Redneck or just cautious – holding back progress won’t work

Over 1000 years ago King Canute commanded the tide to stop coming in as a graphic way of teaching members of his court how silly it was to try to resist the inevitable. It didn’t work then and it’s unlikely to work now.

We have two fine examples at the moment that illustrate this principle – the PSA’s protests over meat inspection trials at three meat plants and the Labour party’s new foreign investment policy. Both tap into the natural conservatism of their core constituencies, represented in one case by the union members who will be affected, if the trials are adopted as future practice, in the other by those New Zealand voters who are aghast at the sale of assets to foreigners.

The PSA’s reaction is predictable, because the trials are seen as a threat to the job security of its meat inspector members, but how refreshing it would be if the union could see the potential advantages of further refinement of a process that has developed through many years of industrial unrest to the present situation of comparatively peaceful co-existence between meat inspectors and companies.

However the obligatory provision of a monopoly service sits uneasily with processors intent on minimising costs and maximising quality and food safety to its export customers. The moves by AgriQuality to establish a competitive meat inspection service would have introduced competition, but the Labour Government of the time wasn’t prepared to stand by and let two SOEs fight each other, so it solved the problem by merging them in 2007.

Meat inspection has evolved enormously over the years, but it has always been a function which has caused a lot of angst to meat processors, not least because meat inspectors are in the unusual position of working in a plant as employees of a separate employer. Wages and conditions of employment are set by a government agency, not by the company they work for.

The trials are not about food safety, whatever the PSA national secretary, Richard Wagstaff, says; they are about following international trends for meat workers to take responsibility for product quality by identifying defects. Nor will this lead to mass savings of personnel or service costs, although some reduction in the duplication of inspection activities is both likely and desirable. NUPE, the other union with meat inspector members, appears more relaxed about the initiative, compared with the PSA which has been raising the spectre of diseased food reaching overseas markets. This over reaction is nonsense and has been termed treasonable by one meat industry representative.

Tony Egan, CEO of AsureQuality, says his company’s job is to work with the industry and the regulator, NZFSA, to deliver the best service to ensure New Zealand meat inspection meets globally competitive standards at the most efficient cost. He makes the valid point the function will not disappear, whatever the structure used to deliver it, so meat inspectors will continue to play an important role into the future, although their employer may change.

The issue of foreign investment in our land and assets is much more far reaching than the delivery of meat inspection services, but it is attracting the same sort of head in the sand reaction, which has encouraged the Labour opposition to seize on it as a vote grabber in preparation for the next election. To quote Phil Goff, “instead of the overwhelming majority of farm sales being approved, the overwhelming majority will be declined” with a 5 hectare limit on purchases not requiring approval. Under Labour, investors would have to invest significantly in further processing and bring new technology to New Zealand. It’s hard to see too many 100 hectare farm buyers meeting those criteria.

Economist Gareth Morgan made the point last week this policy would scare off overseas lenders who wouldn’t accept our ‘funny money’ as security unless they could invest in New Zealand assets and we keep on paying the interest on their loans. If we put the mockers on foreigners buying land and assets, we go back to a fortress economy in which we would no longer be able to borrow from overseas lenders to keep on buying foreign goods.

It looks as if both the PSA and the Labour party might have to give some serious consideration to their stance, but as long as they get encouragement from their members and voters, I wouldn’t bank on it.


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