Chris Luxon’s Government has wiped from the political chessboard key pieces left by the Labour administration and a good deal of its most distinguishing moves.
This is at once invigorating but also concerning.
Luxon has been fully focused on embedding additional third-party ministers within the coalition Government. He has not been out and about the business community – and that has been noticed.
It makes good political sense to make the coalition’s most confronting moves before Christmas.
But several changes – think smoking, changing Waka Kotahi’s name – have been concerning to large segments of the population.
A relatively hostile news media is also giving Luxon and his ministers no quarter.
But around the business sector - which strongly championed a change in government - there is emerging concern on race relations. Luxon may not think it matters, but it is surely time to craft a public narrative that talks of how the coalition will take all of the country forward.
There is also concern that the political pendulum might swing so far in one direction that Luxon does not get enough time to bed in the coalition’s policies, resulting in just one parliamentary term in office.
This worry is not fatuous.
The Bolger Government nearly lost office in 1993 after it embarked on radical economic policies that did not sit well with the New Zealand population. And just this year, the Labour Government – which was swept to power in 2020 with the first majority result in New Zealand’s MMP history - was heavily defeated.
The lesson from both those National and Labour administrations was that they overran the parameters of their own political mandates.
And yet, New Zealand is in need of deep reform.
Whether it’s growth, productivity, infrastructure capabability, digital capacity, education, health or crime, the results are underwhelming.
This does require fundamental reform to reboot New Zealand and take it off its path of decline.
The coalition appears determined to meet these challenges head-on.
Luxon has talked of wanting a partnership with business and the community to address the many challenges and turn the country around.
The business sector is taking him at his word. BusinessNZ is endeavouring to address some of the issues through a Green Paper it commissioned from economic consultants Sense Partners.
The Green Paper - “We’re all in this together: How can business and government collaborate to address shared challenges out to 2050?” - was produced in August and is now being circulated through the business community before being finalised as a White Paper next year.
In essence, it recommends that businesses and politicians seek a common purpose on impending economic and social challenges.
Sense Partners points out that the business environment will become increasingly uncertain over the next 25 years. Megatrends such as climate change, complex geopolitics, rapid technology change, an ageing population and expensive housing inequities will all have disruptive and divisive effects on New Zealand’s economy and society.
It makes the point that these challenges are too immense and far-reaching to be the subject of short-term political point-scoring and bickering between politicians and the business community.
Sense Partners believes a co-ordinated New Zealand Inc. response is required.
Business is seeking regulatory stability, so it can invest and plan for the long term with greater confidence.
But business also has a role. How does it make critical decisions about how to respond to global megatrends?
“We cannot sit idly by, gazing at our own navels and expect everything to work out okay,” the Sense Partners paper says. “Productivity and living standards will suffer, and New Zealand will fall further behind our peers.
“It will become even harder to keep New Zealand’s best and brightest on our shores. This isn’t the future we want, but it might be the future we get unless governments of all political persuasions and business can start working better together.
“Climate change adaptation, closing the infrastructure deficit and an ageing population will put huge pressure on New Zealand’s fiscal position.”
Sense Partners applauds the need to avoid wasteful spending, says there must be much greater focus on evaluating the effectiveness and value for money of policy initiatives, and that politicians need to be stronger in stopping initiatives that don’t stack up. “We simply won’t have the fiscal headroom to accommodate the investments New Zealand needs if spending is poorly targeted or delivers low value for money outcomes.”
It would be a simple matter to discount the Green Paper’s recommendation for a bipartisan consensus on what is needed to ensure the country is on a major success path by 2050. Particularly so given the current Government’s focus on canning its predecessor’s defining policies.
But the economic consultants also point out that New Zealand’s economic history shows sustained progress on important economic and social issues has occurred when political parties have found consensus. And that when it is won, the consensus tends to last.
Sense Partners’ analysis of campaign promises between 1980 and 2020 finds several areas of longstanding agreement. “While there are differences in views around the edges, there is broad bipartisanship in areas such as trade and foreign policy, monetary policy, savings, the importance of home ownership, paid parental leave and Working for Families.”
Yet a political environment which rewards reactionary politics, policy flip-flops and short-termism is leaving business leaders with little clue about what politicians plan to do.
In this environment, it makes sense for the Prime Minister to sit down with the business community - and sooner rather than later.