Rod Oram has a very interesting commentary on that topic in Sunday Star Times “National needs a shake-up”. Rod Oram always takes a long term perspective on the policy direction and its relationship to national economics, which is why I enjoy reading his columns.
Rod runs us through the fiscal mismanagement by National the last two times they have faced externally caused recessions. In both cases the policy response from the National government of the time was proved to be inappropriate and moved directly against stated objectives.
Rod points out that the current external recession is more widespread than previous ones. He then analyzes the economic policy from National articulated at the National party conference.
Then it starts to get interesting as he finishes with a number of conclusions.
So, that is pretty much all we know so far about National economic policies. It’s a rerun of the party’s 1990 mantras about less tax, spending and regulation. That’s no surprise at one level. English, National’s chief policy developer and economic manager, learnt them from the master of budget micro-management, Bill Birch.
Then he gets sarcastic.
She’ll be right, he [English] reckons. We’ll sell more food to Indians and Chinese at higher prices. That was the only vision of New Zealand’s economic future he offered delegates.
Indeed, it would be nice if life were so simple. But, as his own farming constituents would tell him, it’s not. At home, they face distinct physical limits to expanding volumes and financial limits from rising land, fertiliser and other costs. Abroad, they face growing competition from foreign farmers.
The primary sector has a great future, as do many other sectors. But rerunning their 1990s’ strategies won’t deliver that future. The world has already changed hugely since National was last in power and is changing even more radically before our very eyes.
Yes, the change in his own electorate over the last 15 years should be telling English that the world is changing very fast. Dairy, where there used to be sheep. The global marketing of Fonterra pushing dairy products into markets that had little previous penetration.
But the world economy is moving very fast these days as a consequence of the rate of increase of world population and changes in living standards in other countries. NZ is a small exposed economy that has to be fast to move into new markets. This gets driven at least in part by government preparedness and vision beyond the capabilities and short vision time spans of business. When the government goes to sleep then later working generations suffer.
The “she’ll be right” attitudes and policies of the National governments in the 1960’s prevented the critical changes required in the economy then. This meant that changes in our export markets like the entry of Britain into the EEC were not handled. This caused the severe economic difficulties that plagued the following generations. It looks like English still subscribes to this attitude and wants to do the same to more generations in the future. The problem is that everything happens faster. The government going to sleep for a generation is not viable any more.
Key told this columnist in an interview in March that National was working on a “stunning” set of economic policies. But judging by what it has delivered so far, National has spent the past nine years in opposition ignoring a changing world.
He hasn’t said it outright, but I think that Rod is saying that National are conservative. They are looking to solve economic issues the good old way. It didn’t work the last two times they tried it, caused immense damage both socially and economically, but that doesn’t stop them from wanting to try it a third time.
This is why I always feel uneasy about National and its ‘visions’ – they have a habit of being repeats of previously failed policies. It is why the $3 billion fibre to the home policy worries me. It resonates like one of Muldoons “Think Big” projects. Great sound-bite, but what is the economic point?
[hattip: Jafapete]
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