BACKUP An Equitable Institute?

Last month’s launch of new, politically centrist but business-backed think tank has some lofty ideals, but equally high hurdles, to climb before it can expect to win the hearts and minds of distrustful New Zealanders. The New Zealand Institute wants to create an “ownership society” as opposed to the free-market driven, trickle-down economy championed by The Business Roundtable since the mid 1980s.
The Institute has taken year to germinate but finally announced its “here to stay” intentions at respectable 8.30am launch at Onehunga High School on July 26. Corporates and consultancies including Fonterra, Carter Holt Harvey, Westpac, Deutsche Bank and McKinsey’s with The Warehouse’s Stephen Tindall have tossed their lot in with an idea that was grafted, in part, from the remains of the Knowledge Wave days.
According to commentators like The Herald’s Fran O’Sullivan, The Institute’s early growth was stunted by interests who saw, and perhaps still see, it as “a direct challenge to Roundtable hegemony on business debate in New Zealand”. The concerns have, she wrote, “been smoothed over”, presumably because The Institute does not, at present, pitch itself as exclusively business centric. “We are not just business group,” says chief executive and former Treasury growth policy economist David Skilling. It is also “not just lobby group, not just focused on economic issues and not an ivory tower organisation”, he adds. So what is it all about?
The Institute will, according to Skilling, generate national debate and seek common ground on the future direction of New Zealand’s economic and social policies. It wants to bring together business, community, education and “those who don’t generally talk to each other” to build an “asset-based society” and to encourage shift to “savings welfare” and away from dependency welfare. Instead of the social engineering delivered by Labour’s income transfer policies, the Institute advocates policies to help people acquire assets and withdraw from the welfare fix.
A property-owning democracy, according to Skilling, delivers social cohesion and sense of shared purpose. When the economy moves ahead the gains are shared. Skeptics might just argue that New Zealand was, until relatively recently, already property-owning democracy. But, given the turn of economic events and policies, social and otherwise, of the past 20 years the foundations of home ownership have been somewhat eroded. Increasing house prices have pushed ownership out of the reach of gradually increasing percentage of the population. And New Zealanders have never been great savers or equity investors, which suggests that it will take some significant policy changes to turn the attitudes that dictate these realities around.
The Institute plans to release series of reports on wealth distribution in New Zealand over the next two or three months. This process will, says Skilling, trigger debate about what can be done to deliver more equitable social model, one that he says is working elsewhere in economies like Ireland, Finland, Singapore and “even Australia”. The Institute wants to “test ideas, ask people what they think, and determine if the issues are real”.
Skilling does not see his new think tank as competition for existing groups, like the Roundtable, but rather as “something new and supplementary” to them. “We see ourselves as non-partisan – not left or right – and looking for ideas that work.” He is confident that the Institute has sound funding base but, at $35,000 year for corporate membership, it would be hardly surprising if some choices aren’t made.
A more embracing social agenda notwithstanding there are, it seems to me, couple of obstacles The New Zealand Institute must confront. The first is trust. Research released earlier this year suggests Kiwis generally distrust business, particularly big business as exemplified by membership groups such as The Business Roundtable. Forget about the “compelling logic” of any particular economic philosophies, the average Kiwi sees little evidence that deregulated market economy did anything other than deliver considerable wealth into the hands of small number of individuals who exploited the transition from one unsatisfactory but seemingly more egalitarian society to more functioning but exclusive alternative.
And sizeable proportion of New Zealanders are, rightly or wrongly, turned off by the word “growth”. It does not compute, no matter how eloquently economists defend it. Even Skilling concedes that we are “a bit nervous about growth”. So, he adds, “we want to see fundamentally fair growth in which all New Zealanders can share”. The Institute will, he says, help New Zealand develop strong sense of where the country is going “both socially and economically”. Good luck!