KEY POINTS:
For anyone old enough to remember footless tights the first time around, Maurice Williamson's recent explanation of the National Party's broadband policy was somewhat surreal.
After much internal debate, the MP told the Business Herald last month, National had decided the telecommunications market had failed New Zealand. The solution? Think Big and borrow $1.5 billion to help to subsidise a new high-speed broadband network.
"It is a change in the view of National," he conceded. "A lot of the debates of the 90s were about what can we sell. This is a debate about what we can actually invest in and I think that's a really refreshing change."
Refreshing? Having an ice-bucket tipped over your head is "refreshing" but this, after all, is an MP who was once touted as a potential defector to Act.
Speaking of Act, just what part of "no, thanks" does Roger Douglas not understand? Seemingly spurred by National's lurch to the left under former investment banker John Key, the man some see as the real Mad Dog is back on the hustings, providing palliative care for the ailing Association of Consumers and Taxpayers, in the hope that it might somehow make it beyond the next election in just a few months' time.
The Labour Party, meanwhile, seems to have rediscovered its roots. Apparently encouraged by its foray into the airline and banking industries, it has renationalised rail, and outraged private investors with its last-minute changes to the overseas investment rules to prevent the Canadians buying into Auckland Airport.
It has finally smashed our biggest corporate into smithereens (well, into three separate divisions, anyway), while at the same time agreeing to hand over $700 million to our booming food and farming sector so it can spend more on R&D.
Not that anyone, except Rodney Hide and perhaps Roger Kerr, seems to be complaining. Even the old bastions of the establishment aren't sticking up for "rich pricks" any more. In an editorial on May 7, the Dominion Post opined that Labour MP Shane Jones "reflected the views of many" when he told Parliament that Sir Michael Fay and David Richwhite were responsible for destroying our rail transport industry. "Neither man should have the gall to return to New Zealand," the paper squeaked.
Leaving aside the fact that Fay, at least, already returned some time ago, what on earth is what is left of the business sector - no pun intended - to make of all this?
"I think there is often a life cycle of particular approaches to particular problems," is how public law maven Mai Chen diplomatically puts it. "Look at the building sector - we had a pretty deregulated situation, then we had leaky homes, and now we've got an avalanche of regulation. It's regulatory diarrhoea."
Unlike many other Wellington lobbyists, Chen doesn't necessarily detect a change in the political mood, but believes politicians are simply being more pragmatic these days.
There is, after all, she notes, a bill before Parliament that would actually reduce the amount of discretion the Commerce Commission has to undertake price control.
I guess that answers the question she often puts to clients who complain that commission chairwoman Paula Rebstock is keeping them awake at night. Too many clients, she complains, just don't seem to "get it".
"People come to me and say: 'This is what I want.' And I say: 'Well, actually, what you want is this Government to change. Well, tough. It is the Government and I'm afraid they're about to regulate.' Or I say to them, 'You might not like Paula Rebstock but she's got a bazooka and what are you going to do about it?'"
That said, Chen has built a thriving business doing what she can where she can, and getting results. After 15 years in private practice, it has been particularly interesting for her to reflect on what effect MMP has had on the political process, given that it was a favourite subject when she was an academic.
"What you see is Cabinet collective responsibility has generally held, so the executive is still quite united, really," she notes. "It's not an elected dictatorship, but Cabinet discipline is still quite strong. However, Parliament has become a lot more powerful because power is dispersed. You have proportionality in select committees and you don't have a single party majority Government. That's been the major change."
The problem for the business sector, she admits, is that MMP has slowed down the process considerably, because of the need to get consensus for any piece of legislation. And knowing whom to lobby to free up blockages in the system can sometimes be quite complex.
Even tiny problems can be difficult to fix and often the cure proposed by the Government ends up causing more damage than the initial disease.
For businesspeople not accustomed to the capital's cosy cliques, it has all got a bit bewildering, and many seem to have simply given up trying to understand, or even engage, she believes.
