English signals creative role for Government

Between the lines

By Rod Oram



As the twin Bills began selling the Budget yesterday, it was the younger Bill who gave the clearest signal of how the Government's economic management might evolve in coming months.

Bill English, who takes over as Treasurer on July 1 from Bill Birch, said the government had spent the last 10 years building a new public policy and economic framework. Now it will spend the next 10 years "hustling in the market place" to ensure the framework delivers the goods.

Don't be alarmed. His emphasis was on marketplace. He was not suggesting the government would suddenly turn interventionist, reversing the reforms which brought the New Zealand economy back from the brink.

He was suggesting the government will drive sound public policy processes and market mechanisms to ensure that they further the development of the economy to the benefit of New Zealanders.

At first glance, that appears to be only a slight change of perspective from the attitude prevailing through reforms - the conviction that government should disengage as quickly and fully as possible from public life.

But the shift Mr English is signalling to a more active role - government as catalyst, not interventionist - is significant, marking a more mature and constructive use by politicians of the policy process and market mechanisms.

As a young politician who has spent much of his adult life in a market economy, Mr English seems to accept it as the desirable norm. He appears relaxed about using that system in a creative way, just as politicians in the US and some European countries are.

In contrast, older New Zealand politicians who were once interventionists seem doomed to testify constantly of their market conversion lest anybody thinks they are reverting to the follies of their youth. And converts are often zealots, strong in the faith but slower to adapt to changing conditions.

If Mr English helps change his government's style of economic management, his achievement would be notable for New Zealand. But in an international context he would be unremarkably mainstream.

However, there is a danger. If while he gets on with business he talks a little less than his predecessors about the basics of the market economy and the essential disciplines of sound fiscal and monetary policy, he might be falsely judged as one weak in the faith.

Certainly, that has been the reaction to the Business Herald of Roger Kerr, executive director of the Business Roundtable. In a speech last week, he said the Business Herald believed the economic agenda of the past 15 years was "increasingly irrelevant", taking that quote from this column.

In fact it was a misquote. The Business Herald is as committed to that agenda as the Roundtable or Mr English.

It is not that agenda which is increasingly irrelevant but the Roundtable itself because of its refusal to join a broader economic debate and its failure to communicate well with the nation at large.