Grant Robertson and Paul Goldsmith. Photo / Michael Craig
Chief executives send a clear message to Minister of Finance Grant Robertson: You've done well, but the real test is yet to come. It is testament to his performance in the wake of Covid-19 that, asked whether Robertson has been a credible Minister of Finance, an overwhelming majority of CEO respondents to the Herald's 2020 survey — some 91 per cent, said Yes. Just 5 per cent said No; 4 per cent were unsure.
This rating is up considerably from last year. Robertson's rating in the 2019 Mood of the Boardroom survey had 54 per cent of respondents say Yes to that same credibility question and 29 per cent unsure.
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He is the highest-scoring minister, receiving a rating from respondents of 4.18/5 for ministerial performance. To put this score into perspective, this is the highest rating a Minister has received in the Mood of the Boardroom Survey since then-Finance Minister Bill English in 2016, where he received a rating in John Key's Cabinet of 4.51/5.
On his performance as finance minister, the word "capable" was frequently used. Fletcher Construction CEO Peter Reidy says he is "capable, calm and credible".
NZ International Business Forum executive director Stephen Jacobi describes Robertson as "a source of strength and stability for the Prime Minister and the Government". Says a transport executive: "thank goodness he is influential in cabinet".
Beca CEO Greg Lowe says that Robertson has a good grip on the economy, its drivers and what makes it succeed. "He is a hardworking and capable minister," he says. "Engagement with business is good but we could improve the teamwork between government and business."
It was this influence that saw him fulfil Labour's 2017 campaign promise to reduce net core crown debt to below 20 per cent of GDP in 2018.
"Robertson has done a superb job for three years," says a government relations firm boss. "Where are the loony lefties now who cried out for him to spend spend spend when New Zealand had a sizeable surplus? He stared them down — thank God!"
Since the early days of the Covid-19 crisis, Robertson has proven his mettle in the eyes of New Zealand's business elite. He has grown into this role and was superb throughout Covid — "whether we agree with his policies or not", says a real estate boss.
He rolled out the wage subsidy just days after the Government's response to the pandemic was put in place. The subsidy was initially for 12 weeks over the lockdown period, then extended a further eight weeks for businesses still experiencing a significant hit to revenue. A third extension was announced when Covid re-emerged in August.
The Government also introduced a temporary 12-week income relief payment for those who had lost jobs, low interest and interest-free loans for businesses, and changes to the tax system to encourage investment.
Many top business leaders responding to the 2020 Mood of the Boardroom survey say their companies accessed the wage subsidy — 41 per cent received the first iteration, 16 per cent received the second. "This was an excellent initiative. Quick and sharp response," says a healthcare chief.
Some see it differently. A banking chair says "as Minister of Finance, he has held the line in a number of areas, but has allowed Government spending to run riot over the pandemic".
Independent director Cathy Quinn says the wage subsidy was "an important step to keep people in work and the economy going."
But she says we now need business to adapt to the tough new environment as the Government can't afford to subsidise indefinitely.
An executive in the transportation sector says "the real test will be if he gets back and whether he can drive quality spending as opposed to a lolly-scramble".
Mainfreight CEO Don Braid says Robertson has performed well under the conditions — but notes "the real challenge now lies ahead".
That challenge is New Zealand's economic recovery, and the hefty Government debt. According to the Budget, Government debt will peak at 2024 when it hits $219 billion (just under 60 per cent of GDP).
Robertson insists New Zealand will pay down its increased debt over time, through growing the economy. He has ruled out cutting significant public services and income support.
"When I look back to the late 80s and early 90s I saw a different kind of approach to recovery from a downturn, one that was more of an austerity-based one — it was young people who bore a lot of the brunt of that. I am determined we won't allow that to happen."
The Government's approach was to invest in young people now through training and job support.
Chair of Precinct Properties, Craig Stobo, says Robertson has been "unruffled and steady," adding "the spectre of the 80s economic reforms informs his policy preference".
It is unsurprising most CEOs focused on Robertson's performance in relation to the Government's Covid-19 economic response. However, there is underlying disappointment that he has — so far — lacked long-term vision, and hasn't used his position to deliver on the transformational change Labour campaigned on in 2017. A real estate boss says: "he lacks depth and strategic focus — it is all about the now." Adds an executive recruiter: "I have severe concerns over his lack of focus and long-term thinking."
The chief executive of an investment firm says: "He did a sound job in his first two-and-a-half years but he had the opportunity to create a massive lasting legacy and transformational change with the big spend up and appears to have wasted the opportunity on instead spreading money in every direction."
