“You can’t” carries a cost

An excellent op ed by Steven Joyce in the Herald today:

Most of us agree that for New Zealand to be successful longer term, we need more and higher-paying jobs. Jobs provide the incomes that people use to help their families get ahead. Jobs give people the income to pay taxes for the health and education services we value, and well-paying jobs are what keep more of our people making their lives in this country – and that keeps families together.

So we largely agree on the what and the why, but often the consensus unravels a bit when we get to the how. This is a little surprising because in fact the how is not that hard.

Jobs of the long-term, sustainable kind depend on businesses that provide something that people value. That is, something unique, or something of quality at a lower price than their competitors.

There is no other effective way to create long-term sustainable jobs.

And in turn those businesses depend on six key things:

  1. ideas and innovation to create the business (entrepreneurs and ideas people)
  2. money to build the business (capital)
  3. access to raw materials (resources)
  4. skilled people to work in the business
  5. the public infrastructure which the business depends on (power, broadband, transport) and, 
  6. most importantly, customers who want to buy the product.

So if we want more jobs, then we need to look at how to provide more capital, have better access to resources, a more skilled workforce, and good public infrastructure.

We need an environment that is encouraging to entrepreneurs and ideas people. We need to ensure we make resources available for businesses to use. We need stronger and more internationally integrated capital markets that provide money for investment. We need to ensure our people have the right skills. And we need to remember that we have a small domestic market, so our businesses will need to access world markets a lot earlier than similar businesses in countries located in larger world populations.

That doesn’t mean handouts. It just means removing more of the roadblocks that stop people from doing things.

And that’s when the problems start to arrive. The people who say “we want jobs” but then in the next breath say “but you can’t do that … you can’t build that there … you can’t expand that … you can’t explore for that there … you can’t live here … you can’t invest in property here – you just can’t do that!”

And very quickly we start limiting our options. Through the 2000s, as a country, we progressively boxed ourselves in more and more to depend on fewer and fewer industries based on what the “can’ts” said. At the end of it the government of the day was pretty much down to talking only about two of the ingredients – skills training and subsidising entrepreneurs that don’t use resources (the so-called clean-tech sector) – as the bits the “can’ts” were most comfortable with. The rest was off the table.

That attitude made it much harder to pay our way in the world and, as a result, we went into recession before the rest of the world in early 2008.

I am hoping National in their second term will stand up to the “You can’t brigade” and give us more meaningful RMA reform amongst other things.

We live in a world increasingly without borders – at least not as our grandparents knew them. People these days can base their skills, their capital and their ideas just about anywhere. They don’t have to be in New Zealand.

So when we think about the “you can’ts” we need to think about the mobility of people and money. Each time we say “you can’t” carries a cost. That doesn’t mean we should always say “yes”, but we do need to carefully weigh up the consequences of saying no.

And we should learn to stop listening to people who in the one breath chant “more jobs, more jobs” and then in the next breath say “but don’t do that, or that, or that”.

Hear hear.

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