Growth debate moving to Government ground

By COLIN JAMES

Give up on tax cuts. Move to where the debate really is and mesh it with "community" and "knowledge", because without those two, growth will languish.

That's the message for business from the Knowledge Wave Trust's second conference, dubbed a "leadership forum".

This revisionist version of a triple bottom line might have appealed to the Government. There was the odd voice raised in argument for extending the 1990s agenda but that was not the tenor of the overall meeting.

Instead, the organisers wove social capital and creativity into growth policy. American academic Robert Putnam rehearsed his argument that without community - "social capital" - growth would suffer and offered a programme for diverse societies such as ours to build social capital.

Fellow American academic Richard Florida propounded his notion that growth is where the creative people are.

And a slew of other American academics outlined the tech future and told us we had to lift educational performance.

Out of which Deutsche Bank's Scott Perkins distilled a new definition of economic fundamentals, combining the traditional - institutions, markets, individual freedoms, "globality" and stability - with creativity, diversity, education and technology.

This is actually near where the Government is, though there are arguments about the weightings, particularly on institutions, markets and freedoms. It also fits the new growth theory devised by American economist Paul Romer, who delivered a paper.

But if you were looking for a trojan horse for the tax cutters and deregulators, Romer came close to providing it, with a scorecard that rated us average on economic efficiency and an admonition that even equity must be pursued efficiently.

Perkins, too, felt we were underperforming on the traditional items. And the 100 "emerging leaders" - all aged under 40 - voted heavily for company tax and social security cuts at their gathering on Wednesday morning.

Whatever the cause, Prime Minister Helen Clark wagged a finger of warning not to recommend such "failed policies of the past" and conjured up on radio yesterday a "hidden agenda".

Some delegates did have such an agenda. But the diversity of the others overwhelmed it. Such a gathering offers the Government scope for partnership without needing to alienate its core vote. But it remains unsure about taking up the opportunity.

In the meantime, the debate is moving on - ironically, into territory in which the Government should feel comfortable.

* Email Colin James

Herald Special Report - February 18, 2003: