If you want to measure how much this Government is different to the last consider this.
Almost exactly three years ago, on November 8, 207, Jacinda Ardern gave her first major speech as Prime Minister and Leader of the coalition Government.
It kicked off the address in reply debate in Parliament and barely mentioned business or the economy.
Yesterday she gave her first major speech as Leader of the new Labour Government.
It was all about business and the economy. And that is because the fate of this Government is now being determined, not by its manifesto, but by Covid-19.
Ardern underlined that yesterday with a warning to a BusinessNZ audience in Auckland that things were still dangerous.
“The coming years will be very difficult with the global growth forecasts showing the impact of the virus is going to be with New Zealand for some time – both in terms of managing its spread but also recovering from its economic impact,” she said.
Ardern has been at pains to explain how she structured her Cabinet with a health team and an economic team.
Covid-19 Minister Chris Hipkins heads the health team, and Finance Minister Grant Robertson leads the economic team.
That includes David Parker who seems to be positioning himself as a sort of deputy Finance Minister now holding Associate Finance Minister and Revenue Minister portfolios.
Why he wanted to be Revenue Minister is something of a mystery. But it is usually regarded as something of a junior portfolio, and National assigned it to Peter Dunne who was outside Cabinet.
In the past, Parker has been a strong advocate for a capital gains’ tax, but Ardern has ruled that out.
Instead, he is likely to find himself having to deal with the proposals to tax Google and Facebook.
Ardern has also appointed David Clark as Minister for the Digital Economy and charged him with dealing with a range of issues from the digital divide, issues around rural access to digital technologies right through to the digitisation of the public service.
“I see this role as an excellent opportunity to help us respond to COVID-19 and position ourselves in the future,” she said.
“The total global e-commerce market was estimated to be worth US$7.7 trillion in 2018, including both the retail and business to business market.
“Already our technology sector is New Zealand’s third-largest exporter, with ICT alone representing $6.7 billion worth of revenue in 2019 and COVID has shown the role it can play in our recovery and in working in a more remote fashion.
“I see this ministerial delegation supporting the rollout of new technology across New Zealand and creating a digital strategy for Aotearoa. To help do this, the Minister will create a Digital Ministers Group that will focus on: connectivity, economic benefits of digitalisation and e-commerce, data, digital skills and inclusion.”
Ironically this proposal is remarkably similar to a National Party proposal during the election campaign to create a Minister of Technology and to promote a number of high tech educational programmes along with an investment fund for high tech startups.
Labour is also talking about more Government investment funding for business generally.
At the heart of this will be the small business loan scheme which Ardern said would go to Cabinet on Monday for it to consider extending the scheme for three years and extending the interest-free period from one year to two years.
Later in November Ministers will bring further proposals forward to enable the scheme to be used for a broader range of purposes, such as investing in new equipment or digital infrastructure.
But Ardern went further and is proposing a permanent Government entity to provide investment finance for small business.
“I also want us to take up the challenge that has been extended to us by the small business council and commence work on new ways to support small businesses with finance, such as the proposed Small Business Growth Fund, repurposing the Small Business Cashflow Loan Scheme, establishing a micro-finance company for small businesses, or expanding the mandate of the Venture Investment Fund,” she said.
In other moves announced by Ardern yesterday, she said the Government would l boost investment in the Flexi-wage programme through an additional $311 million of funding to increase the average subsidy paid to businesses and enable up to an additional 40,000 unemployed people to take advantage of the programme.
Policy details will go to Cabinet before Christmas and the funding will roll out this year.
Part of the Flexi-wage proposals includes $30 million to support people out of work to help start a business through an expanded Flexi-wage Self Employment programme.
Auckland Employers and Manufacturers Association CEO, Brett O’Riley said these measures announced would help build confidence, particularly in the small and medium-sized business sector.
Ardern also talked up David Parker’s role as Environment Minister where he will work with Infrastructure Minister Robertson to fast track consents for infrastructure projects that are being accelerated because of Covid-19.
And the Prime Minister confirmed that the replacement of the Resource Management Act by two new Acts would go ahead and that it would be a priority for the first half of next year.
That would suggest we might see the legislation in the House well before the end of 2021; Parker had previously indicated it might not be till the end of the year.
These announcements were also greeted with approval by the EMA, but they were not so enthusiastic about Ardern’s commitment to extending paid sick leave to 10 days.
However, in what was clearly intended to mollify the BusinessNZ audience (who oppose thee extension) she was at pains to point out it would go to a Select Committee. (As all legislation is actually required to do).
She said this would mean “we can try and build some consensus around this issue.”
That will be challenging.
Brett O’Riley last night said the extension was going to cost businesses at a time when they could not afford it.
He said it would have a big impact.
“We are however pleased the proposed legislative changes for the sick leave provisions are going to go through the select committee process, which will give us a chance to discuss implementation issues and timings,” he said.
“Really, our business members we would rather have seen the focus on fixing the Holidays Act, the work for which has largely been done and is just waiting in the wings.”
Even so, the fact this was the first major speech of the new Government, the establishment of the economic Ministers’ team and the moves announced yesterday point to the possibility that this Government could be the most business-friendly Labour Government since the Lange-Palmer governments of the 1980s.
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