Mood swing
What’s made business grumpy
Factors outside New Zealand’s control made business leaders more pessimistic about the economy and financial outlook lately, Finance Minister Grant Robertson claims.
After yesterday’s Mood of the Boardroom debate with National finance spokesman Paul Goldsmith, Robertson defended the coalition Government’s performance, saying business leaders’ negativity was about global, not domestic concerns.
And those were largely outside our control, he said.
“When we look around the world there’s plenty of reasons to be concerned. The top seven concerns of business were all international, focusing particularly around the China-US trade was and Brexit,” Robertson said of the survey.
“It’s understandable there’s a level of concern there. But fundamentally the economy is on a solid footing in New Zealand,” he said.
“We’ve got strong underpinnings through a low public debt, low unemployment and the fact that we do have a skilled workforce. There are plenty of reasons to be optimistic too.
“I’ll take on the chin some of the criticisms in the report and New Zealand will continue to be an active player in the international community but ultimately China, Australia and the US — these are big markets for us. We’ll continue to rely on what’s happening there,” he said.
Business leaders responding to the Mood of the Boardroom survey said the Government’s failure to execute its key policies in a timely manner and inability to stoke business confidence was fuelling an overall loss of confidence in the New Zealand economy.
A total of 62 per cent said they were less optimistic about the general business situation in their industry than they were a year ago.
Just 15 per cent felt more optimistic while 23 per cent said they felt the same level of optimism as last year.
The poor outlook squares with other business confidence surveys, which have shown persistent pessimism. Chief executives were not impressed
with the way the Government has addressed housing unaffordability issues, transport constraints or with transforming the economy.
Prime Minister Jacinda Ardern, who is in New York this week to meet US President Donald Trump and deliver the keynote speech at the UN Secretary-General’s Climate Action Summit, is seen as a great global cheerleader but largely ineffectual on the home front.
Her ability to portray New Zealand appropriately offshore was highly rated at 4.14 out of 5. But chief executives rated her at just 1.75/5 on ability to build confidence within the New Zealand business community.
National’s Paul Goldsmith said people were not just worried about international events as Robertson claimed “but also what’s going on domestically and I do think there is
a sense the Government is creating a lot of costs, creating an enormous amount of uncertainty, demonstrated with the incompetence in the way it’s handled KiwiBuild and transport infrastructure.
“If you think in the industrial
relations space, everyone wants higher wages but if you put the minimum wage up 27 per cent over three years, that’s difficult for people to cope with — and of course petrol costs as well,” Goldsmith said.
Dame Alison Paterson, a Vector director, encouraged more recognition of New Zealand’s advantages.
“We need to stand back and look at what we are: a small country, surrounded by sea, we have no predators on our boundaries. We are blessed in that we have plentiful rainfall, the grass grows.
“If you compare us with Australia — called the Lucky Country — their iron ore is worth $300/tonne. Milk powder is worth $3000/tonne — a vast difference. What we need to focus on is realising our advantages, take care of our environment and recognising what contributes to revenue for this country which is agribusiness, tourism, increasingly technology,” Paterson said.