Economic Lessons from New Zealand
Price of Paradise · Hawaii Public Radio · aired 1995-06-25
Guests: Murray Bawden (President, Fletcher Pacific); David McClain (Professor of Business, University of Hawaii)
Duration: 1:00:40

[00:00:01] Randall Roth: Good morning. This is Randy Roth, host of the Price of Paradise radio show. We're broadcast live each Sunday morning from 8 to 9 on KHPR, that's 88.1 FM and KKUA, 90.7 FM. And then rebroadcast each Sunday evening from 8 to 9 on KIFO, 1380 AM. This radio show is entirely the product of volunteers with a goal of generating lively and informed dialogue about challenges confronting the people of Hawaii.
[00:00:28] Randall Roth: We believe such public conversations are absolutely essential if we as a community are going to meet our challenges. This morning's topic is the business and government climate in Hawaii and in talking about it, we're going to focus on some things that are going on in New Zealand. In this morning's advertiser, on page, let's see, B3 in the focus section, the headline says, a kiwi lesson for Hawaii's economy.
[00:00:54] Randall Roth: It's a very interesting article by David McLain, one of our guests in the studio. And another headline says, trim down New Zealand government enhances growth. So we're going to be talking about what's going on in New Zealand and very importantly, what some of the lessons might be for us here in Hawaii. My guests in the studio are Dave McLain, who is the Walker distinguished professor of business and financial economics at the College of Business Administration, University of Hawaii.
[00:01:21] Randall Roth: As that title suggests, he's an economist. He's a former senior staff economist in President Carter's council on economic advisers, and for a number of years headed up the international division of a major consulting firm. Our other guest in the studio is Murray Boden. Murray is the president CEO of Fletcher Pacific Construction Company. It's a subsidiary of a New Zealand conglomerate. Fletcher Pacific Construction here in Hawaii is the second largest construction company here in Hawaii, but as I indicated, its parent is from New Zealand.
[00:01:51] Randall Roth: Murray does a lot of business in New Zealand and I think has some insights in what's going on over there. Dave, Murray, good morning and welcome to Pop Radio.
[00:01:59] David McClain: Good morning, Randy.
[00:02:00] Murray Bawden: Morning, Randy.
[00:02:01] Randall Roth: I think I'll start Murray by asking you if you had a chance to read David's article in this morning's advertiser, and if so, what you thought about it?
[00:02:09] Murray Bawden: Well, I read it. I like it. I think it's right on the ball.
[00:02:12] Randall Roth: How would you describe in your own words what's going on in in New Zealand?
[00:02:16] Murray Bawden: Well, an interesting change is taken place. Uh 5 to 10 years ago, New Zealand was very much asleep and now it's become awake. It was inward looking and now it's become global. Certainly had a negative and pessimistic spirit about it and now it's positive and probably one of the creative spots around the Pacific. Saw itself with no future and now is creating its own future. And it lived in a world where it waited for government to do things for it, and now it's been given the opportunity to do things for itself. The people have come alive.
[00:02:44] Randall Roth: Uh you think there are some lessons to be learned for the people of Hawaii?
[00:02:48] Murray Bawden: Oh, very much so. I think uh because of our cultural similarities, our island nature, and uh um and uh the business environment that that we're facing here, there's a lot of lessons.
[00:02:58] Randall Roth: David, uh and I know from your piece in the paper that you think there are few lessons. Uh what's lesson number one that we ought to be thinking about?
[00:03:05] David McClain: Well, I think the first lesson, Randy, is that uh government has to change from a mindset of being sort of a caretaker and protector of the population into um an agent that creates a situation where people have opportunities to achieve. Uh if you look at at Hawaii today or New Zealand in the past, um government's attitude was that it has to take care of people. And and that can work as long as the economic tide is high, but when the tide is lower, you need to uh get government out of the way and let people uh exercise their natural creative energies. That's what's New Zealand has done.
[00:03:39] Randall Roth: In in your article, there's just a a brief, it may even be one long sentence but a a little story that you told that I thought was telling. Could you pass that on?
[00:03:46] David McClain: Well, a few months ago, I uh wrote a a piece uh that looked at the question of gambling for the state of Hawaii and came down on the side uh of saying that I didn't think it was a good idea. One of our state legislators called me up and and said, you know, I don't really like gambling either, but we've hired all these government workers in in the past several years. We've probably hired too many, but um we need more revenues so that these people can be taken care of. Uh it's not their fault that they were hired now and we certainly can't let them go.
[00:04:13] David McClain: And and that mindset that we have to take care of them because we made a mistake in the past in hiring them in the first place, I think that mindset just can't work in today's environment. If we keep on with that mindset, we'll have a stagnant economy for a decade, which is exactly what New Zealand had uh from 1973 to the mid 1980s after their special relationship with the UK went away when the UK joined the common market and they could no longer send their agricultural products uh so easily into into Britain.
[00:04:39] Randall Roth: So that over in New Zealand, that kind of started with some problems in the agricultural sector. Absolutely. Which has an interesting parallel, I suppose, over here.
[00:04:47] Murray Bawden: Absolutely.
[00:04:48] Randall Roth: Now, David mentioned uh the environment and and Murray, I'm wondering are are we talking about this thing that has come up so often in pop radio shows in the past called the global economy and I'm not sure what that means but is is that kind of the environment that we're talking about right now?
[00:05:03] Murray Bawden: Certainly was the environment in New Zealand uh where New Zealand all of a sudden realized that uh it couldn't look uh to its protective areas of of Europe and couldn't look internally to generate enough money so it had to really look outside its shores. I think uh Hawaii is the same. We really live in the middle of a whole global global economy because uh the people that come here and invest and do business are globally based people and the people that are really switched on and are looking outward outward from Hawaii uh looking at the global marketplace. So we really have to now start to look at operating in a global environment even if our globe is Southeast Asia and the Pacific Rim.
[00:05:40] Randall Roth: So we can't choose to simply decouple from this global economy that we've got to somehow um survive within it.
[00:05:48] Murray Bawden: Yeah, I think we have to survive within it. We have to learn to grow within it and take advantage of it.
[00:05:52] Randall Roth: Okay. David?
[00:05:53] David McClain: You know, uh if you if you talk to um the New Zealand prime minister, their finance minister, and you ask them what their vision for the country is, uh they put it this way, uh they see an an opportunity society based on international competitiveness, successful abroad, secure at home, with a highly skilled independent people, and of course, a safety net for social welfare purposes. I think that's a very articulate and and focused vision that is seems to have been successful in New Zealand and could well be successful for us.
[00:06:20] Randall Roth: Okay. Murray, in David's piece in the paper this morning, he makes mention of some changes with respect to unions, uh management labor relations. Uh you're a businessman. I assume you work with with a unionized workforce here in Hawaii?
