Q+A Panel Discussions

Hosted by Shane Taurima

In response to GERRY BROWNLEE interview

SHANE TAURIMA
Welcome to our panel. From Massey University, Dr Claire Robinson; business commentator Rod Oram; and Phil O’Reilly of Business New Zealand. Rod, your take on that. The minister says he wants a bit of action before the end of the year, but you say there’s still something missing.

ROD ORAM - Business Commentator
The very big missing piece, at least from an economic and business point of view, is what’s the economy of the centre of Christchurch going to look like? Prior to the earthquakes, it was very weak. There was a lot of marginal businesses hanging on in very low-rent, poor buildings, and a lot of traditional economic vitality or rationale for Christchurch had ebbed away. Now CERA is working on an economic development plan for the city centre, and the Canterbury Development Corporation is working alongside that for a wider piece. But until that’s in place, it’s going to be very hard to see how a very exciting - as opposed to a fairly exciting, as the phrase Mr Brownlee used - a very exciting sense of how Christchurch can recreate itself economically that will not only ensure that all the reinsurance money that’s coming to Christchurch is actually reinvested there, but crucially the city goes one stage further, which is to attract a lot more investment on top of that to build a substantially stronger, higher-paying, more resilient, better place to live.

SHANE Phil, tell us what’s happening now. What is Christchurch business telling you now? What’s going on with them? Have they closed down? Are they thinking of relocating? What’s their situation?

PHIL O’REILLY - Business New Zealand
They’re just getting on with it. I mean, the vast, vast, vast majority of businesses who were operating in Christchurch CBD at the time of the earthquake are still operating. I call them - which is a nice way to put this - they’re like weeds. They’re really hard to kill. They come up through the cracks of the pavement. They survive, and they just get on with it. Now, there’s an enormous amount of frustration, of course. But in all the conversations I’m having with Christchurch businesses over the last few weeks, there is genuine excitement about what might be announced on Monday, and I think you’ll find a lot of business commitment to getting on with it. Because if you can unleash the possibility of private sector investment - and bear in mind of course that the footprint of the CBD is by itself an unleasher of investment if people get confidence about, you know, the scale of it and what it might look like - then I think you’ll see an increased confidence in the Christchurch business and other communities as well.

SHANE Which is interesting, because I wanted to ask what does not having a CBD, what sort of impact is that having on the city?

PHIL Of course, what’s happening is mini CBDs are being created elsewhere, and some of those will continue to be successful and some of them won’t. But you’ve got to say that most cities will want to have a CBD because it’s the place in which services, businesses get done. Lawyers, accountants and so on. And it gives the city an obvious heart. It gives tourists and other people coming to do business in it a place to feel as though they’re there. So CBDs matter, and if you can come up with the right idea about what a CBD looks like in Christchurch - right size, right facing, right kind of things going on in it - you’ve actually got all the things that Rod wants and what I want too. In other words, not just rebuild Christchurch, but recreate Christchurch as being a much better place to live and do business.

SHANE Claire, there seems to be a lot of frustration at the perceived lack of progress. What was your reading of what the minister was saying?

CLAIRE ROBINSON - Political Analyst
He personally is the Christchurch MP. There’s a lot of MPs there. On a personal level, they’re feeling their own sense of frustration at the lack of progress. But the government also will be feeling frustrated at the lack of progress because they actually need before 2014 for Christchurch to be actually humming, for the economic growth in Christchurch to be affecting the economic growth for the whole country in order to be able to say in 2014, ‘Look, we’ve done a great job of managing an economy, so keep us on beyond that.’ So I think that, you know, just sitting still and not doing anything is quite frustrating politically for them all.

SHANE So how much weight it on this blueprint to be announced by the government tomorrow, Claire?

CLAIRE Well, a lot of weight, but I think after that, the blueprint is still just words, so they need to be able to get businesses, other funders, the insurance companies on board and actually start doing things. Which is why he said he hopes it’s going to start happening on Tuesday. Somebody’s got to start doing something.

