Shearer faces tricky balancing act

Last updated 11:42 08/03/2012

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For weeks, new Labour leader David Shearer has not been short of advice.

He has been urged by all and sundry to get more visibly involved in the issues of the day, and to let everyone know where he stands on the ports of Auckland dispute, the Crafar Farms controversy, the Government's welfare agenda and so on.

All that urging is about to bear fruit.

Shearer is about to deliver the first in a series of speeches setting out his political philosophy, and the direction in which he intends to take the Labour Party.

It could be a difficult sell for him.

Certainly, the public will be wanting more than good intentions and a few re-branding strategies.

One of Shearer's problems is that he needs to please several audiences at once, some of whom cancel each other out.

Any warm fuzzies about the plight of the unemployed, for example, seem bound to affront many of the middle-class strugglers who have drifted away from Labour.

In one of his few speeches since becoming leader, Shearer described this bloc as containing many former Labour voters who are now self-employed, independent contractors, or in small business.

The sort of people, Shearer suggested, you'd expect to find filling out their GST returns at the kitchen table.

As job security becomes a thing of the past, they're also fearful about being pushed down the social ladder.

They're a voting group unlikely to be interested in any Labour plan to re-distribute the nation's wealth downwards.

Shearer has to do more than devise some palatable ways to re-distribute wealth more fairly.

He also has to unveil new ideas for generating wealth in the first place.

Again, that's a challenge. Despite all the social upheaval New Zealand has been through, our economy looks little different today than it did 40 years ago.

We remain just as reliant on selling primary products to a world that has steadily become more technologically sophisticated – while we have hardly progressed beyond the farm gate.

Moreover, despite three decades of free market policy and pep talks, the state is still the main engine of wealth in the economy, in a trend that appears to be accelerating.

In 1981, the New Zealand sharemarket was dominated by privately created and owned companies – and reportedly, eight out of the top 12 companies back then were strongly involved in exporting.

Today, however, the sharemarket is dominated by former state-owned organisations or by near monopolies.

There are seven former government or local authority-owned companies among the 12 largest companies currently listed.

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Export-oriented firms barely figure.

As financial analyst Brian Gaynor says, once the partial sale of the state's energy company assets goes through, it appears likely that soon, 10 of our 12 biggest listed companies will have had their origins in the public sector.

Not that Shearer can afford to dwell on that point.

Ultimately, he may just end up calling for a new and dynamic partnership between the state and private enterprise.

No matter how zealously some politicians try to starve and shrink the government, it still remains the most reliable engine of wealth in this country.

All Shearer has to do is devise a more positive role for the state and – somehow – make that vision sound exciting.

- The Wellingtonian


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