Picking Winners is For Losers

There has been very little constructive debate on the value to New Zealanders of the government’s $40 million odd dollar contribution to the recent America’s Cup campaign and plans to sink more money into the next challenge. The argument that the jobs created during the building of the yachts and flow on economic benefits far exceeded the government’s contribution seems to have been taken at face value.

The Alliance Party concedes that boat building on this scale creates well paid skilled jobs. We would like to see more of this type of work for New Zealanders. But that does not necessarily mean the government money was well spent.

Firstly, we question whether the campaign actually required government assistance. Russell Coutts is on record as saying Larry Ellison had much of his boat built here because New Zealand boat builders are now recognised as the best in the world. So whether the government sponsored Team NZ to compete against Ellison or gave tax breaks and grants to Core Builders Composite may well have been irrelevant. Ellison is a serious competitor. He wants to win so he would likely have come here anyway.

The America’s Cup is a rich man’s sport and very desirable to corporate sponsors. Team New Zealand was able get at least double what the government provided from corporate sponsors. It is arguable they could have obtained the full amount without too much difficulty.

Secondly, we believe that the government can provide a much better service to industry and in the process create more jobs, if it adopts a more even handed approach. The money spent on Team NZ could have been used to put a local procurement policy in place for all government, local body and SOE’s and to fund more blue skies research.

In just one example, if a local procurement policy had been in place we would now have an estimated 1500 workers with ongoing work at Hillside and Woburn workshops creating rolling stock for KiwiRail. And up to $1 billion going back into the New Zealand economy instead of offshore. This compares to 50 odd workers building boats in Warkworth and perhaps $400 million going to the New Zealand economy.

The government can also contribute to industry by ensuring that the workforce is innovative, skilled, and healthy through prioritising quality free education for everyone right up to tertiary level and free health care for all. And by ensuring, through public ownership, that we have a decent infrastructure; roads, railway, ports, and electricity that are well maintained, accessible, and affordable to all. Picking winners is for losers. The government’s job is to create the conditions that allow everyone to succeed.