Almost everybody with half a clue accepts that another round of economic reform is required to address the challenges ahead. But the National government’s “100 days of (in)action” will soon look like an opportunity lost unless John Key can execute rapidly on some good ideas following next month’s “job summit”.
In case you hadn’t noticed, the perfect storm is gathering. Melting commodity prices, a tidal wave of leveraged debt plus cooling consumer spending has all but evaporated economic growth. The rainy day has arrived. The good news is that previous governments have been fiscally responsible by putting some of their pocket money in the piggy bank. The bad news is that they gave up on attempting to diversify the economy away from logs and animal protein, despite all the advice to do so.
Whatever happens, the prime ministerial “jobs summit” planned for next month will not be a panacea. However it is better than doing nothing, which is what the government appears to have been doing since the election in early November last year. A quick flick through government Minister’s press releases reveals that almost no new ideas or economic strategies have been announced since the election. What are they waiting for? Management theory suggests that business turnarounds succeed best when there are early wins and momentum for change is built up rapidly. Economic turnarounds are surely subject to the same laws of physics. So far the signs are not very promising
The “jobs summit” needs to be rebranded more broadly as a societal forum because it is not just about jobs or even money any more. It’s about dealing with a paradigmatic shift in how business, government and society operate within economies. If the government don’t understand this, we have a real problem. That’s why it troubles me that the forum has been proposed by a former investment banker and will be chaired by a stock exchange CEO. Aren’t these just the kind of people who got us into this mess in the first place?