• How Much Foreign Control Is Acceptable?

    To express concern about foreign ownership and control in New Zealand is often to invite accusations of xenophobia and economic illiteracy. It is worthwhile, therefore, to rehearse the grounds for that concern, and to explore the various forms it can take.

    The most obvious manifestation of foreign influence is when New Zealand assets pass into foreign hands. The downsides of that change of ownership are largely to do with the loss of economic benefit.

    If a significant part of the New Zealand economy is bought by overseas interests, the economic benefits produced by that asset – the income stream, the capital appreciation, the technological know-how, and so on – flow offshore rather than remain in New Zealand.

    The consequence of such developments and of the repatriation of profits to foreign owners across the exchanges is that we are a smaller and less wealthy economy than we would otherwise be, and have greater difficulty in balancing our overseas payments – which acts in turn as an inhibitor to future growth.

    We might include, in this catalogue of disadvantage, assets which have other than a purely monetary value. Foreign companies that bottle our water for export to profitable markets overseas, for example, are using an asset to which we do not attach a market price, but we should not kid ourselves that we are losing nothing of value; in a world when clean water is increasingly scarce, to allow its consumption by overseas profit-seekers is short-sighted in the extreme.

    The fact that our major commercial banks are owned by Australian interests and that the multi-billion profits they derive from their New Zealand operations are repatriated each year across the Tasman represents a further loss of national wealth and a further burden on our balance of payments.

    Nor is that the only price we pay. Given the important role played by banks in our overall economic development, their Australian parentage means that essential elements in the economic management of our own economy are in some senses beyond our control, since the significant decisions taken by our banks will reflect Australian interests rather our own.

    So, our own government – however much it may want to see that decisions taken by the banks on interest rates, mortgage policies, and monetary policy more generally, reflect New Zealand priorities – has to deal with important agencies whose primary loyalty is to their Australian owners.

    There are other examples of foreign entities, by virtue of their significant involvement in our economy, being able to influence domestic policy to suit their own interests. We need only recall the demand made by Warner Brothers some years back that the influence of trade unions in the film industry should be reduced, and the shameful readiness of the then National government to accede to that demand by changing our labour laws so that film industry workers became self-employed contractors rather than employees, to understand how vulnerable we can be to powerful overseas interests.

    We can amplify this analysis by looking at a further instance of potential damage if we allow foreign interests to become too powerful. No one doubts that one of the most formidable obstacles to effective protection of our vulnerable environment is the primacy we accord to profit-seeking enterprises and commercial interests more generally.

    How much more significant does this consideration become if the commercial interests involved are foreign, rather than New Zealand-owned? How much more likely is it that environmental downsides will be discounted if the oil company seeking permits to drill in our coastal waters is answerable only to foreign shareholders rather than to the New Zealand public?

    And will foreign enterprises display the cultural sensitivity and awareness that are required and appropriate in today’s Aotearoa/New Zealand? Will they understand the value we place on the bicultural and multi-cultural dimensions of life in our country or on the social and workplace advances we have made, often ahead of the rest of the world?

    A truly sovereign country will legitimately want to limit the influence of those who are based overseas but seek to play a significant role in our national life – a role that might have deleterious consequences not just for our economy as measured in dollar terms but also for our national identity, our social cohesion and our environment.

    Bryan Gould
    19 June 2019

  • Luxon’s Hubris

    Few tears will be shed in the regions at the departure of Christopher Luxon as CEO of Air New Zealand. Under his watch, the supposedly “national” airline lost sight of its national responsibilities and abandoned regional centres such as Whakatane to a future without connecting flights to the Air New Zealand network.

    Eyebrows have also been raised at the reasons given by Luxon for his decision to give up his Air New Zealand post. He has let it be known that he has in mind a political career – and not just any old political career but one that takes him into the National party (of which he is not currently even a member) and ultimately to the leadership of that party and thence to the post of Prime Minister.

    An enthusiastic supporter has even published an advertisement, showing a face identified as that of John Key transmogrifying into that of Luxon – the Electoral Commission is investigating whether its cost should be counted as an electoral expense.

    Most people seeking to pursue a political career do not announce their intentions in advance, but take the precaution of first joining the party of their choice as an individual member, then of attending local branch meetings, then of being nominated to the list of potential candidates and then of presenting themselves to a constituency party in the hope of being selected as a parliamentary candidate at the next election.

    To attempt to short-cut that process and simply to announce that he intends to become leader of the National party before he has even joined it speaks not only to a lack of judgment and self-awareness but also to a considerable degree of arrogance.

    Nor can we give him good marks for his political knowledge. The notion that someone who has run a large corporation is for that reason well fitted to run the country is a fantasy perpetuated only by those who are still mired in neo-liberal delusion. Running a company (with – usually – the single bottom line of turning a profit) is merest child’s play compared with the myriad responsibilities and goals – not only economic but social, environmental and international as well – required of those who want to run the country.

    As the example offered by Donald Trump shows, it is almost impossible for someone accustomed to simply telling employees what to do to adjust to a context in which everyone is entitled to a view and where people have to be persuaded rather than browbeaten.

