Managing the hot potatoes

Prime Minister John Key. Photo / NZH
Prime Minister John Key. Photo / NZH

John Key has proved an able prime minister, but his political management has left him vulnerable to silly sideshows.

That verdict, from the EMA's Kim Campbell, sums up the frustration many chief executives feel about the Key Government's propensity to get caught up by too many "petty distractions".

But, says a major exporting chief executive, most of this stuff will not stick to the Government. "In the end, stuff happens; it's about how you manage it. The GCSB, youth unemployment and the Solid Energy issues are not important to people. "Novopay looked poorly managed. Auckland housing will continue to bite - while this is hard I think the government could "think bigger" on this issue."

Goodman Fielder's Peter Reidie says it was not a great list from the Government's perspective. "Should let a business go broke. A focus on the economy will help unemployment and housing. Novopay - hopelessly mismanaged by a clearly incompetent Government Department (God help us, they're educating our kids). GCSB unfortunately is the modern world."

Here's what CEOs had to say on the Government's political management of five hot potatoes.


Chief executives felt the Government was allowing the Opposition and media to make the story rather than writing it itself. "GSCB is an example. It has nothing to do with 'spying on NZers' - it has to do with inter-agency co-operation and is a total irrelevancy," says a capital markets player. "But opposition and media are setting the agenda." Seventy per cent of respondents believed the GCSB should "spy" (although some criticised that as a loaded word) on, or intercept New Zealanders' communications at the behest of police, defence and the SIS; 70 per cent also believed the GCSB should maintain NZ's cyber security (including for firms). They were against an inquiry into the GCSB.

2. Youth unemployment

Nearly 80 per cent wanted to see employers financially incentivised to take on more young staff with the proviso they get on-the-job training.

3. Novopay

The Novapay fiasco had teachers up in arms when their salaries did not arrive on time. "Novopay management improved once Joyce became involved," said Mainfreight CEO Don Braid, in reference to the PM's decision to bring in Cabinet trouble-shooter Steven Joyce to sort things out.

4. Housing

Auckland Chamber of Commerce chief executive Michael Barnett says the failure of Auckland to deliver 10,000-15,000 houses a year to meet demand provided a good opportunity for Government intervention: "Why did it take so long? Also missed is an opportunity to review why the cost content of similar sized houses in NZ vs Australia is so different and an opportunity to review the building supply chain and its impacts on NZ."

5. Solid Energy

Solid Energy has turned from "hero to zero" with the global slump in coal prices. CEOs said it demonstrated the perils of the State owning and running businesses. "Solid Energy has been difficult as the banks are keeping it afloat so the public haven't heard the full story." A frequent observation was that the Government needed to "get on top of the spin" and communicate better with the public,.

6. Cabinet Rising Stars

Energy Minister Simon Bridges has polevaulted more senior ministers to go straight into the top eight lineup on CEOs latest ratings of the Key Cabinet.

Several chief executives marked out Bridges and Communications Minister Amy Adams as top performers.

"Bridges and Adams are the stars among the new breed," said a government specialist. "Both competent and confident. Expect them to be leading the party in five plus years." Primary Industries Minister Nathan Guy was also marked out.

Others noted the Cabinet has a nice balance of young and old, "though rather too much is expected of the senior members. Undersecretary appointments might provide mentoring for the less-experienced members."

How they scored

2.20/5 -GCSB issues

2.84/5 - Youth unemployment 2.48/5Novopay

2.82/5 - Auckland housing

2.44/5 - Solid Energy

Pokie plan has CEO backing

Legislation to allow the SkyCity "convention centre for pokies" met with the approval of 78 per cent of chief executives who agree it is justified in the interests of promoting economic growth.

"Let's be pragmatic about it. why without incentive would SkyCity fund? And New Zealand is capital-constrained," said Albano Healthcare chairman Alison Paterson. "However, the process around the negotiation needs to be transparent and even-handed." But 14 per cent of CEO respondents were adamantly opposed saying the deal was "not transparent" and "a poor look at many levels".

"The issue here is not the legislation, it is rather how the Government runs a process to promote economic growth and whether there is transparency for all involved in a competitive process, so that all parties work to the same criteria and terms," said an energy sector boss.

"It plays hard and fast with the rules and leaves the door wide open to future abuse," added an export chief.

"Borderline though... this specific example comes pretty close to being pretty risky to justify," said Port of Tauranga's Mark Cairns

Others said they were comfortable with legislation for special benefits but were uncomfortable because of the downsides of gambling.

"The casino was never going to go away... It's here," said an Auckland business leader. "So why not let them have some more space to gamble, but get them to build something we need. Personally I think that is savvy."

- NZ Herald

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