Where is our economic leadership?

Written By: - Date published: 10:06 am, March 16th, 2018 - 38 comments
Categories: david parker, Economy, james shaw, Shane Jones - Tags:

This government has not yet developed an economic strategy.

Sure, they’re busy, but that’s not the same thing.

Not one month ago there were massive shocks to our two largest local companies at the head of our two largest industries. The government through the Minister of Economic Development simply said the potential demise of Fletcher Building wasn’t their problem, and may consider Fonterra solely through an oblique and awkward agricultural regulatory lens, somewhere deep into the future.

Two weeks ago ago Minister Shane Jones launched the $1 billion Provincial Growth Fund.

A few businesses will do well, but none of the papers released even try to demonstrate how this fund and its projects will make a specific and measurable difference to New Zealand.

A week ago the government signed the CPTPP, a deal almost entirely negotiated by the previous government, for which the current government gave mere tweaks.

This week the Minister of Research, Science and Innovation Megan Woods re-launched the Innovative Partnership Programme.

Pretty much identical to the one the previous government already had running. Did any of it respond to the actual strengths and weaknesses of the innovation system within New Zealand? She provided no evidence of that, nor linkages back to any lessons learned from the past nine years.

Last night Minister James Shaw at a Westpac-hosted business charm offensive threw out further teasers about what his plans for the economy were. Now, he’s a visionary. But the sum message amounted to form another group, write another set of papers, throw out another maybe fund. Don’t get me wrong, he was in total command of his policy field, and he knew full well that unlike Shane Jones’ fund, his task is not to “crowd out” the market, but to “crowd in” by encouraging private capital to work in the service of themselves and the planet. And together with Simon Upton as Commissioner, he is seeking full cross-Parliamentary support for an enduring economic transformation. But he’s on his own in this government, and time is against him.

Absent all of that, for all of the above and more, any coherent framework from the Minister of Finance. Silence.

Sure, everyone’s running around looking busy. MBIE is a big machine and it’s moving fast. Mark my words all of this is in MBIE’s hands.

The difference between the 2014 and 2017 reviews of MBIE show that they are a lot more coherent and effective than they used to be.

So MBIE’s coherence makes them look like they are successfully playing these Ministers in this new government like a black grand piano. You don’t need accountability when everyone’s busy. With such mad-monkey nonsense from an economically incoherent government we can expect to see the leftie version of more huge projects like the Sky City Convention Centre, leftie versions of irrigation dams, more boondoggles, more piecemeal regulation, more chronic wastes of money. Because that’s what you get without a plan. That’s what you get when nothing makes sense. There are no common accountabilities. Nothing to convince us the paying public that the sum of these policies is intended to transform us as a whole, or is worth doing.

None of the Ministers are talking to each other. None of them appear remotely capable of shifting from “coalition” to “government”.

All of them are behaving precisely the way the previous government did: forget about the actual risks to the economy, launch a series of projects and initiatives in the most ad-hoc manner, stay busy, don’t bother to show how you can learn, don’t show how we make sense together.

In sum: they need to develop an economic strategy.

38 comments on “Where is our economic leadership? ”

  1. Draco T Bastard 1

    The government through the Minister of Economic Development simply said the potential demise of Fletcher Building wasn’t their problem,

    They’re right – it isn’t their problem. The rise and fall of a business has nothing to do with government.

    The government’s role is to ensure that the people are well taken care of. It’s not there to protect business.

    and may consider Fonterra solely through an oblique and awkward agricultural regulatory lens, somewhere deep into the future.

    Fonterra was created through legislation and so in this case the government can look at that legislation and change it if necessary.

    A few businesses will do well, but none of the papers released even try to demonstrate how this fund and its projects will make a specific and measurable difference to New Zealand.

    Which is a concern.

    A week ago the government signed the CPTPP, a deal almost entirely negotiated by the previous government, for which the current government gave mere tweaks.

    Which should never have happened because the populace don’t want it or, from what I can make out, any of the FTAs which go against the idea of a free-market.

    This week the Minister of Research, Science and Innovation Megan Woods re-launched the Innovative Partnership Programme.

    Waste of time and money. If we want to develop our economy and our country then we need to do it – not hope that someone else will come along and do it for us.

    Absent all of that, for all of the above and more, any coherent framework from the Minister of Finance. Silence.

    In sum: they need to develop an economic strategy.

    That’s neo-liberals for you. Too stuck in the mantra that private business will do it all and that the government doesn’t have to do anything except remove the nations freedom through FTAs and other supernumerary and unelected and unaccountable organisations so that corporations can do well.

