By COLIN JAMES
Michael Cullen's often-wounding sarcasm is legendary. The man who linked the Greens to Robert Mugabe has one of Parliament's most cutting tongues and he uses it freely on those who annoy him or whom he thinks fools.
Business has not been spared. Consequently, many think he doesn't like business.
If this attitude is left to harden, it will get in the way of the Government's social policy ambitions. So yesterday at Auckland's Chamber of Commerce and Industry Dr Cullen was in bridge-building mode.
Unhelpfully, the speech was in the shadow of confirmation of the truncation of the Timberlands rimu logging contracts. Even with a two-year transition period to "minimise and obviate" job losses, such interventions make business wary of governments.
The logging contracts can be terminated in terms of the contracts themselves - their "force majeure" clauses. But headlines in foreign newspaper business pages rarely convey fine legal niceties. Moreover, contracts have an ethical dimension as well as a legal dimension. The Government shrugs this off by contesting the ethics of concluding the contracts just before Labour issued its policy. But business worries where it will stop.
Also, the rimu cancellation followed the 11th-hour block on foreign bids for Brierley's half of Sealord. Although the intervention was late, it is in keeping with successive governments' policy of limiting foreign ownership of fishing companies to 25 per cent and is unexceptionable. But that, too, is a nicety: the story played akin to breach of contract in some foreign press.
A certain high-handedness does not help. Helen Clark's rush to judgment on the Waitara shooting and moralistic cigarette tax grab, while hinting at a smoking ban in pubs, smack of authoritarianism to the uninitiated.
Her "no-surprises" slogan, which soothed business in the run-up to the election, is looking a bit frayed. The more it frays, the fewer eggs will be laid by the golden goose and the less achievable will be the Government's social policy ambitions. So Dr Cullen yesterday tried to stitch up confidence.
He told his business sceptics that "we have done a lot of the hard stuff now," "the rest of our programme will be less controversial" and he would use the Budget on June 15 to "consolidate our new policy platform and to begin to build bridges to the business community."
The irony is that the bridges were there before the election. Rebuilding them represents lost time and goodwill.
What can the Budget do? First, Dr Cullen said, it "will contain a number of initiatives I would expect business to positively welcome." Grants for research are an obvious candidate.
More important, the Budget can reassure business the Government won't be profligate. Dr Cullen is making much of his $5.9 billion limit (the equivalent of $983 million a year extra compounded, only $275 million a year more than the annual additions by National in 1996-99). He will not exceed it, even if the economy does grow faster than the 3 per cent long-term trend. The "growth dividend" will be banked, he says.
Moreover, the $5.9 billion cap is despite having $600 million less to spend than he thought because in the pre-election departmental projections were buried "savings" that he thinks can't realistically be saved. A good deal of the $5.3 billion he had left has already been committed, which will make for some acidic cabinet battles in future budget rounds.
There is another dimension, less obvious than the cap but equally important. That is Dr Cullen's determination by 2002 to get the Budget working counter-cyclically, extracting funds from the economy in economic upswings and injecting them in downswings. Often in recent years, including this year, it has operated pro-cyclically, forcing the Reserve Bank into bigger monetary swings to lean against it.
Less controversy, no more shocks and a Budget run on textbook lines - perhaps they will keep the goose laying. If not, the longevity Labour yearns for will be in danger.
* ColinJames@synapsis.co.nz
By COLIN JAMES
Michael Cullen's often-wounding sarcasm is legendary. The man who linked the Greens to Robert Mugabe has one of Parliament's most cutting tongues and he uses it freely on those who annoy him or whom he thinks fools.
Business has not been spared. Consequently, many think he doesn't like business.
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