As the first 100 days tick by, business questions still need answering
By Phil O’Reilly.
As the new Government nears the end of its first hundred days on March 6, the business community is responding positively, with a question mark over the future.
Much has been made about how the hundred-day plan is mainly about stopping things.
That is not an accurate description, but nevertheless it does stop a number of the last government’s initiatives that were widely criticised by the business community.
Examples include the income protection insurance scheme, the Lake Onslow pumped hydro scheme, returning the Reserve Bank to a mandate solely focused on inflation, the repeal of the last government’s RMA reform, and the removal of the fair pay agreement legislation.
Repeal of these has either been supported by the business community for years before the election, or their implementation strongly opposed. Their removal and replacement is likely to be widely welcomed.
In addition, a number of sectoral or regional issues are likely to be welcomed by those elements of the business community impacted.
Two good examples are stopping central government support for the Let’s Get Wellington Moving project which will be widely welcomed by Wellington businesspeople, and a crackdown on youth offending which is likely to be welcomed by retailers and dairy owners.
But the hundred-day plan is not just about stopping things.
New initiatives that are welcomed include reform of the Overseas Investment Office and associated legislation, and tax cuts. Work is beginning on improving regulatory quality, long a bugbear for businesses. Work is also commencing on the new national infrastructure agency which, if successful, has the capacity to really help infrastructure provision in terms of speed and value for money – simply a mission-critical issue for New Zealand’s competitiveness.
The big questions now emerging in the business community are about what happens next.
All new governments go through a time of effectively being the opposition in power and that is where we are now. After a period, though, they will create their own rhythm and ways of working.
As this Government beds in, a number of issues both short- and medium-term will need to be resolved before it can be judged a success.
Two examples are high priorities. Both in three waters reform and the demise of Te Pūkenga, the Government seems to know what it doesn’t like and wants to withdraw. It has, however, given less direction about what it will do to replace them and how it will make the broken systems that they represent more fit for purpose for the future.
Employers weren’t necessarily supporters of the Te Pūkenga reforms. They did, however, support the idea of active employer engagement in industry training and a proper investment by both government and employers in making sure the system was fit for purpose.
The same could be said for water reform. We know what the Government doesn’t like, but it is abundantly clear we need some reform. So what is it?
Similar questions might be asked about immigration reform, where a clear and consistent policy position will be critical for New Zealand firms seeking offshore talent.
There are a number of other medium-term issues for the Government to tackle if it is to retain business confidence.
The first relates to its busy agenda. One of the reasons the last Government failed was that it was trying to do too much. If we consider the two published coalition agreements, they represent an incredibly busy agenda with all the same risks of lack of execution that bedevilled the last government.
Business will want to see clear evidence that this Government has the capacity to prioritise and get people working at pace.
This will include both slimming down the level of bureaucracy but also making it more effective. Most government officials are not politicised. They simply want to do a good job.
The new Government can do a lot of good, not just by making sure the scale of the bureaucracy is fit for purpose, but by trusting officials, unleashing their imagination and experience so that the Government gets the best possible advice without fear or favour. That will make everyone, including the media and the commentariat, more accountable for what they say and do.
The final thing the Government needs to work hard on is a framework for building prosperity, productivity and growth that is well understood by everybody and enables businesses to co-invest in time, thinking and money.
The Government’s hundred-day plans and the coalition agreements go some way towards that, for example emphasising the importance of trade in our national agenda.
But more needs to be done to emphasise what it is we are going to do to improve our woeful productivity and connectedness: again, doing new things as well as stopping the old, and signalling a well thought-out way forward that everybody can understand.