What is to be done? A Four-Part-Start
VIEWS FROM OUTSIDE THE APAIARY: IAN FLETCHER
I usually write this column to raise issues and encourage readers to think about solutions. This month is different: this is what I think New Zealand ought to do.
The background: I think the country is drifting not only into irrelevance (that started long ago), but also into not-so-genteel decline and relative poverty. There are four things we can do that together would start fixing things.
First, raise taxes. We now know that economic inequality leads to asset bubbles, like housing. This disenfranchises the young, the marginalised, the immigrant, and the poor. It corrodes our society. The clear evidence is that only lower inequality will work. To fix housing, higher taxes are essential, not optional.
Secondly, tackle productivity. Our public finances are good, so higher taxes give room to spend, fix infrastructure and invest in skills. That might mean making long distance rail work and ending student debt. Others will have other ideas. But also make government a demanding, clever consumer of new, New Zealand ideas and technology. We can’t ignore the evidence (the work of Maria Mazzucato and others) that only the state has the deep pockets and risk tolerance to really call new technology into being (examples include computers, the internet, jet engines, mobile phone standards). We can either keep importing others’ stuff (and paying for them) or own some cool ideas ourselves.
Thirdly, get a grip on foreign policy. Hand-wringing doesn’t cut it. We need to work out who our friends are (hint: it’s Australia – so much better than anyone else). And we need to recognise that we live alarmingly close to the world’s new front line. Defence matters. A bigger navy, and an air force capable of actual force are essential if we are to keep others out of our patch, keep vital sea-lanes open, and balance the militarisation of Antarctica. Off the wall idea: why not start by buying a few of the French advanced diesel-electric submarines rudely rejected by Australia – good boats for cheap and the gratitude of every Western power.
Finally, fix local government. The Three Waters water infrastructure proposal (both obscure and complicated by baroque governance) is important: it shows that local government is financially broke, and politically moribund. Piecemeal reform (the policy since 1875!) won’t work. We need a meaningful federal system. Think Switzerland. The alternative – if we do none of this – is Lebanon.
Time to wake up.
Ian Fletcher is a former chief executive of the UK Patents
Office, free trade negotiator with the European Commission, biosecurity expert for the Queensland government and head of New Zealand’s security agency. These days he is a commercial flower grower in the Wairarapa and consultant to the apiculture industry with NZ Beekeeping Inc.