[00:06:33] Murray Bawden: Yes, certainly.
[00:06:35] Randall Roth: Um any thoughts in terms of what's gone on in New Zealand and and what lesson perhaps there is for the people of Hawaii with respect to management labor relations?
[00:06:45] Murray Bawden: Uh first of all, one has to understand that I think the the union in industrial relations in New Zealand and Australia as compared to America are quite different. Certainly far more cooperative to start with uh here in the states than it was out of the British system. But in New Zealand, they got to the point where uh workers didn't have jobs, there was no future for them, the nation was falling apart, uh and the unions were really just sitting back being the communicator to the workforce.
[00:07:09] Murray Bawden: And what happened down there was that uh out of this situation where no one saw any hope, I think uh the unions gave in and government deregulated and what happened management for the first time legitimately started to talk direct to the workforce and participation with labor really became more of a walk than a talk. Now, in Hawaii, I think uh we're a totally unionized state for the most part in most industries, including construction, and we have to find a way now to start to walk the talk a little bit more, even though total deregulation, I don't think is uh is a viable option for us.
[00:07:43] Randall Roth: Let me see what David McLain thinks about that.
[00:07:46] David McClain: Well, you know, what I'm what I find really striking and and provocative for Hawaii is that that when I talked to New New Zealand's political leaders and I said, how much support was there for passing this employment contracts act in which uh employees and and employers are now allowed to negotiate wages and conditions with or without the involvement of unions. That was passed in 1991. I asked the finance minister uh uh Bill Birch and he said, well, you know, I don't think the the body politic would have ever voted for that directly, but they were so unhappy with the way things were going that they voted for our party and we said that that was part of our platform that we would in fact put in what is essentially a right to work law like we have in the southeastern part of the United States. And and he said it's been enormously successful. Now people uh really believe that this kind of flexibility is essential to a competitive and functioning economy.
[00:08:32] David McClain: Um since the act was passed, some 130, 150,000 jobs have been created, which in a New Zealand context is quite large. Um so and the unemployment rate has dropped from about 11% to about 6 and a half% now. So there's a lot more flexibility in the labor market. And it's one of those from a political point of view, it's one of those interesting things where probably nobody would have been comfortable with it as a single issue, but as part of the larger setting where things were just not going well at all, it was able to be implemented.
[00:08:59] Randall Roth: Okay. Something else in in David's article, Murray is uh a reference to privatization. Um is that anything that you have any any opinions about?
[00:09:08] Murray Bawden: Well, again, New Zealand showed us the way that if government steps out of the businesses that uh are best run by the competitive forces and the and the private free enterprise system, uh the jobs are created and creativity is achieved, and I think here we can probably look at some ways that we can move outside of uh the circle that we've currently created for ourselves.
[00:09:26] Randall Roth: Can you give me one or two examples of things that are done by government in Hawaii now that perhaps could be done by the private sector better?
[00:09:34] Murray Bawden: In the industry that I'm in, I think that uh really a lot of the creation of the built environment could probably be freed up so that the private sector could take charge of that. It's prepared to do it, and I think there's finances available both internationally and nationally to come in. For instance, in schools, we've heard a lot in the last six months about or two years probably about privatizing the development of schools. Uh we could uh I think quite easily move into the area of privatizing school development. But again, you see the public servants are really trying to protect their jobs because they've always done that. They probably need to need to do that unless government gave them some creative options. Prisons are the same area, maybe some of the state run uh health facilities are the same areas. So just from a construction point of view, I think we could get a lot more built services that are needed today.
[00:10:19] Murray Bawden: So um I think uh uh that that's one area that we could move move out of. I think also creatively, we could look at pockets of the airport and certain sectors of the travel and tourist industry that we could privatize.
[00:10:32] Randall Roth: Okay. David, any additional thoughts on privatization?
[00:10:34] David McClain: Well, I think in telecommunications, that's a natural area. We already do have um some efforts underway in in that area to deregulate the telecommunications environment and New Zealand can really show us the way. They've they've been very, very creative in that regard.
[00:10:47] Randall Roth: Is deregulation kind of a form of privatization in the sense that government [unintelligible — audio glitch] less involved, less dictating what goes on?
[00:10:54] David McClain: That's a good point. I mean, no company ever is totally private. It exists in a public context and and no company I suppose is ever totally public. There's a private uh uh society that it serves. But yes, de-deregulating means loosening the hand of government on the industry in question and uh Telecom New Zealand and a number of other indus uh companies in that industry, in the electricity area, there are over 40 independent power generators in in New Zealand. And yet I think what we see in that society is they've been they've been cautious about moving forward here. There's just been a debate over whether to privatize the provision of water. And they've decided no, not to do that. That's that's too too central, too important and and it wouldn't work in that context. So you know, it it it's not sort of a knee jerk reaction that we see going on in New Zealand, but a thoughtful look, where can we get these efficiencies? And the mindset is always to get as much efficiency as you can consistent with the security of the society.
[00:11:47] Randall Roth: Is that really the primary goal of a society, efficiency?
[00:11:51] David McClain: It's not the primary goal. The primary goal is a good standard of living, it seems to me, but to get a good standard of living, you have to have options. You have to have choices and the best way to get choices is by making uh the pie grow rather rapidly and the choice that that we often pose for ourselves is whether to to heavily regulate and and have a very equitable distribution of what I think would be a relatively small pie or to deregulate and to have the pie grow rather more rapidly and then trust in the process that there'd be enough for everybody there. Now, um you know, [unintelligible — audio glitch] lack of trust I think is something else that's characterized our our local economy and New Zealand seems to have overcome that.
[00:12:35] Randall Roth: Murray, you and I talked some time ago about what's going on in in New Zealand and you mentioned something else that um that wasn't mentioned in in David's article, something about their their native population, land claims. Uh everyone here in Hawaii knows generally about uh the whole sovereignty movement and the various lawsuits and whatnot. Um can you tell us just a little bit about what's going on in New Zealand that has uh a parallel of sorts to what we're seeing in Hawaii?
[00:13:00] Murray Bawden: Yeah, I'm not right up to speed with exactly the details of the movement, but I know that there are three major land claims and there has been a lot of uh lot of emphasis in this particular area for a long, long time in New Zealand. And as part of this whole new approach of government looking to solve problems and open up the way, I think we're seeing again, the New Zealand government coming uh uh coming forward and taking a a positive step and saying let's solve these issues and and let them not and stop them festering and stop them becoming bigger issues.
[00:13:31] Murray Bawden: So we've just seen uh I think David was telling me earlier that we've just seen a conclusion where the crown, whether it be the Queen herself [unintelligible — audio glitch] the or the agents of the Queen have now just issued a major public apology, which was one of the things the Maori people were looking for. What's similar with here? I think similarities between the people and the way in which the land has been used and manipulated over the earlier years of our establishment are similar. And I think we probably would uh do well to not just let the land claim people look at what might have happened in New Zealand and become the real aggressor, but also look at the way in which the New Zealand government and the New Zealand people have tried to find that balance.
