In a major speech yesterday Finance Minister Grant Robertson made it clear that the recovery from the covid-19 recession – or very probably, depression — will be a political project.
At its heart will be the document Robertson spent two years in Opposition producing — the Future of Work.
He says the Covid-19 crisis is the challenge he has been waiting for.
The “Future of Work” report drew heavily on the work of the United States economist, Robert Reich, who was the keynote speaker at Robertson’s Future of Work conference in March 2016.
Reich argues that the United States middle class is shrinking and a new oligarchy of ultra-rich investors, “shareholder capitalists” is rising, and the country faces its greatest wealth disparity in eighty years.
He says the truly critical choice ahead is between a market organised for broad-based prosperity and one designed to deliver ever more gains to the top.
It seemed that the Commission got put to one side for the rest of Labour’s Opposition term, and though Robertson frequently now refers to it and though he has established a tripartite committee with BuisnessNZ and the Combined Trade Unions to look at it, his speech yesterday was the first real acknowledgment that it will now lie at the heart of Government policy.
“The project that gave me the greatest satisfaction in opposition was The Future of Work Commission,” he said.
“It was both about how we make sure there is decent work and higher wages in our future, but also working differently, drawing together business, unions, academics, entrepreneurs and more to develop ideas and solutions.
“Well now the Future of Work has arrived, and it looks a bit different than I imagined, but it is the challenge I have been waiting for, and one I want to work with you on making the best of for our people.“
At the heart of Robertson’s “future” is a core Ministerial Oversight Group; the Prime Minister, the Deputy Prime Minister, Winston Peters, Robertson and Environment and Trade Minister, David Parker.
Its brief is wide-ranging.
“We must also make this the opportunity to reset our economy, to take account of the massive disruption to some sectors, but also to address some of the long-standing challenges we face,” said Robertson, adding the caveat that “we also must chart a course to return to a sustainable fiscal position.”
“This work will again require us to develop new ways of working and break down the barriers between partners in our economy.”
Robertson has already defined some of that work with a series of questions; what should we make and do here in New Zealand to ensure our sustainability; what institutions do we need to support our economy; what is the role of the State; how do we trade with the rest of the world in this new environment; and how will the financial system, both here and globally, cope?
Robertson said any plan for the future must take into account the need to continue to reduce greenhouse gas emissions and to address New Zealand’s long-running low productivity.
“We must also not allow inequality to take hold in our recovery,” he said.
“In fact, we need to take this opportunity to improve the prospects of all New Zealanders and tackle those long-standing divisions.”
Obviously addressing inequality is a core mission for Labour and Robertson also returned to another.
“The importance of the role of the state has been underlined by this crisis,” he said.
“I hold a strong personal belief in the power of the State to do good.
“It is through a well-funded, highly functional public service, that we have had the ability to coordinate and provide leadership for New Zealanders, guiding both the public health response and the economic response to this crisis.”
Few would argue with that, but his next sentence might prove to be more controversial.
“I believe it is of the utmost importance that the state continues to play an active part in the economic recovery, providing leadership and direction as we move forward through the challenging times ahead,” he said.
However, he might have drawn sustenance yesterday from a procession of executives from the country’s usually strongly free-market media companies who appeared before the Covid-19 Epidemic Response Select Committee to plead for government assistance for the country’s newspapers, websites and broadcasters. (POLITIK was not part of this procession.)
The executives criticised the Government’s placement of Covid 19 advertising on social media and suggested more could be steered in the direction of their legacy media.
In what might be a sign that any Government direction of the economy is going to be very different to previous eras such as Sir Robert Muldoon’s “Think Big”, the Prime Minister did not agree with the media executives.
“We do need to be present where people are,” she said.
“And so that means that we are behaving in the same way that many private enterprises are.
“There is advertising on those social media platforms, but that has not been at the expense of advertising in those traditional platforms that we have utilised in the past.
“Whether we like it or not, it’s where the public are, and we need to make sure that we access them.
“Separate again is the issue of making sure that journalism can survive in that new environment.
“We can’t stem the tide of people’s new behaviour.
“What we can do is ensure that journalism survives in spite of that.”
Meanwhile, Robertson said that the Government was also actively working on what comes after the Wage Subsidy Scheme, “assessing what further backing businesses and households need as we further understand the impact of COVID 19, alongside further support for the health system. “
(The scheme expires on June 26.)
Robertson outlined the work various Ministers and Ministries and departments have begun to do such as the Infrastructure Industry Reference Group and his own Economically Significant Business Group.
“In every sector of our economy and society we have a need, and an opportunity, to come through the other side of this with a strong recovery plan,” he said.
“We have tasked all Ministers with reaching out to their sector to help develop these plans.
It is important not to see this narrowly.
“Our ingenuity and innovation will matter as we re-imagine what our arts and music scenes look like in an era of physical distancing, as much as in other sectors of the economy.
“As we move towards the Budget on May 14, we are drawing these recovery plans together to play our part in kickstarting the economy.
The Budget will be a Recovery Budget. It will include funding for the cost pressures that are a necessary part of keeping our country ticking over.
“ But we will devote much of our resources to kickstarting this recovery.
“We will do this through the lens of the intergenerational wellbeing of our people and with the long term adjustments, we need to make in our sights.”
That says it all — those long term adjustments are to the big issues that Reich defined in 2016 and which underpin Grant Robertson’s whole political philosophy.
