Saturday, May 06, 2006

Fran O'Sullivan: Wanted, a new breed of revolutionaries

New Zealand punches above its weight - it's the cliche our politicians trot out when they want to make us feel good about ourselves.

And certainly we (mostly) do when it comes to the All Blacks, our Oscar-winning film-makers, our America's Cup sailors, our fashion designers and - dare I say it - with our early focus on free markets and free trade.

But it's the other "ours" we slide over that really count - the areas where New Zealand punches below the weight it once used to enjoy.

This was brought home vividly to me in Sydney on Thursday night when the huge success of Australian schoolteacher-turned ideas entrepreneur Greg Lindsay was celebrated at the 30th anniversary of the Centre for Independent Studies.

The CIS had a huge influence on policy debate in the 1980s and 90s on both sides of the Tasman - not just the free-markets mantra, which now enjoys bipartisan support in both countries, but areas which have not caught fire here, such as social reform and the debate on democratic freedoms and personal liberty.

Australia's most prestigious independent think tank has had a profound influence on that country's policy choices, as Australian Prime Minister John Howard drove home in his speech to a 600-strong audience.

The story of how Lindsay started the think tank in a backyard shed is well-known to policy wonks on both sides of the Tasman.

Mining boss Hugh Morgan persuaded a few Melbourne mates to kick in $5000 each so that Lindsay could leave his teaching job and start raising hell by challenging the protectionist and frankly dull status quo of the late 70s.

I won't hold this against John Howard, but a clear omission in his paeans of praise for this orchestrator of new ideas was the fact that Lindsay, like other New Righters as we used to call them, found New Zealand Finance Minister Sir Roger Douglas a much more willing revolutionary than Australian politicians of that era.

Both Australia and New Zealand deregulated their financial markets. But it was Sir Roger who kicked the struts out from under our agriculture sector by taking farmers off welfare, starting the process that has made them among the world's most efficient.

So it went with labour market deregulation, taxation reform, and the corporatisation and privatisation process for Government-owed commercial enterprises.

I'm not suggesting Lindsay was responsible for the revolution here. Sir Roger, former Treasury boss Graham Scott and the Business Roundtable's Roger Kerr all have their fingerprints on our changes.

What I am pointing out is that there was a rich nexus of policy revolutionaries on both sides which worked together to keep the focus on the changes necessary to make both countries more competitive.

Unfortunately the first mover advantage New Zealand initially enjoyed - by making more courageous calls than Australia - has long since evaporated. Since "reform" became a dirty word when Labour resumed power in 1999 the focus has been on gradual improvements to the status quo.

The intellectual rigour and openness which should characterise our major policy debates has been suppressed. Too many senior public servants second-guess ministers, and those who persist in proffering free and frank advice that is not wanted get a clip around the ear.

One of the reasons I believe the Australia New Zealand Leadership Forum taking place in Auckland this weekend is so crucial to "our" future is that it enables New Zealand politicians, bureaucrats, business people and leaders in education and arts to form a new transtasman consensus on the way ahead.

New Zealand and Australia face major challenges: ageing societies, economic integration with East Asia, China's challenge to our leading role with the increasingly unstable Pacific Islands, our own security as under-populated countries in a world facing resource constraints.

But Australia is replenishing its declining human capital by raiding our skilled workers.

New Zealand was quicker to put a toe in the water on the East Asian integration. Australia is now signing better deals and faster.

Australia has moved in on what we used to consider our back yard. But Australia is seen as arrogant; New Zealand is not.

Australia has the comfort of knowing it has a US security protection blanket; we do not.

Both countries are pragmatically responding to China's regional diplomacy and signing resource deals, but have yet to face the real test of how we grapple with China's desire for "movement of peoples" to be acknowledged in our respective free trade negotiations.

But what stands out is that while these and other issues are likely to be touched on in this weekend's and future forums, not enough makes its way into broader public debates here.

Debates over regional security and trade are not examined here sufficiently in an adult way.

Worryingly, the External Assessments Bureau has stopped publishing an annual summary of the strategic environment facing this country.

Business people say they can find out more about China's free trade stance from the Australian Department of Foreign Affairs and Trade website than New Zealand's.

The beauty of this weekend's forum is that it will equip key players to better engage in these vital debates. But recapturing our first mover advantages may require a new bunch of revolutionaries.

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