[00:14:12] Randall Roth: Okay. David, I'm about to uh not just invite but encourage calls and I'm I'm sure we're going to get some from people who look at the world differently. Anything else you want to put out on the table so far as our topic is concerned before we um encourage listener involvement?
[00:14:26] David McClain: The only thing I'd say is that one one of the ways to test whether or not this is working is by by looking at the flow of foreign capital into the economy uh because in a society that doesn't save uh enough to achieve its economic growth objectives, you definitely need foreign capital. And if you look at the charts that come out uh about the flow of foreign capital, it was really non-existent until uh the early 90s when the government put in place uh a number of laws and we discussed several of them that that created an environment where the government was responsible for the society's development in the sense that it got out of the way and let the private sector operate.
[00:14:59] David McClain: Foreign foreign capital has flowed in as in a in a gush. It's made the New Zealand currency strong. Um it's really a remarkable story.
[00:15:06] Randall Roth: It's interesting. You showed me a few graphs the other day and in New Zealand over the last five or six or seven years, it seemed like all of [unintelligible — audio glitch] good things, the line is going up. You look at the counterpart here in Hawaii, the same graph, the line is is coming down. Um are things to a point in Hawaii where folks are going to be willing to make the kind of changes that that they made in New Zealand?
[00:15:28] David McClain: It's hard to say, but you know I asked I asked Murray uh before the program began, how is it that Roger Douglas, who is the the labor party, not the party in power now but the labor party finance minister who got all this going in the mid 80s, uh Roger is a pig farmer. And and and how is it that Roger Douglas, a pig farmer got national attention with this fairly uh uh conservative market-oriented, almost libertarian agenda?
[00:15:49] Randall Roth: Be very careful here, David. I I come from a farming family, but go go ahead.
[00:15:53] David McClain: So do I, actually. And and so I'm particularly sensitive to how it is that farmers get attention because typically uh we haven't gotten a lot of attention. And and what Murray said is that things were just so bad that finally people started to listen and they were forced to make a change. Whether things are so bad in Hawaii, I don't know, but as I talk to the small businesses around the state, they don't think it's very good right now.
[00:16:14] Randall Roth: Yeah. You're listening to the Price of Paradise Radio show. I'm Randy Roth. My guests in the studio are David McLain, who's the Walker distinguished professor of business and financial economics at the College of Business Administration, University of Hawaii. He's a graduate of the University of Kansas. Yay, Kansas. And uh has been former let's see, senior staff economist for President Carter's council of economic advisers. He was um an official with an international um consulting firm. Uh he likes to play golf, he says not well. And uh basketball and uh an all right uh guy.
[00:16:48] Randall Roth: We've got Murray Boden, another neat fellow, who's the president CEO of Fletcher Pacific Construction Company here in town. He's Australian by birth but has been involved in the construction business for uh 38 years and the last uh 15 or so with Fletcher Pacific, which is a subsidiary of a New Zealand company. He started out as a carpenter. Um he's been working in around the world on a number of construction projects and has been here in Hawaii since 86. He's uh loves to garden.
[00:17:16] Randall Roth: He for many years played Australian football, which I think is pretty rough by comparison to some other places and uh is very active in his church and other community activities. Well folks, you've heard what um our guest in the studio have to say and perhaps you've read David's piece in this morning's advertiser with the headline A Kiwi lesson for Hawaii's economy. Generally, we're talking about what's gone in gone on in New Zealand over the last 10 years or so and also what lessons we might here in Hawaii have learned from it.
[00:17:44] Randall Roth: What do you think about our business and government climate in Hawaii? The number is 955-8821. If you'd like to ask a question or make a comment, give us a call. Well, we've got somebody from Manoa on the line, Malcolm. Good morning, Malcolm.
[00:17:57] Speaker 3: Hello. Uh you just asked of the panelists the question I'd called, which was how bad do things have to get before the people at the top realize things have to change. Um and I guess your panelists gave as good an answer as they can to that. Uh I'd like to observe that uh it seems that our governor recognizes things have to change but some legislators uh are in denial. Okay. Uh
[00:18:26] Randall Roth: David McLain is nodding his head up and down as if he agrees. Yeah.
[00:18:29] David McClain: I think I think that's really right. I think Governor Cayetano and and certainly with some of the appointments he's made to his cabinet really indicate that he thinks it's it's uh time to take a look at how things are done. I don't think he sees his way clear yet, but I know he's uh certainly doing his best to get uh the the best kind of economic and uh political advice he can about how to move forward.
[00:18:49] Speaker 3: Uh I'd like to ask another question. The the uh labor party lost after Roger Douglas instituted these policies. Um there was uh
[00:19:00] David McClain: And evidently the Conservative party, whatever it's called, pledged to continue them.
[00:19:11] Randall Roth: Are they regretting having started this?
[00:19:13] David McClain: Well, yeah. Was the accession to power of the other party in part due by people who didn't like the policy sitting out the election?
[00:19:21] Randall Roth: Let's, let's see what David Mclaine says because I know the people who are real interested in the political side of this and the folks that don't want to be voted out might be concerned about this, David.
[00:19:29] David McClain: Malcolm's observations a very good one and and let's do remember that New Zealand is 10 years into this process of change. I asked exactly this question of the finance minister Bill Birch when we were there and and I said, didn't you just sort of take advantage of the fact that Roger Douglas came in, upset the apple cart. Anytime there's economic change, there are winners and losers. The losers scream bloody murder and and out went um the Labor party.
[00:19:52] Murray Bawden: And Labor is is the counterpart of our Democratic party in terms of being on the left side of the spectrum.
[00:19:57] David McClain: Essentially that's right. And the National party is is the counterpart of the Republicans, although there are many now new parties proliferating in New Zealand. And and what what Bill Birch said was that um there were other factors besides what I mentioned, but basically that that was a strong strain in in Labor's downfall, that the pain had been just too significant at the beginning. And and yet the interesting thing was the party that replaced Labor said we just have to stay the course, you know, that there will be this sort of pain and that that fundamentally um uh we're on the right track.
[00:20:31] David McClain: It was almost an advantage for New Zealand that the party that would tend to be on the on the left of center of the spectrum initiated this this change.
[00:20:39] Randall Roth: Sometimes it takes a Nixon to go to China rather than the other party. Murray, any thoughts on this?
