Barak Obama’s first presidential speech glowed with golden rhetoric – but his best advice was contained in one of its most simple passages. It was a message that New Zealand should heed

“Our workers are no less productive than they were when this crisis began. Our minds are no less inventive, our goods and services no less needed than they were last week or last month or last year. Our capacity remains undiminished. But our time of standing pat, of protecting narrow interests and putting off unpleasant decisions – that time has surely passed.

“Starting today, we must pick ourselves up, dust ourselves off, and begin again the work of remaking America. For everywhere we look, there is work to be done.”

As Barak Obama prepared to deliver his inaugural speech, he admits receiving some sound advice from his 10-year-old daughter Malia: “First African American president – better be good”. And it was.

Obama rang all the right bells: briefly sketching the seriousness of the crisis, setting it in the context of historic challenges met and overcome; expressing his confidence in the enduring capacity of the people to unite in common cause and do it all again; reaching out to embrace old friends and former foes; promising a positive change of direction in government.

Now the talking is done, the walking must begin. Obama’s simple injunction to get to work applies here in New Zealand just as much as there in America.

Our time of standing pat, of protecting narrow interests and putting off unpleasant decisions has surely passed.

In New Zealand, we also have to build the roads and bridges, the electricity grids and digital lines that feed our commerce – to restore science to its rightful place and wield technology’s wonders to raise health care quality and lower its cost – to harness the sun and the winds and the waters and tides [rather than the soil] to fuel our cars and run our factories.

John Key is now almost two-thirds of the way through his “first 100 days of action” – but we have yet to see the real substance of the programme he promised to boost economic growth and tackle infrastructure blockages.

To be fair, there was a lot of action prior to Christmas – but, apart from scene-setting steps to provide an additional round of income tax cuts next April, remove roadblocks to the development of new fossil-fueled power stations, and initiate the review of the emission trading scheme, most of it has been peripheral to the main mission: boosting economic growth.

John Key – just like Helen Clark – deserves a holiday break at Christmas far more than the arm-breaking fall he took on his return to work. One can only hope this is not a precedent for things to come.

However, his New Year announcements that he was calling on New Zealand Stock Exchange chief executive Mark Weldon to convene a business summit on employment next month, and that we were not going to see any more of his plan to accelerate infrastructure projects before then were not what most New Zealanders really wanted to hear.

Mr Weldon is bright, energetic, young, and one of the few to offer some original thinking about stimulating economic growth. But the performance of the New Zealand Stock Exchange and the majority of current business, banking and finance sector leaders and their regulators does not inspire me with confidence that, collectively over a day or two, this group will produce a competent blueprint to see New Zealand safely through tough times.

New Zealand’s private sector is one of the most debt-burdened in the world – second only to bankrupt Iceland. We have achieved this appalling position after one of the longest and strongest periods of economic growth in our history.

The private sector is not entirely to blame for this. Government monetary and fiscal policies have contributed to the mess. However, for the most part, New Zealand business leaders have been mute and compliant throughout the last decade as they were looted so our Government could reduce its debt burden.

In these depressing times, our private business sector’s capacity to raise equity or loans for commercial development is constrained to put it most mildly. Partnership with a minimally debt-burned Government to invest in growth-supporting infrastructure development looks like a circuit-breaker strategy. So why not get on with it?

The Key Government’s infrastructure policy was well developed, prior to the election. Three Ministers have been assigned to oversee its implementation.

It explicitly defines the priority projects to be undertaken. None of them are so stunningly original that they require a great deal of study.

Rolling one or two of them out quickly via public-private partnerships would do more to instill a sense of confidence in the community than any number of business leaders’ gabfests.

As a nation, we may not be known for the elegance of our rhetoric – but there are times when actions speak louder than words. Just do it.

Comments (3)

by Richard Thomson on January 22, 2009
Richard Thomson

"New Zealand business leaders have been mute and compliant throughout the last decade as they were looted so our Government could reduce its debt burden."

Looted? How? And, more to the point perhaps, how exactly has the new government said it will stop this looting?

by David Beatson on January 25, 2009
David Beatson

Looted? How? Simple. Check the following statistics.for evidence of Government looting. Between 2000 and 2008, Crown tax and non tax revenue grew more than 48% - with tax generating around 90% of the revenue - and appropriations for expenditure grew 40%.. Over the same period, Government overseas debt was reduced from 15.7% of GDP to just under 10% - while private overseas debt grew from 93% of GDP to 121.3% of GDP. Between 2000 and 2006, Government savings grew from about 1.0% of GDP to about 6.0% of GDP and private household savings declined from about 1.0% of GDP to about minus 5.5% of GDP. There is no question that the Government has prospered at the private sector's expense by a fiscal policy of heavy taxation to support its spending increases and debt reduction - and a monetary policy that cranked up private sector costs via interest rate increases and further depressed its export earning capacity by pushing the $NZ exchange rate to unjustifiable heights. That's what I cal "looting" the real economy.

How has the new Government said it will stop this looting? Well, words are cheap -.judge it by its actions.



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