SHANE And that’s the big thing, isn’t it, Rod? We all want to see some action.

ROD Absolutely, and some of the anchor projects are really important, particularly the convention centre, um, because Christchurch has lost two thirds of its hotel capacity. That’s hotels, as opposed to motels and lower down the market. And so until you know where the convention centre’s going to be, and the hotel companies that are collecting on the insurance money know where they might want to build and how tourism and the convention market might come back, that’s very crucial. My concern, though, is if it’s all 12 projects, which it’s supposed to be - 12 anchor projects - that’s a very fast journey. It’s been 100 days. I know a lot of work was done beforehand, but it’s a bit fast a journey to pin down these very crucial parts of the CBD. And I think that’s too fast. And again it comes back to this problem in Christchurch that some things that needed to go a lot faster, like house repairs - this is the second winter for some people in broken houses - are going too slowly. And some things that need to go relatively slowly as you think through this, such as where do these very defining elements of the CBD belong, are going too fast. So it’s trying to get that balance between speeding some stuff up and just being a little bit more thoughtful about where those very defining anchor points are going to be.

SHANE Without wanting to down the value, the significance and the impact that we’re facing with Christchurch, what about Auckland and the issues that we’re facing up here? The government seems to be very keen, and we agree that they need to be, on Christchurch, but not as keen on Auckland issues.

ROD This is right at the heart of one of the very big conflicts that’s looming in New Zealand politics. Essentially, what Auckland needs to do is to recreate its economy, needs to recreate its built environment, if we’re going to cope with another million people here over the next 20 years. So we’re facing exactly the same issues - Wellington is the same - as Christchurch is, but not quite the same pressure, because there isn’t an earthquake. What the cities want to do and what they’re saying they want to do is not what the government’s delivering on.

SHANE And we have to leave it there, unfortunately.

In response to RUSSEL NORMAN AND GARETH MORGAN debate

SHANE TAURIMA
Welcome back to our panel - Claire Robinson, Rod Oram and Phil O’Reilly. Rod, what did you make of that? It looks like their meeting this week obviously brought some agreement.

ROD ORAM - Business Commentator
Well, Gareth’s famous for sort of staking out, making a very bold statement in a conference like that, and then when you talk some more, you get a bit around it. But the two central issues for me - first of all, conservation is very important, but it’s only a very small part of a much more integrated, complete picture of how economics and technology and the way we’re running ourselves adapts to make sure that seven billion people now, nine and a half billion people coming, can function sustainably on the planet. And Gareth was very wrong to say the Greens hadn’t made progress on that. They’ve made a lot. And the third point is that what we’re seeing in international business is a much bolder vision staked out amongst those leaders from, for example, the World Business Council for Sustainable Development and very major corporates versus what we’re getting in New Zealand, which is still largely a focus on resource efficiency, rather than trying to understand this new concept of the economy and the environment working together.

SHANE Claire, do they still face that problem of being perceived as the loony lefties?

CLAIRE ROBINSON - Political Analyst
No, not really. I think Russel Norman himself has done a great job of actually mainstreaming Green conservation issues. But I think the problem for the Greens is this: that they’re the most popular they’ve ever been, but they are being the most ineffective they’ve ever been in terms of being able to change policy. I got a flyer in the mail yesterday which still talks about the home insulation scheme. And even Russel just did it. That’s like their big policy intervention over the last four years. They’ve got to be able to do more. But, ironically, if they were going to do more and they were in coalition, they’d be suffering at the polls because no minor party has managed to hold on to their vote. So they’re in this kind of no-man zone where they’re popular but not able to achieve much, except through Russel. And this Russel himself, personally, is doing a very good job as kind of a quasi-Opposition leader. He’s much more out there than David Shearer, for example, when they’re opposing the government. So if they’re looking at the long term, possibly he may have a great role in government in 2014, should there be a Greens-Labour coalition. But for the next couple of years, there’s not a lot that they can actually achieve.

