Dialogue: Balance key to building economy

By PAUL GOULTER*

One of the remarkable features of the debate about the way forward for New Zealand is the degree of consensus.

From the Council of Trade Unions to Business NZ, there is agreement that a successful New Zealand will be built on a high-value-added export economy with its associated high-skill/high-wage mix.

There is also widespread agreement that the market has not worked. For all of the reasons obvious to most, the market-led approach to New Zealand's economic development was a failure.

The social partners - business, unions and Government - agree there needs to be a planned approach to economic development.

We may disagree on all elements of the plan, but we do agree that it involves an active role for the Government, rather than the arid, hands-off approach of the past.

The consensus is a welcome development for the country and reflects both hard-headed economic realism and the general wish of New Zealanders to see society's main actors working together for the good of the country rather than for their own narrow economic interests.

It is also a challenge for the Government. Successive Governments have reduced any meaningful role in building the successful economy.

This approach has resulted in issues of capacity and inadequate advice to ministers on how the Government can work with social partners for the general good of the country.

What do unions see as the elements of a successful plan for the economy? The critical concepts are balance and integration. We need a balance between economic and social development.

Progress in one cannot be at the expense of the other. We welcome the current Government emphasis on social development goals alongside economic development goals.

The painful experience of the past 15 years continually reminds of the need for that balance. Necessary balance can only be achieved through an integrated approach that links the different elements of policy development with implementation.

An obvious example of the need for an integrated approach is in education and skill development. The glaring skill holes in our labour market are a barrier to a successful economy.

Education and skill development are both issues for economic development and social development.

Our country's skills are built on a well-functioning and resourced primary, secondary and tertiary sector where teachers are rewarded appropriately and there are no barriers to access. These social goals underpin the sharper-edged skill development issues in industry training which are linked to economic development.

The skill components (an economic development issue) cannot be successfully achieved without an effective and accessible education sector (a social development issue).

But a successful skill development strategy must be integrated with an industrial strategy to ensure that the skills are sufficiently rewarded to attract and retain those skills.

Access and opportunity to develop skills will not be enough. We must also look at the workplace. What are the elements of successful workplaces that best use knowledge and skills? A successful skill development strategy in New Zealand will also involve industrial relations issues.

In the wood industry on the East Coast, a critical barrier to development is skills. To deal with that blockage we need the necessary education infrastructure to provide the skills and learning.

But this will not be enough. People will not develop those skills and work in that industry without sufficient incentive.

This is the point where the skill development strategy must incorporate an industrial strategy designed to ensure those skills are sufficiently rewarded.

The skill development strategy will not work unless it is integrated with an industrial strategy ensuring sufficient compensation for those skills, safe and healthy workplaces and appropriate terms and conditions of employment.

It is therefore faulty in our view to claim that the successful industrial relations framework can be measured by days lost due to either employer or employee industrial action. That is too limited. The acid test of a successful industrial relations strategy is how it integrates with the overall economic development strategy and its particular elements such as skill development and the creation of successful workplaces promoting learning and knowledge acquisition and use.

The rebuilding of a strong union movement advocating skills development and appropriate rewards is a key element of that successful industrial strategy.

The way forward for this country has three elements, which we are currently seeing emerge:

* A consensus on the importance of moving beyond the past, with its outdated policy prescriptions, in a way that involves all of the social partners.

* Economic goals and policy actively balanced with social goals and policy.

* An approach that recognises the need for the integration of the different elements of policy and practice. A silo approach is not acceptable. With these goals in place we can move forward together.

* Paul Goulter is secretary of the New Zealand Council of Trade Unions.