New Zealand's top chief executives want Paul Goldsmith to find confidence and clarity.
National's finance spokesperson has yet to make a major impact with many top business leaders, perhaps because he has been overshadowed during National's leadership turmoil.
"Paul, like many in the opposition have been starved of oxygen in terms of public voice or debate," says Deloitte CEO Thomas Pippos. Precinct Properties chair Craig Stobo has a similar view: "He has emerging credibility but low share of voice." The 2020 Herald Mood of the Boardroom survey asked executives whether Goldsmith presented as a credible future minister of finance. Fifty-three per cent of respondents said Yes; 22 per cent said No.
The remainder — a significant 25 per cent — say they are still unsure, with many noting Goldsmith has lacked visibility at a time where strong opposition is needed.
"He's been meek," says an executive in the wine industry.
"He should have had a field day with this Government," says an investment banker. "But he has been very quiet in Opposition." Another high-profile banker says: "I haven't seen enough to suggest he is a credible future minister of finance, but give him the benefit of the doubt."
"Based on what little I have seen, he seems to be okay — but I am not ready to say 'yes, he's a credible future minister of finance'," adds a recruiter.
This morning, Goldsmith will debate with Finance Minister Grant Robertson at the launch of the Mood of the Boardroom Election Survey. Several of New Zealand's top bosses note that compared to Robertson — who received a positive response from 91 per cent of CEOs — Goldsmith lacks credibility.
Grant Samuel managing director Michael Lorimer says Goldsmith does not have a good grasp of the issues: "This was evidenced at last year's breakfast debate and he has not improved since," he says.
"He needs to put up ideas — not just point out the faults in the Government," says a healthcare boss.
"While I don't like Labour's policies, I think Grant Robertson is a far better and more credible Minister of Finance."
"He's not as strong as Grant, but he has made some excellent suggestions and would be tested if he became minister, which would give him the chance to raise his credibility." says an executive in the real estate sector.
But Goldsmith should take heart. The Opposition finance spokesperson is typically challenged when compared to an incumbent who has become established in the role.
Robertson also faced a hurdle connecting with the business community prior to taking the helm.
In the 2016 Mood of the Boardroom survey — when Robertson was up against Bill English — one banker suggested Labour should replace him with "someone who understands the portfolio, like David Parker". In the eyes of CEOs, Robertson is now their top performer.
Goldsmith took on the finance portfolio in June last year and was elevated to third in the party's parliamentary rankings under Simon Bridges' leadership.
He won praise as Opposition finance spokesperson in the early days of the Covid-19 pandemic.
Goldsmith commended the Government for the wage subsidy package and its Covid leave support. But he also called for more targeted and specific support for business with more rigorous measures around it if a wage extension was introduced — something that is now being debated as it comes to light that some large, profitable companies likely took advantage of the subsidy.
The tone he used to deliver his criticism of the detail in the Government's economic response was in stark contrast to then-leader Simon Bridges, which drew strong condemnation and ultimately led to his demotion.
"Paul has continued to work hard and push on detail," says a transportation boss.
Goldsmith retained the finance portfolio under Todd Muller's brief stint as leader but dropped in ranking to number five — bouncing back to number three when Judith Collins assumed the leadership.
Despite his backing in the role by three leaders, CEOs say Goldsmith is still yet to prove he's got the chops to run the government books. But they also acknowledge he is in an unenviable position, following in the footsteps of some high-performing predecessors — former National Party finance minister Bill English consistently rated top of cabinet during his tenure as finance minister.
"I compare him to Bill English — a hard act to follow," says a CEO in the agricultural sector.
"I like Paul — and he is smart," says a top lawyer. "But scratch beneath the surface and he can't answer follow up questions."
Another major concern raised by CEOs is Goldsmith's lack of ability when it comes to communicating and connecting with the business community and the broader public.
"He is not really a retail politician, but he is extremely bright and is a very fast learner," says a professional director.
"He is not yet credible, but he has the brain, if not the communication skills — he's very dry," says a lobbyist. A CEO in the transportation industry says he lacks mana and presence — "too much IQ and not enough EQ!". Another CEO shares a similar view: "He's dry, but capable."
The head of an investment firm sends the following advice to Goldsmith: "He needs to command the key points and deliver them with more confidence and clarity."
A real estate boss gives a backhanded compliment — referring to Goldsmith's extracurricular interests: "He's an excellent art historian."
Dairy export revenue has lifted 16% to a record $27 billion.