Posted on Oct 16, 2017
There is an old adage that says that a Labour government is great for business. But bad for the country.
So we will take what is good for business. And a few years on will have to suck up any damage to the country.
Aside from the obvious commentary on the process (that 7.5% of the vote was allowed to dictate the direction of the country for the next three years) and that a “back to the past” world view is bound to be at odds with a digital future, there are a number of intriguing aspects to the situation we as a country find ourselves in.
In contrast to the massive divergences in attitude and beliefs in many of the larger western democracies around the world, the reality is that in New Zealand the gaps in the political spectrum are small. That there was even commentary calling for a “teal” coalition to be explored is evidence. We all (well, most of us anyway) want clean rivers. We want an end to child poverty. We want a relatively homogenous society where everyone has the basic necessities, and contributes to society. We want a strong economy. But we don’t want it at the expense of a downtrodden class that exudes hopelessness.
So where are the differences? I would argue that the differences across the political spectrum are in ideas and plans. If we recognize the problems, and mostly concur that they are problems, then why are we not fixing them? A large part of this comes down to the very same problem that bedevils much of our startup (and beyond) business culture. In my now distant youth, if you had a good idea for a business, you would take your savings, perhaps persuade the three F’s (fools, family and friends) to invest, then set about making your business work. Hard work and good ideas were the main drivers. You accepted that it may take a while to gain traction, but when you did, the measures of success were turnover, profitability and a sound balance sheet. Now times have changed. The good idea is not even a pre-requisite. What is centre stage is the ability to raise money. The measure of success is how much money you can raise – not so much what you do with it, or what you produce with it. So we are rating business on how much money is raised - or in the case of listed companies, what their market valuation is. It’s not about the plan, the results, the progress. It’s about the money that is thrown at it.
And similarly in the political arena. The answers to the universally acknowledged problems are simply money. Who promises to throw the most money at a problem has the best answer. But just as we know that the measure of a business is not how much money they can raise, neither is throwing money at a problem simply the answer. Child poverty – allocate more money. If only that was the answer. But as we all know, just spending money doesn’t solve anything. It’s the ideas behind spending the money that count.
National were certainly starting to run out of ideas. But the evidence isn’t overflowing that the coalition of losers has ideas in abundance either. Taxing the rich and giving to the poor evens out the playing field briefly. But we are already doing that – more than 50% of the populace are already on some sort of assistance. We need innovative ideas on how to ensure that we don’t keep breeding a whole class with a culture of entitlement – without a commitment to effort.
We need to provide a safety net for those who need it. Any caring society should do that. But there is a difference between those who need it, and those who want it, or feel entitled to it. And there doesn’t seem to be sufficient distinction between those concepts.
The world has changed. We don’t have to be very aware to realise that we live in a digital age. But to prosper in that digital age, we need an educated populace. Pumping funding into education, as has been proposed, can therefore only be a good thing. But you don’t have to spend much time in South Auckland to understand that we are spending plenty already on tertiary education, but with little real impact. Unless we make big changes in the way the education system operates, rather than just tinkering, we will continue to produce a generation with few of the skills needed in the 21st century. Teaching them to code is about as useful as the “teach them Japanese” mantra 50 years ago. We have a generation that is essentially financially illiterate, with many whose communication skills are very sadly lacking. And if we cannot communicate, and don’t understand the very basics of finance, then just transferring wealth is only a short term salve. It’s easy come, easy go.
It is obvious that the incoming government has a big spending agenda, and will likely be interventionist and somewhat protectionist. But it will really be a disappointment if the “capitalism has failed the homeless” headliners take precedence over actually working out the answers. We know there are difficult questions to be answered. But alienating the productive sector of the economy is not a great start.
There are very few who don’t want to pay their way. We recognize that for any homogenous society to work, those who are able need to provide for those who are not. Let’s give the new government every opportunity to make the change they want to. But at the same time caution them that it’s not as simple as spending up big with the proceeds of the last nine years of superb fiscal management.