"When we started, we spent a lot of time explaining Auckland to Wellington. Now I spend more time describing Wellington to Auckland."
While the key to success is still the quality of the argument, it helps to tailor your message to your audience - a lesson many people still haven't learned, she says.
"If your audience are Labour-led Governments, then you have to tailor your arguments accordingly, because the reality is they're not going to start behaving like right-wing governments - although who knows what the distinction is these days."
Another lobbyist who has been around even longer than Chen, Barrie Saunders, agrees that the political weather can be pretty hard for businesspeople to predict these days.
Saunders, a veteran journalist who once served as press secretary to Labour leader Bill Rowling, recalls the days of heavy regulation from the mid-1960s to the late 70s, and the period from 1978 to 1984 when the Treasury mindset began to shift. In 1984, all hell broke loose under Roger Douglas.
"Once some things happened, like the 20 per cent devaluation of the dollar, it just begat more things and you got a juggernaut. I remember in 1987 I went to Nelson. The taxi service was dreadful and I remember saying to Roger Douglas: 'You've got to deregulate the taxi service.' I remember his words: 'Don't worry, Barrie, it's on the list.' And they went through things like a hot knife through butter."
But the public grew increasingly alarmed by the rapid pace of reform, and by the early 90s even National was starting to get cold feet.
"What I see in this Government is less inhibition about regulation because they've done a bit and seen there hasn't been too much of a backlash. They've managed to quite superbly divide the business community against itself in many ways. Whereas before they came in, there was pretty much a consensus on dry economics."
Like Chen, Saunders agrees that MMP has changed the political dynamics a lot. And business dynamics have changed a lot too.
"If you go back 30 years, the powers in the land were, not necessarily in this order: the Manufacturers Federation, Federated Farmers, the Federation of Labour, plus the producer boards. Now they either don't exist or the power has got dispersed."
Not that Phil O'Reilly, the genial chief executive of Business New Zealand, would quite agree with that.
As the spokesman for more than 70,000 employers throughout the country, O'Reilly meets with six to eight Cabinet ministers each week, and belongs to about 20 committees.
O'Reilly has a delightful ability to deliver the most caustic criticism with a cheeky chuckle, and his admirers give him credit for being one of the first to realise that discussing, rather than arguing, with politicians was the only way to achieve progress.
But even he concedes that the death of light-handed regulation has certainly not been exaggerated. The latest buzzword around Wellington is "smart regulation", he says.
"The problem with this much more regulatory approach is you're not quite sure whether the Government is going to leap on to you and put some sprigs in your back, and you're not sure how they're going to do that, so you definitely have a decrease in business certainty to invest on that basis."
And it's not just Telecom that feels it's been stomped on, he points out. The real estate industry, the building industry, the financial advice industry, and any businesses with an above-average carbon footprint are all reeling at present, he says.
O'Reilly concedes the situation is the same in many other countries, such as Australia and in Europe. But the point is that until now, our light-handed regulation has been about the only competitive advantage we've had, he says.
"Even to this day, there's not much deep understanding of how business works. You don't have it among officials - with some spectacular exceptions - and you don't have too much amongst politicians. It's not that they're not trying. I sit with them for hours and try and explain how business works and sometimes it's successful in getting them to understand that, but the fact that we have to go through that many times every week is indicative of a wider problem."
O'Reilly also concedes that business itself may be partly to blame.
"We went through a period when business itself was pretty tribal - maybe with some justification, incidentally. What we found here at Business New Zealand is that engagement is a much more sensible and productive method. So what we do is attempt to find agreement if we can, and narrow points of disagreement if we can. I think most businesses do that these days, because it's through conversation that you reach agreement, more often than not."
Unfortunately, special treatment for industries such as the primary sector, with its Fast Forward Fund, and IT with the Right Hemisphere deal, only encourages rent-seeking behaviour, says O'Reilly.
