PM tells business ‘be confident’

Prime Minister Jacinda Ardern says the economy is in ‘‘good heart’’ and warns businesses about talking themselves ‘‘into a funk’’.

At a Trans-tasman Business Circle event discussing the future of work, Ardern’s message to a room of business people was to ‘‘be confident’’. ‘‘The Reserve Bank is doing its bit to ensure the fitness endures and it is important business works with us too.

‘‘We mustn’t talk ourselves into a funk,’’ she said.

Ardern said the record low unemployment rate, topping the World Bank’s index on ease of doing business, and the Reserve Bank holding the official cash rate at 1 per cent last week, were all indicators of a healthy economy ‘‘amid global economic headwinds’’.

‘‘The message is clear – now is the time to invest. New Zealand is doing well and there are enormous opportunities if we act now.

‘‘The best thing for the New Zealand economy at the moment is optimism, planning and investment action.

‘‘We are doing some pretty heavy lifting to shore that up in terms of spending and infrastructure investment; the [Reserve Bank] is doing its bit with record low interest rates – the private sector must make sure it is on board too,’’ Ardern said.

According to an ANZ survey, business confidence hit a 10-year low in September but since then things had started to pick up again. Westpac shared that view in its latest economic overview, where chief economist Dominick Stephens said confidence-wise, the worst was over.

But Stephens said the uplift was not felt by all because of a limited ability to increase prices, and difficulty accessing finance. Economic growth for next year would be a ‘‘modest 2.6 per cent’’.

Ardern said the low business confidence had stemmed from uncertainty. ‘‘Doing things differently has caused some anxiety in the rural sector but my concern is if we did nothing that anxiety would be well deserved in staying the same,’’ she said.

‘‘As an export reliant country, I increasingly hear other countries we trade with asking about what we are doing on sustainability and the environment.

‘‘And they are asking because their consumers are.

‘‘If we do nothing, we will fall behind, lose our branding and we suffer anyway. Change is necessary, it is just about how much we create buffers and absorb the shock of that change.’’

Ardern said the Government was ambitious and aspirational for what it could achieve working alongside business to lift living standards for all. While the Government inherited a stable economy, the country also faced major infrastructure issues and rundown health and education systems, she said.

‘‘We are making good progress – particularly in the area of our investment into much-needed infrastructure – but there is more work to do,’’ she said.

On the future of work, Ardern said the Government would spend about $14.5 million over four years via the workplace literacy fund through the Tripartite Future of Work set up in partnership between the Government, Business NZ and the Council of Trade Unions.

Ardern said that on Monday the forum would present new initiatives, including greater protection for contractor workers as well as support for displaced workers affected by ‘‘wage scarring’’.