Business Scoop


Article – Businesswire

July 31 (BusinessWire) – I’ve got a productivity idea to add to the 50 point productivity plan for New Zealand released this week by Business New Zealand: don’t waffle.

SMELLIE SNIFFS THE BREEZE: Thoughts on productivity

By Pattrick Smellie

July 31 (BusinessWire) – I’ve got a productivity idea to add to the 50 point productivity plan for New Zealand released this week by Business New Zealand: don’t waffle.

The danger in this advice is, of course, that my own ramblings may qualify for such a ban.

But honestly, the worthy document produced by the country’s leading business organisation wreaked of a contract writer who didn’t quite get it rather the clarion call it is obviously intended to be.

Worse, it was its own case study in low productivity, requiring gallons of ink to print the dark-paged 30 page document. A designer had clearly been involved to help present the hand-wringing “New Zealand at a crossroads” cliches that fill the first 11, almost content-free pages of the report.

The throat-clearing opening sentence made me tired just to read it.

“As a nation we need to act.” In case we didn’t get that, the second sentence notes: “And we need to act decisively, with a clear plan and clear direction that will drive change.”

Crikey, there’s a novel idea.

It’s easy to imagine “Setting New Zealand Apart” thumping attractively onto the desk of every MP and mayor in the country where the waffly bits will be skim-read approvingly and forgotten, while those who make it through the rhetorical thicket to the fabled 50 points themselves will find the same stale framing as the economic debate of the last 20 years.

What, for exampe, does Business NZ’s president Trevor Goodwin mean, in his admirably brief two paragraph introductory comment – to which an entire green page has been devoted – when he dreams of “turning productivity into a tool that gets us off the back foot against our competitors”?

You don’t buy productivity at Mitre 10. It’s not a tool or a thing. It’s a mindset. It’s the new word that means what competitiveness meant when we were first besotted by Michael Porter of Harvard Business School, whose advisory taskforce report of the early 1990’s feels as relevant today as it ever was – largely because we only ever did bits of what Porter recommended.

Porter was all about New Zealand as a nation of entrepreneurs well-suited to the role of the “scrappy competitor” who take on Goliaths and find it possible to win with a well-aimed stone. There are a few examples, but not nearly enough.

Supporting such a business ideal has to be great science and inspiring universities where both research and learning are prized, and where there is an open atmosphere of academic and commercial collaboration. It has to include stopping local governments clambering leaden-footed through the areas where the private sector can do a better job. It means making fast broadband available everywhere and letting the chaotic creativity it breeds become a new engine of wealth.

It also has to include making New Zealand a safe, healthy, tolerant society that builds on its growing cultural diversity and its tradition of fairness and the absence of corruption.

It has to include a bit of self-belief and some kind of mass indoctrination in the skills required to build good business ideas into more than self-sustaining cottage industries.

It probably really needs a couple of radical things to happen – a big reform of the tax system which could unleash entrepreneurial enthusiasm while maybe putting a spoke in the wheel of the residential property investment-as-nest egg theory. Can we do something that lowers tax personal rates while taxing carbon? Isn’t it time for a capital gains tax on investment property?

All these ideas are in the Business New Zealand report, although the 50 points are a combination of inevitable bleats, statements of support for things that are already happening and, in a few places, interesting ideas that have often clearly come from some well-organised Business NZ affiliate.

The politics of productivity suffer a bit from this sense that it’s a matter of doing hundreds of small things well. It feels like micro-management without the macro-purpose being clear. It also reflects our politics. No New Zealand government feels it can do anything “big” in economic policy anymore. This one relies instead on the hope that doing a lot of small things will add up to something big.

In theory, that could happen. Just like competitiveness, productivity comes from a thousand places. There are so many things to get right that sometimes it’s hard to see the wood for the trees, which is really where the Business NZ attempt falls flat. Lots of pulp, not enough trees.

The country’s leading business lobby avoids the big picture and paints 50 miniature water colours that range from bland, bleached and slightly washed-out through to some great new ideas and the occasional unexploded device.

One example of a good idea slipped into the report is for “wider merits review” process as a way to run the rule over new regulation and creating a constructive edge to the regulatory impact statements that are supposed to be produced today.

There’s the occasional brave statement. For example, on climate change policy, Business NZ sees the glaring missed opportunity created by a myopic farming lobby. It suggests the Government should “take a stronger leadership role in developing the international response (to climate change) in our areas of comparative advantage”, such as low-emissions agricultural advances.

Then there is the usual and justifiable clamour to improve the performance of government-owned businesses, generally expressed as support for privatisation – a call increasingly heard.

And, of course, there’s a Fletcher’s clause, which urges the Government to allow large commercial players the chance to collaborate to deliver major infrastructure, rather than leaving it to government, or worse, local governments.

There are the usual bleats, including a very generalised round-arm swing at regulation, the tax system, employment law, ACC, and the Holidays Act, all of which Business NZ would like to see dealt with by the middle” of next year. One thought nugget worth considering: change the Employment Relations Act to talk about “productive workplaces” rather than “productive workplace relationships”. It’s not earth-shattering, but it does indicate a focus on wealth creation as well as all getting along just fine.

And there are the long-held dreams. Trans-Tasman imputation credit recognition, for example, has been on the agenda forever and a day. The Australians are reviewing their tax system, so maybe there’s a new chance to raise it, but this hardy perennial suffers from Canberra neither caring to think about it, nor to do things that might have a significant impact on the Australian tax base.

Too often, Business NZ has a bob each way. On one hand, it doesn’t want firms to be penalised for accidents caused by employee carelessness, but also calls for a “culture of workplace safety by removing sections (of the current law) implying health and safety are the responsibility of a health and safety officer or committee”.

Instead, the law should have sections “that make it clear that health and safety is everyone’s responsibility”, which is pretty much what you’d expect the health and safety officer to say.

It recognises invention and creativity at home as vital: “we need new ideas”; but in the next breath is reminding that “we have to remember that we also rely on overseas ideas”. Who knew? And where does that get us, exactly?

On electricity and telecommunications, Business NZ approves most of what is already going on, while on the natural resources front there is some code that must mean something to someone, such as “develop innovative governance arrangements to facilitate economies of scale in assessing natural resources”. Please explain.

In the area of skills training and in lifting the quality and measurability of tertiary education and science funding does, Business NZ ticks all the right boxes, and should be worried to see an Education Minister who seems for now to be almost disengaged from the knowledge creation parts of the education system.

In other words, what Business NZ has wrought is not a bad thing. But it is a bland and self-interested thing, barely an advance on everything we already knew; at best another chance to consider that old philosophical conundrum: “when a report falls in an in-tray and no one notices it, does it make a difference?”

To which the formulaic journalistic response is inevitably: “only time will tell”.


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