Business about to be more assertive

Business is about to get more assertive of its policy needs and to campaign for public backing of faster economic growth. A focal point will be a conference on December 6 organised by Business New Zealand.

This comes at a time when the government is still congratulating itself on its much improved relations with business through its regional forums and other projects. Helen Clark’s speeches to business audiences continue to be very well, sometimes nearly rapturously, received. And she gets very high marks for her trade and investment promotion work with business on trips abroad.

Auckland Chamber of Commerce chief executive Michael Barnett says Ms Clark is “doing a stunning job”, notably on better market access for exports and her understanding of Auckland issues.

But he adds that the change of leadership in the National party has created a “window of opportunity” for business, aware an election is coming up next year, to “try and push for National to create its point of difference around business-friendly policies”.

And he is unhappy with what he describes as “uneven” consultation, a point echoed by Canterbury Employers Chamber of Commerce director Peter Townshend and Business New Zealand chief executive Simon Carlaw. The new Health and Safety in the Workplace Amendment Bill particularly rankles.

And these three are reflecting growing grumbles in private over the past two or three months among corporate chief executives. Now Business New Zealand is preparing to be more assertive about business’s needs.

This will not be the head-to-head confrontation that soured relations over the Employment Relations Act. Instead Business New Zealand chief executive Simon Carlaw aims to make a connection between growth and the social services people want and the need for more business-friendly policies to achieve that growth. Hence his conference is entitled: “Changing gear: delivering the social dividend”.

This connection has not been made by “successive leaderships” of governments, Mr Carlaw says. He has found only “pockets” of MPs who are enthusiastic about economic growth.

He doesn’t entirely blame them. “They are reflecting the equivocation about growth in their electorates” which have bad memories of the deregulation of the 1980s and 1990s but also think they can have rich countries’ social services on a commodity income. So Mr Carlaw’s aim is twofold, both to prod politicians into a stronger promotion of growth and buttress them in doing that by taking the message more vigorously out to the public.

In this, he is paralleling the Trade Liberalisation Network set up last month to argue the case for freer trade.

But, buttressing politicians or not, Mr Carlaw expects that “increasingly the government may be displeased” by his campaign. “There is no way the government is going to agree with our policy on tax or government spending at this point,” he said. “But if we get higher growth it will be able to spend more.”

Mr Carlaw is also critical of the government’s approach to “triple bottom line” benchmarking. In a speech last Wednesday [subs: 21 November] he said: “It seems obvious that economic development should occur in harmony with social and environmental outcomes. It is less clear that a triple-bottom-line accountability can ever produce three table legs of equal length when economic development must always provide the means to achieve those social and environmental outcomes.”

All this might get Mr Carlaw labelled “new right” by the government, as was Reserve Bank governor Don Brash’s attempt to link the achievement of social objectives to the need for growth-supporting economic policies at the Knowledge Wave conference in August.

So be it, is Mr Carlaw’s response. In fact, in his speech last Wednesday he welcomed “the transition from unthinking hands-off to helping hands in an economy dominated by micro-enterprises typically employing five or fewer employees” — a clear endorsement of the government’s business development policies.

But he then went on to complain that “for every dollar spent invested in going forward, there is as much or more being spent on raising the height of the hurdles”. He cited the “rush” to implement the Kyoto protocol, “cherry-picking the best privileges and practices that rich countries can afford to provide their employees”, the tax rise, Finance Minister Michael Cullen’s “super blotting paper, which seems to rule out any serious investment in growth and the infrastructure” and uncertainty over biotechnology.

Ask Mr Townshend and you will get a similar list. In particular he is “staunch” on a corporate tax cut as an “absolute key” to higher growth.

That is among 20 policies which will be promoted at Mr Carlaw’s conference next week — with a scorecard of targets against which to check progress over this decade. The central priority is to “formulate a sustainable development strategy that recognises economic growth as a precursor for social wellbeing and effective environmental management and fosters a climate of innovation and competitiveness”.

Other policy prescriptions include:

* reducing government spending to 30 per cent of by 2005, gross government debt to 15 per cent of GDP by 2010 and local government spending to 3 per cent of GDP by 2005;

* a common currency with Australia;

* cutting compliance costs, particularly for small and medium businesses;

* more investment in transport infrastructure and a top-10 OECD rating for broadband telecommunications penetration;

* a raft of education proposals, more labour market flexibility, more immigration;

* improved linkages between research and commercialisation of ideas and an innovation-friendly regulatory environment;

* a best-practice management and governance project and promotion of ” positive public attitudes towards wealth creation, business success and entrepreneurship”.