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Home / New Zealand

Brash contribution restores dash of realism to conference hyperbole

Fran O'Sullivan
By Fran O'Sullivan
Head of Business·
2 Aug, 2001 12:45 PM4 mins to read

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By FRAN O'SULLIVAN

Reserve Bank Governor Don Brash's bravura performance has injected some realism into the Knowledge Wave conference.

If New Zealanders want world-class housing, health care and education they had better sign on for the policy choices that deliver high economic growth.

It is quite clear to any halfway intelligent person that there is not a hope in Hades that the Prime Minister's ambition for New Zealand to get back into the top half of the OECD will occur unless some radical policy choices are made.

That ambition will not be met unless New Zealand starts to register economic growth at 6 to 7 per cent of GDP.

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Even the Treasury - wearing its new-found cloak of social inclusiveness - has plenty of intellectual rigour left to make these points ... though not too openly.

Speaking in his personal capacity (never really an option, Don, in this country), Brash posited a range of policy options: lifetime limits for state benefits could be set; maybe the minimum wage rate could be scrapped; the age of entitlement for superannuation could be raised.

But it was Brash's tackling of taxation - suggestions that NZ sets an upper tax limit of $500,000 a year to attract entrepreneurs and wealthy people here, slashes the absurdly high corporate tax rate and investigates a currency union, most likely with the United States - that really got the politicians going.

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Deputy Prime Minister Jim Anderton was quick on the attack and the trade unions were foaming on that the Knowledge Wave conference was some sort of New Right conspiracy designed to restore the unfinished business of Rogernomics.

Brash's job is not on the line.

But it illustrates the narrow-mindedness of public debate when US Federal Reserve chairman Alan Greenspan can get up and challenge public policy on a regular basis, and a Kiwi central banker cannot do so in even a controlled debate session such as the Knowledge Wave conference without promoting political hysterics.

The foaming in fact started even before Brash got up to speak, when National Radio's Morning Report did a prior run of mawkish reaction from the Council of Trade Unions.

Helen Clark called the unions in for a prime ministerial talking-to when they threatened to disrupt the well-staged harmony by walking out of the conference in front of her international visitors.

It was tempting to lump expat economist Robert Wade into the same camp as RNZ but the professor of political economy from the London School of Economics is a long-time foe of economic liberalisation NZ-style and gave a useful warning that NZ might be on track to become the first developed country to slip out of the OECD and lose its First World status.

Where conference speakers differed from Wade was in the economic prescription to avert that disaster.

Wade positioned himself as a "constructive dissenter", but with players from both sides of the economic debate trying to form a non-ideological platform on which to move forward, he was essentially a disruption.

A consensus is starting to emerge that it is time to move on from the ceaseless - but ultimately pointless - relitigation of the rights and wrongs of Rogernomics, Ruthanesia and some of the present stuck-in-a timewarp economic policies.

The challenges of building a first-class education system, establishing child-literacy programmes, bridging the knowledge divide and grappling with technological change played a large part in yesterday's debate.

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So, too, did the realisation that globalisation forced a movement towards the centre - a point made incisively by former Australian PM Paul Keating on Wednesday night.

The conference is today buried deep in finalising strategies for the future. Expect some stiff challenges to the Government to emerge.

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