    • Tricledrown 1.1

      DTB a mix of private and public/govt works well.
      Pure private and Pure govt hasn’t had as good record around the world.
      Private investment is less likely to take risks.
      Govt only investment is either poorly managed or taking unnecessary risks.
      Balance between the 2 sectors works the best.
      Ideological dogmatic arguments are all very well but are not reality.
      Leigtant Smith / Mike Hoskings push for pure capitalism which doesn’t exist because it doesn’t work.
      Others push for pure communism which doesn’t exist and doesn’t work.
      These economic arguments have been going on since the being of recorded history.
      Countries which have a good balance of socialism and capitalism have the strongest economies and happiest people.

      • Draco T Bastard 1.1.1

        Govt only investment is either poorly managed or taking unnecessary risks.

        Which is actually a load of bollocks:
        https://www.newscientist.com/article/mg21929310-200-state-of-innovation-busting-the-private-sector-myth/
        http://evonomics.com/economic-myth-private-sector-works-well-and-the-public-sector/

        Balance between the 2 sectors works the best.

        Actually, it’s recognition that the private sector is funded through government spending that works best.

        Leigtant Smith / Mike Hoskings push for pure capitalism which doesn’t exist because it doesn’t work.
        Others push for pure communism which doesn’t exist and doesn’t work.

        This shows a misunderstanding of capitalism. Capitalism is about private ownership and that will always fail as it, quite literally, removes resources from the control of the nation into the hands of the few causing poverty.
        It’s also a misunderstanding of communism. Communism isn’t about getting rid of private business or even the market. It’s about making sure that no one owns the business and that the workers control it thus preventing the bludging class called shareholders which ends up turning into the oligarchical class.

        As long as we have capitalism the economy will always create poverty and will always fail as it has always done.

        • Tricledrown 1.1.1.1

          DTB communism as you have outlined it is pure utopian “fallacy”.
          Humans are part of Nature and nature is competitive.
          No one is going to play fair in your utopian dogmatic dream.
          Nature is about the strongest most adaptable and cunning surviving.
          Communism is cultism just like pure capitalism.
          Both don’t exist pragmatism is the ” communal intelligence.
          That’s why the ACT party and all communist parties have the same support < •5% support both fringe dogmatic policies.
          Political science research has shown fringe lunatics have cult like followers.

          • simbit 1.1.1.1.1

            Nature is hardly competitive.

            • Tricledrown 1.1.1.1.1.1

              Dimwit competition is natures survival tool species competing against other species as well as their own.
              Humans pretend we don’t compete but we do your an example.
              Simbit .
              Even with ideas.

              • AB

                So because, e.g. lions and hyenas compete over a kill, humans shouldn’t cooperate or care about each other. Yup – that’s logical.

              • Lara

                As a Biologist, I’m so very tired of people who have only a passing understanding of Darwin’s theory of evolution and the survival of the fittest mechanism, misusing it in relation to economics.

                Survival of the fittest refers to fittest GENES. Not necessarily biggest, strongest, fastest individuals directly competing for resources.

                Sometimes the fittest genes are the ones which promote co-operation between individual members of species to ensure offspring survival.

                Sometimes the fittest genes are the ones which promote co-operation between individuals of one species with another to achieve higher survival rates.

                Reducing Darwins elegant theory to an argument about individuals fighting it out for scarce resources is simply wrong.

                Please stop.

          • Hanswurst 1.1.1.1.2

            That’s why the ACT party and all communist parties have the same support < •5% support both fringe dogmatic policies.

            The problem with this sort of argument is that it requires one to assume that current mainstream ideology represents the best way of doing things.

          • Incognito 1.1.1.1.3

            Humans are part of Nature and nature is competitive.

            In nature there is competition for resources, not for domination. It is all about balance (equilibrium).

            Nature is about the strongest most adaptable and cunning surviving.

            Only the bold part is truly correct, at a species-level.

            The concept “nature” is not fixed and it changes (evolves) constantly and continuously, especially when talking about humans and human society; humans have come a long way from their caves to being desktop warriors, for example, but the journey has not stopped …

          • Draco T Bastard 1.1.1.1.4

            DTB communism as you have outlined it is pure utopian “fallacy”.

            Nope. Just the way it’s supposed to be.

            Humans are part of Nature and nature is competitive.

            What a load of bollocks.

            Humans are social animals and we do far better when we cooperate than when we compete with each other. This has been seen time and time again.

            Nature is about the strongest most adaptable and cunning surviving.

            And that’s bollocks as well. It’s not about the strongest but about the fittest. The strongest aren’t the fittest as they tend to destroy everything.

            That’s why the ACT party and all communist parties have the same support < •5% support both fringe dogmatic policies.

            Nope. It’s because of what we’ve been taught that we act the way that we do. Told time and time again that centrist is better and that there’s no other way.

            Political science research has shown fringe lunatics have cult like followers.

            Yes, National and Labour have cult like followers.

