A Harvard Business Review article (December '16) Professors Alex Bryson and Richard Freeman.hbr.org/2016/12/profit-sharing-boosts-employee-productivity-and-satisfaction
New Zealand's economy is in a transition of old economic drivers stepping aside for a new "social-justice" version of capitalism.
The three big engines that had driven the economy - migration, construction and tourism - had peaked and would make way for a new version of capitalism, ANZ chief economist Cameron Bagrie said.
26 September · My take on significant announcements during the recent New Zealand election campaign was not from a political party but from the Air Zealand company.
Once again Air New Zealand is giving an equitable distribution of bonus (this year $1700) to each of all 8500 employees who are not currently on an incentive scheme. I believe that Air New Zealand has given an equitable distribution of bonus to all employees on at least eight possibly nine occasions since the company was on its knees and saved from bankruptcy by the Labour Party in 2001.
No one can doubt the outstanding performance of Air New Zealand, from our own small domestic market, against tough international competition, since those times of imminent bankruptcy.
It would be very interesting to measure the financial and social benefit of the co-operative culture that has become a feature of the company’s operations. I note also that the Auckland Airport company is now giving an equitable distribution of bonus to all employees.
Another announcement during the election campaign was that there is no possibility of further tax cuts before 2020. I am sure that there is now an opportunity for a political party to bolster their electorate popularity by announcing they are investigating the possibility of a 15% tax rate.
This fixed 15% tax rate will be on the equitable distribution of bonus for ALL employees, RECORDED SEPARATELY from PAYE on tax returns, and is part of a vision for an inclusive co-operative New Zealand.
A co-operative capitalism culture arises from merging the benefits of capitalism, free enterprise and wealth creation, with the productivity and social benefits existing in co-operative culture enterprises. This can be realised with a relatively simple tax innovation made available as an option for progressive management styles within the tax framework.
This tax innovation, facilitating a co-operative workplace culture, is constructive rather than punitive.
Government has been the recipient of healthy growing dividends from their shareholding in Air New Zealand, therefore, why not encourage that management style in other businesses.
No better way to encourage that management style than to cater for a fixed low tax rate on the annual equitable bonus for ALL employees on Kotahi payments (Mahi Tahi payments, Team NZ payments, Co-operating payments - whatever they are to be called).
Kotahi payments (for ALL employees) are not individual performance bonuses; they are a co-operative culture common bond – the cement that binds the co-operative team together.
Performance related remuneration will be reflected in an employee’s contracted or baseline remuneration, although exceptional specific bonuses, e.g. sales, may coexist along with Kotahi payments.
Following Air New Zealand's management lead a NZ government can be the first to implement the low tax innovation and thereby be the catalyst for the growth of co-operative capitalism.
A co-operative culture will see a giant stride forward in workplace productivity and profitability. - management wins, employees win, investors win and government wins.
I have reflected on why I have attempted to promote a tax innovation that provides a framework encouraging a co-operative culture in workplaces? The website www.co-operativecapitalism.com outlines the numerous social and productivity benefits. Additionally when I first arrived in New Zealand in the sixties, the social fabric of the country had more of an egalitarian quality and that was reflected in the character and spirits of New Zealanders.
This egalitarian quality, much admired – even envied – by other countries, has been eroded as a result of successive government policies over the last 30 years.
Government support for a tax innovation encouraging Kotahi payments, will play a part in redressing that loss of a national, inclusive social and economic aspiration.
As a national framework for progressive management teams, Kotahi Payments have the double attribute of improving both workplace productivity and social cohesion and are an opportunity to recover a valuable part of our heritage. All this at no risk to the tax revenue or business profit.
I believe that improved social cohesion will have an indirect positive effect on individual’s health and ultimately, in a small way, maybe even the national health budget.
A background observation when formulating this simple concept is that New Zealanders have shown that they equal, if not surpass, any nation when they are part of a ‘teamwork’ approach or collective effort.
This characteristic is demonstrated in sporting endeavours, in hosting international events, in producing opening ceremonies, in national charity appeals and in community endeavours. Furthermore some of New Zealand’s more significant industries do have a co-operative basis. Therefore why not build on this national trait in our workplaces?
Arranging for this simple innovation as part of the national remuneration tax framework needs enlightened politicians willing to break out from traditional capitalist thinking and encourage co-operative culture workplaces.
Progressive management teams taking advantage of this option will realise both the productivity and social benefits.
As the Kotahi payment concept becomes part of ‘the New Zealand way’ we will see a more robust growing economy and improved social cohesion.
I am hopeful that New Zealand becomes a lead nation for co-operative capitalism and, as has happened before, have an influence beyond our borders.
Overly optimistic ?.....No - soundly based, and Shakespeare did say ‘Dare mighty things’.
In 2014, the United Nations named New Zealand as the world’s most co-operative economy in a survey covering 145 countries. www.un.org/esa/socdev/documents/2014/coopsegm/grace.pdf
Leading economist Noreena Hertz predicts era of co-operative capitalismEconomist, Professor Noreena Hertz, who for more than two decades has made accurate predictions about economic trends, has named ‘Co-op Capitalism’ as the next economic era.