Letter to Wellington: Centralisation is not the answer, writes David Wilson

Fundamental change cannot all be driven from the centre. Reverting to pre 1980s' centralised planning is not the answer, says David Wilson. Photo/Getty Images

OPINION

The skies are darkened by new officials from the capital and a plethora of new advisors to help the regions.

As the regions face significant challenges, which will have a huge long-term impact on regional economies, I urge the Beehive to consider that fundamental change cannot all be driven from the centre.

The Government believes that neo-liberalism has gone too far and we are now seeing signs internationally of protectionism coming back; think Trump and Brexit.

Reverting to pre-1980s' centralised planning, however, is not the answer. Neither is a continued purist approach to neo-liberalism.

As I embrace the last month in my role as CEO of Northland Inc, I must reflect and look forward for the region.

Gaining the right outcomes for Northland has entailed a lot of negotiation with Central Government.

What I have noticed is that politicians and government officials find it very hard to let go.

And yet they have to do more of that or, at least, empower communities and regions to implement their policies.

Neither is a purist approach to neo-liberalism, says David Wilson, as expressed in the late 1980s with the formation of the Act Party. Two former leaders, Sir Roger Douglas and Rodney Hide, are seen here during the 2008 General Election. Photo/Getty Images

If we are to progress towards addressing some of the challenging issues facing NZ - such as growing the regions, fairness, equality of opportunity, climate change and wellbeing policies - rhetoric and control from the centre is not enough. We need to work out a new way of operating.

What we so often see is that when things are complex or get difficult, politically or otherwise, sides retreat to their ideological positions. The political economy of the last 40 years attests to that.

A move away from the pre-1980s' NZ protectionist economy, described as the "fortress economy" with high tariffs and import duties, protected industries and a highly centralised system of government and regulation under a first-past-the-post democratic system was clearly evident in 1984.

Essentially, cabinet ran the country, and the PM ran cabinet. Then in 1984 when Muldoon was removed and Labour won the election a number of Labour MPs subsequently defected to what is now the Act Party.

A radical pendulum swing ensued for 30 years, called neo-liberalism, which swept political thinking on the left and the right; deregulation, privatisation, more freedom, less government, market fundamentalism and free markets won the day.

New Zealand led the world in implementing a neo-liberal agenda, right up until the last election when all three political parties - Labour, the Greens and NZ First - campaigned on the belief that the neo-liberal agenda had gone too far.

The Market doesn't care - it creates winners and losers, inequality and environmental degradation left unregulated.

Labour now thinks we need to democratise the economy and restrain the excesses of neo-liberal economics.

Mostly as a reaction to the global free market agenda that has challenged advanced economies through cheaper labour and costs of production, and challenged NZ through increased global competition.

Our policy reaction to these big issues include boosting the regions through the Provincial Growth Fund (PGF) and a Provincial Development Unit in Wellington; housing through Kiwibuild and the establishment of the Housing and Urban Development Authority; the review of polytechnics and ITO sector; while adding climate change policies into all agendas.

These are all before we venture into another review of local government and the Tax Working Group recommendations. Complex and multifaceted.

Northland, for example, now has Team Northland, a collection of government officials advising Northland on how to take advantage of the PGF.

Here's my plea for Wellington - fundamental change cannot all be driven from the centre.

Reverting to pre 1980s' centralised planning is not the answer. Neither is a purist approach to neo-liberalism.

Let's use two internationally-used approaches to bridge the polarised ideologies.

Good governance - recognising that governance in the public sector is not just government but an ability to call on expertise and organisations that understand the challenges.

Subsidiarity - putting governance, operations and resources at a level where you can get the best outcomes, whether geographically (local or regional level) or functionally, with the best-positioned organisations to understand the challenges and deliver.

The combination of these principles provides the opportunity to chart a considered and inclusive way forward.

These are challenging principles as there is the opportunity for things to go wrong and government to get the blame.

The upside, however, is better than the alternative of centralising control, again.

* Dr David Wilson is the chief executive officer of Northland's Economic Development Agency, Northland Inc (until March 30), and chairman of Economic Development NZ.