[00:20:43] Murray Bawden: Well, I think I think it's just a process of change. I think when you take such a major change of direction of a nation, even though the nation really wanted some change, it was too dramatic for the people to come to grips with, and the hurt in the early stages was severe. And the consequences of that hurt really was a change of government. So the party that initiated the change that is now really turned um has woken up New Zealand and turned it into a nation that's going forward, really is the party that is going to struggle now to get back into power because the it really went through the four years when people didn't know that they didn't really come to grips with the fact that they wanted to spend the amount of time, the amount of money, and the amount of hurt.
[00:21:23] Murray Bawden: So I think that was a consequence of their decision.
[00:21:26] Randall Roth: Okay. Malcolm, we need to move on. Thank you very much for your call. We've got a caller on a cell phone from Iaa. I guess it's because I'm from Kansas or something like that. Chris, good morning.
[00:21:39] Speaker 1: Good morning. I just have a quick question uh, specifically for Mr. Bodden. I've been watching the news lately. I caught an article that the Mauries, a group have picked up a big property in one of the central cities and are planning to convert it. It seems like the Mauries have done a lot with the the version of the sovereignty there, and I'm wondering if Mr. Bodden has any comments with uh how that may relate to Hawaii's struggle right now. Thank you.
[00:22:07] Murray Bawden: Yeah, I think I think that both sides can learn. That's what I said before. The Mauries certainly have picked up some rights. They've picked up some fishing rights and they've got some industrial rights now and they have done done it, I think a little bit better than the Australian aboriginal that just really tried to take hold of and say it wanted all the major portions of land around the country. The Mauries asked, has swung the pendulum a long way and asked for a lot of prime real estate and a and a lot of prime industrial areas, but have now finished up finding this balance and compromise that the government is starting to say, we'll give you some of this and we won't give you all of that and we'll give you the apologies that we need and we'll um give you the right position and right stature back in the community.
[00:22:46] Murray Bawden: So I think that the Hawaiian people looking at the Mauri situation are really on the right track. My encouragement is that government and the other side of the of the spectrum here in Hawaii should now look at what New Zealand is doing and maybe to some extent what Australia is doing with its aboriginals to see whether we can learn how to find that balance.
[00:23:04] David McClain: Okay, David Mclaine, my sense is that the Mauri people really represent something of an example of um uh what Native Hawaiians can can achieve. Believe me, things are not perfect at all. There's a good deal of dissension still in New Zealand about how among the Mauries, about how they're being treated by the government. There has been the settlement of one of the three major land claims, and that's encouraging. The Mauries have done a good bit to get instruction in their own language in the schools and television broadcasts in their own language and that sort of thing, and I think that's that's all really very positive.
[00:23:40] David McClain: The Mauri culture has a lot to offer the New Zealand environment in the same way that the Hawaiian culture has a lot to offer ours, but it's never easy, it's never simple, and I think the struggle continues, and I think we would be, we would be too facile to suggest that that's not the case.
[00:23:56] Randall Roth: Okay. Thank you, Chris. We've got a couple callers from Maui. Let's go first to Craig. Good morning, Craig.
[00:24:01] Speaker 2: Good morning. I'm calling from the island of Maui. I had lived in New Zealand for several years and it was over a decade ago when a time when it was extremely stagnant, the economy, and many of the most talented people appeared to be leaving to go abroad. I know it's the fashion in New Zealand and Australia to go to England or perhaps even the United States or Canada um, for economic reasons, where salaries are generally much higher than New Zealand.
[00:24:23] Speaker 2: One of the things I wanted to stress, and I don't want to digress too much, is the educational standards are superb in New Zealand. That's one of the fundamental differences I see between Hawaii and New Zealand. As you know, New Zealand has some of the highest reading scores in the world, its literacy rate is excellent and it's used as a model in the English-speaking world for reading.
[00:24:46] Randall Roth: Craig, let's let's see what our guests in the studio have to say about that. Dave Mclaine?
[00:24:49] David McClain: I think that's an excellent point and it's honestly one that [unintelligible — audio glitch] my recent look at the economy now and and my association with it a few years ago, I I never bubbled to the top for me but I I really think that's an excellent point. There's no question that Chris is right and there's also no question that I'm sorry Craig is right. There's no question that at the same time, Hawaii hardly measures up in that fashion.
[00:25:13] Speaker 2: I have to be honest, I teach in the Hawaiian school system here and again I know it's not fashionable to talk stink, of course in the islands. And again, I'm not trying to make the same kind of comparison, you have a Scottish heritage, an involuntary voluntary settlement of a rather lush abundant country. And I think one of the things we have to stress is the fact that New Zealand is the size of California. It has comparability about 3 million people, and the South Island of course is virtually uninhabited, but the standards were brought from Scotland or the British Kingdom and the standards are superb.
[00:25:42] Speaker 2: I lived in Australia as well and of course there's great differences like Canada and the United States. I find Australia far more Americanized. That's what I found so attractive about New Zealand.
[00:25:51] Randall Roth: Craig, let me see if Murray Bodden has any thoughts about anything that you've been saying.
[00:25:55] Murray Bawden: Well, Craig, you know the famous joke, if you live down there, that Prime Minister Long, I think put his foot in it or, no, it might have even been before Long, when when the complaint was coming from the Australians about all the New Zealanders moving across to Australia to take advantage of the higher higher social service benefits and also the higher wage structure where in in answer in Parliament to the question from the Australian government, he said that the movement of New Zealanders into Australia was lifting the IQ of both nations. That is very true. And I think from an educational point of view, I mean, New Zealand is one of one of the top nations, has some of the best engineering and science schools in the country.
[00:26:32] Murray Bawden: The other point I wanted I wanted to make on what you made was that I think one of the things that's happened with New Zealand and and Australia too is that we are pioneering people. Whilst we really started out about the same time as as America, we really haven't grown very big or very fast. And so I think one of the interesting things about both those countries is that people really still have a pioneering spirit to have a go at things. One of that is to go outside of the country for a few years, some for economic gain, but generally just for experience.
[00:27:01] Murray Bawden: They've got nothing to lose by leaving behind. Most of those people as you know, come back. And New Zealand at the moment is getting a lot of its best talent coming back to New Zealand and is starting now the lift the businesses. A lot of them coming back leaving major corporations, like the one I work for and starting up their own businesses, because of what's happening in New Zealand. Opportunities for creativity are great. Government's encouraging that and has got out of the way, hasn't answered the difference between Australia and New Zealand. The answer is very clearly. I think Australia is very much like America and follows American models and New Zealand is very much like England and follows the old Commonwealth model still.
[00:27:38] Randall Roth: Murray, let me ask you, you mentioned pioneering spirit. What do you think here in Hawaii? Do we have a pioneering spirit here in Hawaii?
[00:27:45] Murray Bawden: I don't think we do because I think that we really haven't yet got a real core of people, enough people that have really committed their life to making Hawaii their their home of choice. And so I think we've got people that come here and then leave here, instead of people that are based here, children growing up, and you know all the stories for that. We just haven't got the ability to provide the housing and the lifestyle and the and our cost of living is too high to keep our young people here.
