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Political Update Thur 31 May (No. 04/01)

Agreement on prosperity PM Helen Clark and Business NZ President Doug Marsh both stressed partnership in their speeches at Business NZ’s official opening yesterday. They agreed prosperity would come from the business sector and Government working together, and growing the NZ economy by focusing on the production of high value added goods and services for profitable export.

Hong Kong CEP needs rules The proposed closer economic partnership with Hong Kong may be signed by early 2002. Business NZ supports the move, as long there are rules to:

- stop entry of goods from China masquerading as goods from HK

- put constraints on financial assistance to businesses in both NZ and HK

- ensure labour and environmental standards are not included

There also needs to be a disputes resolution process so issues don’t get stalled - like the vehicle manufacturing issue under the CER with Australia.

Governor should point the finger The Minister of Finance’s decision not to turn the Reserve Bank Governor’s responsibilities over to a committee was sound. But while we’re looking at possible changes to the Reserve Bank, we should also consider other changes - e.g. giving the Reserve Bank the mandate to publicly advocate reforms for sectors that create the most inflation. The tradeable (exporting) sector currently creates less inflation than the non-tradeable (non-exporting) sector, where domestic regulation and occupational licensing increase costs. The Governor should be able to “point the finger’ at those sectors of the economy that push inflation up.

New Act endangers free speech The Local Electoral Act passed under urgency last week makes it an offence to publish or broadcast material promoting the election of any candidate without their authority. It means, for example, you could be prosecuted if you distributed a checklist of candidates’ track records on supporting business issues - because critical commentary could be construed as an indirect attempt to promote candidates who were not criticised. It will restrict freedom of speech and needlessly increase litigation.

Buy NZ NZ suppliers may gain more contracts from government now the state procurement regime has been beefed up. Previously, state agencies were encouraged to inform the Industrial Supplies Office of their buying intentions, and these were publicised to potential suppliers via ISONET ( But now govt departments will be required to notify Industry NZ of their intention to buy goods or services (with some exemptions) valued over $50,000, for display on the Govt. Electronic Tenders Service (

Less regulation on business in US The Bush administration is starting make good on its campaign promise to reduce the level of regulation on businesses. The Consumer Product Safety Commission, Federal Communications Commission and agencies for policy in the oil, gas and nuclear industries are soon expected to confirm senior appointees with a track record in working to roll back the regulatory burden on business. The approach being pursued by the Bush administration involves a greater focus on the regulation costs and benefits.

Police hacking not on The Privacy Commissioner has misgivings about proposed amendments to the Crimes Act which would authorise police hacking into computer systems (“That pernicious secret policing practice should not be allowed for ordinary law enforcement”). He wants “full and meaningful” public reporting on any state practices involving intercepting non-oral communications and accessing computer systems. The Privacy Commissioner also recommends that new exemptions to the interception law should not be made by delegated legislation, and says ISP providers and telecommunications operators should be subject to criminal sanctions if they keep, use or disclose private communications obtained during maintenance work

Quality the best advertisement Complaints by universities about the “mean’ Budget should be viewed alongside the $23 million the education sector spent advertising for customers last year. While advertising is a necessary cost for any enterprise wishing to communicate with potential customers, it’s not the only tool available. Public league tables and greater transparency regarding quality are great marketing tools - and could help divert some of those advertising dollars into actual education.

Any old reason will do The Engineering, Printing and Manufacturing Union is at least consistent over its desired outcomes, regardless of the issues. First they wanted a multi-employer agreement (in April, on pay issues, with INL) - now they say they’re being forced towards one. Last week they protested outside NZPA over journalists being excluded from collective agreements, and threatened a multi-employer agreement as a result: “The employers are forcing us into a position of having to co-ordinate across the publishers,” their Secretary complained happily.

Less government, more business Controversial analyst Charles Murray entertained business audiences and had the last word on National Radio’s Kim Hill during his visit to NZ this week, courtesy of the NZ Business Roundtable. Known mostly for his views on welfare reform, Murray also writes on the benefits to business of free society. He says the power of central government should be limited to maintaining national defence, enforcing contracts and upholding fewer, better enforced laws. The benefits to business would be great, he says - in particular, judicial reform has made litigation so complex, time-consuming, and expensive that most businesses would rather put up with almost any harm than resort to the courts.

Deregulation delivers Energy stats released yesterday by Statistics NZ show the benefits the commercial sector has seen from electricity sector reforms over the last three years. Increased competition in the generation sector and the further removal of cross-subsidies by lines companies have contributed to the fall in prices. The commercial and industrial electricity price (bold line) has fallen by 7% since March 1997 compared with gas prices (dotted line) which have continued to rise (by 7% since March 1997).

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