the profits away from the New Zealand Public in many ways, through Private/Public entities which reward the "investors" in good times and look to the "public" to pay the bills in bad times.

    Money makes money and should be kept to a certain circle/class/suitable recipients.

    Back room deals, nods winks and who you know….. "Standing /Religions and old School ties" come into play. Men lead, women are seen as supporting extras who could be easily replaced.

    I have seen all of that over my 78 years.

    Jacinda Ardern is special, and she is attracting people to the left who have been middle right before. She is outstanding in many ways.

  7. Byd0nz 7

    And I have heard her quote Big Norm recently and that says heaps for me.

  8. Paddington 8

    "They rarely think of where their business will actually be in a decades. They focus on the current plans over the next few years. "

    Nonsense. NZ business is dominated by SME's. Many of these are family owned, who have a far greater incentive to plan longer term. Individual Governments think little beyond the current electoral cycle, and when they attempt to, they frequently fail to deliver (eg Kiwibuild). In a mixed market economy, Government and business both have a role to play. The governments is to provide the environment in which business can best thrive; it is business after all who employ people, pay taxes to fund public services, and provide many of those public services efficiently and effectively.

    • Sacha 8.1

      The private sector has done such a great job of building roads lately.

      • Paddington 8.1.1

        They certainly have. Well Connected, who built the Waterview Connection in Auckland is just one example.

        • Sacha

          As opposed to the more recently delivered Waikato or Kapiti Expressway projects..

        • lprent

          Do you mean from when it was being planned – 20+ years ago?

          Planning history

          The project had an extensive planning history, with the earliest consultation in 2000, though the proposal for a route roughly in the area dates from much earlier.

          Oh dear… Well Connected didn't turn up until 2011. Late Connected perhaps?

          In mid-2011, it was announced that the 'Well Connected' consortium led by Fletcher Construction had won the tender, for $1.3 billion.[50]

          And then they did the implementation in the shortish end phase 6 years later

          The tunnels opened at 12:47 am on 2 July 2017, with three police cars leading the first vehicles through the northbound tunnel.[57]

          Oh well, I guess that being stupid and lazy must shorten your time scale to just the end-bits of the processes required for infrastructure.

          You always have to look at the foreplay otherwise you’re only looking at part of the act…

    • Adrian 8.2

      Kiwibuild struggled because housing SMEs did not want to contract to build smaller houses because there was less money in them. A lot more money in a mansion with only a metre of grass on all sides. Watch this space, I think this Labour will be a Retreat, Regroup and Rebuild and comeback and hit the bastards hard. BTW, I think the new supply of Lab built houses is over 12,500 already.

    • Incognito 8.3

      Heh! The PPP, the Paddington Pandemic Plan that every SME has nailed on the wall next to the Evacuation Scheme and First Aid Kit.

      • lprent 8.3.1

        🙂 That is a much tidier and shorter way than I tried.

        I still think that Paddington will have a problem with it. Could we condense it down to a slogan suitable for chanting at a Trump camp for political thought?

    • Draco T Bastard 8.4

      NZ business is dominated by SME's. Many of these are family owned, who have a far greater incentive to plan longer term.

      [citation needed]

      IME, all SMEs are run by a single person who doesn't think beyond next week.

      Individual Governments think little beyond the current electoral cycle, and when they attempt to, they frequently fail to deliver (eg Kiwibuild).

      Kiwibuild is the problem we see when government tries to get the private sector to do the work. Kiwibuild and many other government works would have worked if the government had simply reinstituted the MoW and then simply done it. Would have removed all the effing around with the private sector.

      Of course, that would have proven the inefficiency of the private sector and we can't have that now, can we?

      In a mixed market economy, Government and business both have a role to play. The governments is to provide the environment in which business can best thrive;

      The only environment where business thrives is in a working society which means the government needs to provide all that the citizens need.

      it is business after all who employ people, pay taxes to fund public services, and provide many of those public services efficiently and effectively.

      The government doesn't need money to spend money and it doesn't need to take out loans either. And, in fact, all the resources in NZ are owned by the government.

      Which all means that we don't need private business at all.

      • lprent 8.4.1

        Which all means that we don’t need private business at all.

        Not entirely true, I wouldn’t work for government. Far too tedious, slow and they seem to have a permanent negative innovation index.

