Phew, thank goodness the government appears to be back tracking from suggestions yesterday that it would bail out Fisher and Paykel.
In a country where more than 90% of businesses employer fewer than 20 people, a company with 1600 staff is unusual and the impact of those job losses should the company collapse would be significant for the individuals, the wider commnity and the economy.
But the company is not about to collapse and even if it was I’m very wary of any suggestion that the government should invest to save it.
Easing the way should a foreign company wish to take a stake in the business would be okay but there’s nothing iconic about whiteware and even if there was that’s not a reason to invest taxpayers’ money in a company which makes it.
If there are any iconic industries here then they are those based on what we do best because of our climate and topography – growing grass and turning it into protein.
Fran O’Sullivan writes about a couple of those, PGG Wrightson and Fonterra.
Speculation can easily turn into self-fulfilling prophesy so it’s important to make it clear that neither company is facing a situation which might make them need or ask for taxpayer assistance. However, if they were I’d be just as opposed to any suggestion of any government investment in them as I am to the idea of a state bail out of F&P.
New Zealand dragged itself away from governement interference in, protection of and subsidies to businesses in the 1980s with considerable pain for those caught in the fallout and we should resist any attempt to go back there.
There may be a difference between government investment in a company and a subsidy to producers, but I wouldn’t want to be in Tim Groser’s shoes if he was asked to explain that while putting New Zealand’s case for freeing up trade to our competitors.
If we make a sacred cow of a company which manufactures whiteware we’ll be in a much weaker position to argue against countries which build alters of subsidies for their primary producers.
For the record: I own a few Fisher & Paykel shares and our farm supplies Fonterra.