    But the real reason to react with scepticism to Luxon’s self-promotion is that the record shows that business leaders often fail to translate their business success into political achievement – and on that subject I have some personal experience.

    As a British MP in the 1980s, I had the opportunity of viewing at close quarters the fortunes of another businessman turned politician. Sir John Davies was a very nice man who exhibited none of Christopher Luxon’s unfortunate hubris. He had been a successful businessman and had even become Director of the Confederation of British Industry before succumbing to the temptation to try his luck at politics. He got himself elected to the Home of Commons and was appointed to join Edward Heath’s cabinet as Secretary of State for Trade and Industry.

    The poor man found his appearances in the House to be a nightmare. He simply could not adjust to a scenario in which everything he said was subject to immediate challenge, scorn and ridicule. My own direct experience of him came at a later stage in his political career when he chaired the Scrutiny Committee of which I happened to be a member.

    The function of that Committee was to keep tabs on how far European legislation impinged on British law. On that subject, his and my views diverged somewhat (he was a euro-fanatic) but we managed to rub along together quite nicely and I was pleased to see that he found the Committee a more congenial environment than the House itself.

    But his example ( as well as countless similar others) should be a warning to Luxon and the National party. Luxon-style hubris is so often followed by nemesis. Simon Bridges can sleep easily in this instance at least.

    Bryan Gould
    25 June 2019

     

  • Luxon’s Hubris

    Few tears will be shed in the regions at the departure of Christopher Luxon as CEO of Air New Zealand. Under his watch, the supposedly “national” airline lost sight of its national responsibilities and abandoned regional centres such as Whakatane to a future without connecting flights to the Air New Zealand network.

    Eyebrows have also been raised at the reasons given by Luxon for his decision to give up his Air New Zealand post. He has let it be known that he has in mind a political career – and not just any old political career but one that takes him into the National party (of which he is not currently even a member) and ultimately to the leadership of that party and thence to the post of Prime Minister.

    An enthusiastic supporter has even published an advertisement, showing a face identified as that of John Key transmogrifying into that of Luxon – the Electoral Commission is investigating whether its cost should be counted as an electoral expense.

    Most people seeking to pursue a political career do not announce their intentions in advance, but take the precaution of first joining the party of their choice as an individual member, then of attending local branch meetings, then of being nominated to the list of potential candidates and then of presenting themselves to a constituency party in the hope of being selected as a parliamentary candidate at the next election.

    To attempt to short-cut that process and simply to announce that he intends to become leader of the National party before he has even joined it speaks not only to a lack of judgment and self-awareness but also to a considerable degree of arrogance.

    Nor can we give him good marks for his political knowledge. The notion that someone who has run a large corporation is for that reason well fitted to run the country is a fantasy perpetuated only by those who are still mired in neo-liberal delusion. Running a company (with – usually – the single bottom line of turning a profit) is merest child’s play compared with the myriad responsibilities and goals – not only economic but social, environmental and international as well – required of those who want to run the country.

    As the example offered by Donald Trump shows, it is almost impossible for someone accustomed to simply telling employees what to do to adjust to a context in which everyone is entitled to a view and where people have to be persuaded rather than browbeaten.

    But the real reason to react with scepticism to Luxon’s self-promotion is that the record shows that business leaders often fail to translate their business success into political achievement – and on that subject I have some personal experience.

    As a British MP in the 1980s, I had the opportunity of viewing at close quarters the fortunes of another businessman turned politician. Sir John Davies was a very nice man who exhibited none of Christopher Luxon’s unfortunate hubris. He had been a successful businessman and had even become Director of the Confederation of British Industry before succumbing to the temptation to try his luck at politics. He got himself elected to the Home of Commons and was appointed to join Edward Heath’s cabinet as Secretary of State for Trade and Industry.

    The poor man found his appearances in the House to be a nightmare. He simply could not adjust to a scenario in which everything he said was subject to immediate challenge, scorn and ridicule. My own direct experience of him came at a later stage in his political career when he chaired the Scrutiny Committee of which I happened to be a member.

    The function of that Committee was to keep tabs on how far European legislation impinged on British law. On that subject, his and my views diverged somewhat (he was a euro-fanatic) but we managed to rub along together quite nicely and I was pleased to see that he found the Committee a more congenial environment than the House itself.

    But his example ( as well as countless similar others) should be a warning to Luxon and the National party. Luxon-style hubris is so often followed by nemesis. Simon Bridges can sleep easily in this instance at least.

    Bryan Gould
    25 June 2019

     

  • The Public Sector Pay Puzzle

    Who would have thought that so many different groups of public sector workers would have discovered at roughly the same time that they have been underpaid and under-resourced to such an extent?

    No one doubts that teachers of different kinds and at different levels, and health care professionals across the sector, as well as a range of other public servants, have all been under-valued over a long period. But what is surprising is that they stayed silent about their plight for such a long time.

    Being underpaid – that is, being paid less than one is worth – does not, after all, happen in the blink of an eye. It is necessarily something that develops over a period – and something that cannot happen without the victims being aware of what is happening.