        The only times I’ve actually worked for the government or done contracts with it here was when I was in the army and when I was working for a company that contracted to them. I’ve now done work for governments in several countries providing IP to fulfill contracts. The contracts provide the insulation. They’d be quite horrible for me to actually work for.

        I prefer to go off and figure out how to build a survival level existence on a block of land instead. It’d be far more interesting innovating ways to not starve or freeze.

        Private industry, for all its faults and bosses with excessive hubris like Paddington, provides a insulating space for the many of us who really couldn’t stand a government job.

        That doesn’t mean that I don’t value government. For me they are a necessary evil – like having a sewerage system, defense force, courts or the police. You may be critical of them. But they provide the bedrock for all of the interesting things that could be done, and that I’d like to do.

        • Draco T Bastard

          Far too tedious, slow and they seem to have a permanent negative innovation index.

          Interestingly enough, research shows that its been government doing most of the innovating and moving fast.

          • maggieinnz

            Thanks for the link. Interesting book. I started reading Picketty's 'Capital in the 21st Century' but can only do so in small bites, and Paul Mason's PostCapitalism – far more digestible but didn't deliver what I was looking for; perspectives and thinking beyond the usual dynamics. I think Mazzucato may have that special something due to her interest in heterodox economics and being influenced by Schumpeter. It was Schumpeter's Gale (aka creative destruction) that kicked off my interest in economics and its influence on cultural evolution.

          • lprent

            Sure – but that was the funding for the Research & Development. Look at the implementation – which is at least as important.

            There are very few cases where the actual development beyond an unusable academic proof of concept was actually done by state employees. They pushed it out in the form of contracts to develop an idea or a block of research. That is mostly because governments have very little ability to do development in-house.

            Personally I'm not a researcher. I'm usually employed as a developer. So I've wound up doing some of that government development delivering contracts to governments worldwide. I've also done it for private companies.

            The government contracts are often more open-ended than those of private companies because they're often further at the edge of capabilities. The private funding is usually focused on developing enhancements on something already known to work. The vast majority of development work is done in private companies and has nothing to do with the state at all. Governments tend to fund leaps. Companies tend to fund incremental progress and refinements and moving everything past 'just good enough'.

            From what I gather from people who are researchers, the same applies at a lesser extent there. The government hands out funds for research to other organisations to do. Governments usually don't have those skills in-house except at pseudo independent institutions like universities.

            • Draco T Bastard

              Sure – but that was the funding for the Research & Development. Look at the implementation – which is at least as important.

              I did and its not just funding. There's the choosing of what to research and what direction that research should take and then how to bring that research to fruition. the US red govt has hundreds of departments doing just that across thousands of areas of research.

              How to bring it about is usually a combination of private contractors, universities and dedicated government institutions such as NASA and DARPA which utilise the same combination. It's a many branched tree.

              Almost all of what the US government does directly is basic research which is then made freely available to private companies who then take it and make products with it – the applied research and, yes, development. Interestingly enough, if the US government didn't do that basic research pretty much all of the development that comes out of the US would vanish as they're simply wouldn't be the knowledge available to continue.

              IMO, Boeing simply wouldn't survive without the knowledge coming out of NASA. I'm pretty sure that you'll find that that's true of Elon Musk's businesses as well.

              Innovation is pushed by governments, either directly or indirectly, because its how a nation successfully develops their economy across all sectors. Leaving it to the private sector results in a narrowing of development and a reduction in resources going to that development. Its why NZ spends less than 1.5% GDP on research while almost all other successful nations are spending significantly more.

              • lprent

                Sure. But if you go to my original comment, what I said was that

                Not entirely true, I wouldn’t work for government. Far too tedious, slow and they seem to have a permanent negative innovation index.

                I wasn't talking about their funding. I was talking about the experience of trying to work for them. Frequently even when trying to deliver to them.

                My point was that the governments may have ideas about what they'd like to slosh money at. They largely seem to be incapable of effectively working on it themselves to the point where it is useful.

                IMO, Boeing simply wouldn't survive without the knowledge coming out of NASA. I'm pretty sure that you'll find that that's true of Elon Musk's businesses as well.

                But NASA doesn't generate more than a fraction of that knowledge. What they do is to order and pay for it to be delivered to them. The vast majority is delivered by the companies that they contract.

