Deborah Hill Cone has a dose of the glums

Deborah Hill Cone is one of my favourite journalists.

Her cosmopolitan reading habits are unique in the New Zealand media, and she’s generally no slouch in business and economic commentary either.

But she must have got out on the wrong side of the bed the day she wrote ‘Dream of success keeps slipping away’ (New Zealand Herald, October 22, 2010).

She wrote that New Zealand is losing its place in the international league tables and that nothing we have done has made a jot of difference.

A reading of yesterday’s 2025 Taskforce report will cheer her up.  It confirms – see the graph on p4 – that New Zealand kept pace with the average per capita growth rate of the OECD as a whole following the earlier economic reforms, only falling away in the last years of the 1999-2008 Labour government.  In other words, the long-term decline relative to the OECD was arrested (although Australia did a bit better).  OECD projections suggest that New Zealand will outperform the OECD average to 2025.

Other data confirm that productivity and many other economic indicators improved markedly in the 1990s.

Deborah may have been seduced by Phillip McCann’s defeatist thesis that ‘economic geography’ is to blame and there is little we can do about our fortunes.

Again a reading of the Taskforce report should make her feel better.  It has a whole chapter (Chapter 4) on this thesis and finds it unconvincing.  Better institutions and policies can offset any geographical disadvantages.

The article goes on to criticise Roderick Deane at the Dunes Symposium and the “song the Business Roundtable always sings” about economic reform.

But where have we gone wrong?  We said the economic reforms would boost productivity and economic growth, and they did.  We said backing off them would damage both, and it did.  And since the ‘song’ is standard, mainstream economics, why would you change it?  Economics is not like fashions and changing hemlines.

Deborah gave a great talk at the Dunes Symposium on public policy and the media, and lamented the MSM’s general inability to explore serious issues.  She is an exception, and I trust she’ll get over this dose of the glums and be back in top fighting form. 

She is certainly right to say that the country is underperforming (although few economists would share her view that we are heading towards a double dip recession) and that business as usual is not an option if we are serious about raising our game.

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Public policy matters

On Thursday and Friday last week the Business Roundtable held its 6th Dunes Public Policy Symposium for Emerging Business Leaders (pictures to come).  It attracted a most impressive group of upcoming senior executives interested in a serious engagement on the principles of good public policy.  A perspective that is often misunderstood but that was fully grasped by the group is that the drivers of successful businesses are quite different from those that underpin sound public policy.

The calibre of this group – and their enthusiasm for the topics and the concept generally – convinced me of its value and that we should continue to run these forums.  It was a shame we had to turn some would-be attendees away.  The speakers also entered into it in the right spirit, including ministers and MPs who weren’t into political grandstanding but wanted instead to shed light on public policy processes. 

There are few business leaders better qualified to speak on public policy than Roderick Deane,  whose presentation The New Zealand Economy: Challenges and Opportunities was one of the symposium’s highlights.   Also well worth highlighting was Don Brash’s Answering the $64,000 Question aka catching Australia by 2025.  If Don could get these facts out to wider New Zealand I’m convinced the public would be clamouring for change.  A good task for public service broadcasting?

For me, and for many of the attendees, a welcome break from public policy and a star turn of the two days was a riveting after-dinner talk by Fletcher Building chairman Ralph Waters exploring risk – its history, mitigation and management, its manifestation in current Australian politics, and its place in his own early career.