    So how is it that it has only now become an issue? Why were we not made aware of complaints and protests, of strikes, and difficulties of recruitment and people leaving the profession, over the decade or more during which the underpayment phenomenon was gathering force?

    How did those who were responsible for the growing crisis across the board, those who held the purse strings at the crucial time, those who – in government – boasted of how well they were managing the public finances, get away with it?

    Why is it only now, now that the situation has crystallised and become entrenched, that government is under pressure to take urgent action? Why, when the underpayment issue took years to develop, do the efforts to remedy it suddenly have to be completed overnight?

    One is tempted to answer these questions with a shrug of the shoulders and to marvel at how successful has been a political strategy adopted by one of our two major parties. National, when in government, quite deliberately decided to hold down wages and restrict resources in the public sector. They gained, as a result, plaudits for managing their finances prudently, and for producing a government surplus, and have the been able to sit back and watch while their successors have had to find the funds to make good the shortfalls that have arisen and have copped brickbats from the public sector work force when they couldn’t do so immediately.

    Are the public servants themselves unaware of how they have been manipulated, as though they were pawns in a game of chess? Or are they willingly complicit? Did they recognise that, as a right-wing government saved money at their expense, any protests would fall on deaf ears, and opportunistically calculate that the time to make a fuss would be to wait until a government more sympathetic to their cause gained power?

    Do they imagine that striking (literally) while the iron is hot – that is, when a government committed to the public sector is in office – is at all likely to resolve their problems in the long term? Or will it not increase the chances of the return of an unsympathetic government that will launch the same damaging cycle of public sector cuts and underpaid public servants all over again?

    No one doubts the justice of their cause. But the resolution of the endemic problem of under-resourcing should not be the sole responsibility of a government that had no responsibility for creating the problem in the first place. That task must be undertaken by both government and workers working together and showing some understanding of how and why it came about, and making a joint and cooperative effort to enter upon a course of action that will produce – not a rabbit out of a hat – but a long-term solution that will last.

    Everyone – on all sides – should recognise that both rabbits and hats are in short supply.

    Bryan Gould
    9 June 2019

  • Defending Privilege

    “Keep things as they are,” is always the catch-cry of those who are happy with their lot. “Change is a waste of time” makes sense to those who are doing well and see no reason to disturb their privileged existence.

    That is precisely why the right-wing party in Britain calls itself the Conservatives – they have plenty to conserve and they don’t want anyone rocking the boat – especially if it’s a luxury yacht. The corollary is that they have little interest in, or sympathy for, those whose vessels are a little less seaworthy.

    The usual argument of those who resist change is that the privilege they enjoy has been earned, and is a just reward for their superior abilities and efforts; it has not, they say, been gained at the expense of others, so any attempt to redress the imbalance between them and those others would not only be misplaced but unfair.

    But we know that privilege breeds privilege – and that is not just a slogan but an economic fact. Research by Nobel Prize-winning economist, Joseph Stiglitz, shows conclusively that the best chance of being well-off is to be born to rich parents.

    He also shows that it is up to us to choose, as a society, whether or not to tolerate a high degree of inequality. If we allow our politics to be dominated by defenders of the status quo (or, in other words, by “conservatives”) we will end up with a society in which privilege is endemic and entrenched and feeds on itself.

    It will also be a society that functions less well, that is riven by discontent and division, and that fails to use its resources (particularly human resources) fully and efficiently.

    The inefficient use of human resources in such a society occurs for two reasons. First, if privilege is the deciding factor, then incompetent people will be promoted to positions for which they are not fitted – and they will then make a bad job of making the important decisions that affect all of us.

    Secondly, if privilege is the key to success, then able people, with plenty to offer, will be held back and denied opportunities so that we lose the full benefit of what they can contribute.

    If, however, we want to see a fairer and more integrated society, we might prefer political leaders who try to find better and fairer ways of cutting the cake – as well as making the cake bigger.

    But those who favour the status quo will always argue that change isn’t needed or won’t or can’t work, or that, even if it is brought about, it will produce outcomes that are not those intended.

    They will, in other words, always protect their privilege, usually by rubbishing those who seek change – what else do you expect?

    So, the next time you read or hear someone, as a matter of course, rubbishing or mocking change or those seeking change, just because it is change, pause to question their motives. Aren’t they really just defending privilege?

    And you should really be on your guard if you are told that those who are less privileged have missed out because they are feckless or ignorant or can’t be bothered to get up in the morning – or that the fat cats got that way because of their inborn qualities and by working hard.

    Another tell-tale sign is when it is not change itself but those proposing change who are attacked, or the difficulties inevitably encountered in bringing that change about are highlighted and celebrated – when their message is that if change can’t be achieved painlessly or smoothly it should not be attempted.

    No one pretends that change is painless or that making good past deficiencies does not carry a cost. But we should always be on our guard against those who say that proposed change should never be supported because it always means worse rather than better, and is, as a matter of principle, misconceived.

    Change can only be resisted in principle by those who are satisfied that everything is for the best in the best of all possible worlds – and only those who don’t think, think like that.

    Bryan Gould
    15 May 2019