Fran O’Sullivan’s column
Jacinda Ardern mentioned the term “Coalition Government” just twice in an address yesterday as she reassured business her “Government” had a plan to deal with the obvious global economic slowdown.
Notably, none of the bevy of Cabinet Ministers who accompanied Ardern to BusinessNZ’s economic update breakfast in Auckland was from New Zealand First.
While Ardern and her deputy Prime Minister Winston Peters have seriously taken issue with journalists’ characterisation of her administration as “the Government” or the “Labour-led Government”, such niceties appeared to fall by the wayside in the PM’s own speech.
New Zealand First may shrug this off. But when it comes to managing the economy in slowing times, it is pertinent to recall that NZ First has not only extracted key economic policies as part of its coalition agreement with Labour, but its ministers also preside over some powerful portfolios like Foreign Affairs, State-Owned Enterprises, Regional Development and Infrastructure.
They should have been present to hose down current claims that NZ First’s ministers are simply running their own race, and respond that they are part of a coherent Government that will go the distance.
At the breakfast, Ardern told her Labour Cabinet colleagues to “put your hands up” so businesspeople could buttonhole them later.
Finance Minister Grant Robertson and Revenue Minister Stuart Nash, who clearly have a strong interest in the Tax Working Group’s proposals, which will soon made made public, kept a relatively low profile.
Trade Minister David Parker sidestepped a question on services trade.
But Education Minister Chris Hipkins, who next week is tipped to unveil a proposal to wrap up the nation’s polytechnics into one megaorganisation, was happy to talk after breakfast about what is on the agenda, without giving too much detail away.
The problem the Coalition faces is growing business concern on two fronts.
The first concern is financial probity. There is a growing impression that the $3 billion Provincial Growth Fund is in danger
Frankly, Ardern’s overall performance was relatively lame. The big-picture analysis was weak.
of becoming a slush fund. The problem is that NZ First MP Shane Jones, who holds both the Regional Development and Infrastructure portfolios, tends to react with bluster when valid questions are raised about the targeting and efficacy of PGF grants. While there is a unit within the Ministry of Business, Innovation and Employment to administer the fund, delegated ministers can make decisions on investments between $1 million and $20m, consulting with the relevant portfolio ministers when appropriate.
The question is whether ministers should be that close to the action.
Another concern is whether ministers such as Jones and Nash are also too close to the action when it comes to thorny matters concerning the NZ fishing industry.
The second issue is competence. Notably, the Prime Minister did not deal directly with the major issue facing New Zealand, which is housing — and also from a business perspective, the continuing need for skilled and unskilled immigration.
A pledge to address the “housing crisis” was Ardern’s clarion call during the 2017 election campaign.
But the Coalition Government — and notably Housing Minister Phil Twyford — has so far failed to make a dent in the issue.
What she did emphasise was plans to broaden NZ’s trading base, reform skills and trade training to address long-term labour shortages and productivity gaps, changes to tax to make the system fairer, address longterm infrastructure challenges, transition to a sustainable carbonneutral economy and invest in wellbeing.
Frankly, Ardern’s overall performance was relatively lame. The big-picture analysis was weak.
When China catches cold, New Zealand catches flu.
“The worry for us is that further reductions in Chinese exports could cause a material slowdown in its economy, with adverse effects for New Zealand exporters,” she said. But Ardern did not unveil any serious strategies to combat the US-China trade war, apart from pointing out the obvious — that trade tensions in the wake of tariffs imposed by the US on Chinese imports dented the strong growth previously seen.
Nor did she indicate any shortterm strategies to deal with tougher times ahead,
For instance, there was no indication that “the Government” would axe wasteful spending to ensure the books are knocked into good shape to withstand potential impacts on tax revenue from a slowdown.
Ardern announced five Budget priorities:
● Create opportunities for transitioning to a sustainable lowemissions economy
● Lift Maori and Pacific incomes and opportunities
● Support a thriving nation in the digital age through innovation
● Reduce child poverty, improving child and youth wellbeing, including addressing family violence
● Support mental wellbeing for all New Zealanders, particularly those under 24.
Ardern’s address was appreciably better that a speech she gave to a business awards dinner last year where much of her focus was on “kindness”.
The Prime Minister will get a chance to rectify the obvious gaps and address the slowdown when she makes a statement to Parliament next Tuesday afternoon. The PM’s statement typically reviews public affairs and outlines the Government’s intentions for the year ahead.
Woolliness will not cut it.