                Innovation is pushed by governments, either directly or indirectly, because its how a nation successfully develops their economy across all sectors. Leaving it to the private sector results in a narrowing of development and a reduction in resources going to that development.

                Exactly. However innovation is delivered in a usable form to governments by private companies and separate organisations to the government. There is a reason for that. It is because people talented enough to do research and especially development can't be arsed working for governments because as I observed – they are…

                Far too tedious, slow and they seem to have a permanent negative innovation index.

                Good at ordering the impossible. Good at throwing money at it. Hopeless as an institution at retaining the kind of staff or the kinds of processes required to deliver it.

                It gets really interesting through the 20th and 21st century history when you look at the delivery of development innovations from governments who actually did the innovative work, and who they were actually employed by.

      • Paddington 8.4.2

        "Kiwibuild is the problem we see when government tries to get the private sector to do the work."

        Rubbish. Kiwibuild is the problem we see when governments have an ideological brain fart and 1. have not the slightest understanding of whether or not they can deliver on their promises or 2. know they can't and just keep lying.

        • lprent

          Kiwibuild is the problem we see when governments political parties have an ideological brain fart and 1. have not the slightest understanding of whether or not they can deliver on their promises or 2. know they can’t and just keep lying.

          I quoted and corrected your obvious and rather ignorant error. The various statements made about kiwibuild since 2012 were by a political party. One that wasn’t the government at the time, and had no capability to do the kind of serious research that a government can do into policies.

          It isn’t hard to find similar issues with failures in National’s promises that they have made before becoming government for much the same reason. In fact it isn’t uncommon to find them even when political parties take the treasury benches. Simon Bridges promises about bridges for Northland during a by-election being an interesting case in point.

          What you are describing is a common failing with the democratic system that causes over-promise and under-deliver by political parties and individual politicians in each generation of politicians.

          They usually get the bad news after they gain the treasury benches and ask about the feasibility from the machinery of the government.

          However if you really wanted to look at extravagant promises, the I always go for amusement to those of the minor parties. Act in particular are just crazy on the lying politicians stakes – because they know that they will never be called onto deliver.

          • Paddington

            Political parties aspire to become governments. When Labour became government it doubled down on the madness that was kiwibuild, despite plenty of warnings it would fail. Ardern is a smart cookie; it still surprises me she allowed the idea to proceed.

            • SPC

              Trying to do contractictory things will neuter any policy.

              KiwiBuild was first a programme to get more homes built and at low cost to government. Build them and then on-sell to private buyers. There was the added component of them being smaller builds rather than the MacManions preferred by the private sector profit chasers.

              The government is quite capable of building houses – note the state house building ramp up. And should have built Kiwi Build by the same process.

              At some point Labour decided to amalgamate the plan with the concept of an affordable homes for first home buyers. And restricted KiwiBuild houses to such people – this despite the fact the RBG had brought in deposit requirements. So unless the government was going to stump up the deposit as equity there was not going to be enough buyers.

              The KiwiBuild sales should be to downsizing babyboomers and to those who took their first step on the property ladder to flats and apartments and now want to trade up as they start families and families renting at around mortgage cost – who the government can help into homes via shared equity (stumping up their deposit).

              • Paddington

                The government should be in the business of providing social housing via state houses and partnering with other agencies. They should not be building houses for private sale. If Kiwibuild shows us anything, it is that.

    • Johnr 8.5

      Please remember Paddington, that it is the employees of businesses that earn the revenue for said business owner, and who spend their income in providing revenue for businesses. It's a virtuous circle

      • Paddington 8.5.1

        Not entirely. The businesses revenues are the result of the capital of the owner + the labour of the owner + the labour of the employees. Without the invetsment of the owner, there would no business to employ anyone.

  9. Paddington 9

    "But basically business people are extremely poor handlers of real risk. Things like epidemics, global recessions, and pandemics are simply concepts that their ever optimistic small focus minds prefer not to deal with. After all that will always be someone else’s problem. This is a direct consequence of the short time horizons of most managers and even business owners these days. They rarely think of where their business will actually be in a decades."

    Good grief, another one! Business anticipates these types of events all of the time. As they have to anticipate events such as government mismanagement of quarantine processes, incompetent government ministers (think Curran, Twyford, Clark), the list goes on. Those of us that survive do so precisely becasue we 'expect the unexpected', and plan accordingly. On the other hand, for government's, they are simply waiting for November each 36 months.

