Fran O'Sullivan: Stronger Labour team on the attack

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David Cunliffe's assault on copper-based broadband pricing shows party intends to keep pressure on Govt.

The new leadership under David Cunliffe will give much needed heft to Labour's performance. Photo / New Zealand Listener
The new leadership under David Cunliffe will give much needed heft to Labour's performance. Photo / New Zealand Listener

David Cunliffe leveraged the "axe the copper tax" campaign in Parliament yesterday to signal he intends to keep waging war against John Key's Government over claims it is indulging in "crony capitalism". Cunliffe's question was direct: "Does he still think that Chorus will go broke if his Government does not intervene to change the pricing for access to the old copper-based broadband network as proposed by the Commerce Commission; if so, why?"

It was a marked change from the fatuous and deeply repetitive questions that Cunliffe's predecessor David Shearer used to lob in each week asking Key if he "stood by all his statements". And an indicator that Cunliffe and his top team will continue to mine issues such as the $30 million subsidy the Government dished out to keep the Tiwai Point aluminium smelter running longer (which is really all about removing a central risk to the Meridian Energy float), the SkyCity convention centre for pokies deal and more.

That Labour in its previous incarnations has also gone against Treasury advice so its Cabinet ministers can bolster their pet projects matters not one whit.

For instance, Labour's decision to give Toll Holdings a gold-plated deal to buy back the train set and establish KiwiRail was also in that vein.

This is politics pure and simple and was recognised as such by both sides in Parliament yesterday in relatively good-natured but content-rich exchanges that will not trouble the business community much.

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Business is relatively divided on corporate welfare. There was pragmatic support for the legislative deal Warner Bros and Sir Peter Jackson negotiated to ensure The Hobbit films were produced in New Zealand. But while business players in the main took a pragmatic approach to the SkyCity deal there has been considerable disquiet as to its propriety.

It's a mark of Cunliffe's political competence that he jumped on the campaign being orchestrated by public relations dark arts operator and political commentator Matthew Hooton.

Hooton has lined up a coalition of the willing players to front the campaign and distance it from the real commercial beneficiaries in the telecommunication space from any rebalancing of the copper loop charge.

Consumers Institute chief executive Sue Chetwin is the campaign's public face.

There have been plenty of stunts - a Covec report gives the economic rationale behind the $600 million "tax" (it isn't a tax), Economic Development Minister Steven Joyce has been singled out to face allegations he pressured commercial players to stand aside from the campaign (all deny these allegations). Behind scenes the PR operators are lining up media influencers and lobbying them for columns.

There are clearly winners and losers as the Commerce Commission has already pointed out. And justifiable concerns that the Government will be guided by its own $1.5 billion under-writing exposure for the ultra-fast broadband rollout and interfere to the detriment of other commercial players and some (but not all) consumers.

Irrespective of the merits of this issue (which this columnist will visit at another date) the important aspect is that finally Labour has two competent and experienced former Cabinet ministers as its No 1 and No 2 in Parliament who are intellectually up to the challenge of pressuring the Government as they each comprehensively demonstrated yesterday.

Finance spokesman David Parker - who is now Cunliffe's deputy - is a careful politician. The business community does not hold him in quite the same regard that Cunliffe enjoyed when he was himself finance spokesman under Phil Goff's leadership. They find some of his theories rather arcane.

They were angered and troubled by Labour's plan to join the Greens in pledging to introduce NZ Power to control electricity prices and are waiting for Parker to fully communicate some major changes he wants to make in the monetary policy area.

But Cunliffe and Parker together with Shane Jones in the economic development portfolio will give much needed heft to Labour's performance. They each have strong business pedigrees which will induce business people to look beyond the political atmospherics of their recent primaries campaign.

It's pertinent that prior to the last election, chief executives responding to the Herald's annual Mood of the Boardroom survey rated Cunliffe and Parker equal first as Labour's top two performers.

They also singled out Cunliffe as having the best attributes to make a vigorous opposition leader with 32 per cent of survey respondents putting him as their choice compared with 17 per cent for Jones, 10 per cent for Parker and 7 per cent for former Labour Party president and trade unionist Andrew Little. The business sector did not rate Grant Robertson as a player.

Cunliffe has strong support from the unions who played a huge role in catapulting him into the top job.

It's inevitable that business lobbies will be seeking an assurance that a future Labour Government will not be purely a creature of the union lobby, that it will be pragmatic and not doctrinaire.

Cunliffe has signalled Labour plans to make a break with neo-liberalism. But in truth, New Zealand is not some neo-liberal haven. Successive Governments have dished out tax credits to boost the incomes of less advantaged families.

In his campaign porkfest the new Labour leader dipped into pork barrel politics. But it is the big issues that Labour will be judged on - where it sits on housing, capital gains taxes, the retirement age and compulsory savings.

And the policies it will implement to boost regional economies and innovative companies through a new R&D regime.

It's far too early to say the bilateral economic consensus that has sustained international confidence in New Zealand has fractured.

What Cunliffe, Parker and Jones plan may simply be the start of forging a new consensus for the future.

Time will tell.

- NZ Herald

Fran O'Sullivan

A columnist for the NZ Herald

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.

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