Richard Inder: Essence of Budget grates with many

Ever since I bit the bullet and decided to cough up for high-speed internet, it has become an increasingly important part of my life.

If I get home from work late, I catch up on the news with full motion pictures through the TVNZ and TV3 websites.

My partner and I have just started downloading music from the net, and our bilingual daughter needs story books and songs from The Netherlands if she is to continue to make the rapid progress she has made over the past couple of years.

The internet connection is usually good but, last week, as the country was lashed by the southerly storms, it failed and I was forced to dial my provider's help desk.

I was pretty sure the fault was not at my end. Only an hour before, I checked my email. But I wanted to know for sure - if only to protect my computer from my usually ham-fisted tinkering with its settings.

The technician was not terribly co-operative. Instead of answering my inquiry as to whether the wider network was operating, he took me through a laborious check process.

"Is your broadband modem turned on?"

"Yes it is turned on. It was working fine an hour ago."

"Is it connected into your computer?"

"No, it is a wireless connection and it was working fine. Just a little while ago I checked my email."

The technician's questions continued, tinged with more than a hint of frustration.

"You sound tired," I inquired.

"Yes," he said, changing his tone. "It has been a busy night here."

With that hint of apology, I relented. He was after all doing his job and I was more than aware of the techno-illiterates he would have to deal with in his work day.

People who are so lacking the fundamentals that they are quite literally surprised to discover that a computer needs a physical connection to an external network before they can surf the internet.

People who just do not get it.

This week I encountered the tone again. But this time, those voicing the frustration were some of the nation's business leaders. Their complaint was that the Government seemed to display a similarly deep misunderstanding of how business operates.

Communications Minister David Cunliffe elicited the first cry as he suggested Telecom might have to cut its dividend as it adapted to the soon-to-be introduced controls on its phone network.

Cunliffe seemed to be oblivious to the possibility that his comments could be construed as indicative of the regulation's detail. And most importantly, that they could suggest an antipathy towards a robust and long-standing tradition of corporate governance - that dividends are a matter to be resolved by shareholders and directors.

Almost $160 million was wiped from Telecom's market value after Cunliffe's comments, taking total losses since the proposed regulation was disclosed to more than $2 billion.

Then came the Budget, in which the Government trumpeted a payroll subsidy. This will give employers $2 a pay period for each employee for up to five employees, costing a not insignificant $79.4 million.

In fact, this amounts to $520 an employer a year, at the most. And after deducting the costs of claiming the subsidy (including the business principal's charge-out rate of a conservative $80 gross an hour) it is doubtful the payout will amount to a hill of beans.

Certainly, it is not the sort of regulation that will make the difference between a company surviving and failing.

This is not to dismiss the Government's Budget initiatives outright.

The extra $1.3 billion set aside for roads, the promise to review regulatory frameworks, including the hodge-podge of rules governing the energy sector, and Finance Minister Michael Cullen's vague references to tax cuts next year deliver (or could deliver) the outcomes business seek - better infrastructure and less regulation.

However at the heart of the Budget was a view that in many areas - perhaps most contentiously in infrastructure and welfare - the Government is better at allocating resources than the private sector.

It redistributes the $7 billion operating surplus in the form of the barmy $1.85 billion Working for Families tax package. Private funding of infrastructure is moved further into the public domain with initiatives such as the abolition of tolls on the Tauranga Harbour Link project.

This is a view that grates with many in business. For these people, government is generally regarded as a necessary evil. Limiting its involvement in the economy should be the first principle of regulation since laws imperfectly deal with real world situations. Public welfare should be a safety net.

"It's the old saying: 'Don't give me a fish, teach me how to fish,"' said one observer of the Budget this week.

They also regard this Government's ideology as one founded on a lack of experience in the business world, where concepts such as fairness, equality and probity rarely enter the lexicon. Fumblings such as Cunliffe's comments can only reinforce that view.