[00:28:09] Murray Bawden: We've got to solve that over the long term.
[00:28:10] Randall Roth: David, do you agree generally with what Murray just said, and if not, why not?
[00:28:16] David McClain: I think I guess I have faith that there's a pioneering spirit here in Hawaii, but I think it's been sort of suppressed by um the good times that we had for such a long period of time. A whole generation of people didn't really have to live by their wits because things just came to them easily once you have the jet plane and statehood and you had 30 years of great growth and tourism. You had beaches and lots of sun.
[00:28:35] David McClain: And the Japanese bubble and all sorts of uh benefits for a while from that. So I think the I think the spirit's there, I think it's latent, and I think the fact that we've had almost a generation that has not had to be pioneering is is a worry for us. I hope we can rekindle it, but we certainly need effective political leadership to do that.
[00:28:52] Randall Roth: Okay. Craig, you've generated an interesting conversation. Thank you.
[00:28:55] Speaker 2: Thank you.
[00:29:17] Randall Roth: Patrick.
[00:29:17] Speaker 5: 20. Um I'm wondering how important you gentlemen, uh uh think the uh, well, well, to digress, we visited, uh, we live here and have lived here for uh over 20 years and visited New Zealand last summer. And speaking to the uh local entrepreneurs there, what we found to be so strikingly different there than here, was that the the two things that were most important, uh at least as far as their GDP and uh versus ours nationally and um uh locally, was that they uh they lacked um they they already uh undergone uh tort reform where there was just a a lack of a personal liability uh situation where you couldn't just uh sue someone because uh uh they you slipped on a banana peel and their floor. Well, hey, uh the attitude there was, hey, you were pretty silly not to be looking where you were about to step versus, hey, uh it's his fault for having the banana peel on the floor floor in the first place.
[00:31:21] Randall Roth: You know, Patrick, you're raising um a great topic, and we're going to do a show on that. I don't yet have it scheduled. Um the producer Suzy Roth is working on it right now, but I'm going to to pass over that right now because we we don't have a legal expert in the studio and we are going to do a show on that sometime in the not-too-distant future.
[00:31:40] David McClain: Well, add add to that the presumption clause as well for the employers here where [unintelligible — audio glitch] presumed that that any employer uh or employee uh disability or whatever Right, uh is is the fault [unintelligible — audio glitch] or it's just resultant from the workplace.
[00:31:56] Randall Roth: Well, in fact, that one relates those don't exist there and do exist here and that seems to be a seven to 10% advantage that they have in their GDP upside.
[00:32:04] David McClain: That relates directly to our worker compensation system and Murray, I know from past conversations with you, um you have an interest in that. You're president CEO of a big construction company, second biggest construction company in Hawaii. Um what's your experience been with the Hawaii worker compensation system?
[00:32:22] Murray Bawden: Well, worker comp and we've heard a lot about it in the last six months, but workers comp really has been one of the killers for business, both big business and I think more particularly small business and the uh the stuff that we heard talk about talked about around Hawaii in the last six months is really true for small business in particular. What we have really come to see is is that the worker seems to have far more rights than the employer and there doesn't seem to be a balance in the system. And we are and we saw a lot of people taking advantage of the system. Um, some attorneys that uh really didn't look at things the right way in my opinion, and some insurance companies that wanted to take the easy way out. And that really doesn't exist in New Zealand um because um there's a lot more protection and a lot more balance. What what I saw here was that we had a lot of employees that finished up getting two paychecks, and finished up uh with maybe 70% of a disability that started out with only a 20% payment for them, getting 70% payment for that same disability.
[00:33:20] Murray Bawden: We also found that a lot of people were malingering and uh getting paid worker's compensation and taking second jobs, and the people that we had employed uh that were handling our worker's comp for us, the industry as such as as we as we then knew it, really weren't following them up. So we turned our own into our own insurance companies, we did our own investigation, we take on our own research and we go and do our own uh counseling and communication with our injured workers at the moment. Something along the lines that we do in New Zealand, and we find that actually that's working for us, and we haven't sat back and waited for government to make all the changes that we'd like them to make. So I think again, coming from that environment, we've found some ways to do things a little differently.
[00:33:58] Randall Roth: Okay. Thank you, Patrick. Appreciate your call. We've got a caller from Honolulu, Oscar. Good morning, Oscar.
[00:34:03] Speaker 4: Good morning. Uh my question has to do with uh the relationship of uh government to small business. I was intrigued with an article this morning, Sunday paper, it may have been mentioned um about the problems of small business, and they're closing up because of mainland competition. And they um uh they point out that many of these mainland firms offer uh amenities to their companies, they do business with like buying them sweaters and other kinds of amenities, and uh overcoming the competitive edge with the local outfits. Now, I know that there are limitations to comparing New Zealand to Hawaii, but um apparently government does have to provide some some support and and help to small businesses. And what is New Zealand doing that we can learn here that could help our small business to survive with strong mainland competition?
[00:34:52] David McClain: Okay, David Mclaine. I don't know the specifics of the New Zealand government's small business assistance program, but but certainly there is one. But I would say that that [unintelligible — audio glitch] big dimension of of the New Zealand policy towards small business is that government's mindset is to create a fertile playing field, a a field where creative ideas can happen. As I mentioned in my article this morning, the email that we use at the College of Business was created in Dunedin on the nearly uninhabited South Island of New Zealand. Um that's an export product that has clearly been quite successful. Um and clearly a small business uh has has done that.
[00:35:26] David McClain: What the government has has done instead of trying to provide a lot of subsidies and that sort of thing is to is to create an environment uh where people can be creative and are not um fettered by government regulation.
[00:35:41] Murray Bawden: Can you find an example of this environment creation you're talking about?
[00:35:44] David McClain: Well, I I think I just gave you one, which is this uh firm on on the South Island, which is a high tech uh software firm uh that's able to export its products and use the telecommunications network uh to market itself. Um, you know, there are lots of other email products around.
[00:36:01] Randall Roth: So you're saying government in New Zealand has removed barriers that used to be there, and here in Hawaii, the barriers are still there.
[00:36:08] David McClain: I think so. I mean, when you when you talk about uh building anything, certainly Murray knows here in Hawaii, it takes five to seven years to get something done. Uh, there are all sorts of permits uh that that are required for a variety of things and and I my sense is that a New Zealand setting uh that's that's much less the case.
[00:36:25] Randall Roth: Okay. Oscar, thank you for your call. Thank you. Uh, you're listening to Pop Radio. I'm Randy Roth, and my guests in the studio are David Mclaine, the Walker distinguished professor of business and financial economics at the College of Business Administration, University of Hawaii, and Murray Bodden, who's president, CEO of Fletcher Pacific construction company. It's a subsidiary of a New Zealand conglomerate. We're talking about the business and government climate in Hawaii and also what's gone on in New Zealand and the lessons that we might learn here in Hawaii from that. If you'd like to ask a question or make a brief comment, all you need to do is call 9558821.
