I really wanted to like Todd Muller. We all know how badly National needs to identify itself, particularly as the party that is a great steward of the economy. Muller started his leadership (ignoring poorly handled issues about hats and a lack of diversity) by naming himself as the champion of small business. This was an immediate point of difference. Then, we waited with bated breath for National to roll out its plan for the economy, to save small businesses, protect investments and ultimately save or create jobs.
But there is no plan. Not really.
They said they wanted to grow the economy, rather than just throw money around like confetti at a wedding. Most conservatives will like this idea, rather than going deeper and deeper into a pool of debt which will take generations to repay. Growing the economy worked after the GFC; yes, the government did run deficits for a while, but the resulting economic growth brought us back into surpluses much faster than any tax-and-spend policy will ever do.
Sadly, the party’s latest policy, the Jobstart scheme, introduced by Muller himself, sounds to me much like something that Labour would do. Newshub reports:
Businesses in New Zealand will get $10,000 every time they employ a new full-time worker if the National Party is elected to power in September, it says.
The scheme, proposed by National leader Todd Muller and finance spokesperson Paul Goldsmith, would begin on November 1 and run for five months through to March 30 next year.
Businesses would receive an initial $5000 payment when the hire is made, and the additional $5000 would be handed over after the new worker had been employed for 90 days.
I am struggling to see what is so very different between this and Labour’s wage subsidy policy. Both schemes are designed to keep people employed. Admittedly, National’s policy is to encourage new hires, but again, it is a focus on jobs. It is not, as we were expecting, a scheme designed to help businesses to survive. It focuses, as Labour does, entirely on employment.
Isn’t this just splashing money around, just like Labour is doing?
A business that is struggling to survive is not focused on hiring more people. Far from it. It is focused on paying the bills, keeping their customers, reducing their costs and trying to survive. The wage subsidy has certainly helped many businesses until now, and some will not need the second tranche, now that they are once again open for business. But with the economic consequences of the pandemic only starting to unfold, most businesses will be going into siege mode; hunkering down and trying to get through the next year or two before things start, hopefully, to improve.
I have been there. The year to March 2009 had been our best ever year in business, but the year to March 2010 was one of the worst. Clients capitulated, many couldn’t pay their bills, some we just didn’t hear from again. Our focus was on survival. Like many business owners, we got through the tough times by doing the work that additional employees would normally have done ourselves. It was hard, but we did get through it. Even though we really needed an extra employee, we simply could not afford it. A grant of $10,000 would have made little difference to that decision, because it would not have gone far enough.
There is so much more that the National party could suggest. Businesses need to focus on keeping their customer base, or on expanding it in times of economic downturn. How about grants for marketing, tax incentives for R&D (not just the tinkering around the edges wrapped up in screeds of red tape that we normally get from governments on R&D), or assistance with development costs for new projects?
The party has a policy, introduced by Simon Bridges, of refunding GST payments to small businesses if they face a 50% drop in revenue, and I approve of this idea, but to grow the economy, particularly after the effects of a pandemic which has completely destroyed some businesses and severely damaged many others, we are going to need more than that. We need incentives. We need new markets. We need new ideas and new products. In other words, we need a government that is proactive, rather than reactive.
National has a reputation for being great economic managers, and in the days of John Key and Bill English, this was true. The party cannot rest on its laurels, however. It needs to prove that it is still the best party for economic management, and policies such as this do nothing to support that view.
You have no idea how much I do not want to say this, but Todd Muller’s National party looks to me more like Labour 2.0 than anything else. And if there is no real point of difference, why vote for them?
If you enjoyed this BFD article please consider sharing it with your friends.