Fran O'Sullivan on business

Business analysis and comment from Herald columnist Fran O'Sullivan

Fran O'Sullivan: Goodbye to Smiling John

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Bill English has slipped ahead of his leader John Key in the Cabinet ratings. Photo / Michael Craig
Bill English has slipped ahead of his leader John Key in the Cabinet ratings. Photo / Michael Craig

John Key is firmly in "Master and Commander" mode as he executes a "starboard turn tight" after a first term dogged by the Global Financial Crisis and Canterbury earthquakes.

Chief executives perceive the Prime Minister is finally much more focused than in the first months of 2012.

"This is Year One post the election. 'Smiling John' has by necessity turned to hard-nosed John to get the jobs done this year that need to be done - all of which were signalled well before the last election," said a professional services firm CEO.

"It's good they are ignoring the drivel around partial privatisation. They have their mandate from the last election. Voters obviously believed the National party package offering (including asset sales) was a better mix than the others."

The Herald's 2012 Mood of the Boardroom Survey, presented in association with BusinessNZ, attracted responses from 113 participants; 106 were CEOs from major companies and professional firms.

Not surprisingly, they have strong views on where New Zealand needs to go.

Behind the scenes, the Cabinet is preparing to roll out what Key pledges will be a comprehensive plan across the areas of innovation, skills, capital markets, natural resources, infrastructure and exports.

At last weekend's National Party conference he unveiled a loyalty scheme to entice smaller retail investors to buy shares in the upcoming IPO for Mighty River Power. And he is trying to face down a challenge from the Maori Council, which is seeking recognition of Maori interests and rights in water and geothermal energy. But the admiration is by no means unanimous.

"The post-election period has been disappointing from Key," says Navman's Andrew Blakey. "There have been numerous examples of poor political management, the complete 'head-in-the-sand' response to Superannuation and a nagging feeling that National has not done well at communicating a clear Economic Vision for New Zealand."

A professional advisory firm head said the PM had made a poor job of setting out a vision for New Zealand. "He has also done poorly leading the nation on some of the controversial reforms such as asset sales and classroom size, relying more on reflective opinion polls (telling him whether something will hurt him politically) rather than persuasion and leadership."

Another professional firm boss said Key was genuine in his belief that making change would improve New Zealand and be sustainable politically.

"It's his job to keep in power. The ball has been dropped on a few issues, such as education and ACC.

"Unfortunately the Opposition can talk big. If they get elected and implement expensive policies [they will] tax the few to hell who create jobs. It will be a tragedy.

"We all need to get real. We need to earn more as a nation to allow us to provide the services we want the Government to fund. If we can't earn more (by generating real dollars, not taxing a few), we need to accept less government services."

The CEOs are looking to the Key Government to stake out a bolder vision for New Zealand and tackle big issues like the age of eligibility for National Superannuation. Eighty-eight per cent of CEO respondents said the age should be raised to 67 from the present 65.

Finance Minister Bill English has jumped (very marginally) ahead of Key in this year's Cabinet ratings (a factor he is savouring). The CEOs felt English's "Zero Budget" still resulted in sufficient fiscal stimulus washing through the economy.

The Government's performance in retaining the confidence of credit rating agencies was top among a bunch of factors contributing to confidence (see Government Report Card).

But they are less impressed with progress on the Canterbury earthquake recovery. Says EMA's Kim Campbell, "initially they handled the quake superbly but inexplicably we have now settling into a planning miasma at a time when decisive leadership could kick-start our recovery."

"I'm not sure we can keep on blaming Europe for our situation," says South Pacific Picture's chief executive John Barnett. "And I am concerned that one of the biggest growth stimulants, if not the biggest, is the rebuilding of Christchurch.

"So, without the earthquake where would we be?"

The Government was also marked down for failing to stem the flow of Kiwis offshore. 'It's a ridiculous discussion," said a leading banker. "People want their cake and eat it too. The want a Green New Zealand but they don't want people to work in Australian mining."

The Cabinet's first six months back in office was dogged by political debacles: botched regime change at MFAT; the Bronwyn Pullar affair that claimed the scalps of top ACC players; the proposed sweetheart deal that the PM spearheaded with SkyCity which would fund a new national convention centre for more pokies and the fumbled shift to increase classroom sizes.

CEOs marked down Cabinet Ministers involved in the most high-profile debacles. The biggest casualty was ACC Minister Judith Collins, who dropped from 6th to 11th place this year.

Foreign Affairs Minister Murray McCully was at bottom place reflecting the ructions at his foreign ministry.

- NZ Herald

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