Will Shane Jones be crown prince or court jester?

by Jane Clifton / 12 July, 2017
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Shane Jones. Photo/Getty Images

New Zealand First's Shane Jones is riding a wave of hype, but this could prove a handicap.

In the unofficial competition for “politics’ worst-kept secret”, the media have been quick to declare Shane Jones the winner. His New Zealand First candidacy has been the subject of more teasers than all The Bachelor episodes combined, to the point where only Jones announcing he was not making his bromance with Winston Peters official would really have constituted news.

But Energy Minister Judith Collins has resoundingly trumped Jones. Her shrewd commissioning of a report into petrol pricing has produced the most blindingly obvious conclusion since someone asked whether the world was still roughly spherical and popes still needed to be Catholic: petrol companies are price-gouging.

No one anywhere was knocked down with a feather. The report found petrol companies charge what they reckon they can get away with and then some, they don’t pass on downward fluctuations in the global price, and only in places where there’s the extra competition of Gull stations do they tone it down – just a bit.

Were the same exercise commissioned into other economically critical sectors’ pricing, notably electricity, building and the supermarket duopoly, it would probably produce the same conclusion: that in our small economy, lack of viable competitors leads to dominant companies charging at will.

The question is: what do we do about it? Where a market is not working competitively, there are three available remedies. One is to stimulate further competition – which markets are supposed to do in the first place and governments are pants at. Or the state could nationalise the sector, but that’s pricey and apt to freak out one’s trading partners and wobble the currency. So the prevailing orthodoxy is to regulate, which is hard to do fairly and without unintended consequences. More pertinently, the current Government is EpiPen-carryingly allergic to regulating profitable companies.

So even “Crusher” Collins, with her unerring populist nose, has ordered a further options report that will kick the petrol issue to the post-election touchline. If the errant companies aren’t voluntarily being more competitive by then, they’ll be referred to the Commerce Commission, which is being given new powers over them.

The Opposition, with superficial common sense, argues the commission should be sicked onto the job right now. More seasoned observers familiar with the ways of big business know this is no threat. The headline “Commerce Commission Cracks Down” is only slightly more common than “Donald Trump Admits Error”. It may be a bit mean to say our dominant businesses see the state’s watchdogs and regulators as one big Morris dancing troupe wafting wet bus tickets instead of hankies, but it needs saying anyway.

Gouging and weirdness

Which curiously brings us back to the second worst-kept secret, Shane Jones. This sort of issue is right up his alley. As an Opposition Labour MP, he once launched a promising campaign to highlight the price-gouging of our two dominant supermarket chains, both of customers and of suppliers.

What followed was deeply weird. Shoppers, whenever asked, said, “Too right we’re being gouged.” Food and grocery businesses supplied compelling evidence that they were being gouged. But primo business lobby Business NZ, representing food and grocery suppliers and supermarkets, said Jones was wrong and the sector was robustly competitive. The commission had a preliminary look and said there was nothing that fell within its scope.

This was more a function of its long-outdated legislative parameters than of evidence of satisfactory competitiveness among supermarkets. In Australia and the UK, which have far more than two big grocery chains and much keener competition, regulators have imposed a number of restrictions to curtail exactly the same anti-competitive practices Jones highlighted as occurring here.

Jones simply ran into deep institutional inertia, because sectoral lack of competitiveness like this is damnably hard territory for policymakers. The process of remedying it generates typhoons of vested-interest lobbying, fearmongering, economic instability and that most pernicious of effects, lawyers’ bills. The very act of signalling a review can imperil national productivity. Politicians hate legislating in this sort of din, and it absolutely terrifies public servants.

Jones found he couldn’t even get wholehearted support from Labour colleagues for his message that shoppers and small businesses were being gouged. Whatever the prevailing Labour message was at the time, it wasn’t that. Rather than bang on by himself, he lapsed into a sort of bemused sulk, came a distant third in the next leadership ballot and was rescued by National with a job offer to be Ambassador for Pacific Economic Development.

His righteous populist urges simmered on and are now a good fit with NZ First and set for a vigorous talking-up as the party advances on kingmaker status after September’s election. NZ First is not squeamish about proposing tumultuous regulatory reforms. That’s at least partly because it has yet to be in a position to form a government and having to carry any out.

But given that it’s likely to be more than tail-end Charlie in the next – still probably National-led – government, Jones’s pro-competition preoccupation is worthy of careful study by those sectors that – however contentedly – comprise just a few dominant players. Meat and dairy will also be under at least a rhetorical threat of regulation if/when NZ First enters the Beehive. The party advances a pro-regional stance with such hyperbole that those invested in Auckland’s continuing to grow apace had also better bone up on Jones-speak.

Life in the Winston-ocracy

A common media and collegial criticism holds that Jones is lazy, but it may be fairer to say he was easily discouraged by Labour’s “not your turn yet” caucus ethos. NZ First doesn’t do democracy or seniority like that. It’s a Winston-ocracy, in which Jones is now crown prince and sharing the wheel.

What’s unproven is whether he has the crossover appeal the hype surrounding his candidacy supposes. On paper, he should engage National, Labour, grumpy, provincial, blokey and Waitakere Man voterdom. In practice, the media-generated excitement could be a handicap.

Voters abroad have rejected the commentariat’s picks, preferring their discards. Jones’s best bet may be to court mockery by playing up his naughty-video-watching past. Actual past groping hasn’t impeded President Trump. British Labour’s Jeremy Corbyn, near-universally mocked as a frowny old throwback, was just mass-cheered at Glastonbury and is now the muse behind a designer range of “Dad-wear”.

This article was first published in the July 15, 2017 issue of the New Zealand Listener.

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