PLUGGING THE GAP: TAKE 2

Gap No 1 is between our lifestyle aspi-
rations and the earning capacity and savings inclination of most of our population. For long time we have lived on foreigners’ savings.
This has had three important results.
Foreigners own large numbers of our businesses and run them on foreign criteria (the branch economy syndrome). Their profits are negative on the balance of payments. This has built our foreign debt very high, exposing us to the risk of debt trap if the dollar goes too low.
This new colonial status has caught up with us in the form of very low dollar, which accentuates the above factors in an awful spiral.
Gap No 2 is between the assumption by policymakers and citizens that an economy embraces (or should or could embrace) everybody and the reality of modern archipelago economy.
The “archipelago” is the abounding “new-economy” businesses in biotech, IT, finance and the like, plus smattering of very well-run more traditional businesses.
The old national industries spread wealth broadly through easy-to-learn jobs. The new businesses typically employ few and those with mostly high qualifications, largely independent of the surrounding society and economy and mostly on world-class pay. If successful, these businesses often end up in foreign ownership (the nursery economy syndrome), then in the new owner’s country.
Most punters are on the surrounding continental shelf, which has been sinking for decades on falling terms of trade.
The islanders are in Helen Clark’s cherished “first-world” nation; the continental shelf dwellers are not.
Gap No 3 is between the allure for the able and ambitious of big cities – where trends are made, challenge and opportunity are legion, rewards are commensurate and fun is to be had – and the narrower attraction of this peripheral society.
This is the so-called brain drain. It won’t stop now. Politicians might instead focus on attracting here brains inside people who earn their money in the world economy in new-economy activities and want to do it where skiing, yachting, green spaces and so on abound and are cheap.
But if politicians make this switch, how will they adjust education funding policy to cope with the likelihood that fewer brains will come than will go over the next 30 years?
Gap No 4 is between 20th century beliefs in what governments could do and the reality of the globalised 21st century’s limitations on national governments.
These days we might most usefully think of the Beehive as broker, sending some matters up to supranational (or Australasian) institutions, sending others down to local government or non-government organisations (the principle of subsidiarity) and itself doing what it can actually achieve or cannot escape doing.
Gap No 5 is where Helen Clark came in with noble ambitions last December: reducing ethnic socioeconomic disparities.
The Government thought it was setting out to lift education, employment and health standards for Maori (and Pacific islanders). Attacked from the left and the right and in sore political strife, by September it was pretending this was just part of an attempt to reduce disparities in the population at large.
But by then power and culture gaps had opened up. Maori leaders were no longer content to deliver goodies on programmes determined, contracted, funded and monitored by Wellington politicians and bureaucrats.
They do not see “closing the gaps” as making Maori more nearly like Europeans in the society and economy but in ethnic terms of self-definition and self-determination. This means, for example, educating children according to Maori imperatives which may or may not be the imperatives of the global economy.
These issues go to the heart of the nation. Just to address them will require an extensive education campaign to explain to ordinary folk what is involved and why. Such an education campaign would take at least generation.
If this list makes ministers quail, they might note it does not include the gap between rights and responsibilities at the heart of social policy, nor the gap in trust – in Government and Parliament, nor the gap represented by the failure to develop agreed criteria to define what the state should do or not to – “adding value” or “fixing market failure” or “doing only what the private sector cannot do” or some other benchmark.
There are many gaps. Get used to them for they won’t be closed in hurry.

Colin James is Wellington-based political commentator

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