Fran O'Sullivan: Labour mouse's roar has business listening

David Parker says John Key's refusal to shift the age of super is foolhardy. Photo / Greg Bowker
David Parker says John Key's refusal to shift the age of super is foolhardy. Photo / Greg Bowker

Labour's David Parker made an impressive debut at the Herald's annual breakfast to launch the Mood of the Boardroom CEOs' survey.

Within a very short period, he staked out areas of commonality with National - such as Finance Minister Bill English's focus on posting a Budget surplus in 2014/2015 - but also areas where Labour differentiates itself from the governing party.

Parker's unassuming style - he is somewhat mousy - fools observers who are not gifted with any appreciation for subtleties.

Outside of Parliament he has been relatively invisible since Labour went into opposition. But judging by the incisive fashion with which he fronted up to debating some critical issues on Thursday, those last few months of relative anonymity have not been put to waste.

Finally - some eights months after the election - somebody high up in Labour is trying to give due thought to what they would do in power, rather than simply jumping on every contentious issue and hammering the daylight out of the Government.

Talking to influential business people later that day - including five who were present at the Herald breakfast - it was clear they appreciated Parker's staking out Labour's position in three clear areas: Superannuation; capital gains taxes and the value of the New Zealand dollar.

One said "if you closed your eyes and just listened to Parker speaking - it could just as easily have been someone from National".

This is because Parker reaffirmed that Labour is not about to neglect the centre: fiscal responsibility, labour flexibility and a growth programme focusing on innovation and leveraging New Zealand's resource base.

But what they also appreciated (not spelt out directly) is that Parker is not afraid to move in some areas where National, particularly John Key, fears to tread.

The most important of these is Labour's decision to retain its election pledge to raise the age of eligibility for national superannuation from 65 to 67 years.

Prime Minister John Key has backed himself into a corner on this.

Key argues it would be breaching a trust with voters if National did bump the age, a position which Finance Minister Bill English reinforced after the Herald survey revealed that nearly nine out of 10 chief executive respondents believed it needed to happen.

Parker bluntly describes Key's intransigence as "nonsense". He forecasts that by the end of 2016 the amount spent on super will exceed the total amount of government spending on pre-school, primary, intermediate, secondary and tertiary education.

He maintains that failing to make changes means that future Governments will be forced to make unfair changes such as cutting the rate of super or making working Kiwis pay through the nose.

"Labour's policy of steadily raising the superannuation age to 67 is prudent financial management and the fairest way of dealing with the pressures caused by the looming fact of a million people aged over 65."

The CEOs suggested that Labour's timetable for hiking the super qualifying age needed to be sped up because the blunt reality is that the transitional timetable outlined in the 2011 election policy means the vast majority of baby boomers will have moved into "retirement" before it is fully implemented.

Labour has yet to do the hard yards in this area.

But it is clear that Parker will be able to draw on a strong reservoir of support from the more high-profile members of the New Zealand business sector if he can persuade his colleagues to sharpen the pace on implementation.

Capital gains taxes are seen as an inevitability. Parker still has some work to do on this as last year's policy was messy and inconsistent. He said that there needed to be a neutral investment signal, rather than a tax bias that directs too much money into property and speculative activity.

Nobody seriously expects that a future National Government would unwind capital gains taxes put in place by a Labour predecessor.

The third differentiating element - and in some ways the most controversial - is a tantalising suggestion by Parker that a future Labour Government would examine mechanisms to bring down the value of the New Zealand dollar.

There have been years of relative ideological hegemony on this score.

But when countries like the United States are printing money and pushing their own dollar down to stay competitive, it is relative madness for New Zealand to try to compete without a more relevant currency setting.

As Parker puts the flesh on the bones of these policies he will be a force to be reckoned with.

- NZ Herald

Get the news delivered straight to your inbox

Receive the day’s news, sport and entertainment in our daily email newsletter

Head of Business for NZME

Fran O'Sullivan has written a weekly column for the Business Herald since its inception in April 1997. In her early journalistic career she was a political journalist in Wellington and subsequently an investigative journalist who broke many major business stories including the first articles that led to the Winebox Inquiry in both NBR and the Sydney Morning Herald. She has specific expertise in relation to China where she has been a frequent visitor since the late 1990s. She is a former Editor of the National Business Review; has twice been awarded Qantas Journalist of the Year and is a multiple winner of the Westpac Financial Journalism Supreme Award.

Read more by Fran O'Sullivan

Have your say

1200 characters left

By and large our readers' comments are respectful and courteous. We're sure you'll fit in well.
View commenting guidelines.

Sort by
  • Oldest

© Copyright 2017, NZME. Publishing Limited

Assembled by: (static) on production apcf03 at 26 May 2017 18:43:17 Processing Time: 685ms