SMELLIE SNIFFS THE BREEZE: Central planning

SMELLIE SNIFFS THE BREEZE: Central planning

Nov 6 (BusinessWire) - When everyone from Rodney Hide to the Listener start asking "where's the plan, John?" is there something for Prime Minister John Key to worry about?

Quite the contrary, Key should be quite happy about such speculation. He does have a plan, and the more he is looked to for leadership, the more he is able to put it in place. Where Key is clever is that he is seducing old opponents into acquiescence, if not agreement, on thorny old issues.

What's more, in the thin atmosphere of New Zealand political politics, this week's "what plan?" theme drives National into the arms of Act, where its leader Rodney Hide waits, after making it all a bit obvious by accusing Key of doing nothing, and where Key is willing to be.

Yet Hide's slip is just the sort of haughty palaver you'd expect from an extrovert politician among a group of strangers, unaware that one is a reporter from Christchurch's daily paper, The Press. Anyone who's worked as personal staff to a Minister knows the caricatures they adopt to advance the cause.

That doesn't mean there's no plan, but it does chime with a sense that the Government risks becoming a soft photo opportunity, riding on the PM's undoubted likeability, and not doing much of anything else.

The counter view is that people who make it look easy get a lot done.

So where's the plan?

Where to start? First, Key instinctively understands the importance of trust. He has gone out of his way this week to mean it about not touching superannuation eligibility, almost because it forces the electorate to focus on fixing other problems instead of going on in circles on this one.

The biggest scary problem is arguably health spending, if almost half of us are going to be codgers by 2050.

By asking to be trusted on superannuation, Key is seeking to build political capital to do hard-ish things elsewhere.

What hard-ish things elsewhere? Start with turning Auckland into a super-city. Remember the hysteria earlier in the year about how unachievable and disruptive it would be? Well, maybe I'm wrong and it's going to explode, but it looks from here in Wellington like enough Aucklanders see the point of the whole place having coherent local government. It will happen with hiccups but not tears before bedtime. Hopefully.

Then there's the tax review. Something needs to happen and, especially if Australia introduces a land tax, we're going to want to look at big tax reforms, which leads on to the kind of trans-Tasman integration envisaged in the all-but-ignored Single Economic Market agreement with Canberra earlier this year.

Then there's the electricity task force, which may yet deliver the political theatre required by a Government wanting to show its voters that it can feel their pain too. On that note, Key must have been delighted that the Remuneration Authority decided MPs shouldn't get a pay rise. Since most people think Key decides such things, he gets the kudos for looking humble. And as Act's former leader, Richard Prebble, said earlier this week: "The symbolism's important."

Key going cattle class to Europe with his family while a single Minister sat up the front in first class is a powerful signal, and one that will be all the more powerful if, next year, Air New Zealand makes flatbed sleeping possible in cattle class: what a victory for the impecunious Antipodean to sleep as flat as the average business class customer on those interminable flights to other parts.

For a nation with a small band of global entrepreneurs who struggle to build businesses and cope with the vagaries of constant international travel, decent sleep is an important Air New Zealand contribution to national productivity. Perhaps it will drive wealth creation here if the concept sweeps the world on a New Zealand patent.

Next there's the Capital Markets Development Taskforce, a Labour creation that has taken the opportunity afforded by an action-prone new administration to get on with the important business of creating wealth.

To that end, science and innovation policies are under serious review in a way that can't yet really be seen. There are serious efforts behind the scenes to take an unusual moment of political opportunity for taking action on some simple, widely accepted policy goals. "Catching Australia" is already in the bag. "Being smart about how smart we are" is available as a next goal.

Hence the focus on innovation policy that is about to emerge, and which is highly dependent on the influence of the Prime Minister's Chief Science Adviser, Professor Peter Gluckman, and which has potential to put New Zealand's science effort on a more wealth-generating basis.

Key is also showing remarkable fiscal restraint at this stage. The Government can hardly be blamed for being sidetracked by the global credit crunch. New Zealand itself has weathered that storm, it seems, not too badly.

However, the rosy uplands of endless Budget surpluses have disappeared overnight and there is only $1.1 billion a year in new spending available for the foreseeable future. That's a drop in the bucket compared to the $4 billion and $5 billion annual, forever increases that occurred in the earlier 2000's under Labour.

There will be difficult choices about what to spend that money on. Will it be prisons and hospitals for chronic preventable diseases, or investment in new things that make us able to have fewer unhealthy people and criminals?

Innovation policy - which is the sexy way of saying science, research and technology investment - is on the boil.

If Key can get it right, and the 2010 Budget seems to be his target, he might just crack a new route to national enthusiasm for the idea of getting rich.

(BusinessWire)

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