POLITICS Brash and Business

Would Don Brash government soothe business’ fevered brow? Answer: we can’t say for sure, yet.
Surely that’s preposterous. Brash is nearer mainstream ACT than mainstream National. He has personal authority. He says business-friendly things. Surely, all will be well.
First, note National will not govern alone when next it wins office. It is also unlikely to be governing alone with ACT. Any other partner will pull National towards the centre, though United Future is more business-friendly than New Zealand First.
But National has variations within its own ranks which complicate clear Brash run.
All this became evident in March when National dumped its bold tax-cutting policy of 2002. In place of 32 percent top personal rate and 27 percent corporate rate at the end of the first term of government and 10-year aim of 25 percent for each, Brash now emphasises cuts for low-middle income-earners, very modest personal cuts otherwise and 30 percent for business – with only vague indications of more in future.
For business the company tax cut promise is welcome, if timid. To be competitive at the end of the world, New Zealand must be more attractive to investors than richer, centrally positioned nations – even than Australia.
To tax you might add government charges, for example, on freight and passenger clearances imposed because of terrorism. National has implied it will continue those charges.
Next: workplace relations. Expect National to promise wholesale repeal of the Workplace Relations Law Reform Bill, especially the provisions for forced bargaining, multi-employer agreements, non-pass-on of union-negotiated rates and protection of vulnerable workers. By and large, however, the parent act of 2000 will stay.
Brash has dammed the Holidays Act and declared unequivocally National will repeal the fourth week’s holiday and time-and-a-half on public holidays. But other provisions await detailed examination of the act.
Workplace spokesman Roger Sowry says Labour’s Health and Safety in Employment law will remain though stress will go and OSH will have to operate more respectfully and carefully.
National is leaning towards reintroducing competition on ACC levies but in less draconian fashion than in 1999. Detail is yet to come.
Workplace relations and tax were two of five competitiveness issues that Business New Zealand chief executive Simon Carlaw told National party conference in May were key business concerns.
The others were: Spiralling local government activities and so rates, more than half of which are paid by businesses and which have climbed by more than twice the rate of inflation in the past 10 years, with more feared as councils get their teeth into the “power of general competence” legislated in 2002. National’s local government policy is work in progress as it gathers submissions.
The same goes for the Resource Management Act: “major discussion paper” is due from Nick Smith in July-August. High priorities are fast-tracking large projects, time limits on objections, blocks on vexatious claims, limits to Maori consultation and direct access to the Environment Court.
Kyoto and climate change: National will commit to removing Labour’s carbon tax (in the first period New Zealand has more emission credits than debits) and may withdraw before the second period starts unless most trading partners join in.
Carlaw did not include compliance costs in his five issues but it infuses at least four of them.
In addition to competitiveness issues, Carlaw identified infrastructure as critical. Skills and learning were top priorities. Businesses can’t get staff and must train people to handle simple notices and calculations. Brash is long on rhetoric on this but short on detail. Most attention so far is on zoning and testing, which won’t fix skills. Bill English, meanwhile, is developing policy.
Transport was Carlaw’s second infrastructure issue. The RMA looms large. Deputy finance spokesman John Key talks of better legislation to encourage private-public partnerships and selling an energy-generating company or two to fund roads. Brash is promising to thin the thicket of consultation over transport plans and actual projects.
Carlaw’s other infrastructure issue was energy. Spokesman Sowry’s focus is on getting more gas, more electricity generation and more competition. Lines companies will be allowed into generation and possibly retail, though that is still being weighed up; regulation will remain on lines companies.
Summing all that up: National policy is still very much work in progress. Should business be bothered? Not yet. The Brash National party is still emerging from the chrysalis. The acid test will be how specific it is getting by late 2004.

Colin James is Management’s regular political writer.
Email: [email protected]

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