            Reality has a radical Left bias.

            • Lara 1.1.1.1.4.1

              “And that’s bollocks as well. It’s not about the strongest but about the fittest. The strongest aren’t the fittest as they tend to destroy everything.”

              Well… not quite. Please see my comment to Tricledrown above.

              It’s about fittest GENES. Not individuals. Genes and individuals not the same thing.

              Survival is also very often about co-operation.

  2. Pat 2

    One could equally ask the same of the previous government…..Blyth covers it well, economic strategy has been abandoned by the politicians of all persuasions as problematic.

    To get better politicians we need better voters.

  3. Tricledrown 3

    Political reality is economic policy is tinkering around the edges don’t scare the voter’s !
    Pragmatism is the new economic policy and has been the reality for some time
    Politics 101.

  4. eco maori 4

    I say the best economic strategy is to back proven carbon neutral economic policy. And have a strategy to lower our import cost is not rocket science if we lower our fuel consumption our import costs are reduced. OUR new coalition government is doing OK I’d say 9/10 in my book.
    120 days we’ll let’s look at Germany they have just formed a government in 110 days at a guess don’t worry its a better to take time and come up with a excellent economic plan than have a plan that takes 10 minutes and fails to deliver the goods. Ana to kai Ka kite ano

  5. Philg 5

    The topic should be reframed as an analysis of political economics, the interaction of politics and economics. Standard BAU economics is being exposed for what it really is, a long run experiment, which is not working for the the general public.

  6. Stuart Munro 6

    It’s unfortunate that neither National nor Labour have been serious about economic development for generations. This is how you get nonsense like real estate inflation got up as ‘growth’ like the mock turtle from Alice in wonderland.

    Robertson is not really a developmentalist – he’s a networker – hence the conference on standard of living, which given stable decent incomes kiwis could and would probably prefer to work out for themselves.

    Shane Jones proved a poor administrator of Sealord, it didn’t build a solid skill base or diversify profitably under his leadership. With a large chequebook there is a lot he can do for chronically underfunded regions – but it’s not a joined up program and will likely be vulnerable to piecemeal failures and missed opportunities.

    So what should we be doing?

    We should be looking at best practice examples from at least three different economies. That might well include the Scandinavians because we want a sophisticated and educated nation, not an industrial or postindustrial hellhole.

    We should analyze what works and what doesn’t and model it in the context of our existing medium and long term situation to determine what we need now, and what we will need in twenty years. (This is how Korea decided to build a steel industry postwar – there was no immediate need but they would need it once their construction industry expanded.

    Of course contemporary neo-liberal public service economists are useless for such analyses – their ruling presumptions are the reason we’re in the shit we’re in now.

  7. Shona 7

    Now just where the hell is David Cunliffe when you need him??? O h yeah still getting the stitches removed from his back after all the knife wounds have healed. This government hasn’t the talent or the experience to do the work. Clark’s cabinet achieved simply because of the enormous range of abilities of her ministers. There is no one in this government with Hodgson, Maharey, Cunliffe or Cullen’s ability. Why does MBIE even still exist?
    FFS even a household manager would have removed a useless cumbersome expensive object like that on the first day of cleaning . Sorry folks but this government couldn’t organise a piss-up in a brewery. I have zero expectation of any economic progress under a lying pack of scumbags who would sign the CPTPP.

  8. Tricledrown 8

    Shona you underestimate the next generation your living in the past.
    Curmudgeon.
    Changing the Education system is a brave but badly needed improvement.
    The $1 billion a year regional fund beats the $50 million cycleway over 9 yes.
    Upgrading power security in the pacific Island’s a huge longterm saving releasing more funds for local initiatives.
    One thing is Robertson is being super careful with the balancing of the books.
    Reinstating contributions to the Cullen fund which will help keep taxes low for for those fewer worker’s who will be paying taxes to fund future govt spending.
    As well as providing an increased tax base from the Cullen funds investment Profit.

    • Shona 8.1

      Yeah nah! @ tricledrown. It is a fair comparison. The NZ labour Party is a gutless shadow of what it needs to be. Having raised my fair share of members of the younger generation I know exactly how limited, spineless, unoriginal, talent less, materialistic, vision less and shit scared they all are. The future has been clearly mapped and sign posted since my youth. It bores me . Constantly being right even in old age is no turn on!

  9. Sparky 9

    Lets be honest and say there is bugger all difference between the last so called govt and this one. Nat 2.0.

    • Stuart Munro 9.1

      Hopefully the difference will become apparent as the malefactors in the Christchurch non-rebuild are prosecuted.

  10. Tricledrown 10

    Sparker this is a more hands on govt as opposed to Nactunited which slowly cut back govt services to the point that the wheels were falling off .
    The old sinking lid policy cheap and nasty.
    Health care
    Police
    Education
    Etc all wound back to the point of neglect.