[00:37:04] David McClain: David, you know, just one follow-up on that small business question that Oscar um uh called in with just a moment ago. Recently, um the um uh in conjunction with the annual meeting of the Pacific Basin Economic Council, the University of Hawaii, East-West Center's Apex Study Center held a conference on leadership in small and medium enterprises, and we videotaped the results and we'll distribute them around the Pacific, and the keynote speaker at our conference was the New Zealand finance minister, so he he was charged with telling us what New Zealand had done for small business and so uh what he said to us was what I what I just said a moment ago, the key is creating the environment in which people can be creative. That is the single most important contribution.
[00:37:47] Randall Roth: And this goes to this pioneering spirit. Exactly. Okay. Something Murray, that you and I, we talked some time ago about the cost of construction in Hawaii, and you were saying that if certain changes were made in Hawaii, that the cost of construction
[00:38:00] Speaker 6: could more than be cut in half. And you were giving me an example of of what it cost for unskilled labor here in Hawaii as compared to some other places on the mainland or the Pacific or around the world. Could you tell us a little bit about that?
[00:38:16] Speaker 7: Yeah, I want to correct, I think we can cut construction cost by a third, if we really made some radical changes, maybe not by half. I think one of the interesting things that's happening because so as it's happened in a lot of other places around the world where the unions uh have really taken a dominant position and management hasn't haven't kept up with them, is that the labor cost just keep going [unintelligible — audio glitch] we can't really keep doing that, particularly in a place like Hawaii.
[00:38:41] Speaker 7: Because if you look at Hawaii now somewhere, the cost to a company like ours of uh union labor, unskilled labor is somewhere in the in the 40 to 45 dollars an hour. If you go and work in Florida or parts of the of Texas at the moment, um, where there is the opportunity for people to work union or non-union, the total cost to a company can be as low as 12 to $15 an hour. If you go and uh and and work in a place like Guam or Saipan, which is still American controlled territories, where people are looked after well and protected by by the right sort of social rules and and regulations, you can get the labor now for uh anywhere from 6 to $12 an hour and then you go and work in places that we're going to have to compete with for our services in the past, parts of Southeast Asia and and the Middle East where I'm currently working at the moment you get labor down to a dollar to a $1.20 an hour.
[00:39:30] Speaker 7: Now, I don't think that's where we want to go and I don't think we want to break what the unions have now achieved for the workforce, I believe that's been good. But somewhere we've got to stop this process of just increasing salaries and wages to everybody by a percentage on an annualized basis, irrespective of what's happening to the economy, and irrespective of the productivity performance uh of of each business unit. And so we've got to find a way to get management and and labor back together looking sensibly at what is the right sort of reward for effort.
[00:40:04] Speaker 7: And really, in fact, can we find a way where we get paid for our performance and our productivity, so that then we're all sharing in the ownership of both the corporations that we work for, and also in the ownership of the state that we live in.
[00:40:16] Speaker 6: Okay. Well, we we're going to go to the phone in just a moment. I want to remind listeners that this is pop radio and if you'd like to ask a question or make a comment, you can call us at 955-8821. Steve in Waikiki, good morning.
[00:40:28] Speaker 8: Good morning. Good morning to you and good morning to your panel. A fascinating discussion. And uh, uh, two quick comments and then a question. Quick comment number one. With all the similarities between Hawaii and New Zealand in many ways, there's obviously the striking difference of the fact that New Zealand is relatively under populated uh, with regard to, you know, relation relationship of number of people to amount of land, whereas Hawaii is very much on the edge. And that I think points to a second my second comment, which is that while New Zealand can develop production, we have to develop services in Hawaii. Uh and and that's a different sort of cut on the economy. And then my question, does New Zealand have anything that it can show us about the cooperative relationship between management labor, for instance, uh, um, profit sharing or other kinds of things which are not being done in Hawaii, which has has always had this very strong management is management, labor is labor mentality over the years.
[00:41:30] Speaker 8: Do they have anything that they can show us where we can get into that arrangement and both share in the profits if we do well?
[00:41:36] Speaker 6: Okay. And I'll get off the phone and listen. Thank you, Steve. Dave Mclean.
[00:41:39] Speaker 9: A a couple of comments. Um, first of all, as I see New Zealand's competitive advantage evolving, it's exactly in the same direction we're using, which is the direction of services. I already made the uh allusion to the software firm. Any any um industrial country, any wealthy country, as New Zealand certainly is, is going to have to go in the services direction. It's going to have to use knowledge based comparative advantage. Yes, they have a lot of land. The only use to which they they will increasingly put that land that will matter for them in an export sense is tourism, which is something we understand very well.
[00:42:11] Speaker 9: With regard to um, whether there are any specific examples, profit sharing arrangements and or or whatever, I think the point is that with the employment security act of 1991, all sorts of possibilities have been opened up between firms and and um and their employees. Um, some firms will do profit sharing, some will not. Uh there's just a whole lot more flexibility.
[00:42:32] Speaker 6: That's the keyword in New Zealand, flexibility as opposed to here.
[00:42:35] Speaker 9: Exactly.
[00:42:36] Speaker 7: Okay, Murray. I think what happened in this uh labor management and incentives to the workforce uh some five years ago when they brought the employments contract act in known as the ECA in New Zealand was that all of a sudden it gave options to both the workers and the employers and it took the absolute control away from a regulated union union movement, but it didn't cut out the union movement and didn't cut their options off. Now, what's happened in most businesses, as I understand it, and certainly in my business, and we're an employer in New Zealand of probably some 12 to 14,000 people in New Zealand alone, one of the largest employers in the in the country, um is that we've been able to create different rules for different workshops and different rules for different industrial bases in our company, uh that suit the employees.
[00:43:24] Speaker 7: Now that's taken five years to get their trust. It's taken five years for management to really come to grips that they want to trust the workers. But what's happening now is that we have created individual contracts for people and we've created uh workshop agreements with people where they really have a sense of ownership, and they really are now being rewarded right down to the blue collar shop floor level uh on performance base. They're are getting profit incentive schemes. Generally, the companies have switched on to say that we won't set profit schemes by paying a uh fixed percentage performance per per output, they will make an output based, and they'll do all sorts of creative things from holidays to Hawaii or Australia to share shares in the company, to some cash that's paid at the time of employment.
[00:44:09] Speaker 7: So there is a lot of creativity being created in the in right across that country and rewarding people for their efforts now, and that seems to be what people want. As I understand it, from a survey just recently done, that uh people on individual contracts in New Zealand now are about 80% saying that they are more satisfied with pay and conditions than they were before. They are more committed to the performance of the organization because they sense that they have a piece of that company, and they are more believing that good performance will continue to be recognized and rewarded financially.