    • lprent 9.1

      Good grief, another one!

      That is exactly what I thought reading your pig ignorant and dumbarse assertions.

      Clearly you have done fuck-all real business. Probably one of those idiots who did a economics course sometime in the past rather than anything realistic.

      I've spent 40 years working in private industry with everything from greenfield startups to international corporates. I have yet to see one that had any assessment of the risks for something like a pandemic. Some have a concept of a war risk – but only in warzones. Are slowly coming to recognize the ideas of technological risks.

      Those of us that survive do so precisely becasue we 'expect the unexpected', and plan accordingly.

      Yeah right – so tell me what provisions you have made for pandemics cutting out your source of supply for 6 months. Or for a lack of supply of trained staff in 5 years time. Or the cost of housing rising in the city of operations in a decade?

      Please be precise, because if you're the kind of moron who relies on bold assertions and no content, then I'll class you as another assertion only jerkoff who isn't worth listening to.

      …incompetent government ministers (think Curran, Twyford, Clark),..

      On the other hand, for government's, they are simply waiting for November each 36 months.

      And those statements just just indicate how profoundly ignorant you are of the real world. perhaps you should consider the word government rather than ministers. That is a process rather than a instance of who holds the treasury benches. The government plans roads, infrastructure, emergency responses to disasters and pandemics, and just about everything else over decades. Ministers come and go and provide some political guidance to it – but that isn’t government. It is just deciding priorities. Companies have nothing like the level of risk assessment processes that show up in forward policies looking over decades at risk.

      I'd say that you are just another stupid blowhard playing a tune on your own ego. Makes you look like a good dumb short-sighted and narrow minded national fool.

      • Paddington 9.1.1

        Wow, have I touched a nerve?

        I've run a variety of businesses for 35 years, and currently network with hundreds of SME's in NZ. We plan for all manner of events, and certainly for periods in which we cannot operate for a period of time. It also features in our insurance renewals, in the way we approach our H&S planning, and in a raft of other ways. Despite your so called' 40 years in private industry', I can only be glad you've been no-where near any business I'm involved with, because with that lack of insight anything you've touched would simply not survive.

        • lprent

          Wow, have I touched a nerve?

          Why is that lazy morons always start with that as their response. I guess that is because they can’t think of original insults to provoke a response.

          It also features in our insurance renewals, in the way we approach our H&S planning, and in a raft of other ways.

          So you're getting insurance policies that last for decades, and not just for the year that you pay premiums for? You know like the government does with strategic stockpiles of ammunition, medicines, trained personnel, buildings designed in part for unlikely events, and the like.

          Because generally insurance policies just say that they will pay out for losses. They don't say that they will provide the required services – right? What happens when those services aren't there. Say in a pandemic when you get an outbreak in your staff. Your insurance policy has immediate access to medical staff and ventilators?

          Of course they don't – you dimwitted pillock. What you and the insurance company lean on are the preparations of government.

          …and in a raft of other ways

          Yeah right. Explain them, and I'll keep pointing out exactly both how inadequate they are, and how they ultimately depend on the precautions that the government provides.

          Personally I think that you are so full of stupid bullshit that you’ll keep slipping over the crap that you spew from your lying fingers.

          Making unsubstantiated assertions about the provision of support for low probability and high risk events is just stupid. You need to be specific before anyone would consider that you’re being believable about the companies covering that kind of risk. All I am asserting is that they don’t usually, which is why you find companies failing when they occur, or unexpectedly retrenching and inventing half-arsed plans to do it.

          • Paddington

            That's an incredibly lazy response; I'll assume you're busy trying to figure out how you've made youself look so silly with your original post. here, try this:

            "So you're getting insurance policies that last for decades, and not just for the year that you pay premiums for? "

            We pay Insurance premiums as we go, but we integrate our cover into long term/unexpected event planning. I assume you've heard of 'loss of profits' insurance? You know, to plan for an unexpected event like a fire?

            The business I run will survive Covid-19 because we expect the unexpected and plan for it. We have contingency supply plans, financial reserves and the technology and systems to migrate business across borders. It’s not rocket science, but clearly beyond your comprehension.

            • Drowsy M. Kram

              "A muppet for a health Minister. A lack of PPE. Inadequate border control."

