OnPoint by Keith Ng

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OnPoint: Taskforce 2025: A Space Odyssey

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  • Sacha,

    Ooh, O'Sullivan's stablemate Rudman goes for the jugular.

    Have faith in this medicine, says Dr Brash, and the gap will close. Trying to explain why these drugs didn't work the first time round, the taskforce claims "the reforms of the 1980s and early 1990s represented a very significant step forward" but "the pattern of policymaking over the last decade defies the well-established international evidence about what works. So it is no real surprise that New Zealand is not doing better."

    But a comparative study of economic policy and outcomes in Australia and New Zealand since 1984, published in the June 2006 Australian Journal of Political Science suggests just the opposite. Auckland University Professor of Economics Tim Hazledine and Queensland University fellow in economics and political science John Quiggin say the medicine served up by task force member David Caygill as Labour Finance Minister in the late 1980s, and by his predecessor Roger Douglas, and successor, Ruth Richardson, is the cause of the wage gap, now standing at 35 per cent.

    Ak • Since May 2008 • 19745 posts Report Reply

  • ScottY,

    I don't think this is true; we're hostile towards a lot of our top business people, but that's because most of them are evil thieves.

    In saying that didn't you just prove my point?

    Aren't we one of the easiest countries, regulations-wise, to do business in in the whole wide wacky world?

    We are, but the regulatory framework is only one factor in the success of a business. There are plenty of countries with more regulation than our own and that do better than us. Like Australia.

    Business investment in smarter systems and better management skills is essential. I'm unconvinced our widespread failure to do so is down to lack of praise for businesspeople. Pride in being good at it is another thing, however.

    Capital depth is a problem that seems hard to separate from both our poorly governed and enforced investment markets and our distorted penchant for unproductive real estate that comes with untaxed gains and writeoffs. The Aussie super fund has to be a major difference too.

    Nobody is claiming we can magically transform our economy by suddenly treating our business leaders as heroes. But there's no question a widespread disdain for businesspeople (as evidenced by some of the comments in this thread) creates a disincentive for some people to try harder.

    No question the tax incentives to invest in real estate aren't helping.

    You said 'part of this is because..'. I'd speculate that larger parts of the problem are the geographic isolation of NZ, and the small population, which directly effects both your workforce/pool of talent, and your market size.

    Geographical isolation and distance to market are not the problems they used to be. Australia is also distant to most of its markets, but does better than us. And with the development of new communication technologies, we should be doing better. We aren't. And I'm not sure how relevant small population size is. Other countries with small populations do better than us. It may be a factor, but I'm not sure it is a large one.

    West • Since Feb 2009 • 794 posts Report Reply

  • Danyl Mclauchlan,

    Okay, someone explain this to me.

    Brash, Fran O'Sullivan et al are insisting that cutting spending back to 29% of GDP is no big deal, since that's what it was in 2005, and that this would allow the government to cut taxes to 20%.

    The thing is, all of our taxes were a lot higher in 2005 than they are today. I know we ran surpluses and that we have costs like WFF and interest free loans, but those numbers still don't quite add up to me. I suspect there's a scam or a bait and switch somewhere - but where?

    Wellington • Since Nov 2006 • 927 posts Report Reply

  • George Darroch,

    My suggestion: reinstate compulsory penal rates.

    If we want productivity, then it makes sense to have workplaces try and squeeze more of it out of less hours. If they can't do it in 40, then they're not trying hard enough.

    Of course, Brash's mob was the lot that got rid of them, and "Labour" showed no inclination to reinstate them in 9 long years.

    WLG • Since Nov 2006 • 2264 posts Report Reply

  • Danielle,

    But there's no question a widespread disdain for businesspeople (as evidenced by some of the comments in this thread) creates a disincentive for some people to try harder.

    OK, a) I don't think there is a widespread disdain for businesspeople, just asshole ones; and b) even if your assertion is true, why is it our responsibility as a nation to tend their fragile self-esteem? No one gives me a ticker-tape parade for doing my job, and somehow I manage to struggle on regardless. The motivation is in the job itself (sometimes) and the eventual financial reward (always), not how many people slap me on the back for it.

    Charo World. Cuchi-cuchi!… • Since Nov 2006 • 3828 posts Report Reply

  • George Darroch,

    My suggestion: reinstate compulsory penal rates.

    If we want productivity, then it makes sense to have workplaces try and squeeze more of it out of less hours. If they can't do it in 40, then they're not trying hard enough.

    Of course, Brash's mob was the lot that got rid of them, and "Labour" showed no inclination to reinstate them in 9 long years.

    WLG • Since Nov 2006 • 2264 posts Report Reply

  • giovanni tiso,

    But there's no question a widespread disdain for businesspeople (as evidenced by some of the comments in this thread) creates a disincentive for some people to try harder.

