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| "Nice supermarket chain you have here. Shame if something were to happen to it ... " |
When the Greens suggested a policy calling for a government supermarket, National called it "communist." "Soviet." Now, Nicola Willis wants to forcibly "break up" private supermarkets in a bid to lift its flagging electoral fortunes.
It's of a piece with David Cunliffe's 2006 dismemberment of Telecom, a private company, and the First Labour Government's nationalisation of the BNZ.
I was (initially) impressed with Business NZ's response, which came out swinging. "BusinessNZ is alarmed at National's proposal to pursue the separation of supermarket chain Foodstuffs," said BusinessNZ's Catherine Beard.
New Zealand has long benefited from a reputation for regulatory stability, respect for property rights and predictable policy settings. Measures of this nature risk undermining that reputation at a time when New Zealand needs investment, productivity growth and economic confidence ...
This is a very concerning move by the National Party and sends a chilling signal to businesses across New Zealand ... We consider this to be in the same league as Labour's ban on oil and gas exploration and New Zealand First's promise to split up the gentailers.
Exactly right.
If National really gave a damn about regulatory stability, respect for property rights and predictable policy settings, it would be ashamed of itself. But this of course is the same party which had a Prime Minister who used to make up "mini-budget" on the hoof (so much for predictable policy settings), and went on to introduce the RMA (so much for private property rights).
And of course the hypocrisy is baked in: when Labour's Michael Cullen introduced his Welfare for Working Families, in order to get over the line in another narrow election, National leader John Key described it then as "communism by stealth" -- only to embrace it three years later. (As it happens, Willis was then a senior advisor to Key during this capitulation.)
So National has form.
But if only Business NZ's Catherine Beard had left it at that. Instead. she heads swiftly from the broad uplands of principled opposition to Willis's pledge to strong-arm a private business, and straight into the undergrowth of compromise.
Ms Beard said any proposal to structurally separate Foodstuffs would require rigorous scrutiny of its unintended consequences."Scrutiny."
Increasing competition in New Zealand's grocery sector is a worthwhile goal, but structural intervention of this scale raises significant questions about whether it would actually deliver lower prices for consumers.
National, a party founded to protect private enterprise from the predations of state intervention, will campaign on "pursuing" the breakup of Foodstuffs into two competingchains.
National came into government promising a resource management regime based on property rights. It's going into the next election promising a property rights regime based on a hopeful Cost-Benefit Analysis and vibes.
Great headline - absolutely correct!
ReplyDeleteShe's not only a thief, but a dimwit too. As Ryan Bridge pointed out to her this morning when he interviewed her, splitting them up will likely add to costs due to the duplication of administrative functions and the loss of economies of scale. The market has two main operators for a reason - if it made sense for there to be more in the current economic and regulatory environment, there already would be more. And anyway, as Eric Rush, owner of the Whanganui New World pointed out this morning too, they are franchise owners who already compete against their local PakNSave for customers anyway, even though they're both under the Foodstuffs umbrella. The profit margin from these supermarkets is currently around 3-4% of revenue. So even if you could (magically) make these supermarkets operate without any profit and nothing else changed, they most reduction for consumers would be 3-4%.
ReplyDelete@Mark, you said "She's not only a thief, but a dimwit too...": You're assuming that her primary motivation here is to fix a supermarket problem. Whereas her primary motivation is to get re-elected.
DeleteSo it's the old 'Yes Minister' thing: "Something must be done. This is something. Therefore I must do it."
@Pete: The two aren’t mutually exclusive. You don’t get re-elected by proposing a solution to a perceived problem that is so obviously nonsense. It suggests she at least partially believes in it. I doubt this is going to gain them more votes - if anything it’s going to drive traditional National voters to vote Act.
Deleteand of course, she went on and on about this a year or two ago, so despite the actual findings making the case for this sort of measure weak at best, it's all about being seen to do something for voters. Since she doesn't have enough courage to replace the RMA with a property rights based framework (no doubt because officials, mostly from Internal Affairs and what was Environment don't support it, but act like Sir Humphreys in stopping it), and that takes "too long" and she wont argue based on principle, this is dangling an idea. An idea ACT might stop, but Labour might also back when it comes to it, but who cares about spooking investors when there is an election to win?
ReplyDelete