              Paddington, you left out 'NOT ONE SINGLE CASE of community transmission of Covid-19 in NZ since the recent managed isolation and quarantine measures were put in place at our borders.' I would have though a successful businessman such as yourself would be well aware of the Covid-19 health outcomes of our government's "Inadequate border control".

              We don’t know how lucky we are…

            • lprent

              It’s not rocket science, but clearly beyond your comprehension.

              It is unlikely. I damn near do the rocket science level – at least in my areas of interest. Business as a profession was something that I grew out of in my youth as being somewhat simplistic. These days I just use businesses to provide me with the work that they and I want me to do, and treat the examination of their characteristic behaviours like entomologist (or a programmer) looks at bugs.

              We pay Insurance premiums as we go, but we integrate our cover into long term/unexpected event planning.

              Sure – a parasitical industry can always pick up the cash and move. Provided of course you can collect, that the law courts are still operating, and a pile of other considerations that you’re just ignoring because you think that something else like a government will provide them.

              That appears to be your basic problem in this forum. You appear to be very shallow in the way that you look at risk. You keep assuming business as usual. Which coincidentally just happens to be the subject of my post about the exact same issue for the National party.

              Nice to see that you’re finally back on topic…

              • Paddington

                "You keep assuming business as usual. "

                Again, lazy analysis. The businesses I run are successful specifically because we plan for the unexpected. Perhaps if your default position had been to ask some questions rather than a personally directed diatribe, you might have picked that up earlier.

                [lprent: Let me just point out that you are the idiot who made completely off topic comments in my post.

                If you’d prefer, I could simply just treat you as a troll. Otherwise if you want to make off-topic comments on my posts then you are personally volunteering as a test subject in my quest to test self-entitled trolls and how they respond to the same stupidities that they are inflicting on others.

                Please read the policy. ]

      • Paddington 9.1.2

        "so tell me what provisions you have made for pandemics cutting out your source of supply for 6 months."

        I run a group comprising 12 businesses across the planet. We have established multiple supply sources for precisely this type of eventuality.

        "Or for a lack of supply of trained staff in 5 years time., Or the cost of housing rising in the city of operations in a decade? "

        Both are managed in a similar way. We have made our businesses in the form of a ‘caravan’. For example in Asia we have offices in Ahmedabad, Dhaka, Hong Kong, HCMC, Nansha and Shanghai. All service our customers in the 'consuming' nations, eg the US, Europe and Australasia. We have developed a business model where we can migrate business around the East Asia group, using technology and relationships with supply partners.

        • lprent

          So what you're saying is that you're diversifying your risks across state boundaries. That is essentially what the business I'm in does as well. As well as having a number of different type of customers that they service that connect at the technological capability level. US, parts of Europe, and APAC mostly.

          You're essentially taking a bet that nothing would affect all of these locations at the same time, and that the transport links that connect them and your customers won't fail.

          There look to be several risks that could do both. War, widespread terrorism, and pandemic are obvious. But others like famine have flow-on issues as well. Typically if the borders get closed or constrained in all cases.

          Structures like that are also typical of ones required to minimize tax risks. So any kind of multi-government treaties on tax evasion / avoidance are a risk as well.

          But that is the multinational survival strategy. But in all cases you’re still relying on the base countries to provide the bulk of the staff, and because you haven’t mentioned it, My guess is that the warehousing of supply is limited.

          Essentially you’re just leaning on the states in those areas for the provisions of services. For instance the maintenance of law and order, and even the honouring and enforcement of the local laws of contract.

          Government is an infrastructure that commerce leans on heavily.

          • Paddington

            "You're essentially taking a bet that nothing would affect all of these locations at the same time, and that the transport links that connect them and your customers won't fail."

            Nope. The industry we do most work for operates itself like a caravan. We have the flexibility to 'follow' or even 'lead' that caravan. So if the industry shifts production from eg China to Vietnam, we are either already in situ, or we can pop up like a mushroom.

            "But in all cases you’re still relying on the base countries to provide the bulk of the staff…"

            Well it was YOU who wrote " lack of supply of trained staff in 5 years time". Our caravan moves to places where there is labour. Our technology makes that much easier.

            "…and because you haven’t mentioned it, My guess is that the warehousing of supply is limited. "


            • lprent

              So it’s flexible.

              But it does sound far more like a trading emporium house or a private banking consortium than anything substantive.

