O'Sullivan: Clark risks missing the wave

By FRAN O'SULLIVAN

If Helen Clark wanted to make our day she would call an early election.

Not for the daft reason promoted by the more geriatric of the two Friday "business weaklies", The National Business Review, which blared "Early election on the cards as economic growth starts to dive" over its Friday front page lead, but failed to provide a skerrick of evidence for the assertion.

She should move because MMP's limitations have again become abundantly clear.

The Government needs to create a new agenda and get on with it.

Labour's junior coalition partner - the Alliance - is engaged in in-house interrogations over its support for the Government's anti-terrorist stance.

How Stalinist do they have to get before Clark starts to doubt the sanity of her Coalition partners?

Of course the Prime Minister could pull the house of cards down and start again; call the Alliance's bluff and ride the patriotic fervour line. With National's new leader Bill English vacillating on the terrorist stance there is a ready-made issue. Or is there?

The reason that Clark will sit on her hands for now is that early elections are risky: New Zealand has a politically risk-averse Government.

Governments must give several weeks' notice of an election. By the time voters go to the polls the issue that created the call for an election may have disappeared. The Greens are also more popular than the Government's coalition partner.

The PM has openly dumped all over the suggestions. "We intend to go the full distance," she chirped from South America.

But the early election speculation suits Clark as a big stick to wave at dissenters.

She has already used the early election weapon to create just enough political uncertainty to keep the Greens in line over genetic modification.

But unless Alliance leader Jim Anderton's colleagues have a political death wish - which is always possible - Clark's Deputy Prime Minister will triumph over his party.

The more telling issue is why business is murmuring about an early election.

It wants one so that the Government can hurry up, finalise and promote a big-ticket economic growth agenda, instead of its present focus on introducing more red tape.

Clark's own department has been pulling together a strategy for her to issue in February. This includes reports by taskforces on immigration, direct foreign investment and innovation. The Government has been promoting this as evidence that the August Knowledge Wave initiative is not dead.

But much of this work could have been brought to finalisation months ago and implemented. Instead it has been pushed out for political reasons: to enhance the Government in election year.

The net result is that, instead of providing the impetus to sustain New Zealand's economic growth, this work will be released at a time when concrete evidence shows a major slowing in global growth.

The International Monetary Fund has just updated its forecasts for last year and this.

Its projections of world growth of 2.4 per cent for 2001-2002 are much lower than the 2.6 per cent growth for 2001 and 3.5 per cent for 2002, which it had published in September, before the full impact of the September 11 attacks on the World Trade Center.

Clark has many political skills. But her pragmatic approach is overlaid with gradualism.

Now even her kitchen cabinet has become privately disenchanted with slow progress on some fundamental business-led change.

The PM's kitchen cabinet includes a bunch of prominent chief executives.

Among them are McKinsey & Co principal Andrew Grant, Deutsche Bank chief executive Scott Perkins, Carter Holt Harvey chief executive Chris Liddell, Korn Ferry managing director Annika Streefland, Fonterra chief executive Craig Norgate and The Warehouse's chief executive Greg Muir.

All of them are involved in private taskforces working with the Government.

When the Herald published a special report on the Knowledge Wave in early August, the expectation of taskforce members - and Government bureaucrats - was that their reports would be finalised in late August.

No one said anything about another six-month delay before the plans were executed.

The Government's attention has been deflected by the Air New Zealand rescue and the September 11 attacks, but responsibility for overall progress must be laid at Clark's door.

She chairs the joint Government-business sector steering group to which the taskforces have been charged with bringing together strategies to enhance New Zealand's talent pool and the level of foreign investment.

But apart from a London networking party - organised by Korn Ferry - little progress has publicly taken place.

The same inertia bogs down Competitive Auckland - a self-appointed private sector group devoted to promoting Auckland's economic resurgence. This group was initially supposed to wind up in June after publishing a strategy report, but is seeking Government funds to perpetuate itself.

Last week's GEM report - the first time New Zealand has been measured on this Global Entrepreneurship Monitor - also gave a pointer with its promising findings on the level of Kiwi entrepreneurship.

But instead of helping our budding entrepreneurs, the Government is tying them up with new demands to create stress-free workplaces.

The private-sector push to reinvent New Zealand is needed.

But it is not new. The last serious economic revolution phase was pushed along by the private sector: Auckland-based businessmen such as merchant bankers Sir Michael Fay and David Richwhite, investment banker Alan Gibbs and commercial lawyer John Fernyhough - complemented by others such as Sir Ron Brierley and Sir Ron Trotter - formed the nucleus of Labour Finance Minister Sir Roger Douglas' kitchen cabinet.

Their proximity to power was rewarded with jobs: chairmanships of new state-owned enterprises, a contract to redesign the country's hospitals system and the inside running on the sale of state assets. But the economy fundamentally changed.

Fifteen years later, the 1980s reformniks have either left New Zealand or retired from active business life.

The guard has now changed.

But the essential point of difference is that in Sir Roger Douglas the business revolutionaries had a politician committed to pushing at ferocious pace an agenda for change.

If Clark's kitchen cabinet wants the change motor to accelerate it might have to be a bit more open in its criticism.

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