Mood of the boardroom: Business needs a clear path, with no surprises

Kirk Hope, BusinessNZ. Photo / Michael Craig

The BusinessNZ CEO is adamant that for business confidence to be restored, the current Labour-led Coalition Government and whichever party/parties comprise the next government must be clear and certain about the path it's going down.

"The best way to boost business confidence is a 'no surprises' approach," says Hope.

The challenge with creating something new is all well and good but unless you have signalled it for a period of time, it will reduce confidence, he adds. The more certainty across markets, sectors and within industries, the more confidence and investment there will be from businesses.

"It's not rocket science," he says.

Only 18.9 per cent of the 1193 respondents to a Deloitte/Chapman Tripp survey of BusinessNZ's members taken in June thought the current Government has a co-ordinated plan post Covid-19 of raising New Zealand's economic performance.

While Hope describes Finance Minister Grant Robertson, as "very stable, strong and effective" he is concerned about the new debt levels.

The Government's ability to clearly communicate its short, medium and long term plans will encourage businesses to invest, argues Hope.

"There needs to be a coherent economic framework to stimulate investment and growth from the current government," he says.

The business community has seen elements of the political parties' plans. But they have not been presented as a coherent whole.

"Labour has a tendency to engage, consult and talk to people which is a useful feature and allows businesses to add their input into what the framework looks like. But we also need some very clear decisions if Labour is to lead and the same advice would go for National," he says.

From a business perspective, there is an immediate need for a more responsive training/skills environment. Long-term skills mismatches have been the reason New Zealand businesses have had to rely so much on immigration, he says.

Education Minister Chris Hipkins, can be credited for recognising this and taking action on vocational training. Hope is extremely concerned about the international trading environment.

He notes free trade agreements with the EU and the UK will be very important to New Zealand and help insulate it against any challenges, economic and political. New Zealand's relationship with its biggest trading partner, China, is delicate and it must tread carefully, he warns.

The international environment is very intense with China and the US essentially "at war", he adds.
"We rely on China a lot, they don't rely on us at all.

"We sell a lot of our produce and goods and services into that market and we have a lot of investment coming into New Zealand from China. They have been, and remain, very important."

As countries the world over struggle to pull themselves out of the ever-present Covid mire, New Zealand's relationship with Australia, remains crucial.

There is clear political commitment between the two, exemplified by the Transtasman bubble and that work needs to continue despite cluster breakouts, says Hope.

"NZ companies list on the ASX because it's an opportunity to tap into more capital and Australia is a massive source of capital for New Zealand.

"By and large we've taken the same approaches to Covid and we want them to be successful and to be successful ourselves."

Kirk Hope's top 3 issues

Jobs: there needs to be a better skills-matching process.
Infrastructure: execution of projects at pace.
Investment: maximise the opportunity provided by NZ's reputation and allow high-quality investment into New Zealand.