Thursday, February 5, 2009

Business will have taken heart

The significance of the business assistance measures announced yesterday by Prime Minister John Key goes beyond what they actually do. The package itself may be relatively modest, especially when compared with what Kevin Rudd has done in Australia. But it sends an important message to business – and particularly to small business owners – that this is a government that values the business sector, understands its difficulties and wants to give it a leg-up. The potential impact, in terms of morale, shouldn’t be under-estimated

For nine years, the business sector managed as best it could under a Labour-led government that too often seemed indifferent to its problems and unappreciative of its importance. The only temporary departure from this pattern was the famous “charm offensive” of 2000, when Labour realised it had gone too far in alienating business people by burdening them with regulations and compliance costs.

That Labour and its parliamentary allies didn’t spend a lot of time fretting about the welfare of business was hardly surprising. Only a few Labour MPs had experience in the private sector and fewer still – a mere handful – had experienced the challenges of trying to run a business. Overwhelmingly, Labour consisted (and still does) of former teachers, university lecturers, trade union officials and public servants: people who never had to worry about paying wages or GST, complying with the minutiae of health and safety regulations, finding suitable employees (and getting rid of unsuitable ones) or the plethora of other daily challenges that go with operating a business. It’s astonishing – and a compliment to Labour, in a way – that a party so unrepresentative of mainstream New Zealand should have stayed in government for so long.

It wouldn’t be fair to demonise Labour as being overtly hostile to private enterprise. After all, international surveys showed that New Zealand remained a relatively easy place to do business. Yet Labour often managed, collectively, to give the impression that business was tolerated only because it was a means by which the government could gather more revenue with which to fund its multiple busybody initiatives. Rarely was there any acknowledgment by leading Labour figures, such as Michael Cullen, that private enterprise – risk-taking capitalists big and small, from the farmer and the local hairdresser to Fonterra and Telecom – was the source of all our economic wealth.

That has now changed. A dramatic political mood shift has swept the country, the full extent of which is only now becoming apparent. New Zealanders signalled strongly in November that they have had enough heavy-handed government, thank you very much, and they are likely to be receptive to a stronger emphasis on the need for wealth creation and the removal of barriers to improved productivity. Key’s package yesterday may have been modest, but business will have taken heart from the underlying message.

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