Fran O'Sullivan: PM needs to substitute political correctness with political courage

Prime Minister John Key has set a serious challenge for Kiwis: "We know how to spend like a First World nation - do we know how to earn like one?"

This conundrum has clearly been exercising his mind.

As the enormity of the task New Zealand faces in trying to catch up with Australia on the income-to-GDP stakes becomes clear (Australia has not sunk into recession despite the impact of the global financial crisis), Key repeated a great line from Reserve Bank Governor Alan Bollard: "There's only one answer: God's an Australian."

The fact that Key broke from his jocular reverie at this week's New Zealand Business Hall of Fame celebrations to also insert a serious note is a signal that the Prime Minister is getting to the point where he can start to concentrate on the hard yards of retooling the New Zealand economy, rather than dealing with the detritus of 18 months of domestic recession exacerbated by the impact of the global crisis.

Key will no doubt outline more of his hopes and aspirations for New Zealand at this weekend's National Party conference as delegates celebrate their party's return to power after nine years on the opposition benches.

One of his central skills is the ability to lift spirits - as a national cheerleader. But the route to this country reversing its long-term decline is more dependent on political courage.

There is major work to be done to add substance to the economic platforms that Key and Finance Minister Bill English are developing.

The PM believes New Zealand "cannot defy gravity" and should concentrate its focus on industries where we have a competitive advantage and the opportunity to excel globally - like agriculture. Pity the message still needs to sink in.

In the same week that Fairfax Media lent its name to the long-established event (National Business Review had the naming rights when the Business Hall of Fame was established in 1994), the political columnist in its own flagship business paper was busy damning the "business class" who had responded to this year's Herald Mood of the Boardroom survey.

"When it comes to narrowness of vision it has few serious rivals," said Chris Trotter, himself illustrating the petty small-mindedness that dogs far too many columnists in our own local media. Trotter would undoubtedly have choked on his meal (if there) as stellar representatives of the business class he despises were honoured by the boss of his own media organisation just days after his spectacularly dismissive column.

Establishing a strong risk-taking and competitive business culture is a major issue facing New Zealand. It is also one that is not made easier by the current inane bias - all too prevalent among opposition parties, public service unions and some media elements - to the private sector playing a greater role in this economy.

So, the "beltway" gets angst-ridden about the constitutional propriety of Treasury Secretary John Whitehead stimulating debate over the role of the public sector, taxation and developing new policy on other gritty issues to drive New Zealand forward.

The reality is that among the senior members of Australia's more hard-nosed bureaucracy, Whitehead and his team have (till now) been seen like shrinking violets: spending too much time second-guessing the political will of Cabinet ministers and too afraid to argue the need for New Zealand to adopt significant policies "in the national interest".

If we are to catch up with Australia, New Zealand needs to be much more focused on New Zealand first - whatever it takes. We will only recognise that the country is truly on this path when Whitehead has the courage to run counter to Key's opposition and focus on extending the age at which the baby-boomers should be eligible for national super.

In his drive to get New Zealand back up the income scales, Key has yet to take counsel from no-nonsense business leaders like Roderick Deane.

Deane was, with business visionary Sir Ron Carter, among this year's inductees to the Hall of Fame.

His business legacy is well understood as a former chief executive officer of ECNZ and Telecom and present chairman of Fletcher Building. But it was Deane's courage while Reserve Bank deputy governor in helping face down former National leader Sir Robert Muldoon in the 1984 currency crisis, his role in the decision to float the dollar and subsequent chairing of the State Services Commission during a time of tumultuous change, that make his reservoir of experience so valuable.

Deane believes leaders should be driven by an "enthusiasm to work towards leaving a legacy to make the world a better place when they leave it". Key is of a similar mind - but unless he develops a thicker skin, becomes less reliant on polling and more focused on using his superior communication skills to convey the necessity for change, he will find legacy-making a difficult task.