              What you’re describing depends on having very shallow roots with neither deep expertise embedded at a location nor dependent of any deep loyalties in your customer base. Probably services only. Reliant more on getting the type of staff required rather than any deep skills.

              Ummm the kind of thing that Cactus Kate was into.

              Hardly a business. The organisation you’re describing doesn’t sound even commensal, almost more parasitic. Interesting. I can see why you’d have a contempt of government. They sound like your sworn enemy. But that is a pretty unusual type of business plan.

              Different type of organisation to the kind of thing that I will work in.

              • Paddington

                You're simply digging a bigger hole, into which you are spewing your lack of business comprehension. You're now making (inaccurate) assumptions about a business you know nothing about in order to cover up the lack of meaningful commentary in your original piece.

                • lprent

                  Not really, I’m simply doing it to annoy you. This does appear to be the level of debate that you feel comfortable with – sniping without thinking. Being snarky.

                  Ummm – it appears you don’t like it either. Why do you do it at all?

                  • Paddington

                    Your approach began with a poorly thought our response peppered with personal abuse. I've long since learned that generally points to shallow thinking.

                    • SPC

                      Back in March the DG of Health wanted us to close borders – the government did not, after advice from whom not to, for economic reasons.

                      A Business groups

                      B MBIE

                      C Treasury

                      The outcome was a Level 4 lockdown because we did not go early enough.

                      Guess why government ignored advice from such groups in delaying moves to Level3, to Level 2 then to Level 1 – because effective pandemic response actually delivered better results to business than the more lax approach they wanted for business reasons.

                      The facts support the argument made by LPrent

                      Now who is still advocating for the wrong approach, the National Party and its Paddington bear.

                    • Paddington

                      "The facts support the argument made by LPrent"

                      Ah, no. The government, repeat, the government, made the decision you are lamenting.

                      "…because effective pandemic response actually delivered better results to business than the more lax approach they wanted for business reasons."

                      Says who?

    • Drowsy M. Kram 9.2

      "waiting for November"?

      Despite the excited ad naseum parroting of "government mismanagement of quarantine processes" by opposition National party politicans and their supporters, including media 'pundits', still no cases of community transmission detected. NOT ONE SINGLE CASE!
      If that's a typical outcome of government mismanagement, then please can we have more of the same.

      Poor old Todd Muller is probably tearing his hair out at the prospect of no cases of Covid-19 community transmission before the September election.

      We don't know how lucky we are… smiley

      • Paddington 9.2.1

        The country, all 5 mil of us, have been in a total lockdown. (Well except for the Minister of Health!) If there was any community transmission, it would be a miracle.

      • Heather Grimwood 9.2.2

        To Drowsy M Kram at 9.2 : Your ” we don’t know how lucky we are” can’t be repeated enough.
        First heard Jules Older who ran programme “American Pie” on a Dunedin radio station in the ’70’s playing the tune and singing over it ” you don’t know how lucky we were” emphasising the ‘were’ on night Kirk was defeated.
        Needless to say, we didn’t hear him again except for unrelated interviews from time to time about his interests.

        I agree wholeheartedly with you Drowsy ( not so! ) M. Kram

    • Draco T Bastard 9.3

      Good grief, another one! Business anticipates these types of events all of the time.


      So why are we always having to bail out the farmers every time there's a drought if they're anticipating them all the time? Or is it that they're anticipating having the government bail them out?

      • Paddington 9.3.1

        We're not 'having to'. That's a decision the government makes. Ask them. In the mid 1980's the government took SMP's off farmers virtually cold turkey. They survived.

        • Draco T Bastard

          We're not 'having to'. That's a decision the government makes.

          And the government makes that decision because they know damn well that all the farmers affected by drought would collapse, putting thousands out of work and collapsing the local economy.

          Now, if the farmers had actually anticipated the existence of droughts and made the necessary plans to survive them they wouldn't actually need the government handouts.

          That they do need them proves that they didn't plan for the droughts that do happen and thus proving their short term focus.

          • Paddington

            Or, they could be allowed to provide their own solutions to droughts without being impeded by legislation such as the RMA. Just like Auckland's water shortage could be solved with more catchment. The Government giveth and the government taketh away.

            • Drowsy M. Kram

              If a 'solution' is fit for 100+ years (unrealistic I know), then great. Same bar for political solutions and farming solutions, IMHO – raise the (sustainability) bar.

