Opinion - The cost of change: Is NZ's political flip-flopping stifling progress?

  • 14/12/2023
Every time the pendulum swings one way and back the other, the public starts to feel disfranchised
Every time the pendulum swings one way and back the other, the public starts to feel disfranchised Photo credit: Newshub.

By Mike Lee of the University of Auckland

Opinion: As someone who teaches strategic leadership to managers and executives, I often talk about the importance of leadership in terms of providing vision, direction and certainty. However, a balance must be had between 'staying the course' and 'knowing when the plan must change'. This is a tricky balance, and 'value-driven leadership' often provides a guiding light for decision-making. 

The problem with New Zealand's short parliamentary terms is that the value systems of the people in power are sometimes so different that decision-making resembles the swing of a pendulum.

This has ramifications, not only for how people feel about progress and their trust in political leaders, but it also impacts the country's path forward in areas that desperately need consistent long-term thinking and action. 

The new government's intention to overturn the ban on new offshore oil and gas exploration, change the Smokefree Act and reverse years of te reo use in public institutions are just a few examples of damaging flip-flopping.

Aside from environmental degradation, the cost of rebranding and the future health costs of smoking-related illnesses, flip-flopping has other consequences, including its impacts on the morale of the general public and business leaders. 

Even in the US, one of the west's most polarised democracies, we see less policy change. We have seen how difficult it's been to change gun legislation. It also seems like the pendulum swings less in more established European countries. In contrast, New Zealand appears to be experiencing more flip-flopping of policies, depending on which government gets in.

When citizens and businesses feel that one right-leaning government will come in and change the rules made by its left-leaning predecessor, and vice versa, it discourages them from striving toward an ambitious goal. Instead, 'waiting it out' starts to look like a viable strategy. 

Research that co-authors and I have conducted on consumer decision-making reveals that, in some cases, the more options people have, the less satisfied they are with their choices. In other research on political activism, the more calls for action a person becomes aware of, the less likely they are to act. In contrast, when you have policies that provide certainty, it forces firms and citizens to work towards that legislated goal.

Investors like a predictable investment, and one of the reasons Asia has become so economically powerful in the last 50 years is that their governments (from Singapore and Indonesia to Bangladesh and Thailand) have all been focused on providing stability and certainty for foreign investment. Their particularly long governmental runs have enabled very little flip-flopping in terms of their policy, so foreign investors know what they're going to get. 

When you know what you're going to get, you can plan and invest accordingly with as few surprises as possible. Some critics might argue that those governments are not truly democratic, and I'm not saying what works there would necessarily work here. However, the foreign investment and speed of development (sometimes at the cost of civil rights) in those countries is undeniable.

One possible solution that New Zealanders may have more appetite for is the extension of parliamentary terms. Three years is simply too little time to enact and solidify real change before the party starts to focus more on winning a re-election. 

Failing an extension to four or, perhaps even five years, there needs to be greater use of technology to run referendums more efficiently, thereby enabling the public to decide on what matters to them in the long term and which policies should be bipartisan and binding, regardless of the party in power.

Meanwhile, frequent policy changes by successive New Zealand governments impact the country's international reputation and can affect the willingness of international companies to do business here. 

Take the government enquiry into the retail duopoly and various proposals to increase competition in the area. On the surface, this seems like the right thing to do for consumers; however, if you are a large multinational thinking about where to invest next, you might be more reluctant to invest in New Zealand because you're not sure whether the next government will further meddle with the sector in order to increase competition, which would reduce your first-mover advantage.

The point of leadership is to provide certainty so that people can get on with what really matters. Having certainty enables government departments and businesses to commit and strive forward to a target. But if that target keeps moving or sometimes completely gets removed, it becomes incredibly frustrating and leads to people taking a 'wait and see' approach, impeding progress in many facets of society. 

Every time the pendulum swings one way and back the other, the public starts to feel disfranchised because it feels as if neither party will make any significant difference. Either they implement policies that you don't agree with, or they reverse policies that you did agree with.

Mike Lee is University of Auckland’s MBA director and Associate Professor of Marketing.