Matt McCarten: Key needs to stop playing with ideology and get serious

Warren Buffett, who lost US$25 billion ($48 billion) and was the wealthiest person in the world until this week, has claimed that capitalism as we know it is over. It seems every country in the world is following the US lead and pouring in massive amounts of public money to keep their economies solvent. That's everyone except, apparently, New Zealand.

I may have been a little sectarian when I've observed that our Government didn't seem to be doing much so I felt somewhat vindicated when the news sheet of big business, the Wall Street Journal, ran an editorial mid-week praising John Key for doing just that - nothing.

According to the WSJ, Key has a cunning plan to steer us through the impending economic tsunami. Instead of pumping money into the economy to keep demand up, his Government will instead rely on the free market to naturally grow our economy. The writers weren't kidding.

I'm becoming more convinced our Government's strategy is that if it ignores the world economic crisis it somehow won't reach our shores.

How else do we explain that the main initiatives to come out of the Job Summit were a bike track and a bastardised version of the Council of Trade Unions' proposal to get pre-redundant workers into skills training?

What we have is a public relations gimmick. A national bicycle pathway is sexy. But 3000 short-term jobs to build it won't exactly make much difference when our able-bodied unemployed have now passed the 100,000 mark with another 50,000 predicted to join them this year.

And once we get past the "nine-day a fortnight" headline it merely amounts to giving those businesses employing more than 100 workers the option of asking their workers to take a day off each fortnight with the taxpayer partially compensating them. There isn't even a requirement to take up training.

But if any employer takes up the offer it can't make its workers redundant. Does anyone believe there's going to be a queue of employers lining up for this?

What the Government needs to do is dump its non-interventionist dogma. The trade barriers that used to protect us have long gone. We'll never be able to compete in some industries and the sooner the Government admits that it has to get involved, the better.

The cause of the world's economic problem is that market deregulation has failed. Only massive public investments and government control of gangster capital will save us. The rest of the world gets this but our Government is going in the other direction.

For example, does anyone believe the nonsense run by Accident Compensation Corporation Minister Nick Smith is any more than a ruse to privatise accident insurance to business? Even his advisers put ACC's finance problems down to its investments. Every institution in the world has that problem at the moment. But Smith's gatecrashing of the ACC parliamentary select committee and his behaviour in interrupting the ACC chief executive is politically revealing.

When we see a similar strategy of attacks on the management of prisons you can't help thinking they are connected, especially when the answer proposed to these problems is that the departments need to be privatised.

Even rudimentary research shows that private prisons overseas are grouped in the lowest quarter when it comes to performance. Private prisons also pay the lowest wages and have inadequate training with the resulting poor performance.

I won't even bother to explain the inevitable outcome if ACC is privatised. Does anyone think they'll be paying lower accident levies for a better performance if it's sold?

But then it's not about efficiency. I accept the management of some of our public institutions can be as bad as that of some private organisations. And they should be dealt with.

I have sympathy with Judith Collins, who as Corrections Minister, can't sack the prison boss. But the politicians have made the rules that pretend that the senior public servants are independent and neutral.

I prefer the US system where there is no illusion about the senior government department mandarins. In Washington, they are accountable to their political masters. That's what the big salaries are for. The politicians in New Zealand can change the rules but they won't because it's politically convenient to pass the blame to their chief executive at times.

But it's not really about management. It's about an ideology that believes, somehow, if our services were being run by private operators then all would be well. This is despite evidence to the contrary - as we saw with our railways, when the buyers have sacked workers, reduced wages and sold anything not tied down they flick it back to us for another profit.

The rest of the world has finally woken up to this. I know Act still lives in the 1980s but I would have thought the National Party would have learned its lesson by now.

Paying the minimum wage to workers for five hours a fortnight to ride a bike on the new cycleway might be a good health strategy, but it's certainly not an economic strategy. Prime Minister, you need to get more serious!