              • Paddington

                Absolutely! But you try getting some of those solutions past the RMA or local councils.

                • Drowsy M. Kram

                  Yes, feel sorry for politicians and farmers in their battles with the RMA, remembering that one purpose of the Act is “…to promote the sustainable management of natural and physical resources”.

                  Repeal and replace (the opposition National party’s current (?) policy, as announced by JC last December) or amend/reform (Government plans to reduce complexity, increase certainty, restore public participation opportunities and improve processes) – the RMA seems likely to be a 'bone' that farmers, politicians and others with the best interests of NZ's natural environment at heart will be worrying at forever and a day.

                  What it will take for Green Party support for RMA reform?

                  Local involvement and environmental bottom-lines will be key to the Green Party's support to any future reform of the Resource Management Act, co-leader James Shaw says.

                  On Thursday, the party voted against a government bill to fast-track consent approvals for infrastructure projects, forcing Labour to rely on the National Party's support to pass the legislation.

                  The special legislation shortcuts normal consenting processes under the Resource Management Act to speed up consents to keep jobs and build infrastructure as part of the economic response to the covid-19 pandemic.

                  • Paddington

                    I'm not convinced the current law is redeemable. I'd rather see a completely new law that genuinely focused on sustainable development.

                    As far as the article you linked to, for once I find myself with the Greens.

                  • Paddington

                    "do you think that a new law/Act “genuinely focused on sustainable development" would be welcomed by most NZ environmentalists and conservationists? For example. could your hypothetical new Act facilitate ‘sustainable mining‘ in National parks, or is that (to quote Gerry) "really being hysterical"? "

                    For the record, I would be opposed to mining in National parks, but it would be near impossible to please everyone. Pro-environment and pro-development interests need to work together, otherwise we will end up with a wrecked environment and no development.

                    • Drowsy M. Kram

                      Fair enough, although tbh I don't understand how NZ's natural environment (which was quite exceptional prior to being extensively modified/developed, and still retains pockets of its original uniqueness) could be further wrecked by "no development".

                      If pro-environment and pro-development interests don't work together, then history teaches that the most likely outcome is 'more development' AND 'further wrecking'. Whereas if they do work together – maybe slightly less wrecking?

                      "Those that fail to learn from history, are doomed to repeat it."
                      – Winston Churchill

  10. Grant Insley 10

    Quite simplistic of me BUT Governments Govern, Business manages. You govern countries to achieve the best outcomes for ALL the population. Managing only achieves limited outcomes for a select few.

    • Paddington 10.1

      Mmmm, well you forget that businesses employ people, pay tax, supply a significant amount of the public and private services we enjoy.

      • Just Is 10.1.1

        Yeah, but which comes first?

        The Chicken or the Egg

        The same applies to businesses and consumers of products and services

        • Paddington

          In a mixed market economy it's 'symbiotic'.

          • KJT

            You have rather outed yourself there Paddington.

            "Consumer countries'. Suggests your business is parasitic rather than symbiotic.

            One of the many businesses who take advantage of both the functional economy, Government support and higher wages of the developed countries, and the low wages and poor work conditions in the third world, to pocket a large difference, while avoiding contributing significantly, to either.

            • Paddington

              We operate across the supply chain. That is, we operate in consuming and producing countries, and those are not always the same, depending on the product. You seem to suffer from the same lack of business comprehension as MS.

          • Patricia Bremner

            Paddington, "In a mixed market economy it's "symbiotic".

            Until it isn't, then it becomes parasitic, even killing off the supplier (host) and damaging the workers (community).

            Government has to protect supply and community through planning and legislation, granted "after the fact" in many instances.

            1.Mining in Waihi wanting to mine under homes, in areas of slippage, build huge earth dams for toxic waste.

            2. Clear felling radiata forests to turn to dairy, failing to allow for flooding or replanting along streams or rivers.

            3. Moving manufacturing from a thriving community in NZ to an overseas low wage economy to increase profits.

            4. Having billionaires bring branches of their businesses here to compete for the local dollar.

            5. Banks which have before this Government "Never wasted a crisis" to gain assets and taken billions in profits which go off shore.

            We appreciate the symbiotic businesses, just not the takers.

