Business loses confidence in Act

John Key and John Banks sit down together for their now-controversial 'cup of tea meeting' in Epsom. Photo / Dean Purcell

Brash's party still preferred partner for CEOs, but Maori and Greens also get a look-in, writes Fran O'Sullivan

John Key and John Banks have had their symbolic "cup of tea" - but while business still supports Act as a coalition partner in a future National-led Government - it is fast losing confidence in the right-of-centre party.

"Business might have to suck it up and vote for Banks to give National a coalition partner that at least thinks about business," said a professional firm boss. "The Act Party has lost its way and needs refreshing. I doubt John Banks is that but he's the only chance Act has of being re-elected. Don Brash should go - he is yesterday's man."

Business' rapid loss of confidence in Brash - a former National Party leader and Reserve Bank Governor - is telling. If he stays on as leader after the election - and there has been considerable speculation the mystery tape records Banks saying Act will be "restructured" - he will need to stay on-message.

Banks needs Key's imprimateur if he is to have any chance of winning Epsom and getting Act back into Parliament. Several chief executives believe Act has the best policies for business and a clear majority want the party to be part of a business-friendly National-led Government. But infrastructure lobbyist Stephen Selwood says it is "currently unclear how Act would make a positive policy contribution other than numbers in the House".

"I am not sure if any of those combinations are satisfactory, particularly in light of Act's performance over the past 12 months," says Mainfreight's Don Braid.

Act's falling star makes Key's job more difficult when it comes to rounding up coalition numbers. But chief executives recognise he will need a broad coalition if his party is to have any chance of winning a third term.

"The third term is important for National because the underlying demographic shift in New Zealand could see Labour becoming the natural ruling party," said an agri-business boss. "John Key has been smart moving the National Party to the centre. The inherent risk is that he does not do what he needs to do to drive growth and national competitiveness."

Several chief executives noted the positive role played by the Maori Party in the past three years. "The Maori Party in coalition with National is good for business because it creates the opportunity for the Government to be more sustainable and lasting into the future," said a resources sector chief executive.

"I think including the Maori Party is very helpful in inclusiveness and in the MMP environment most probably assists in ensuring less hold-ups in legislation, says South Pacific Pictures John Barnett. "National will most probably have a near majority so its coalition partners won't be the tail wagging the dog."

"Labour is unlikely to have a strong enough base and it would have to rely on others which will lead to potential stasis on almost every significant issue."

NZ First's poll ratings have risen since the election campaign began, but a chairman is not keen on seeing the party back in either a coalition or support arrangement after the election. "Any spectre of Winston Peters coming back into a position of power would provoke a further exodus of talented people."

Though most CEOs do not currently see the Greens as a positive player in a future government coalition, the party's stakes are improving with business. "They are becoming more business savvy and there's less polemic," said a communications company head.

Another said they were inclining towards National/Greens if their ambitions around environmental issues can be tempered. "There is some pragmatism in their policies that are future-relevant."

"The worst would be Labour and New Zealand First - the Greens are not a risk," said a motoring sector chief.

A clear majority of chief executives do not believe Labour-led coalitions will be the best mix for business. "Labour could continue to create a coalition by "giving stuff away" - more promises we can't afford," said a fast-moving consumer goods boss.