KEY POINTS:
The Dunes Symposium is one of those all-too-rare opportunities for up-and-coming business leaders to take a couple of days out from the coalface and concentrate on the public policies that are needed to make New Zealand hum.
It's pretty hard-nosed, as you would expect from a symposium orchestrated
by the Business Roundtable. It involved no-nonsense analysis, no bullshit and plenty of telling examples of how the dead hand of the state is contributing to the country's rather alarming productivity record.
This year's symposium - the third that Roundtable executive director Roger Kerr has marshalled - took place at Waiheke Island last week.
It was the first time I had attended. I was there as a member of a media panel, sharing insights into the forces that shape public policy from a journalist's perspective.
Participants ranged from John Howard's former chief of staff, through to a former Treasury secretary, established business people, young politicians and university debating teams. Among the examples of "bad behaviour" raised were:
1 How the current Government has ignored the lessons of the 1980s-1990s relating to public sector management, to the detriment of economic efficiency. A picture was painted of a public service that was under extreme pressure to conform to political direction instead of holding true to the principle of independence. At issue was whether "Wellington" had now reached the point that it would make more sense to move to an American political model, with each administration bringing in its own sets of key advisers rather than continuing with a permanent, but badly compromised, public service.
2 Alarming incursions by Cabinet ministers who have arbitrarily encroached on private property rights in the commercial arena. The assault on Telecom's broadband "monopoly" is a case in point where ministers failed to compensate shareholders for the company's loss of value. Cabinet's decision to pass an order in council effectively knee-capping the Canadian Pension Plan's successful bid for 40 per cent of Auckland International Airport was also raised.
3 Cabinet ministers bypassing Treasury and commissioning advice elsewhere for the re-nationalisation of the railways, without any cost-benefit analysis of whether it made economic sense to do so. Economists presented analysis which suggested the deal was fundamentally so absurd it would have made better sense to pave over the national rail network and use it as a road.
4 Telling examples of how Kiwi businesses are being tied in regulatory knots by the devolution of powers to overly aggressive bodies.
5 The major decline in the health sector, where the budget has increased by 54 per cent in recent years yet the amount of elective surgery has declined. Higher wages are part of that, and are necessary to retain staff. But the productivity decline is also due to a predominance of managerialism - too many administrators compared with frontline staff. Of considerable alarm was an example of how the Health Ministry - which no longer posts much basic statistical information - tried to charge $12,000 for supplying productivity data. Irrespective of the ministry's bully-boy tactics, the finally released data has underpinned research that shows the productivity decline.
6 How the Beehive leaned on bodies such as the Electricity Commission and power generators to push prices up during the recent power "crisis" so that the Whirinaki back-up plant could be pulled into action, and then hammered them to drop prices. But it prevents the generators from putting sufficient thermal generation in place to ensure security of power supply.
Much of this suggests the Government has been too long in power. But it also underpins the obvious fact that too many in business, media, the public service and our leading institutions have become "gun shy" when it comes to standing up to abuses of power.
The upshot is that if there is a change of Government there will need to be substantial reform to get rid of the blurring of responsibilities that is now common place in the capital.
One suggestion was to put in place a productivity commission with independence guaranteed by statute.
Australia's commission subjects many Government policies to scrutiny to assess their national benefits and costs. The commission has enjoyed bipartisan support for years and is well-respected. But the Rudd government has bypassed it by assigning a tariff review elsewhere.
Another suggestion was to give the Government statistician legal power to force departments to release information in the public interest.
On the upbeat side the Roundtable also released some insights from the study it has commissioned into Maori economic behaviour, and which was mainly driven by Roundtable chairman Rob McLeod.
What was notable was the willingness of young business leaders to grapple with the major issues confronting New Zealand.
