Capitalism versus prescription

Hort Talk
with Mike Chapman
HorticultureNZ CEO

Shortly after becoming Prime Minister, Jacinda Ardern commented that capitalism has been “a blatant failure”. However New Zealand is and has been for many years, a mix of capitalism and socialistic programmes and policies. This has been the case with all of our governments – no matter what their political persuasion has been.

Capitalism is defined as “an economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state”. But I would argue that very little in New Zealand’s trade and industry is controlled by private owners. Most of our businesses are extensively dictated to by government and councils. This is not capitalism as it has been defined.

New Zealand is embarking on a new decade, with enormous challenge to every business – be they rural or urban – as we collectively meet climate change and improve freshwater quality.

Fresh approach

Government and councils essentially have two options to achieve these environmental outcomes. The first option is to do what has been done over past decades. That is, set in law what is to happen down to absolute detail. The second option is to take a different, outcome-based approach, where government and councils establish what they want to achieve and then partner with business within a regulatory framework to achieve these outcomes.

Many people would agree that what NZ has done for the last few decades has not achieved the desired environmental outcomes. Prescription, laws and regulations have not worked, and – with the massive environmental challenges that we are facing – we can’t just do as a country what we have done in past.

A fresh approach is required. I think the only one that will succeed is working together and trusting and enabling our businesses to perform and achieve the environmental outcomes we all want.

This could be defined as some form of capitalism. However, it is for environmental sustainability and not for profit. This new approach would need to be based on trust and partnership between government, councils and business. Collectively, we can have the impact that is needed.

New maturity level

With climate change, the food and fibre sector has entered into such a partnership with this Government with some very firm outcomes now written into the Climate Change Response (Emissions Trading Reform) Amendment Bill, which will soon be made law.

This partnership approach now needs to be extended to freshwater quality and allocation.  This is because I think it will only be through environmental partnerships that we, as a country, will achieve sustainable outcomes.

I would classify this not as capitalism but as NZ reaching a new level of maturity, where our businesses are trusted to perform to the standards expected by the NZ public, backed by government putting in place the outcomes to be achieved. I would classify this approach as a recipe for success.


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