[00:44:40] Speaker 6: That's coming from the workers?
[00:44:42] Speaker 7: That's coming from a survey of the workforce.
[00:44:44] Speaker 6: Amazing. David Mclean.
[00:44:45] Speaker 9: I I think the proof in the pudding uh that really compliments what Murray just said is in the aggregate statistics. When you look at New Zealand's productivity, uh over the last four or five years as compared with uh where it was in the preceding 10 years or the of the five years before that, um, New Zealand every country after the first oil shock did much worse in productivity terms. For New Zealand, the downturn was the the worst of almost any industrial country.
[00:45:11] Speaker 9: And productivity remained stagnant until toward toward the latter part of the 1980s, and in particular in the '90s, it is just exploded to the point now where business costs can be held in line because uh there's so much productivity gains. I think these productivity gains have got to be laid in part at the door of um a better employer-employee relationship.
[00:45:31] Speaker 6: Mhm. You know, sometimes, oh, Murray.
[00:45:33] Speaker 7: Yeah, there are two two other things on this subject I think that's important. Uh one of the keys that came out of New Zealand, uh as they started to reward people by letting them choose their own conditions of contract, uh has been that the communication has increased in the two ways. It's more this walking of the talk um [unintelligible — audio glitch] what we used to have before, and communications become the key and what's really happened is that the workforce have responded that this is what they wanted all these years.
[00:46:01] Speaker 7: They've wanted to be able to hear direct from management, uh and not through their union. In the past, we used to go and talk to the union because they were the people that represented the workers, and [unintelligible — audio glitch] were wrong, we should have talked to the unions but also gone and talked to our workforce. And that's now happening, so communications become one of the keys and that really seems to be motivating people to produce better.
[00:46:21] Speaker 7: And companies are now trusting that and starting to pay incentives and rewards on on productivity performance. The other thing that seems to be coming out of New Zealand at the moment is because the skill level of the workforce has become so high and the training has become so much a an everyday part of business, and people are now becoming empowered to do their job. The pressure is on finding better leadership.
[00:46:43] Speaker 7: There's a shortage in New Zealand as there is in most countries of companies of good leadership, and that's come because of this freeing up down the line.
[00:46:51] Speaker 6: You know, I and and you didn't know this, but our topic next week is leadership. Our topic next week is, what is this thing we call leadership? How do we recognize it, how do we support it, can we teach it, etc. You know, something as I was listening to you talking earlier, David, I think you were commenting that things may change in Hawaii when they get really bad, etc.
[00:47:12] Speaker 6: When I talk to folks, especially in the legislature, there seems to be this sense that well, things are bad now, but if we wait long enough they'll be good again. They think of what we're in now as being part of a cycle, and and I don't think I've talked to you about this, but other economists have used words like structural in describing what's going on as opposed to cyclical. What are your thoughts and what are the implications to what we've been saying for the last 45 minutes?
[00:47:35] Speaker 9: Well, I I would I would agree with the assessment that the 90s is the is the day the decade of structural readjustment. Um, it's not just a matter of a cyclical change in in the economy.
[00:47:45] Speaker 6: And what does structural mean?
[00:47:46] Speaker 9: Well, what it means is that that um the fundamental assumptions under which business is done, uh the fundamental assumptions by which competitiveness is determined uh have changed. Um, it's not the case that Japan's just having a bad year or two. Japan's having a bad decade. Uh Japan's banks were so excessive in in the loans that they made in the late 80s that it will take them until the the early years of the 21st century to work through all that.
[00:48:11] Speaker 9: That's not good for us, of course. Um, in the United States setting, uh the California economy was so based on on defense and there's been such a readjustment there, [unintelligible — audio glitch] important market for us is finding its way again. I think it'll come back sooner. There's some very recent and encouraging evidence in that regard. Um, but for both of those reasons, our our major markets are undergoing fundamental uh restructuring and that means that it's just not going to be a matter of waiting another year or two or three.
[00:48:41] Speaker 9: Um, we really now have to think for ourselves instead of waiting for our markets to improve.
[00:48:46] Speaker 6: Okay. We have a caller, Dick from Honolulu. Good morning, Dick.
[00:48:49] Speaker 10: Good morning, Randy. The uh I'm I missed some of your programs so if I repeat something that's already been touched on, cut me off. But at the beginning, it sounded like uh there was a call for what is known as the Republican Party needed here, or platform needed here in Hawaii because it sounded just like what we read from our our platform. I noticed also that uh the comment was made that unless there is [unintelligible — audio glitch] package that can appeal to the union as it were, we're going to have some some difficulty here.
[00:49:22] Speaker 10: And also some comments about the privatization approaches, which I think were very well outlined in Mike Liu's alternative budget for the for the state. My question is, will it take something like the uh contract for America to be developed here in Hawaii, perhaps to get us moving in the right direction?
[00:49:41] Speaker 6: Well, let's let's ask a Democrat in the room or at least I I think uh David admitted in a chapter he wrote for the Price of Paradise book that he's he's a Democrat and yet what people have been listening to for the last 45 minutes, pretty conservative stuff, David. Um but we'll push that aside, will it take a contract with America type approach here in Hawaii?
[00:50:03] Speaker 9: Um, well, as a registered Democrat, um, who has occasionally voted for the odd Republican, uh let me say that um uh what we're talking about here is actually not very conservative stuff. I mean the theme of the Clinton administration is to make the American people receptive to the inevitable change that goes with the United States integration in the international economy. That sounds like the same theme that we've been hearing out of New Zealand for the last 10 years.
[00:50:28] Speaker 9: It's just not the theme that we have here in Hawaii. All right. Um, with regard to whether we need some sort of contract with America style uh initiative, uh personally I'm uh not comfortable with some of the the social dimensions of the contract with America, but I think as a as a a device to focus debate, it's been superb. And I I give a lot of credit to Newt Gingrich uh on that score.
[00:50:53] Speaker 9: Um, and we certainly could use some sort of device to focus debate here, I think.
[00:50:58] Speaker 6: Presumably both from the Republican Party and the Democratic Party and you know, there's the green party and libertarian and and other folks with a voice out there, too.
[00:51:06] Speaker 9: Well, in this state, I think bipartisan would really help. I I think that's really true. And and in fact, what we're seeing evolving in a New Zealand context is an uh an an as I mentioned before, development of a lot of other smaller parties. They've just changed the method by which uh uh the parliament will be elected and they haven't had an election under that new method yet.
[00:51:25] Speaker 9: But I I think we're going to see more need for coalition in a New Zealand context. I think that's also a good idea here for Hawaii.
[00:51:31] Speaker 6: Okay. Dick, thank you for your call.