SHANE Is Russel more than just a respectable man, Phil O’Reilly? His economic policy, for example, Gareth Morgan said is not credible.

PHIL O’REILLY - Business New Zealand
Well, he’s a nice bloke. I’ve met him on several occasions. We’ll be meeting with him again over the next few weeks to continue the discussion, but, of course, the problem for the Greens is they’re not just an environmental party, they’re a far left party. So the so-called mainstream stuff that he was just talking about a second ago - look at the examples he used. One, a new tax. Second, a new charge. Whether you agree with him or not, that’s where he comes from - taxes, charges, more legislation, more control. So I think in order to get mainstream, he’s going to have to be thinking much more about how you get economic growth. And the interesting thing is Rod’s wrong about this. New Zealand businesses are up for the debate much more than you might expect because, actually, when I talk to business leaders, they’re saying to me this idea of the economy versus the environment is simply wrong-headed. We need to get a better economy and a better environment. We need to have better leadership on both. And increasingly they’re getting frustrated that that debate is not being held. Now, the important thing is that you don’t have a debate which excludes possibilities; you have a debate which includes possibilities, and that’s part of the problem of where Russel and the Greens are at. They’re excluding a lot of possibilities. They’re not mainstream about taking up the best of the economy and the environment.

SHANE Rod, are you wrong on this?

ROD No. Phil is boxing himself and the rest of New Zealand business bar some into a very narrow track saying we want a better economy and we want a better environment. If you don’t think in these new conceptual terms - and the Harvard Business Review calls sustainability the greatest driver of innovation the world has ever seen - unless you start to think in these terms, you’re always banging one against the other.

PHIL That’s what I said, Rod. I said you need to do both well, remember? I don’t think it’s boxing me into a corner.

ROD It is. And so, for example, why are you still sitting on the New Zealand version of the World Business Council for Sustainable Development’s Report, the Vision 2050, which actually brilliantly articulates that and applies those issues to New Zealand? But unfortunately although that work was completed a year ago, Business New Zealand’s Sustainability Council still hasn’t delivered it

PHIL That’s quite wrong. We have working very heavily on that report, Rob.

SHANE We have to start wrapping, so, Claire, save us. Tell me, though, the whole notion of this National-Greens coalition. Is it possible? I think we got a very clear sign from Russel Norman it’s very unlikely.

CLAIRE Yeah, I think the signals that they got from their voters and from some of the new MPs - this is the Green Party - was that they didn’t want to go into coalition with National. I think National probably would need them in 2014.

SHANE So should the Greens be rethinking their position?

CLAIRE Well, possibly. They’ve never wanted to sell out. They’ve wanted to be more mainstream, but they’ve never wanted to sell out to the man. So they haven’t quite worked it through in their heads. I think Russel is much more amenable to going into coalition than some of the other MPs. But it depends how much they want to effect. This is what the Maori Party has discovered. You can’t effect a lot of change from outside of Cabinet.

SHANE What about business? Do they like them? Would they ever like them?

PHIL They’d have to become a lot more mainstream. There are parts of their policy - I think if you talked to business - this is Gareth’s point - the perfect coalition, in a sense, is Greens and National, if you can make that happen, because business people in New Zealand, we’re all a bit environmental, we’re all a bit green. So that’s an important aspect for all of us as New Zealanders. So the question is, really, how do you build both economic credibility and a green future? And, fundamentally, I don’t think the Greens are close to that right now.

ROD But the Greens are very mainstream because on a Capital Gains Tax, we are one of I think it’s three or four only OECD countries that doesn’t have a Capital Gains Tax. So for them to talk about Capital Gains Tax is astonishingly mainstream. It’s just that some people in New Zealand aren’t so keen on it.

SHANE And there we shall leave it.

In response to DAVID CLARK interview

SHANE TAURIMA
Welcome back to our panel - Claire Robinson, Rod Oram and Phil O’Reilly. I think he [David Clark] summed it up at the end there when he said there were bigger issues. Phil O’Reilly, your take on it.

