POWER PLAY, with Brent Edwards

7:55 am on 18 April 2014

Voters deserve a rational economic debate from politicians in the lead up to the election in September, not polemic and rhetoric.

If there is one thing that epitomises the challenges facing the New Zealand economy it is the contrasting fortunes of New Zealand Post and the information, communications and technology industry. New Zealand Post's letter deliveries have continued to drop but much faster than the government-owned company had anticipated.

It is already committed to reducing deliveries to three days a week from July next year under its new deed of understanding with the Government, that is meant to be looked at again in 2018. But the company has now warned its shareholding ministers it might have to have review its business plan earlier than that.

Over that period it is expecting to shed at least 2000 jobs as the impact of online business cuts deep into its traditional business. So things look grim for the postal service.

Contrast that with the ICT industry which faces a growing labour shortage. Its industry association estimates there are up to 10,000 vacancies as the industry struggles to find the qualified and talented programmers and engineers it needs. These jobs pay much more, too, than what posties earn working for New Zealand Post.

Voters need to consider best economic prescription

What then does this have to do with politics or the role of Government?

In the lead-up to the 20 September election all political parties will be putting forward their credentials to run the economy. The question for voters to consider will be which prescription is likely to lead to the high value, high wage economy politicians of all stripes have been talking about for the past 25 years, but so far have failed to deliver.

The National-led Government points to the fact it has managed the economy through the worst international downturn since the Great Depression of the 1930s and the effects of the Canterbury earthquakes. Having promised a brighter future in 2008 Prime Minister John Key's message to voters is do not throw away the gains his Government has made. Mr Key has been particularly vehement about the prospect of a Labour-Green government, saying the Greens would drag it to the extreme Left. He also criticises the Greens for being anti-growth.

Green Party co-leader Russel Norman dismisses that attack and in turn accuses National politicians of being anti-growth in well-paid jobs.

The Labour Party has released its manufacturing policy but, in a sign its political management is still not as sharp as it needs to be in election year, it chose to do so on the last day before Easter. The announcement has been buried in an avalanche of other news and will likely die over the Easter break, not helped by the fact Labour's leader David Cunliffe will also be on holiday.

But that policy, the Government's economic approach and the policies of the Greens, New Zealand First and other political parties deserve public scrutiny and debate.

Governments do matter

In the end, while private sector businesses do a lot to create wealth, governments do matter. Just what policies are pursued can influence what sort of jobs people work in and what they can earn. It is particularly important as technology continues to drive radical change - what is happening to New Zealand Post is an example of that - in the economy.

Does the Government have a role to play in ensuring that change, as far as possible, benefits people rather than disadvantages them? For example, can it help provide the training to equip people, in jobs that are becoming redundant, to have the skills to pick up one of the 10,000 vacancies in the ICT industry?

Between now and the election there will be charge and counter-charge about which parties really support growth. Political parties are likely to muddy the economic debate with polemic and rhetoric. But what is really needed is a rational and nuanced discussion on how to create the smart economy governments first began talking about in the 1980s and early 1990s.