    And surely the problem is whether we are entreprenurial enough, not how we feel about businesspersons. Because so long as there's no dearth of people who want to be self-employed and employ others (I seem to recall that's documented to be the case), and the conditions for doing business are favourable (which they are), I have trouble picturing a businessperson being stifled by this supposed disdain.

    'I might as well just middle it... they're not going to like me anyway!"

    Wellington • Since Jun 2007 • 7473 posts Report Reply

  • ScottY,

    OK, a) I don't think there is a widespread disdain for businesspeople, just asshole ones;

    I read and hear a lot of unflattering stuff spoken about people with money. Some of it is deserved, but not all of it.

    Michael Cullen's "rich prick" comment about John Key is one of the more obvious examples.

    BTW, I'm not suggesting we get the hankies out and start weeping for the poor dears. But the widespread disdain goes some way to explaining why many business people "satisfice".

    To be fair, the idiotic 2025 report probably doesn't help, and probably convinces a few people there is some evil big-business agenda to eat our babies.

    West • Since Feb 2009 • 794 posts Report Reply

  • George Darroch,

    New Zealand is one of the most unequal of all developed nations. I think that a good number of poor people actually resent being told to celebrate rich people. I know I do.

    WLG • Since Nov 2006 • 2264 posts Report Reply

  • Craig Ranapia,

    Ooh, O'Sullivan's stablemate Rudman goes for the jugular.

    Wow -- if you're going to be at Emma's book launch tonight, you might like to ask my partner how much stock he puts in Rudder's analytical skills, at least when it comes to pontificating on rail and public transport. It won't take long.

    North Shore, Auckland • Since Nov 2006 • 12370 posts Report Reply

  • ScottY,

    I think that a good number of poor people actually resent being told to celebrate rich people. I know I do.

    But if someone has achieved wealth through creating a successful business, then chances are they're probably also creating jobs and income for the country.

    If they just inherited a bundle, or got rich playing the markets, then screw them :)

    West • Since Feb 2009 • 794 posts Report Reply

  • Kumara Republic,

    ScottY:

    BTW, I'm not suggesting we get the hankies out and start weeping for the poor dears. But the widespread disdain goes some way to explaining why many business people "satisfice".

    To be fair, the idiotic 2025 report probably doesn't help, and probably convinces a few people there is some evil big-business agenda to eat our babies.

    Geroge D:

    New Zealand is one of the most unequal of all developed nations. I think that a good number of poor people actually resent being told to celebrate rich people. I know I do.

    The venerable Brian Gaynor speaks for most if not all of us; for him, the disdain towards NZ business leaders seems to be a post-1987 thing. The article's from a few years back, but it still rings true today. (My emphases in boldface.)

    New Zealand's leading business people are held in low regard because of their poor performance over the past 15 years.

    The lack of respect is not due to envy or the tall-poppy syndrome. Respect has to be earned, and the top end of the business community has eroded its support over the past decade and a half.

    It was a very different story in the late 1970s. There was the occasional rogue businessman at the time but most - they were all males at the time - were highly respected.

    And around the same time as the above, Pete Hodgson hit the nail on the head when he effectively attributed the issue to anti-intellectualism.

    NZH - Let 'nerds' drive us all into future

    The southernmost capital … • Since Nov 2006 • 5446 posts Report Reply

  • BenWilson,

    I think our extreme remoteness is most of our problem in terms of pay equivalences. We are even more remote than Australia, which constantly complains of the same thing. It's nothing to do with resources and management, and just the fact what we're so damned far away from everyone.

    Any time I play any kind of strategic game that involves building up some kind of infrastructure, I notice that the cities or towns at the edge of the map always lag behind everything else. Stuff near the center flourishes because of the other stuff near the center, and because it's older, it's been developed earlier, for longer.

    It really is that simple, I think. I still like this place. Wealth isn't everything.

    Auckland • Since Nov 2006 • 10657 posts Report Reply

  • Gareth Ward,

    The thing is, all of our taxes were a lot higher in 2005 than they are today

    I've asked this question in a few places - but nobody's been able to answer it (or even begin to engage in it).

    Auckland, NZ • Since Mar 2007 • 1727 posts Report Reply

  • Stephen Judd,

    DeepRed, thank you for linking to that old Gaynor article -- it's a pearler.

    ScottY: I've read that report more closely now, and I don't find too much to disagree with in its prescriptions, quite honestly. If I were the author, I would be annoyed with the media coverage which devoted a lot of space to presenting our local culture as problematic, but very little to his recommendations about working with the culture.

    Wellington • Since Nov 2006 • 3122 posts Report Reply

  • Logan O'Callahan,

    Totally agree with the sentiments on wealth.

