The Government Economic Network (GEN) held their annual conference in Wellington on Monday, 30 November and Tuesday, 1 December 2015. The McGuinness Institute interns attended the conference with the aim of sharing their insights with the Institute and our community. Below is a summary of the sessions on day one.
Day one sessions were centred on two broad themes. The first theme was based around understanding New Zealand’s economic narrative over the next five years. In particular, aiming to identify the key emerging issues that the public sector will need to know about. The second theme, holding these emerging issues in mind, are the key skills and tools that our government will need over the next five years to do their work effectively and efficiently.
Below is a brief summary of the day’s events:
The morning began with an opening address from David Smol, chief executive of the Ministry of Business, Innovation and Employment. David spoke about the role of economics and stressed the importance of economists to keep an open mind while also remaining highly disciplined.
David was followed by keynote speaker Professor Robert Wade who discussed the growing income gap in New Zealand society. He spoke critically of the government’s ‘close-minded’ approach to tackle this massive issue by solely focusing on tax based policies. His view was that we should instead be looking into how we could bring about pre-tax equality in more creative ways. This may come in the form of exchange rate manipulation or perhaps through the introduction of a salary cap for CEOs.
After morning tea, the attendees split up into two groups that each examined a particular topic in detail. The first group focused on changes in population demographics, while the second examined changes in the business environment and the economy, I chose the latter.
In this parallel session, I listened to Shamubeel Eaqub. He gave a fascinating talk outlining the immense change that he expects the business world to experience over the next five years. He demonstrated that we are still struggling with the aftermath from the 2008 Global Financial Crisis, stressing that this recession is ‘shallower and longer than we have ever seen before’.
He also said that although job losses were apparent across all sectors, job recovery has not been. Shamubeel found that high-ranking roles, with larger salaries, resurfaced at a faster rate than jobs paying lower salaries, further contributing to the growing issues of income inequality and poverty.
Later in the afternoon, the Minister for Economic Development, Hon Steven Joyce MP, continued in the discussion of New Zealand’s economy in the immediate future. He provided an insight into what his government is doing to maximise efficiency while minimising risk. The Minister began his presentation by again reiterating the idea that we are still in the ‘hangover’ stage of the recession. In addition to this, he said that we should be optimistic about the next 2 to 3 years as wages are rising at a faster rate than inflation and also as there is significant growth in areas outside of the dairy industry.
At the end of the day Veronica Jacobsen, Chair of the GEN, provided the audience with some take home messages that she felt had repeatedly surfaced throughout the conference:
- We need foresight. However, we must always do our best to avoid assumptions and keep in mind that the past is not always the best indication of the future.
- We must ensure that the policies that we implement are highly flexible and have the ability to adjust and adapt to the economic environment.
- We need the humility and courage to ask for the guidance or assistance that is so vital for effective collaboration.