The man driving Labour's economic policy

David Clark

David Clark has learnt a harsh political lesson – don't do interviews in the car.

The former presbyterian minister, a first-term Labour MP in the safe Dunedin North seat, has been handed the keys to drive his party's economic development policy.

That sits him opposite one of the government's key ministers and Prime Minister John Key's Mr Fix-it, Steven Joyce.

Dr Clark, the man behind the "Mondayisation" bill, agrees to talk NBR ONLINE while he's driving between Dunedin and the small Otago town of Waikouaiti.

But as speaks through his hands-free kit, winding his way towards the Kilmog hill, he becomes unstuck.

An NZIER graph shows trends in the country's "filled jobs", with uplift in Auckland and Canterbury and a decline in public sector-driven Wellington.

Dr Clark, a former Treasury analyst with a PhD in theology, is quick to leap on the government's jobs policies.

"The population's actually growing and it's been growing faster than the creation of jobs, so even though sometimes the jobs figures come through in a mildly positive way, there's actually fewer jobs per capita in the economy and lower wages that go with them.

"Clearly, what the government's doing at the moment isn't working."

He says the government's business growth agenda is largely "policy reheats” but graciously admits it has one or two "smaller things" which are helpful.

However, they "won't turn the boat around", he says.

Pressed to name those "smaller" initiatives and outline Labour's answer, he can't – he says that's the danger of doing an interview in the car.

"I would need to get back to my papers to see what those smaller things are.

"I'm trying, essentially, to cover off the fact there aren't big things in there but you would be pedantic to say there was nothing."

Capital gains a key plank 
As to what Labour would do, the former competitive cyclist who has competed in the New Zealand Ironman triathlon champs says policies are not settled.

But it's likely Labour will favour a capital gains tax, universal KiwiSaver and a wider mandate for the Reserve Bank, to take in jobs and economic growth as well as inflation.

Asked when Labour's policies will starting working and how much they will cost, Dr Clark says he doesn’t have the answers yet.

“I’m two weeks into the role. My real task is to make sure people understand those policies and the fact that they will create jobs, and to say how many jobs and what impact on the economy they will have.

“Labour always gets the heat put on it for its economics and jobs policies, and we don’t shy away from that.”

One thing he says Labour won't be doing is dropping policies close to the election.

In the lead-up to the 2011 poll, when Dr Clark was a new candidate, Labour released a lot of policies “quite late”.

“Where we thought they told a good story it didn’t give us a chance to sell them–  to get the public familiar with them.

“We’ll be trying to do things differently this time round.

“I would like to be bringing out numbers towards the end of this year so that we go into an election year with a clear picture of the kind of jobs policy Labour will have and we’ve got plenty of time to campaign on it."

NBR columnist Matthew Hooton lambasted Labour recently for backing a clear loser with its opposition to the government's partial-privatisation of state assets, now Mighty River Power is being promoted for a public float.

However, Dr Clark disagrees, saying between 70% and 80% of people in some surveys want them to stay in government hands.

“Those who can afford them may well buy them because it’s the second-best option."

Whether Labour wants to buy them back are questions for state-owned enterprises spokesman Clayton Cosgrove, he says.

“Labour has done that in the past but there’s also tight economic conditions and we’re not about to make promises we can’t keep.

"We need be a credible alternative government.

"If the government raises $5 billion out of their sale in a one-off sugar hit, buying them back might cost $5 billion as well.

"We’re not allowed to make that promise if we don’t think we can keep it.”

Eye on Otago 
What about his own patch? Dunedin's population growth has been sluggish compared to the overall New Zealand rate, as head offices migrate north and manufacturing continues to decline.

Dr Clark says Labour's policy of supporting New Zealand businesses in government procurement contracts will help protect manufacturing jobs, like those at the now-closed Hillside Engineering workshops.

But isn't National following age-old policies, such as those followed by Helen Clark's government?

“The situation is becoming more dire with time," he says.

The challenge is to look at today's policies and decide if they are the right ones.

The market can solve problems, he says, but when they're not working the government needs to step in and ensure they do.

What about government research and development incentives, another favourite of the Clark regime?

Fisher & Paykel's Mosgiel factory was propped up with government incentives and it was still closed.

Dr Clark says it is an issue which should be addressed.

However, the country and local community benefited from F&P's continued operations through jobs, income taxes and the support of local schools.

“I don’t think any of that money was wasted.”

Is it any wonder a former clergyman is leading Labour's economic second coming?

He laughs, saying the Labour Party’s roots are from "applied Christianity".

"The economy is there to serve people, not so we can serve it. The markets make excellent servants but terrible masters."

So, what do we make of this?

If the politician some say is being positioned to spearhead Labour's election-winning economic revival is to contribute to such a miracle he needs to move faster to come to grips with the nuts-and-bolts reality of financial credibility.

dwilliams@nbr.co.nz

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