Those who do not learn from history are doomed to repeat it. National has learned nothing from the failure of the neoliberal policies of the late 80s / early 90s (when gaps in growth and income opened up with Australia). So they are gearing up to repeat them:
[English] and other ministers’ utter single-mindedness of purpose was evident at the weekend’s National Party conference. They are like bees drunk on pollen. In their case, the tipple is a commodity called power. National intends major reform across what English called a “broad front”. … His theme was reinforced by Justice Minister Simon Power, who warned of the dangers of governments losing momentum. In short: full steam ahead.
High on the agenda will be privatisation of publicly owned assets. Recently appointed “Productivity Czar” Don Brash is already signalling this, listing as one of the impediments to foreign investment in NZ (pdf link):
The capricious way in which the Labour Government over-rode the rights of the shareholders in Auckland International Airport and the rights of two major international investors wanting to buy shares in that company…
What Don sees as capricious others see as principled. And the lesson of history is that it was also wise. A takeover by the Canadian Pension Plan (CPP) would probably have been a fiasco, for the reasons described in this excellent piece by Gordon Campbell:
… CPP’s fortunes have plummeted in the wake of the global economic crisis, and CPP directors have been taking a hammering in the Canadian press and in the Canadian Parliament for awarding themselves huge bonuses even while the fund’s fortunes shrunk by 18.6 % during fiscal year 2009. Is this the sort of enterprise that would had any inclination or ability to put fresh productive investment money into growing its assets in New Zealand? Hardly.
On the evidence of what has happened to CPP, New Zealand should be thanking its lucky stars that its prime tourism and transport hub did not pass into the hands of a pension plan in crisis. The lesson being – not all foreign investment is virtuous. Some of it can be about extracting monopoly rents from captive New Zealand customers. Back in the 1980s, it might have been possible for the naive market zealots of the Lange government to treat the private sector and foreign investment as being inherently virtuous. In this day and age, it is almost criminally stupid to do so.
Thanks to the Labour led government we dodged a bullet. Will National learn any lessons, or is it “full steam ahead”?