    Not too many people have a problem with the likes of the La Grouws (Lockwood houses) and Gallaghers (electric fences) of this world. They built big businesses by hard graft, making real things and employing lots of people.

    What we object to is the people who get rich quick at other people's expense simply by shovelling money around. The scene that is crowded now with property developers, investment bankers and finance companies.

    My concern is that we're too entrepreneurial, in the wrong ways. It's too easy to start a company, and with no requirement for input capital. It's a form of win only gambling: Want to take a few punts on the horses, do it through a company. In fact, do it through 5, keep the winners and let the TAB take a bath on the rest.

    Since Apr 2008 • 70 posts Report Reply

  • Sacha,

    if you're going to be at Emma's book launch tonight

    Was. Can't believe I missed you again. Not saying Rudman is always on the mark but that particular story had a striking clarity of tone. Well, it struck me.

    Ak • Since May 2008 • 19745 posts Report Reply

  • Jamie Anstice,

    I've been thinking a lot about this business scene recently, as I've got a new venture about to taxi down the runway, and while there are a lot of issues around market size & isolation & access to capital & all those usual things, I think that the Bach-Boat-Beemer checkout point is at a natural inflection in an entrepreneurial business, where the owner who is talented at making boats or software or cheese or whatever reaches a point where to get bigger needs less technical expertise and more managerial skills. There's got to be a conscious decision to get managerial - it's an easy non-decision to keep doing things the way they've always been done.

    I think that NZ accepts entrepreneurs (especially those who make things rather than move other peoples' money around), but distrusts professional managers as at best a bunch of flash harrys who come along after all the hard work has been done & take all the credit & make all the money, and at worst hatchet men for the already ultra-rich.

    I wonder if this is tied into the access-to-capital story - in a lot of places angel & VC money comes from entrepreneurs who have cashed out and then invest in the next round - if NZ business owners putter along quietly and don't have big exits then the capital gets stuck and doesn't roll forwards.

    Christchurch • Since Nov 2006 • 16 posts Report Reply

  • Deborah,

    You should all go and read Chris' excellent post now:

    Nine reasons why New Zealand is not Australia

    New Lynn • Since Nov 2006 • 1447 posts Report Reply

  • Islander,

    I did. Well worth the few minutes it took...Chris has articulated all the reasons that make me feel so frustrated with pollies advocating "catching up with Australia" as though it were probable or desirable.

    The only additional one that I find relevant is the size of the Oz popul ation- getting to 20 million and growing...

    Big O, Mahitahi, Te Wahi … • Since Feb 2007 • 5643 posts Report Reply

  • Craig Ranapia,

    You should all go and read Chris' excellent post now:

    Nine reasons why New Zealand is not Australia

    I did, but there's one passage I found rather over-egged the pudding:

    Australian life is full of fees that are effectively taxes, even though they go by different names. [...] Flying out of Sydney Airport costs $70 in departure taxes, and $7 per head to use the train station.

    Um not free but heavily subsidised public transport is a stealth tax now? At least you can catch a train from the centre of Sydney to Kingsford Smith. Won't hold my breath waiting for any such thing to happen in Auckland.

    North Shore, Auckland • Since Nov 2006 • 12370 posts Report Reply

  • Simon Grigg,

    Reading through it briefly, the report reads like an enormous waste of time and money, but for all that, the amount of xenophobia from some on this thread scares me as much.

    Not wanting to go into battle, just saying...

    people who live in temperate countries (like all the commentators comparing New Zealand to Australia) don’t appreciate what really hot places are like.

    They're rather pleasant actually.....

    Just another klong... • Since Nov 2006 • 3284 posts Report Reply

  • BenWilson,

    They're rather pleasant actually.....

    That depends. The dry heatwaves they get in Oz were most assuredly very unpleasant. But I do long for the nice balmy temperature of Thailand.

    Auckland • Since Nov 2006 • 10657 posts Report Reply

  • Simon Grigg,

    But I do long for the nice balmy temperature of Thailand.

    I'm actually back in Indonesia this week, where it's a decidedly less balmy and humid high 30s, but either way, give me the swelter of a stinking hot South East Asian day over a chilly Auckland spring/winter/autumn. It always looks rather pretty in the shots but the day to day reality is rather different.

    And then you go south...

    That said, nothing beats Tamaki Drive or Piha late Jan / early Feb..nothing.

    Just another klong... • Since Nov 2006 • 3284 posts Report Reply

  • Kumara Republic,

    They're rather pleasant actually.....

    Not when I visited the Gold Coast in the autumn of 1995. Talk about thermal shutdown.

    The southernmost capital … • Since Nov 2006 • 5446 posts Report Reply

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