Prebble's Letter from Wellington - 24th October
Letter from Wellington
Tuesday, 24 October 2000
The coalition hopes this week's business meeting in Auckland will enable the government to re-launch itself. Ministers intend to grab the initiative and silence their critics by outlining pro-business initiatives like compliance cost reform, export assistance and tax breaks for R&D. The list of invitees has been carefully managed. By refusing to invite leaders from the Employers' Federation, Business Roundtable, or Manufacturers' Federation, government ministers hope the attendees will not have enough experience to challenge them.
The Labour leadership is convinced that business leaders have never given the coalition a chance. Helen Clark complains that when she is overseas influential members of the financial community are hostile. Michael Cullen reports that his meetings with the World Bank and IMF have also been difficult. The government protests that it is a moderate centre-left government, that has been misrepresented internationally by business organisations. What neither the Prime Minister nor Finance Minister seem to understand is that re-nationalising accident insurance, lifting personal tax rates, halting tariff reform and labour market re-regulation, are not considered moderate measures in the twenty-first century. They are considered discredited dogma. Today there is a free global market in capital, and an increasingly free market in skill's. New Zealand's disadvantages of size and isolation are no longer compensated by superior policies. New Zealand is the last bus stop - to attract capital and skill we need to be more attractive - comparable policies are just not good enough.
The coalition's decision earlier this year to freeze tariffs now looks very silly. The drop in the dollar is giving local manufacturers far more protection than a tariff freeze. Tariffs, plus the low dollar, mean the costs facing families for children's clothing and shoes are artificially excessive. If Cullen is looking for measures to persuade business that the coalition is flexible and at the same time ease the mounting pressure on household Xmas budgets - why not tell the forum that all remaining clothing and shoe tariffs will be removed?
The Waitangi oil claim has been divisive for the coalition. Associate Energy Minister, Paul Swain, on advice from officials, issued an official Labour/Alliance policy statement: the Crown owns minerals and regardless of any tribunal recommendations the Crown will not recognise a Maori claim for petroleum. After all, if Maori can claim mineral rights, then what about the rights of non-Maori landowners? Labour's problems stem from their backdown over the radio spectrum. Prior to the election Labour stated it did not recognise Maori claims of electro-magnetic spectrum ownership (the light from the stars). The government then flip-flopped and gave away a valuable spectrum parcel. Ministers said it was not a Waitangi settlement but part of the unethical 'closing the gaps' policy. Unethical because Maori most likely to reap the benefits, as Simon Chapple points out, are Maori with above average incomes, education and job prospects. Alliance MP, Willie Jackson, and Labour's, John Tamihere, are confident that after their hijacking of the spectrum policy, overturning the minerals policy will be a walk in the park. If Clark does not back Paul Swain one hundred per cent on the issue, any remaining claims of prime ministerial loyalty will be derisory.
ACT has just completed a four day, Far North report back tour. The good news is farmers are positive, although they recognise a low dollar is not panacea. Two problems repeatedly surfaced amongst locals: Employment and the Resource Management Act.
Long term unemployment in the North rose on average eight per cent this year, so the ACT MPs had expected to be questioned on solutions. Instead, we were told of chronic labour shortages. Farmers said they had given up. Forestry said it was a bigger problem than the roads. In Dargaville, a clothing factory closed last week - not because of tariffs - as there is no shortage of work, but due to an inability to find staff. The locals consensus? Staff can 'earn' more on welfare doing nothing.
The Resource Management Act
The RMA produced horror story after horror story. The new port in Whangarei has spent $6.5 million gaining resource consents, yet Ken Mair and his rent-a-mob are still planning demonstrations. Developers told of pro forma objections to every proposal they submit. When National introduced the RMA, Parliament was told it would lower compliance costs, speed up consents and make for better outcomes. But as objectors, both environmental and Maori can testify, it has made their job a whole lot easier.
ACT MP Owen Jennings has won the ballot for his Bill to amend the RMA. Owen's Bill aims to stop the problem of landowners discovering their land has been designated of "significant national interest". Such a designation can be devastating - in effect your land becomes a park and the landowner's only 'right' is to maintain it and pay rates. Owen's Bill requires pre-consultation. The Bill is needed. Rodney Council is designating a new plan and some 100 landowners will be stunned to learn they now own a new park.
Dumbing Down New Zealand.
The latest immigration figures confirm that we are dumbing down. The year ended September is the worst year ever for the loss of skilled professionals (19,335), while only 13,863 skilled immigrants came into the country. The number of immigrants with no work skills continues to climb, 11,403 more than last year. National's immigration policies were inadequate. Winston Peters scared off quality Asian immigration and Labour does not appear to accept how serious the problem really is. ACT believes immigration is a very important issue. If one projects our skill loss/skill gain ratio into the future, we are well on course to become a third world nation.