    • Shona 10.1

      So what? that’s what Nactional have always done. Of course this government has to be hands on someone has to plug the leaks in the sinking ship that is NZ INC. We are looking for hands on policy directives. They are not there because the government is incoherent. It is incoherent because of the coalition. Because of the egos. Because of the animosity Of the dickheads in NZ First for the Greens. There is a distinct lack of respect across the parties and distrust for anyone with half an eye to see.It is hampering what should be a bloody good government for us all. Labour’s wank fest and love in with neo- liberalism continues unabated. And yes they need someone with Cunliffe’s talent and they are just not there.!Wake the fuck up!

      • patricia bremner 10.1.1

        Shona, incoherent as in muddled? I don’t agree.

        All the three Leaders have expressed quite clearly in speeches a belief that neo-liberalism/capitalism has been unable to fix many of our ills, and Government will need to be hands on to correct that.

        The coalition agreed to work towards better conditions and equity for people in homes and incomes taxes and education. A cleaner environment with attention to water rivers and lakes. A programme of transport aimed at less carbon and more trains and public transport. More investment in the regions. What is muddled?

  11. R.P. Mcmurphy 11

    I fail to see your point. New Zealand has very few industries that are amenable to scale or innovation. These have become merely code words for owners and bosses to use for bashing workers. till we have major industrialisation we have to accept these facts and work towards progressive income income taxes and reducing the leech like activities imposed upon the economy by the nationals party. i.e. managerialism and lack of trust in the people who do the actual work.

  12. R.P. Mcmurphy 12

    oh and bring back rail and get the trucks off the road.

  13. eco maori 13

    The Crowd goes Wild you brown people are good to see Guys I will tau toko you good people Ka pai Ka kite ano

    • eco maori 13.1

      BBC Hard talk Seymour Hurst is a great reporter he made a stand and reported the truth about a Vietnam mass murder of hundreds of people women children old people he is 81.
      I say that our reporters job is to report the truth that about the wrongs be dished out to the innocent common people watching this program backs my view that WAR is for idiots. Kia kaha Ka kite ano

  14. patricia bremner 14

    I’ ll save my breath to cool my porridge ’till after the budget.

  15. Incognito 15

    I agree that without a cohesive plan, a vison with an accompanying strategy true progress (transformation) will be out of reach.

    What puzzles me is why this Post only focussed on the economy and the need for an economic strategy. What about integrating this into an overarching strategy that includes the environment and social equity/justice? I think the sole (?) focus on the economy and the benefits of a few was exactly the MO of National and not sustainable in the long run. We must indeed do better, much better!

  16. OncewasTim 16

    Is it just me or…..no! I sense a moderator note moving comment to Open Mike.

  17. Ian 17

    No surprises here. Despite Adern stating neo-liberalism has failed, this government is still thoroughly imbued with neo-liberal thinking and practice, which, incidentally, is why they have no hope of seriously addressing the problems created over the past 10 years or so.

    As the philosopher Wittgenstein stated: ” In order to find one’s way out of the fly-bottle, one’s perspective must be different to that of the fly”

    #NZLPstuckintheneoliberalflybottle

  18. patricia bremner 18

    I have read your post several times. Looking for positive ideas about the topic.
    The comment about Shane Jones “Crowding out the market” made me smile. The places he “wasted money” were not even on the market’s radar.

    Won’t an economic strategy still need “think tanks” and no doubt “they will write another set of papers”.?

    I thought we understood that underpinning this Governments economic direction was improvements in the living conditions of citizens of NZ, and improvements in our carbon capture and environment, and that any improvement in productivity must be measured against these factors.

    I understood the “Tax working group” was looking at tax through that lens. Further Robertson has warned that his first budget will follow this pattern of economics which enhance NZers lives and improves the environment, and economic activity which doesn’t do that will have to change.

    “Crowding out the market” won’t happen, as the Government means to control damaging excesses of capital, and kick start regional development and Reaearch and Development to support businesses to contribute to the three economic goals.

    In the cities, a gradual shift of capital from property ownership tp investment in infrastructure and innovation is supported by a growth in Research and Development Fund, a look at Banking and its role.

    Well that is what I have taken from speeches and published papers. 147 days* aprox. progress is steady. Personally I will await the budget before agreeing they “have no plan”

    IMO they are already working on it.

    As to Fonterra and Fletchers well they are symptomatic of heavy loading in one area, and failing to plan for a sharp market change. They privatise profit, but want Government to publicise debt. I think the reply was that wouldn’t be happening.
    .

  19. patricia bremner 19

    At 7 minutes I lost the ability to correct an error. Research so, sorry.

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    ...
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