PHIL O’REILLY - Business New Zealand
Well, this is just really CTU policy that the Labour Party is putting out there, so we know that a $15 minimum wage will actually damage employment, and it won’t actually help much. It’s a very poorly targeted policy if you’re after poor families, because the minimum wage is paid to the sons of rich parents as well. So it’s actually rather poorly targeted. We know it will impact employment weakly. But here’s the optic that the Labour Party’s got to worry about - in tough economic times, everybody’s thinking about belt tightening, all the rest, the Labour Party’s going to put up a proposition, are they, which says, ‘We’re going to make it harder to employ young people by putting up the minimum wage, and we’re going to have more holidays.’ Really? Is that part of an economic plan that I can buy?

SHANE And let’s not forget Sue Moroney’s Paid Parental Leave Bill. That goes in the mix too. How do you think voters will be perceiving this?

CLAIRE ROBINSON - Political Analyst
The interesting thing about these members bills is that they tend to be ‘nice to have’ bills that actually aren’t going to make a lot of electoral impact. The one bill, actually, that has been pulled out that will make some electoral impact is the gay marriage bill. So that is the one that is going to cause more discussion and controversy amongst the general public and is likely to have some sort of electoral impact. These ones, these small ones, aren’t. They’re actually a bit of a waste of time.

SHANE Are they a waste of time, Rod Oram? He [David Clark] didn’t seem to have done his homework. He couldn’t tell us how much they were going to cost at least.

ROD ORAM - Business Commentator
I’d like to think that we’re capable in Parliament and as a society to work on big issues and a whole range of them, and these obviously come well down the range. But they are important because our workforce does work very long hours, and people are very stressed. So the idea that we’re trying to improve those working conditions so that people then are more productive - and I think there is good evidence that that works - then that’s a very interesting discussion to have. And all the research is not black and white at all about the effect of minimum wage on hiring. You can get all sorts of studies that will show you a different pattern. So it’s an endless argument that we’re not making any progress on, despite evidence on both sides.

SHANE What about Mondayisation? I want to talk about that briefly too. Phil O’Reilly, would employers support that?

PHIL Not in principle. I know the tourism guys do, and I acknowledge that point. But I think most employers would say, ‘Gee, really? Are there not some more important things to be talking about?’ I also think it’s important that we understand what those two days are about. Anzac Day and Waitangi Day are celebrated on the day for a particular reason.

SHANE But aren’t we talking about giving a fair deal as well, though?

PHIL Well, I think you could argue that. And, as I say, it’s not the biggest cost that employers will face - two days over seven years. But I think in principle-

SHANE It’s minimal.

PHIL In principle, employers are saying, ‘Gee, really? Do you think we could get more productive?’ To Rod’s point, I’d like to see a more productive workforce as well and a higher-skilled workforce. Is the way to do that putting up minimum wages and having more holidays? The having more holidays may have a very marginal impact. In fact, what we should be doing is getting on a giving those kids more skills, more science, technology and engineering and maths skills so that they get a better job in the future.

CLAIRE And design.

SHANE Claire, the politics on this, National not supporting it, what do you make of that? It’s a bit puzzling, isn’t it?

CLAIRE Well, no. I think that National, actually, conforms to what Phil is just saying.

SHANE But Phil says that there is some prospect of some support out there.

CLAIRE Yeah, and I think most ordinary workers, like me- I mean, I’d love to have a Mondayised holiday, but, actually, yeah, for National it’s one of those issues that isn’t on the top of its pile of things to do.

SHANE So flip the coin - is this Labour trying to get its policy through with stealth?

CLAIRE No, no, no. I think it is what it is. It’s a very keen, young, new politician - David Clark. I mean, I think he’s very highly rated in the Labour Party, and I think he’s somebody who’s going to go far. You know, he was lucky. He got his bill.

SHANE He just needs to do his maths. Unfortunately, we have to leave it there, but thank you very much to you all for joining us.

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