Betting the bank on slow-return projects

The government says it wants and needs three terms, that is, nine years. Heavy evidence of its need will be supplied in tomorrow’s Budget.

The two themes ministers have been billing are “closing the gaps” and “kick-starting the knowledge economy”. Both are slow-return, long-range projects, with spare prospect of much to show by the 2002 election.

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From bubble to bust in ninety days

Six months into the government’s term and things could hardly be more different from the rosy glow of the three-month mark. What has changed?

In March as the 100 days peg was passed the country was in a bubble. The summer had been kind, with jobs from Y2K and money in farmers’ pockets, and “we” held the America’s Cup. A new, confident, vigorous cabinet promised a fresh face after 15 years of economic reformation.

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What the government stands for

Six months in and the government has had its first public spats, its first political stumbles, its first management failures. The icing, though still very thick, is beginning to melt here and there. A suitable time for the first budget.

Growth has given the government a little more leeway but Michael Cullen is determined not to spend the “growth dividend” from good times and leave himself short in the next downturn. In any case, having missed the fine print in the pre-election fiscal update, he has a lower baseline than he campaigned on and so fewer funds for new social programmes. That sets up a difficult start to the next budget round starting in October.

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What happens when the mandate runs out

Helen Clark and Phil Goff are harmony in action on foreign policy: the brainy daughter of conservative small farmers and the brainy working-class kid who left home young both learnt their political analysis at Auckland University in the 1970s.

In the 1980s they were factionally separated, he as the protege of the Douglas-Prebble-Bassett team, she in a rearguard action against it. That, plus a modish conservatism on law and order after 1993, have given Mr Goff a right-wing reputation.

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Aiming to keep the golden goose laying

Michael Cullen’s often wounding sarcasm is legendary. The man who linked the Greens to Mugabe has one of Parliament’s most cutting tongues and he uses it freely on those who annoy him or whom he thinks fools.

Business has not been spared. Consequently, many think he doesn’t like business. If this attitude is left to harden, it will get in the way of the government’s social policy ambitions. So yesterday at Auckland’s chamber of commerce Dr Cullen was in bridge-building mode.

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Sharpening hooks to catch middling voters

The government was in a helpful phase last week: the Greens were given a free publicity hit over rimu logging; National’s morale was lifted by a swarm of jolting errors and mismanagements.

No earthquake has yet followed the tremor-swarm. Pronouncements of the end of the government’s honeymoon with the public are premature until the polls speak.

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Making the most of a negative consensus

“We’re drinking their beer here”. Sic transit Steinlager. Along with other icons of our boozy past and present. We can’t even hold on to our liquor these days.

Lion Nathan’s move to Sydney is in impressive company. Fletcher Challenge is being broken up and sold to foreigners, Carter Holt Harvey is contemplating moving west and Telecom may follow in time.

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Hair shirts for Public Service

There are two essentials to staying in office a good long while, as Labour aims to do. One is to take ordinary folk with you. The other is to develop a strong policy capacity in the public service, to make sure you can ride out shocks and keep a strategic focus.

New governments, especially after a long spell out of office, reckon that policy is what they made in opposition. The Clark-Anderton government is particularly hot on this.

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Can the departments really do their job?

Where did the money to fight the honey bee mite come from? From something else the Ministry of Agriculture and Forestry (MAF) was going to do but now has put off till next budget year. Is this the way to protect our national livelihood?

There is no contingency fund for dangerous pests. A procedure which I have been assured does exist for fast release of new funds appears not to have been triggered. If the honey bee mite did not trigger it, one wonders what will.

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Role-modelling for a would-be role model

The first “new economy” was the Dutch “tulip mania” in 1637. There was joint stock company madness in London a century later, investor obsession with rickety railway ventures in the mid-nineteenth and an assembly line revolution in the 1920s. Crash, crash, crash, crash.

It is too early to say whether the 1990s “new economy” bubble is bursting or just subsiding and thus what economic effect will follow. But the weekend’s turmoil is a reminder of our vulnerability to overseas events.

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