Rodney Hide scored an important goal this week, naming Don Brash to head a taskforce advising the Govt on how it can close the income gap with Aust by 2025. Establishing this advisory group was an essential element of ACT’s coalition agreement with National. Critics say it’s a mistake to select Brash as its head, since it automatically ensures the demise of cross-party support for the project which Hide describes as a mechanism to measure the success or otherwise of action to close the 30% income gap.
Brash says the gap which has emerged over 30 or 40 years is the biggest challenge NZ faces. “The better Australia does, the bigger our task. But we either take on that task or accept we gradually become a distant Tasmania to the Australian mainland.”

Labour leader Phil Goff attacked the Brash appointment as a “Trojan horse” for privatisation, and right-wing ideology, to govern the direction the country moves in. But productivity (shorthand for living standards) is almost certainly the defining issue on which the Key Govt wants to be judged. It is at the core of the Key Govt’s economic philosophy. Where the Clark Govt was focused on social justice, and saw economic policy primarily in terms of income redistribution, the new administration believes lifting NZ’s economic performance is the means to achieve higher living standards and deliver social justice.

The Brash appointment might have been a victory for Hide, (some National Ministers proposed other candidates), but there is little doubt National and ACT are in harmony on the objective. They agree if NZ doesn’t make radical changes, NZ will slip further behind. Brash’s taskforce is to produce an initial report by October though since the other four members of the group have yet to be chosen the target seems optimistic. Further progress reports will then be provided in 2010 and 2011.

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