Another reason why roger Douglas should be Minister of Finance
From the ACT Party website
Govt Should Not Be In The Business Of Business
Posted on 19 Feb 2009
ACT New Zealand Finance Spokesman Sir Roger Douglas today urged the National Government to first set out clear goals about what it hopes to achieve before considering a bailout of Fisher & Paykel or any other private company.
“So far, the only known advice that Prime Minister John Key has sought is that received from a phonecall to Fisher & Paykel’s managing director,” Sir Roger said.
“National is considering bailing out Fisher and Paykel without any financial data or independent advice on the implications – how will Fisher & Paykel raise the required finance now, when any rational investor will fear the company will be nationalised?
“With its accounts already in deficit, the Government can’t afford to prop up businesses. More spending means more borrowing and higher taxes. No one is willing to mortgage their children’s future, so why can National do it through borrow and spend policies?
“Talk about attaching conditions to a potential bailout, like requirements that jobs stay in New Zealand, is worrying. Government should not be in the business of business – we tried that before and it failed. Companies must be competitive and innovative; governments tend to monopolise and stagnate. Picking winners is no way to run an economy.
“The approach to bailouts is similar to the Government’s approach to the ‘jobs summit’ – the plan is ill thought-out and lacks logic, and the only goal seems to be how to retain the number of jobs we currently have. The real issue is about growing job opportunities.
“The only way to encourage job creation is by lowering the compliance costs associated with employing people. Those costs increased 60 percentage points under Labour, and National seems unwilling to get rid of these barriers to employment.
“We must look beyond the short term. While bailouts and jobs summits may reduce fears now, we will regret it when we start repaying the debt we are amassing. Only by lifting our sights, setting goals, and developing policies to achieve those goals can we lift a stagnating economy. We must stop fiddling with the cents and move on to the dollars,” Sir Roger said.