Politics
In these overly eventful times, ScoMo may have something to teach us.
If only the great Ghosts of Politics Past could tap living leaders on the shoulder before they make charlies of themselves. Britain’s former prime minister Harold Macmillan would have loomed behind Simon Bridges with four pithy words before he so joyfully announced the National Party’s “bonfire of regulations”.
“Events, dear boy, events,” Macmillan once replied, when asked what could blow successful governments off course. The events that stand to blow our Government off course are not niggly rules constraining hairdressers and scaffolders or even the whole infuriating canon of “PC gone mad!”
Coronavirus and the impending global financial slump might, aside from being the events that sweep all others into the “later” cupboard, incidentally take care of the pesky regulations Bridges is concerned about. Large-scale isolation could rather put paid to overregulated hairdressing for a while. And there won’t be a lot of overweeningly prescribed scaffolding going on if construction funds dry up.
It wasn’t so much the timing of National’s economic strategy discussion document release that was odd, but the emphasis. With challenges akin to a world war facing us, a comprehensive alternative plan to the Government’s for safeguarding lives and supporting the domestic economy would have been right on cue. Evidently, the focus groups and polling said otherwise, because pedantic regulations were the overwhelming focus of National’s presentation.
This could not help but bear the implication that deputy leader Paula Bennett’s 2015 Loopy Rules Report had embarrassingly left hundreds of loopy rules unmolested while the Nats were in office.
The fact that the specific regulations now under National’s fire came in under its own administration was awkward enough. That Bridges was the minister responsible for most of them made the exercise as silly as painting a bullseye on one’s own backside.
The Nats did try to draw a straight line between the benefits to business of cutting compliance clutter and helping people through the crisis. But the link between cushioning recession and, say, junking the new tenancy regulations or relenting on money-laundering controls wasn’t immediately obvious.
TAXING QUESTIONS
More cogent was Bridges’ renewed promise of a personal income tax cut. At least leaving more money in pockets can be understood as an immediate and measurable act of support in a recession.
But as National has been ceaselessly
telling the Government, much more than that is needed to keep New Zealanders safe from the virus and bankruptcy. The trouble is, until the scope of the pandemic and the financial slump become clearer, the optimal policy response is hard to determine.
Should we, as the Government proposes, let the next minimumwage increase proceed and subsidise struggling employers’ wage bills? Or would it be more sensible to postpone the increase, thus theoretically copping less of a wage-support hit?
The Government will argue the minimum wage is a more effective way to support the most vulnerable, whereas the Opposition’s proposed tax cut would disproportionately benefit the better off. But as the better-off sector is the provider of jobs, such distinctions become dizzyingly circular.
As we have already embarrassed ourselves as a nation by irrationally hoarding dunny paper, the odds of a reasoned debate just now seem slight.
Perhaps the most mind-focusing aspect of all this is it makes the 200708 financial crisis seem bearable. At least world trade was able to carry on through the turbulence. The supply chains for the imports and the export income we depend on are now utterly unpredictable.
The Government has to be nimble enough to support our key sectors before they collapse, but mindful of the fiscal unknowns. Emergency bailout systems could in time come to seem permanent. This will be a
Having already embarrassed ourselves by hoarding dunny paper, a reasoned debate seems unlikely.
period of mandatory corporate welfare, possibly on a Budget-busting scale. Equity issues will seethe as, inevitably, the nascent wage growth we’ve finally achieved now cruelly abates, while business is propped up.
The Government is urgently devising tax-based support measures, bank-fostered temporary capital support for struggling borrowers and alternative work options for suddenly surplus staff in hard-hit industries. The Reserve Bank is ready to crank monetary levers. The health authorities are issuing clear messages about handwashing and self-isolation.
ONYA, SCOMO
But the cut-through message people may be looking for is what Australian Prime Minister Scott Morrison nailed when he said, “This is a Team Australia moment.” Somewhat hapless of late, Morrison now shows the advantages of a career in marketing in parlaying his “Where the bloody hell are ya?” tourism slogan to loftier registers. He has urged Australians rich and poor to act as though they were all in this crisis together. That much may be self-evident, but Morrison’s vivid subtext needs spelling out here, too.
It’s that our commercial sector’s scrupulous fidelity to shareholders and by-hook-or-by-crook profit striving is no longer appropriate – and is fast becoming unpatriotic. This is not just about the petty obscenity of opportunistic markups on masks and hand sanitiser, but the need for those who retain their fiscal power during the crisis to put aside their normal cut-throat ethos and voluntarily take less profit in order to look after staff, contractors and suppliers and thereby the whole economy.
Morrison’s stirring message is that, even without a specific enemy to rally against, the Dunkirk spirit of universal self-sacrifice and unity is still a country’s best defence.
It’s one thing, though, for his conservative, business-friendly Australian
Government to say this. For Jacinda Ardern’s administration, still resented and distrusted by many in agriculture and commerce, this could play as “yet another anti-business smack”.
What a march Bridges could steal on Ardern were he to make the
“Team Aotearoa” call.
It’s not an entirely Pollyanna-ish concept, since New Zealand business has had a major teething experience with the zero-carbon legislation and water-management reforms. Most of those measures will make business and agriculture harder and less profitable. But the planet’s viability being at stake puts commercial reputations and brands – and those of entire sectors – at stake, too.
Who wants to be the head of a business that proudly maintained record profits while the rest of the country was driven to its knees?
Here’s hoping the epitaph for this “event, dear boy” will not be “Cometh the hour, cometh the special pleading.”
Our commercial sector’s by-hook-orby-crook profit striving is fast becoming unpatriotic.