Don Braid. Photo / Natalie Slade
The country's chief executives and chairs are not impressed by the Finance Minister and Government's wasteful spending.
Grant Robertson, a high-rating Minister of Finance in previous Mood of the Boardroom surveys, has some work to do to recapture the hearts and minds of many leading New Zealand businesspeople. Asked if they had confidence in Robertson's management of the economy, 46 per cent of the respondents said they haven't, 38 per cent said they have and 16 per cent were unsure.
Don Braid, group managing director of Mainfreight, said Robertson's star was waning. He says: "At least produce a plan that has some consultation with business."
Business leaders are calling for Robertson and the Government to reduce public spending and produce a long-term economic plan that increases productivity.
Craig Stobo, professional director and chairman of Precinct Properties, said "I used to have confidence (in Robertson) but institutional decay and miserable execution has shaken me. Covid corporate welfare, the $350 cost of living spray, the GST on managed funds reversal and the proposed income insurance scheme point to a political-polling driving policy.
"I would like to hear Minister Robertson state unequivocally that productivity is the primary driver of rising living standards for Kiwis."
Roger Partridge, chairman of The New Zealand Initiative, said "with high unemployment and rising inflation, I would like to see the Minister of Finance rein in public spending to support the Reserve Bank's policy of restraining inflation.
"Beyond that, the Minister should focus on strengthening public sector decision-making frameworks to achieve two things: Reduce wasteful spending by government, and avoid imposing unnecessary costs on the productive sector."
Partridge said top of the list was the Government's Fair Pay Agreement proposals. It should liberalise restrictions on foreign direct investment to enable firms to access the capital they need to lift productivity.
Chris Taylor, general manager at Sleepyhead and NZ Comfort Group, urged Robertson to stop wasting taxpayers' money on every item of the He Puapua agenda. "I don't believe he or the Government has shown any genuine interest in creating a long-term productive economic plan for New Zealand. They have a different agenda."
Our economy is holding up well, cushioned so far from the energy crisis but there is a cost of the living issue and also concerns of a recession around the world. Unemployment is low at 3.3 per cent, the second-quarter gross domestic product grew 1.7 per cent for annual growth of 1 per cent at the end of June, and inflation is at a 32-year high of 7.3 per cent.
The current account deficit widened to $8.5 billion in the March 2022 quarter, from $6.6 billion in December, with the value of imported goods rising to $871 million and services exports falling to $831m.
The Covid-19 Response and Recovery Fund, established in April 2002, was closed at $61.6 billion, with a remaining balance of $3.2b.
Working families and beneficiaries who pay increased rents are now mostly worse off or barely treading water since in the first lockdowns in March 2020. Food banks are seeing record demand and the waiting list for public housing has risen 65 per cent to 24,475 since the beginning of Covid, trebling in the past three years.
Economist Cameron Bagrie said the 2023 Budget would define Robertson's management of the economy.
"Any Finance Minister can spend but can he and the Government pivot away from sugar candy economics and spend less to curb inflation and start focusing on key supply-side initiatives to support growth?
"We need to be asking some hard questions about the labour market and where all the workers have gone." An airport executive said New Zealand was falling behind in real wages, competitiveness and performance. "Handouts, even good ones, aren't structural reform that deals with real issues. It's a sugar hit on those most vulnerable long term."
A banking chairman said Robertson should have dialled back his fiscal stimulus as the economy emerged from Covid. On the long-term plan, he suggested Robertson should have removed barriers to incoming foreign investment from OECD countries, fixed the Resource Management Act to make it easier and faster to get consent to build, and scrap the Fair Pay nonsense.
A building chief executive said overall Robertson's approach was okay but "I am concerned about large and increasing government overheads that adds to inefficiency."
He asks the Government to pull the obvious levers — get immigration going; leverage private sector to drive some of their agendas rather than trying to build a bigger and more cumbersome government machine; and not be so expansive with policy ambitions, instead be focused and crisp in solving the key issues.
Chief executives had other suggestions for Robertson in developing a long-term economic plan.
Chris Quin, CEO of Foodstuffs North Island, wants tax reduced at lower income levels to support the cost of living without inflation. Simon Bennett, chair of Accordant Group, wants a progressive change in employment relations rather than backward-looking collective bargaining.
Reduce debt and ensure allocation of monies to areas that can assist with the recovery and growth of the economy, said Franz Mascarenhas, managing director of Cordis Auckland.
Andrea Scown, chief executive of Mitre 10, said "if an investment won't drive value, then re-think it. There should be a focus on investing in productivity improvement."
A professional director summed up the feelings of the leaders. She did have confidence in Robertson but not now because of wasteful expenditure. "Our investment needs to be in matters that will lift our productivity — open borders, education, health and supporting a digital economy," she said.
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