"I'm certainly seeing, in some aspects of business anyway, much more of that ... I think that's one of the downsides of the left-wingedness of this Government, is you tend to think that government can help."
As far as the reforms of the 80s and 90s are concerned, O'Reilly is prepared to agree that even if they were right for the times, a different approach is needed in this environment.
"The idea that you go back and beyond all of that just doesn't have political resonance in New Zealand any more. Whether that's right or wrong doesn't matter. It's just the way it is in New Zealand now. The idea of doing anything radical that might have lots of disruptive impacts on the economy is pretty much anathema to most people right now."
That said, businesses are not having much luck advancing the same argument in respect of an emissions trading scheme, he notes. And O'Reilly has been slightly alarmed at both National and Labour's proposals for encouraging more rapid investment in high-speed broadband, given that fairly radical reform of the telecommunications sector has only just taken place.
Certainly, more corporates appear to taking an interest in what is going on in Wellington than they did a decade ago, or even three or four years ago, he says.
"However, I still see quite a bit of amateurish activity going on - people who aren't well informed coming into Wellington; people who don't seem to have a clear understanding of what the Government is trying to achieve, and trying to engage with it, and misunderstanding the motivations of people in the room and so on. More companies are doing it, but it's only a slow growth in quality and sophistication.
"I still hear people say 'I'll go down and see the minister and that will sort it'. Yeah, right. That was true in the days of Muldoon, but that hasn't been true for quite some time."
Like most of those on the right, O'Reilly would like to see government expenditure reduced. "But how you get there, we should be much less dislocationary than we were in the 80s and 90s."
And he is prepared to say on the record that he doesn't believe New Zealand needs to go back to the days of the Employment Contracts Act.
"When we got into the ECA we needed to massively change the culture of industrial relations and industrial bargaining in New Zealand. We were 19th century in the way we were doing things. But we don't need to go back to the ECA because we have changed cultures in New Zealand."
While Chen, Saunders and O'Reilly are among a small group of lobbyists who have little difficulty making appointments with ministers, Business Roundtable executive director Roger Kerr is one of those who has felt the chilly draught of indifference, or even contempt.
Former National Party press secretary Matthew Hooton is another whose mere presence virtually ensures the current Government will dig in its toes, say insiders.
Kerr is happy to acknowledge the positive things Labour has done, such as the free trade agreement with China. But he is not about to admit that business has shot itself in the foot by being so critical of both major political parties.
Where some see the Roundtable's failure to adapt to different political and social climates as a weakness, Kerr sees only consistency. The Muldoon years should have taught any government that being popular in the short term is not necessarily the right thing to do, he says.
"There's often a considerable difference between whatever is popular opinion at a point of time and what is good long-term policy for the country."
And in any case, he argues, how has cosying up to Labour achieved anything meaningful for business?
For a while it looked as if the current Government wanted to listen to some of the people involved in the Knowledge Wave, such as Warehouse founder Stephen Tindall, Kerr says.
"Sure, the Government can have good reasons for not wanting to accept certain things. They could be political, they could be things they feel they just can't sell to the electorate even though they're good policies. And that's the way the democratic process should operate. But if you want to think of it from the point of view of 'have those that have taken a more negotiating stance actually succeeded?' - the answer is 'no'."
What's more, Kerr senses that the public mood is not as anti-reform as National and Labour seem to think.
"More New Zealanders are waking up to the fact that we're not going places, that Australia is in a much better space, that we've got a heck of a lot of outmigration going on there and they're worried about that."
Why, then, has Act has performed so poorly in the polls? Kerr is coy.
"I don't want to get into political comment. People could speculate all sorts of reasons about why parties are getting the sort of support they are."
However, he insists New Zealand is out of step with most of our traditional allies when it comes to issues such as privatisation.
You've only got to look across the Tasman where you've got wall-to-wall Labour governments at federal and state level and all, in varying degrees, are into privatisation, he notes.
