Why Government has a problem with business
Itend to ignore business confidence surveys, and often for good reason. David Parker once called them ‘‘junk’’, and he was right. They don’t like Labour governments, and they have little correlation to how well the economy is doing. Business is grumpy, even though the economy is doing better than Australia’s. Business seems to forget former Labour finance minister Michael Cullen’s strong record of growth and surpluses.
A survey is pretty useless if all it does is pick up an obvious prejudice. But those surveys don’t just relate to the headline confidence figure. There are other metrics that get less coverage.
The most common gripe is uncertainty, and second is that the Government doesn’t listen to business concerns and complaints.
Businesses make investments over long timeframes. If we want them to invest in New Zealand, we need to give them as much certainty as possible about what’s coming down the line.
But in one area where there was some certainty, the Labour-led Government has been flat-out contemptuous of business.
Back in 2017, former broadcasting minister Clare Curran wanted to give RNZ a slice of a $38 million increase to broadcasting funding to turn it into a bargain-basement BBC, with pictures, bigger budgets, and streamed online. The plan was terrible. Even RNZ didn’t like it. It’s an excellent radio station, but TV isn’t its forte – and how could it be when it costs nearly $300m a year to run TVNZ.
Worse still, it was hated by the rest of the sector. MediaWorks said it could put it out of business. It already faced unfair competition from state-owned, but commercially run, TVNZ for viewers and advertising. Now, as MediaWorks was trying to fight off Facebook, Google, and TVNZ, Curran wanted to erode its viewership further by adding another state-backed TV station into the mix.
Curran wouldn’t listen, wedded as she was to her plan. Her prevarication cost her the broadcasting portfolio, and her plan for RNZ+ was mothballed, but the true cost is the 520 jobs at MediaWorks currently on the line.
The Government doesn’t want to spend the money needed to do what MediaWorks wants, and turn TVNZ into an ad-free station. But had Curran treated its concerns with empathy, broadcasting would doubtless be in a better position. Instead, this Government may be about to preside over the biggest contraction in the broadcasting sector yet seen in New Zealand.
A slightly more complex crisis was unveiled by Stuff this week concerning light rail in Auckland.
In May last year NZTA went out to contractors asking them to bid on its $6 billion project. Contractors geared up, hiring experts from overseas who knew about light rail, something we have almost no experience with here.
But unbeknown to those contractors, Transport Minister Phil Twyford has also asked NZTA to examine a completely different plan for light rail, lobbed in by the NZ Super Fund.
The current and former board chairs disagree about whether it was NZTA’s or Twyford’s fault that this happened, but the effect was simple: millions of dollars was wasted bidding for work that might not even happen.
It’s a travesty, whoever is responsible: if you’re going to spend millions bidding for work, you know you might not actually win the bid, but at least you deserve to know for certain that what you’re bidding on is a real project.
The fact that it has been delayed by what the former NZTA chair has called six vague PowerPoint slides will only add insult to injury.
This isn’t just an Auckland issue. New Zealand needs to build more infrastructure. We’re a wealthy country with low debt. Provided the cost is fair and suitable, we should build projects like this.
Businesses need to feel they’re going to be treated fairly. We need to ... keep them and their employees in this country so we can keep building the things we need.
The issue is confidence. Businesses need to feel they’re going to be treated fairly. We need to work hard to keep them and their employees in this country so we can keep building the things we need. Economic indicators say the construction industry is currently at capacity. We already don’t have enough workers. Australian Prime Minister Scott Morrison announced a A$100 billion infrastructure package in the most recent budget – that’s a lot of jobs for Kiwi construction workers with itchy feet.
We should be doing everything possible to keep these workers here. The Government has gone part of the way, announcing billions of dollars of infrastructure projects, some of which should have been built years ago. But promises won’t be any good if businesses are too afraid to commit money and labour to those projects.
That’s why confidence is so important. It’s not just about big firms committing billions of dollars to build Auckland’s light rail; it’s also about finding small crews of workers to fix potholes and make repairs to roads, rails and roundabouts up and down the country.
The Government shouldn’t roll over for everyone with a big chequebook, but it’s too often ignorant or contemptuous of those who want to invest and employ.