Hooton’s diagnosis

Matthew Hooton writes:

Labour’s media surrogates have loyally argued it’s all just a tantrum about the colour of the new Government. But the Government is not “new”.

It was elected nearly a year ago and business confidence did not sink to its current depths immediately.

This is true. In January business confidence was only -19 and stayed there until April when it hit -23. Then -27 in May, -39 in June and -45 in July.

The real problem is that Ardern, Robertson and the rest of the Labour crew were either incapable, too lazy or too distracted to do any policy work during nine years in opposition.

Can we choose all of the above?

The Government’s 100-odd working groups are designed to fill that gap, but their combined effect is to leave every area of policy open to radical change but with no real indication of the nature of that change or when it might happen.

We have no idea what taxes might be dreamed up by the Tax Working Group, let alone which will be implemented or at what rate.

The proposed independent Climate Change Commission means Parker and Nick Smith’s Emissions Trading Scheme might be replaced with something better or worse.

It’s unclear if the Government will streamline the Resource Management Act processes or expand the Auckland urban boundary.

On water, some sort of tradeable rights scheme seems inevitable, with Māori taking some percentage as with the fishing quota. But the Government is unable to indicate when it will happen, how it will operate or what it might cost.

Consequently, farmers and growers don’t know if their access to water will be restricted or a charge introduced. Potential new entrants, including iwi, don’t know if they might get better or cheaper access. Neither can invest until the policy is resolved.

Similarly, no one knows what Jim Bolger’s Fair Pay Agreements working group will conclude, with fears it will be the biggest reversal in industrial relations since Bolger himself abolished compulsory unionism in 1983.

Future immigration policy is unclear, despite its reduction being Winston Peter’s central political message for a quarter century. Almost every other important area of policy, including health and education, is equally up for grabs.

I think this is right. Business has no idea what the Government is going to do, which does reduce confidence.

Alongside its diversions and smears, the Government tried this week to launch a charm offensive, with Ardern and Parker’s “Trade for All” initiative and Robertson’s people pointing media to a speech he gave at SkyCity.

The former is an Ardern special. A year-along “conversation” about what trade means to you, complete with yet another “advisory board”.

This was billed as a major announcement!

Robertson’s speech was the usual precis of historic economic data combined with vague references to an Economic Plan, written in the style of a high school debating runner-up.

The Beehive PR machine needs to remember it’s communicating with investors and business leaders, not infants.

Business owners often have their livelihoods attached to their business. They want certainty and preferably good policies.