Pattrick Smellie: The politics of gesture

Pattrick Smellie

Thursday 26th February 2009

In a new weekly column Businesswire commentator Pattrick Smellie gives the NZ economy the sniff test.

How real is the Jobs Summit?

And if it is real, how much is it reasonable to expect from such a gathering?

My suspicion is that it's only real as a nationally unifying gesture; that the notion of a couple of hundred, albeit hand-picked, leaders can produce a coherent result is just so unlikely.

Which is not to say that gestures don't matter. In fact, PM John Key may just be the most adroit gesture-meister we've seen in New Zealand politics for quite some time.

It started with his response to the low-income family who bagged him and whose daughter he then took to Waitangi. More recently, it's been the plaster-cast on TradeMe; the repackaging and minor expansion of current initiatives as an "infrastructure package"; the "I'm listening" gesture to the media this week on the iniquities of the new Copyright Act; and last week's risky but populist support for Fisher & Paykel Appliances.

The Jobs Summit is an extension of the trend - the appearance of action, freshness and new ideas, with the ever-present suspicion that anything "announced" from the event will have been pre-approved and packaged, and bear a strong resemblance to more spending in areas that will soak up unemployment while doing a bit of good round the place. Hence, presumably, the imminent announcement of a further package of funding for home insulation retro-fitting, foreshadowed this week by Energy Minister Gerry Brownlee.

Of course, that's not to say that people won't come to the Jobs Summit with good ideas, or that its chair, current flavour-of-the-month Mark Weldon from the NZX, won't have burnt the midnight oil sorting the wheat from the chaff.

It's just that we've been here so many times before. The problems - high debt, low productivity, agricultural dependency and distance from markets - are the same. And the answers - as suggested by all sides - sound pretty much the same as ever. There are only so many ways to say that productivity improves when markets are open, workers are well-trained and motivated, regulation is clever and not oppressive, the tax system rewards value creation, or that job security is safest when firms are prospering.

Much of the commentary from the usual suspects from the Business Roundtable through to the Council of Trade Unions has struck tired notes. The CTU's Helen Kelly was this week laying down bottom lines that, while admirable in sentiment, seemed out of touch with the potential severity of our circumstances.

It's surely difficult to go into a Jobs Summit with a fixed idea that existing jobs and existing wages should be regarded as an apparently unshiftable starting point.

Likewise, a lot of learned helplessness and bleating is almost inevitable from much of our current business leadership who, despite living in a stable democracy, enjoying sound money and the rule of law, are forever pleading for "more certainty" than they already have, while also seeking more freedom than they already have. Like Fred Dagg said: "We don't know how lucky we are."

Then there will be the handout brigade, represented from all parts of the political spectrum, each with a perfectly formed reason why their sector should get preferential treatment.

Reports from the coalface suggest that the MED officials, charged with making sense of the slew of ideas put up for the Jobs Summit, are tearing their hair out trying to make sense of the numerous competing claims for "just a bit more money for this, please", let alone the competing policy prescriptions.

In other words, when you make gestures, you need to be careful about the hand-waving you get in reply.

It's a bit like last week's revelation that there was a Treasury "watch list" of iconic New Zealand corporates now on the radar for government help if the world economy looks likely to take them down.

Trouble is, no such list exists, although there may well be some Treasury paper floating around that looks at what a Government might be tempted to do to shore up confidence.

But there is a huge risk that by starting down the track of "new measures for new times", we will simply be back into the old measures for old times - like protectionism, nationalism, and an increasing claim on the public purse from an economy that has a harder and harder time creating wealth in the first place.

So, it's good that we have a Government that appears to understand not only the significance of confidence-enhancing gestures, but is also reasonably skilful at delivering them.
What remains to be seen is whether the gestures are backed by actions, because gestures are just that - movements in the air that are gone once they're made, and can sometimes be open to misinterpretation, as anyone who's ever flirted in a bar will tell you.

You can only make gestures so often before the audience starts wanting a diet of substance. The tax cuts and some of the new spending is already hardwired for delivering some of that.

But what more is in the pipeline, and how much of it is deliverable by a government which is popular, but still has only the slenderest real majority in the House?

As the world economy continues to darken, the acid will be on John Key to do more than just help us feel good about ourselves.

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