Karyn Scherer: Cullen's less is more comes up a bit short

Okay, so we all know by now that the only thing more boring than a Bill Birch budget is journalists going on about how boring Bill Birch's successor's budget is.

But let's face it, there's nothing like looking back to give you some idea of where you're going.

So, 11 months on, how has Dr Cullen's "less is more" strategy paid off?

As far as business was concerned, the main morsel offered in last year's budget was probably the promise of a comprehensive e-commerce strategy.

Although the amounts involved have been paltry, November's e-commerce summit was generally regarded as worthwhile.

It is going to take quite a while, however, before initiatives such as the E-commerce Action Team and pilot schemes to introduce more technology into classrooms start paying off.

Plans to get Government departments setting an example of how to operate in the digital age are also moving at snail's pace.

While many in the IT industry have nothing but disdain for such tentative efforts, others concede that the Government is, at the very least, putting its pocket-money where its mouth is.

In March, the Government finally backed down on its insistence that tax breaks were not the way to encourage R&D.

While the about-face was rubbished by some, it showed the Government was prepared to listen.

Another major initiative was the establishment of business-boosting agency Industry New Zealand.

Former rental car boss Neil Mackay took up the top position at the new agency just six weeks ago.

A study on the biotech sector is in "peer review," and the agency is already reserving a place in a plethora of steering groups, working groups and action groups.

Certainly, it hasn't come as much of a surprise to many businesspeople that this Government has already been forced to lift its cap on spending.

Nor has it shocked anyone that the economy hasn't grown as much as Treasury thought it would.

Unemployment, on the other hand, is no longer the issue it used to be. In fact, some skills are now in critically short supply and employers have been relieved that wages have not yet increased as much as might be expected.

While it is obviously too early to test Treasury's forecast last year that the official cash rate will climb as high as 7.8 per cent next year, it has to be said that it has so far gone down, rather than up.

And while it is also too early to blow a raspberry at its suggestion that the exchange rate will hit 62 on the trade-weighted index by 2003, it is at present a fair way from that.

The Government can legitimately blame Australia's and America's woes for at least some of this.

But what is interesting perhaps is that the economy has held up so well, given the pessimism that is so pervasive in two of our biggest trading partners.

Naturally, the timetables attached to many of last year's promises have proven rather optimistic.

There have been several hurried announcements in the past few weeks about initiatives either spelled out or hinted at last June.

A programme intended to incubate business incubators, for example, was launched only last week. And just when you were wondering what happened to the export credit guarantee scheme, the Government confirmed on Sunday that it is now going ahead in July.

Other business-friendly initiatives that have yet to be ticked off include a raft of law changes, including laws governing electronic transactions and cracking down on hackers and electronic crime.

None of this, of course, is likely to light the fires of many in business, who would rather have a tax cut than an export credit guarantee any day.

But business cannot complain that it has been completely ignored.

This Government doesn't want to be seen as spendthrift, yet it is at least trying to look as though it is doing as much as any posse of politicians can do to build a launching pad from which it hopes a high-tech, export-based economic rocket will eventually take off.

Unfortunately for those in business, the Government's other priorities, such as the Super Fund, mean that the rocket is so far providing a fair bit of smoke but very few flames.

www.nzherald.co.nz/budget

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