Radical moves ‘take toll’ on confidence
National Party leader Simon Bridges says the Government needs to extend an olive branch to business by pausing radical reforms – or suffer the economic consequences of falling business confidence.
The first step would be admitting it ‘‘stuffed up’’ on its ban on oil and gas exploration, and go back to the drawing board, Bridges said.
The Government announced last month there would be no further offshore oil or gas exploration permits granted.
But the Government’s own officials warned such a move would increase risks around security of supply, increase costs to consumers, decrease economic activity in Taranaki and reduce Crown revenues from future royalties.
There would be a ‘‘negligible’’ impact on reducing domestic greenhouse gas emissions, meanwhile, and it would likely cause an increase in global emissions because of the downstream impact on producing methanol.
Bridges said the Government’s lack of consultation on the oil and gas decision, and its workplace reforms – potentially the biggest shake-up in industrial relations in decades – were taking a toll on business confidence.
An Auckland Chamber of Commerce Survey shows business confidence in ‘‘freefall’’, with nearly half believing the economy will deteriorate over the rest of this year. Only 15 per cent expected an improvement, compared with 12 months ago when a third of businesses thought the economy was going to get better, and 8 per cent believed it would get worse.
Speaking to TVNZ’s Q+A programme, Prime Minister Jacinda Ardern disputed that business confidence was falling, and said it ‘‘just hasn’t increased’’.
There are several different surveys and different measures of confidence, including confidence in the direction of the economy, versus confidence in the direction of their own business.
Ardern said the reality of the economy was that New Zealand was still predicted to have strong growth, at 3 per cent of GDP, on average.
But she acknowledged that the Government needed to work on the perceptions of business. ‘‘Of course, we’ve got to do everything we can to change that.
‘‘I agree. That’s why we’re undertaking things like our R&D tax credit, to try and stimulate that investment. That’s why we are looking at things like incentives for people to invest in small business.
‘‘That’s why we’re going out and working alongside business for some of the things that we’ve floated that we want to do. We’re not making arbitrary decisions. ‘‘We’re working together. ‘‘For me, I take it as a matter of pride. I want to demonstrate that I cannot achieve what I want to achieve as prime minister if we do not have strong business confidence and growth.’’
She also disputed that the Government had acted precipitately to end oil and gas exploration.