Politics
Shane Jones’ latest corporate tongue-lashing is more than mere bluster.
Here we go again. Yet another politician who has merely skimread Sun Tzu’s The Art of War. Not finding anything from the master 6th-century BC general against conducting one’s pre-battle sledging in the manner of a hyperactive toddler, Shane Jones has continued his crusade against big companies that displease him by saying, in effect: “You’re a big poo-bum and my mother’s gonna give you a hiding.”
The recipient of paddywhacks thus far is neither Air New Zealand nor Fonterra, but Jones himself. Prime Minister Jacinda Ardern has at least twice told her Regional Economic Development Minister that although he is, of course, free to criticise companies that don’t act in New Zealand’s best interests, his implied threats to executives’ and directors’ jobs are way out of line.
That Jones’ leader, Deputy Prime Minister Winston Peters, has smiled on approvingly, has been widely interpreted as cheap sabrerattling, as New Zealand First tries to shore up its withering vote.
There is a big dollop of vote panic and vanity in Jones’ antics. But his purpose, believe it or not, is way more significant than that. As Peters signalled the night the Government was formed, NZ First is concerned about the state of capitalism, and the lack of fairly functioning markets in this country. Global giants such as Google and Apple have, as in other countries, achieved near-monopoly dominance with little accountability, and many of our domestic markets are uncompetitive. People are feeling done over by big business.
This isn’t some mad fixation, or pique at the lack of invites to join boards. When even Britain’s Conservative Chancellor of the Exchequer, Philip Hammond, is on a mission to “modernise” – meaning, regulate – free-market capitalism on the grounds that there’s no longer such a thing as a free market even in his populous country, it’s pretty clear that Peters and Jones are on a perfectly respectable page. It’s just that they can’t help but scrawl rude graffiti on it instead of being clear and strategic about what they’re trying to achieve.
At least when Jones hoed into Air NZ, the perceived offence was clear: further shrinkage of services to provincial New Zealand. Also clear was a degree of stakeholder credential. The airline is 53% state-owned, having been renationalised when on the brink of collapse in 2001. Though it has always been left commercially independent, Jones fairly asked: why shouldn’t it be expected to act in New Zealand’s best interests?
The Fonterra critique was just a Donald Duck tantrum. Our largest company was, apparently, not nearly as high and mighty
as it thought it was, had lost a poultice overseas and was insufficiently respectful of the new Government.
EASY TARGET
There is no end to the – rather more nuanced – complaints that could be levied against the dairy giant: too much bulk product, not enough processing; tough on the environment;
Many of our domestic markets are uncompetitive and people feel done over by big business.
exploitative of suppliers and contractors; unwieldy in its structure; imperfect in its democracy.
Jones didn’t attempt to backfill his outburst with one of them. Sure, the loss on one of its Chinese investments was appalling, but we’re not talking Solid Energy grandiosity here. Fonterra remains eye-wateringly solvent and an impressive world player.
As for Jones’ threatening Fonterra with the current statutory review of its empowering bill – that’s the sort of thing you keep in your back pocket, where, just quietly, everyone knows you’ve got it. The power play comes in not even having to mention it. Yet having done so, Jones was unable to say how the law might be changed to make Fonterra more patriotic.
It would be awful to think he’d forgotten that, notwithstanding some state-conferred privilege, it’s a
private company, owned by dairy farmers, for dairy farmers.
The barmy thing is, but for the ill-disciplined execution, NZ First should be on to a vote-winner – and one that chimes well with Labour. Both parties’ heartland voters are being short-changed by faulty markets. It’s not just such hard-to-avoid natural monopolies as airport companies that can charge at will, but a host of other sectors that are only in theory competitive free markets. Car parts, building products, groceries, fuel, electricity, banking
– all these sectors have come to exhibit cartel-like behaviour.
WHERE IT ALL BEGAN
Jones began, then apparently got bored with, a highly promising crusade against the supermarket duopoly when he was last in Parliament, for Labour. He accused our two major supermarket chains of over-squeezing suppliers to achieve not lower prices for consumers, but higher margins for themselves. Just this year, two of Britain’s big supermarkets have sought permission to merge to achieve 70% dominance of the grocery sector, and guess what their big promise to shareholders is: the ability to use that dominance to squeeze suppliers’ margins. That’s the sort of thing – along with such global goliaths as Apple – that worries Hammond, and has prompted him to try to reframe the Tories’ version of modern capitalism. He argues that regulation, once anathema to capitalism, may now be its saviour. Admittedly, his mind has been focused by the bow wave of support for Jeremy Corbyn’s vengefully hyperleft Labour Party, which would use heavier tools such as nationalisation and actively penalise business.
But there isn’t a developed country in the world not grappling with the local challenges from globalisation. It’s why the Government here is strengthening the Commerce Commission and reviewing the mechanics of our fuel and electricity markets. It’s why even the laissez-faire National Government growled about global giants not paying income tax.
And it’s why, if NZ First wants to make a success of its righteous crusade, it needs to ration the rhetoric and become forensic about it. A few wee factoids here and there, a few joined dots – why are wages not growing as fast as the price of household staples, sort of thing.
So far, its outbursts are too easy to dismiss as opportunistic attentionseeking. And Jones’ Insult-a-Bigwig binge is playing merry hell with Finance Minister Grant Robertson’s effort to reassure businesses that Labour isn’t secretly out to seize the means of production and socialise distribution.
He will be urgently brushing up on Sun Tzu’s chapter on disposition of the army. Alas, it’s as silent on crashtackling one’s own soldiers as it is on toddler-talk.
If NZ First wants to make a success of its righteous crusade, it needs to ration the rhetoric.