[00:51:33] Speaker 7: Thank you for the response.
[00:51:35] Speaker 6: Um, I just want to let listeners know because at times this morning show may have sounded anti-union or at least been unbalanced in terms of the conversation about the role of of unions. Um, our philosophy on this show is that we don't necessarily look for a point counterpoint with respect to each topic each week and we've been working very, very hard trying to get some union officials to come in and have a conversation about their vision for the future of Hawaii and and how they think perhaps we could get from here to there, etc.
[00:52:06] Speaker 6: And so, if you're out there a union official, give me a call, if you're somebody who would like to hear a conversation about these topics from union officials, uh call them and encourage them to um to be a part of this sort of of community dialogue. Murray.
[00:52:20] Speaker 7: I started my working life in the union as a carpenter and I started out strongly supporting the union. And I today I still support the union as a principle and I think that they have brought uh the blue collar workforce of uh our respective nations a long way forward and have been a necessary part of growth. Um, and I support them today. What I really am pushing for is a a more enlightened management going hand in hand with a with a substantially more enlightened union.
[00:52:46] Speaker 7: There are far too many unions looking after the one industry, so we've got to look at ways to come together uh and not fight on that demarcation issue. We've got to look for multi skilling of our workforce in all our industries and we've got to look for legitimate ways that we can reward the union worker uh from from a point of his production, uh not just from a point that every year he's going to get two to 5% increase because there's a big hammer coming down on top.
[00:53:12] Speaker 7: So creative working together, I think is the way in which this state uh is is going to going to be helped to come out of the doldrums.
[00:53:19] Speaker 6: Okay. We have a caller from a Noah. Mike. Good morning, Mike.
[00:53:22] Speaker 11: Oh, good morning. Uh, I'm uh got a question about the government accounting system which uh Dave Mclean mentioned in his article and you guys haven't really spoken about yet this morning. Right.
[00:53:31] Speaker 6: And just in case anyone tuned in late, uh David wrote a a column this morning's advertise the page B3 that's in the focus section and the headline is a kiwi lesson for Hawaii's economy. Go ahead, Mike.
[00:53:43] Speaker 11: Very good article. Um, as I understand it, um uh the government accounting system that's been used in New Zealand was uh uh created by I believe the IMF and the IMF had something to do with uh a currency crisis back in the I think it was the early 80s, some such time in New Zealand that really forced this whole series of of events uh upon the country of New Zealand. And uh that uh after um they had instituted this uh new accounting system, uh for example, the economist magazine in uh in Great Britain and uh all of other international agencies uh gave the New Zealand governments quite high marks for its ability to report accurately on public finances and uh I would I was wondering whether or not um we could have a little more discussion about that particular part of it.
[00:54:37] Speaker 6: Okay, David.
[00:54:38] Speaker 9: Um, two things. First of all, I think the the IMF's connection with the New Zealand economy is is uh to the extent that it ever was is is many many years ago and not terribly connected with the current situation. The um the the government's decision to move to um a a an accounting system that people could understand is something that was done just just very recently, uh just a year or two ago.
[00:55:01] Speaker 9: And the idea here is that the government will publish government uh government accounts, which are similar to those of private sector firms. So you'll have a balance sheet of assets and liabilities, an accrual based operating statement of income and expenditures, and most interesting to me is that these accounts are independently audited. And moreover, before an election is called, the government has to come forth to the public with a current uh reporting on its physical situation.
[00:55:25] Speaker 9: So what it does is it it removes the ability of the government to engage in fiscal shenanigans, and I I remove somewhat because of course, any set of rules always has interpretation open to it. And then it also encourages the government to focus on long-term policies. Uh so it's it's something we've been saying is necessary in the US for a long time for our government.
[00:55:45] Speaker 6: Well, here in Hawaii, it seems as though nobody really understands the budget. or or how many employees we have, yeah.
[00:55:51] Speaker 7: The the budget here is an absolute mess and [unintelligible — audio glitch] purposeful obscuration of of of facts that people use to hide behind. Uh another question, the uh real real quickly Mike, we're running out of time. the 20 or 30% of debt to GDP seems to be awful low uh in comparison to what the US is today and what people say is trip wire number of 100 or 120%. And I'll hang up, bye.
[00:56:16] Speaker 6: Okay. David, quick response to that?
[00:56:18] Speaker 9: Well, the US number uh of debt to GDP is 65% and uh that that's uh uh about the average for industrial countries, New Zealand is far below that average.
[00:56:28] Speaker 6: Okay. Well, we've got just a minute or so to either say something that needs to be said that hasn't been said or to emphasize something that has been said. David, you're first.
[00:56:38] Speaker 9: I think the emphasis is simply on creating an opportunity society instead of a society that's focused on uh protecting uh people. People cannot fundamentally be protected. The best protection for people is to give them the opportunity to create.
[00:56:50] Speaker 7: Mhm. And work for the bigger pie and trust that we're going to share it in a reasonably fair fashion as opposed to saying it has to be fair and setting up a system that
[00:57:00] Speaker 6: themselves in a small pie. Well, I I think that that's that's how I would put it, but I just amplify it to say that the trust has to be based on credible political processes. Mhm. All right. Murray?
[00:57:08] Murray Bawden: I just want to say that I think that people get nervous about the change, and particularly people that are in the public service. Uh, and there are so many of them here get nervous about the change. The New Zealand experience has really been that uh, that over time, that has not now been a problem. Unemployment has come down. It's down under 6% now, which is very good in New Zealand, and I think that the same could happen here. We need the courage at the at the government level, both at the at at the government leadership and at the legislature point of view, to really give us the leadership that people I think really want more than they're even saying with their votes because I think they're wanting to protect their positions.
[00:57:44] Murray Bawden: So, we need courageous leadership that creates an opportunity for us to make the changes that are necessary uh, to take us forward. And then I think we'll be surprised once we get out of the way at what the people of this state can do.
[00:57:55] Speaker 6: Murray's the only one in the room, doesn't work for the government. Uh, David and I work for the university. David, are we up to it?
[00:58:00] David McClain: I hope we are.
[00:58:01] Speaker 6: Okay. Uh, my guests this morning were David McClain, the Walker Distinguished Professor of Business and Financial Economics at the College of Business Business Administration University of Hawaii, and Murray Boden, the President CEO of Fletcher Pacific Construction Company, a New Zealand company. Next week, we've got a show on leadership with David Heenan, who is from the Campbell estate, and Dan Boylan, who again is a professor at the University of Hawaii. The Price of Paradise radio show's producer is Susie Roth, our director of operations Jeff Aylardy, our interns this summer are Cassie Ross, Aaliyah Yap, and Walter Roth.
[00:58:37] Speaker 6: You've been listening to the Price of Paradise radio show. I'm Randy Roth. Aloha.
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