            • Paddington

              The role of government in a mixed market economy is to restrict the excesses of the 'takers' (in effect limit the possibility of 'parasitic' businesses surviving) in the interests of the whole. Likewise, there are times when governments insert themselves into the activities of 'businesss' that cause long term problems. SMP's paid to farmers were one example.

  11. Wayne 11

    The speech by the PM was actually rather disappointing. That is how I interpreted Audrey's comment.

    I have read the speech, and though it read well, and no doubt would have been well delivered, it didn't actually have much in it that we didn't already know.

    So rather than use the speech to criticise National, why not look at the speech itself, and what it says about Labour. What will the government do that is any different at all to what it is already doing? Which frankly is no different to what any government, whether left or right, would be doing in the same circumstances.

    Based on the speech, I would have to presume the next three years under Labour will be pretty much the same as the last three. Incremental improvements here and there. Though I do appreciate that perhaps Covid does not allow for any other approach.

    We basically have to wait for Labour's tax policy, which going by Sunday's Q & A interview of the PM, will include some form of modest tax increase for higher incomes. I am picking 36% for incomes above $120,000. I don't think there will be any other tax changes. Which is just as well. In a Covid recovery, any dramatic tax changes will just hamper the recovery.

    As for more election promises from Labour, I expect some health benefits, maybe much wider free dental care, something for teachers and ECE, and more in training and innovation, probably with a green tinge. But not much else.

    And in my view any big spending promises from either major political party would be irresponsible. The country is already borrowing a fortune to recover from Covid. Anything substantially more in election promises will just add to the debt burden.

    • Enough is Enough 11.1

      I think the only bold policy will come from the Greens and Act. As you have said National would have followed a very similar playbook over the past 3 months on the economic front. I think that is why they are struggling to develop policy now because there isn't really anything different that they would have done.

    • SPC 11.2

      It's always been faintly ridiculous that our top rate came it at such a low level, having a higher rate at $120,000 would sort that I suppose.

  12. maggieinnz 12

    This is such an excellent article LPrent. I've always been concerned with the idea that you can run a country like a business and have a successful long-term outcome. I assumed my concern was affected by my limited understanding of global economics, or that I was biased due to my deep loathing of 'profits over people' type policies.

    I've always been wary of relying too heavily on international markets for our own economic success. Whilst I understand that as a small country we're unable to be fully self-sufficient I think we've underestimated our ability to do more for ourselves. This has been largely influenced by the focus of previous governments to be like the US where the focus is solely on economic growth using GDP as its index rather than using/developing an index which measures quality of life, economic ability and sustainability.

    I think we can learn a lot from history where we see that time and time again that failure to meet the needs of ordinary people by focusing on wealth for some has had disastrous consequences and globally I think we're fast approaching another tipping point.

    This is especially relevant when you consider our reliance on other countries for our own success. Even if we're diligent in ensuring our people are taken care of our ability to continue to do so is constrained by the economic stability of other countries. This is where it is so important that we develop self-sustainable economic buffers.

  13. SPC 13

    Todd Muller did not just believe that there was community spread when there was not, he actually wanted there to be community spread then and now.

    Now he advocates for riskier border entry management, taking in more people with less managed isolation – a focus on numbers at the risk of allowing community spread.

    He knows that nations with community spread open up their borders to other nations with community spread. For National greed for this is doing good business.

    It however requires the government to take limited action to manage community spread, to put business before the peoples safety.

    Given the fact that those at higher medical risk are those in poorer health, more often Maori and Polynesian, and the now known fact that Maori and Polynesians have the highest blood type A profile in the world – blood type A people are more at risk of dangerous immune response to coronavirus infection. National's policy is racist.

  14. We thought he was vacant in action, now we know it. Very few will want what he wants ..

  15. Peter 15

    National business as usual. Scumbag Clutha MP leaks details of members of the public.


    C'mon Woodhouse, get on your f—-n high horse now.
    And the Boag? Will I still hear her on RNZ?

    • Tricledrown 15.1

      Serious breaches criminal offending anyone else would be already being questioned by police.

  16. sumsuch 16

    Reading that, Lprent, thank you for your computer skills.

    M.bs seems appropriate.

    Why Labour is dominated by political experts rather than a mass membership.

    Lets start again, the people are the basis of everything. Their interests come far ahead of the 'art of the possible' by which the neediest have been starved these many decades. Poisoned a la America.

    The fundaments come first always.

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