"Yet our main parties are now saying they're not into privatisation. Privatisation is only one of the policies that are important for growth, but the evidence is strong that more privatisation would be more beneficial here."
At the risk of running the same old arguments about Telecom, NZ Rail and Air New Zealand, the bottom line is that they are only three out of 30 state businesses that were privatised, says Kerr.
"Air New Zealand was privatised for several years and there was general agreement that it was a much better company, and then it made a seriously bad business decision in a competitive environment and that can happen to any business, right? Nobody says that all private enterprises are going to succeed and all state enterprises are hopeless."
As for Kiwibank and many other SOEs, it is impossible to tell exactly how well they are performing because there isn't sufficient transparency, says Kerr.
However, he concedes that the past couple of decades haven't been all bad.
"The country and the economy is a whole lot better than it was and we're not at risk of the sky falling in as we once were. Nobody should be talking doom and gloom, but the other side of the ledger is that we're seriously underperforming relative to where we could have been. We were doing as well as Australia in the 1990s. We're falling quite quickly behind Australia and, in the next 10 years, there's a real risk that 30 per cent gap in wages is going to fall further. But what can you do? In a democracy, it's what voters want and you just have to be understanding and consistent."
Whether National lurches back to the right once in office, as Labour likes to suggest, remains to be seen.
But Sir Roger Douglas, for one, is not holding his breath. National knows exactly what it needs to do, he argues.
"The hard part is to get a coalition Government to actually do it and, I'll be quite frank, that's why I decided to get back in politics, because I think this is the one opportunity New Zealand has got. We're going to get rid of Clark and Cullen - they're gone. John Key is going to be the prime minister. The issue is, is John Key going to have any spine?"
But is that the issue? While most pundits have already written off Labour, two scenarios are still possible: that National has peaked too early, or that it does not manage to get more than 50 per cent of the popular vote (the last time this happened, after all, was in 1951) and needs to rely on others to govern.
At this stage, it is far from clear who its potential partners might be and National is certainly reluctant to give anyone the impression it could include Act.
"They're scared of us," Douglas admits.
However, he sees no need to soften his image.
Act recently released a 20-point plan outlining its latest manifesto, but Douglas laments that it got little media coverage.
"Most of the public don't really understand the detail of how [policy] really impacts on them directly. To me, I think what's happening here is indicative of what's happening in the wider political debate. What we're doing is arguing and debating how we carve up the current cake or what we do with the current cake, and it has nothing whatsoever to do with growing the cake and making New Zealand a richer country. To me, that is really at the heart of the issue."
So with the benefit of hindsight, would Douglas have done anything differently in the 80s?
"My only regret is I didn't get the job finished. We should have had 23 per cent tax, we should have reformed health, education and welfare. Instead of [wages] being $450 a week behind Australia, we'd be $100 a week ahead of them. That's a regret.
The problem, he admits, is that Don Brash all but killed off what was left of Act, by attracting its supporters back to National. With just a few months left until the election, and very little cash left in the party's coffers, time is running out to lure them back.
"We've got to get back up off the canvas. We know what New Zealand has to do to beat Australia and the rest of the world. It isn't hard to work it out. What is hard is to have the guts to do it ... For heavens sake, Clark and Cullen are 1960s socialists, but that isn't to say that National have to be 1960s socialists, too."
And it seems Brash, who was himself once a 1960s socialist, now feels a bit the same way. In a remarkably frank interview published last weekend, the former Reserve Bank governor revealed his regret at having not acted more boldly as National's leader.
What he didn't reveal is whether he regretted not taking the advice of a politician who, early on, tried to persuade him to steer clear of politics. The problem, the old Labour minister apparently explained at the time, was that you had to compromise your principles.
"You put them in a box, like roses," Brash was quoted as saying. "And when you open the box, they're dead."
I suspect Maurice Williamson knows exactly what he means.
