Can this government put it together with business? Surely last month’s outrage over the new local government and holidays laws put the kibosh on any such radical thoughts. But something has been going on in the underbrush.
The list of the government’s uncompromising policy positions is long: higher tax, renationalised ACC, a heap of workplace legislation with more to come, Kyoto, energy conservation, the native tree logging ban, the Resource Management Act (RMA), waste minimisation, more marine reserves, tighter takeover and competition rules, increased local councils’ powers and on and on.
This government has undoubtedly added to business costs and cut profit margins. Business New Zealand’s periodic huffing and puffing appears justified. The slimmer list on the positive side of the ledger — some of Jim Anderton’s programmes, for example, does not offset the negatives.
The government has also probably ensured that by adding these costs it won’t meet its objective of lifting the economy’s long-run growth trajectory to 4% from today’s 2.5%-3%.
So what misguided souls in business can find common cause with this lot?
Well, some have. And the government is also learning that meeting its social and environmental goals depends on business performance which in turn depends on business having the confidence and enthusiasm to invest.
The rationale from the business side goes roughly like this, though with many variations on the theme.
1. The government won’t back off its fixed positions.
2. It is likely to get a second term.
3. There are points on which business can engage and even initiate or influence policy positions.
4. Some government initiatives are positive for business. Its push for free trade and the Prime Minister’s promotion of private sector interests on her overseas trips is the pre-eminent example.
5. Other initiatives, though negative overall, offer some upside potential: Kyoto is the prime example.
6. If enterprise doesn’t seize the opportunities it might not be worth doing business here. Multinationals can up sticks or sit on their hands. Not so local business or home-based executives.
There are examples of business-friendly improvements which can be made even if the overall policy stance is negative. The Forest Industries Council, for example, is working with the Ministry for the Environment and Local Government New Zealand on a pilot to get more consistency and expedition into RMA consent processing. It’s not as good as reform but offers some potential.
Engagement at another level was evident in the annual Prime Minister’s statement to Parliament on February 12.
In the wake of the open warfare over the Employment Relations Act and the first peace-pipe government-business forum that followed, some Aucklanders set out to find ways in which business could contribute to government policy without challenging the non-negotiables.
They applied two lessons from business analysis: firms can no longer just expect workers to turn up at the door; nor can they expect investors to queue up to back them.They must go hunt both. They reckoned the same goes for national economies.
The result was two government-commissioned private sector reports — by LEK Consultants on “talent” and the Boston Consulting Group on foreign direct investment — both of which have fed into initiatives central to the government’s economic development programme.
None of this prises the government from its entrenched positions. But ministers for their part have learnt that their social goals will dematerialise into mirages if business is disaffected.
Enter Helen Clark’s unusual brand of prime ministership.
Clark can be and often is rigid. She has been especially rigid about her 1999 election promises, carrying them out even when faced with legitimate doubts and parliamentary difficulty.
But Clark is also inquisitive. She likes nothing more than learning new things. And business is new to her.
Her critics have made great play of this, offering it as proof she will get the economy wrong. In fact, she listens carefully and stores up heaps of information, often injecting suggestions or complaints into other ministers’ agendas.
So, amidst their frustration and anger about the rigidity of the agenda, chief executives willing to engage can make headway on other fronts.
Go out another three years, when the 1999 agenda has become part of the woodwork and this interaction might construct a positive functional relationship. Who would have imagined just 18 months ago that this could be possible?