Hawaii’s World

By A.A. Smyser

Tuesday, October 14, 1997

Hawaii should emulate
New Zealand

IT will be useful in judging the work of Governor Cayetano's Economic Revitalization Task Force to remember that Hawaii has a labor government. We call it Democratic, but the party name ought to be Labor.

Not much will change unless labor changes or the voting public changes its view of our labor government. I have hopes for both.

Government services are dominated by the Hawaii Government Employees Association, the United Public Workers and the Hawaii State Teachers Association plus a few other unions. They have some of the cushiest benefits in America. They naturally are reluctant to change.

They stir a lot more re-election fears in the hearts of key legislators than any business lobby. Job security is at the top of their agendas. They made mincemeat of Governor Cayetano's slash-and-burn attempt to cut the government payroll in 1995.

Better management-labor accommodation exists in the private sector. The ILWU, Teamsters and Hotel and Restaurant Employees tend to accept management's right to manage. They mostly focus on fighting for their fair share of the pie their work helps create. But they remember: No pie, no jobs.

No government employee can dream of the government pie disappearing. There has always been the quick fix of more taxes...up until now.

"Up until now" is a key point. That's why I have hope.

In 1984 New Zealand elected a Labor government that looked at an economy immensely more socialized than ours, saw it draining away the country's assets, and rammed through the most dramatic free-enterprise reforms seen in any modern democracy.

Labor cut income taxes, boosted the general excise tax, privatized, opened the doors to foreign investors, required maximum department-by-department openness on budgets and outcomes and decentralized public education. It also got tougher on social welfare even though the actual payouts haven't shrunk much in terms of gross national product.

New Zealanders were force-fed a bitter pill that led to short-term higher unemployment. Even so, the nation's voters re-elected Labor in 1987 and in 1990 chose a Conservative government pledged to further the reforms. The 1990 government added a ban on compulsory unionism and created a reserve bank with enough power to keep inflation down.

New Zealand is prospering today. A key labor leader says unions are stronger now that membership isn't automatic.

Estimates are that voters who would return to the pre-1984 order of things were less than 15 percent in 1996.

Our labor government reflects long distrust of business. It has accepted union restrictions on freedom to manage within government, permits a stifling of innovation by a heavy-handed bureaucracy, and accommodates a "yen for power" that keeps bureaucrats demanding that investors clear with them at turn-after-turn on the investment path.

Teachers resist quality evaluations. School centralization's failures are dramatically highlighted by comparison with our better-performing, less costly Catholic schools that have a central staff of only five.

WE have on Maui a Republican mayor, Linda Lingle, who wants to be governor. Her seven successful elections to public office in Maui County without significant union endorsement show our state legislators may be over-scared of labor. When she talks common sense, union members vote for her even if their leaders don't. What's more, very few of them feel threatened by her.

She articulates issues superbly, and brings great freshness to the state scene. Who else could call our state employee drug policy: "Four strikes and then you can resign"?

Lingle is one reason I am hopeful. The other is that the governor's task force is apt to recommend changes in the right direction. Because our government structure is different, they will have to be far less dramatic than New Zealand's to prevail. But let's push the limits of what's possible before things get worse.

A.A. Smyser is the contributing editor
and former editor of the the Star-Bulletin
His column runs Tuesday and Thursday.

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