Business Vision: How to Get Government and Business to Work Together?

Listener: 19 November, 2005.

Keywords: Business & Finance; Political Economy & History;

One might think there is a standoff between government and business. A fortnight before the election, a Business Herald “Mood of the Boardroom” feature showed that many chief executives were antipathetic towards the Labour-led government and willing to say so in public. The impression was reinforced by leaks showing that business and a business lobby group had been involved in the making of Don Brash, leader of the National Party.

It’s more complex than that. Business is not a unity and neither is its attitude to the government. Even so, in 2005, the public again chose a party that some businesses seem to dislike. For there is considerable public unease with the business sector. Ironically, for each day we purchase and consume the products of myriad businesses, while most workers like their jobs and the bosses. So most of our trans-actions with businesses are benign to beneficial. But we ignore that when we think of “business”.

The public anxiety towards business seems to have intensified since the 1980s, when policy was based on “what was good for business was good for the country”, a view which assumes that the country’s interests are exactly the same as those of businesses. Its logic is that Gross Domestic Product is the nation’s objective, since business is best at adding to GDP.

However, surveys show New Zealanders have little enthusiasm for GDP as the ultimate goal of their society. Sure, they like more material things and more spending power to attain them. But they also want community, independence, quality of life, security and sustainability, none of which business is particularly good at delivering. The 90s obsession with GDP contradicted New Zealanders’ aspirations.

In 1999, the voters elected a Labour-led government whose “New Zealand Vision” begins with wanting:
– a land where diversity is valued and reflected in our national identity;
– a great place to live, learn, work and do business;
– a birthplace of world-changing people and ideas;
– a place where people invest in the future.

These do not directly contradict business’s requirements, but they are broader, and so demote business from the dominant role it had in the previous 15 years. But you can’t blame this on the government. We chose it. Moreover, the government seems acutely aware of the tension. A secondary element of the Vision Statement involves a country “rich in well-founded and well-run companies and enterprises characterised by a common sense of purpose and achievement. They are global in outlook, competitive and growing in value.”

Business generally does not seem to have come to terms with this apparent demotion. The ideology of the Business Roundtable focuses on business knows best. Much of the rhetoric in the business pages seems to belong to another country. (There are, of course, those such as the NZ Business Council for Sustainable Development, which promote business interests in a broader context. To repeat, business – like the rest of us – is not a unity.)

It is not helpful to argue that “what is good for New Zealand is good for business”. The statement is either meaninglessly platitudinous or wrong. Sometimes national decisions are not entirely in all businesses’ best interests. But that is generally true – policy cannot please everyone. On occasions, each of us loses out on some matter of public policy. Ironically, because the government has to resolve the tension between business and the community, it often, illogically, gets blamed for it.

We need business to acknowledge that although it is a critical part of the nation’s success, that success is not to be solely measured in terms of the GDP it is so good at generating, but in terms of wider objectives to which GDP often, but not always, contributes. Sometimes business interests will not predominate.

But the rest of us need to remember that although we may have broader objectives, those hundreds of commercial transactions we do every day indicate that we depend on a significant contribution from business to our welfare. Even though business requirements may not be paramount, their concerns – particularly when they are put in the context of our wider objectives – should be carefully listened to, respected, and overruled only with reluctance.

The previous sentence applies, of course, to every sector of society.