Has National done enough?

ROD ORAM
Last updated 05:00 15/06/2014

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It often helps to look back before looking forward, to acknowledge achievements before evaluating new goals.

The National-led government has had two terms in office and will seek a third on September 20.

Thus, this column looks back at some of National's economic and business goals that I have endorsed over the past five-and-a half years and adds the question voters should have foremost in mind when at the ballot box.

In due course, the election campaign will offer opportunities to assess their impact and to look forward to the next three years and beyond.

National had two over-arching economic ambitions when it took office in November 2008: to return government finances to surplus; and to ensure our incomes caught up with Australians' by 2025.

Both were good goals, requiring strong discipline and bold strategy to help us survive the global financial crisis and build for the future.

By the time of his first budget in May 2009, Finance Minister Bill English had made a reasonable start on the finances.

Next year, the government will likely report a budget surplus. "The National-led government deserves to enjoy the surplus, since its fiscal discipline will have helped create it," this column noted post-budget four weeks ago.

English, though, was committed from the outset to a far bigger ambition: reinventing public services.

"Rightly, the finance minister is planning such a revolution in the way government delivers services because there will be no more new money to keep old models performing even at their current sub-optimal levels," my March 1, 2009, column concluded.

Since then the government has improved fiscal discipline, initiated its Better Public Services programme, and set itself 10 big challenges such as reducing long-term welfare dependency and boosting skills and employment.

If National wins the election, English says his next budget will be the most radical restructuring of government spending in 50 years as he seeks to take an investment-led, performance-driven approach to programmes.

The government has also bravely tackled the incredibly complex and fraught issues of freshwater regulation. The previous Labour government had failed abysmally on these during its nine years in office.

"Likewise National was struggling with water until it had the courage to commit to a collaborative way of working," I wrote in November 25, 2012.

The turning point had come in 2009 when Environment Minister Nick Smith agreed to set up the Land and Water Forum, an initiative proposed by farm, environment, business, NGO, science, iwi and other organisations as a way of finding common ground for a new freshwater regulatory regime.

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The forum's reports are the basis for the government's massive work on water standards and regulatory processes. This work has yet to come to fruition. But if it delivers on its promise, it will be one of the government's most far-reaching and enduring achievements.

The government took longer, though, to get its growth strategy going. It first attempt was to appoint ACT's Don Brash to lead a 2025 Taskforce. But the government's response to Brash's first report a year later was so dismissive, it was clear the government was already working on more focused, more practical and more beneficial targets than simply matching Australian incomes.

The three leading ones it chose were to double exports, to lift exports from 30 per cent of GDP to 40 per cent, and to double private sector spending on research and development to more than 1 per cent of GDP - all by 2025.

These are excellent goals. Achieving them would show our companies had become more technologically savvy and internationally competitive. As a result, we would earn a bigger, more resilient living in the global economy.

To help reach these goals, the government created the Business Growth Agenda with its six key areas of export markets, capital markets, innovation, skilled and safe workplaces, natural resources and infrastructure.

More than 350 BGA actions have been completed or are being implemented.

"The government's Business Growth Agenda has some useful programmes," I wrote last September. "But it is not a strategy. It only seeks to drive incremental growth in existing activities rather than shift the economy into more productive areas."

However, there has been some significant progress along the way. In its early days in office, the government had slashed NZ Trade & Enterprise's market development funding. But this column argued then for far greater support for a much more sophisticated T&E. It got the help from government and has turned itself from a good agency into an excellent support agency for many of our fastest growing exporters.

Similarly, "Callaghan Innovation's overall strategy represents the most intelligent and complete response yet by a NZ government to the challenge of commercialising science and developing a more sophisticated economy," I commented in February.

The Primary Growth Partnership is another government initiative that has evolved well. Its start was not promising. During the 2008 election, National said it would scrap Labour's Fast Forward fund, which was aimed at bringing together government, scientists and business on projects to enhance technology and value creation in the primary sector.

National said it would replace it with a smaller, simpler programme of government funding. This column argued, however, for retaining co-funding by business to ensure projects had scale and commitment. National's Primary Growth Partnership developed that way and is now delivering exciting breakthroughs such as new technology for precision seafood harvesting.

Likewise, National was right in the 2008 election to commit government investment to accelerate the deployment of ultrafast broadband. Initially, it largely cut Telecom out of the programme. But once Telecom offered to split itself into separate service and infrastructure companies, I argued the government should focus most of its UFB investment in Chorus, the infrastructure part of the old Telecom. The government has, and while this is currently a rather rocky relationship, its investment is likely to prove rewarding for Chorus, the government and the country.

The government also decided not to do some things it had promised to do. Two examples were to turn New Zealand into a back-office centre for offshore banking, and to privatise parts of ACC.

So, National's had a busy two-terms. The question for the election campaign is: has it done enough?

- Sunday Star Times

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