Westpac New Zealand chief executive Catherine McGrath is adding to the chorus of Kiwis calling for more bipartisanship across the political aisle when it comes to the management of the country’s infrastructure.
Speaking to the Herald after taking part in its annual Mood of the Boardroom survey, McGrath said the changes of approach between different governments were creating uncertainty and impeding growth.
“I completely respect that political parties go in with different views, and we value that as the voting public,” McGrath said.
“But I think on some critical areas of infrastructure – components of health, components of education, components of housing – having a bipartisan path would let us firm up in terms of the investments.
“It would let us firm up in terms of the economy and still give plenty of room for different policy views and different execution approaches.”
McGrath called on political leaders to at least agree on the core aspects of building infrastructure.
She said businesses struggled with the swings between administrations.
Every time this happens, progress is paused as the public sector figures out how to articulate the change, while those in the private sector must work out what this means for them and how they need to position themselves.
For example, McGrath recognised more work was being outsourced to private healthcare providers under the Coalition Government compared to the Labour Government.
“We’re doing some work with quite a cool-looking build that’s going to be happening in the South Island, that is assumed to be a mix of public and private investment. They’re just having to get on with it in the hope that the contracts firm up and it will all continue in the way that it’s currently planned,” McGrath said.
She noted the provision of public housing was also being dealt with very differently by the Coalition Government, which was leaning more on community housing providers rather than the state to build public housing.
While house prices and rents have fallen, McGrath remained concerned about housing affordability in New Zealand.
She praised the Reserve Bank’s proposal to tweak the amount of capital it requires banks to hold in relation to the different types of lending they do.
McGrath was of the view that having more granular rules would enable banks to lend to community housing providers at a lower cost.
“There have been some good policy decisions made by this government, which is useful. But overall certainty around government policy would both give developers and community housing providers real confidence to start scaling up.
“It means that we could look at quite innovative lending structures like shared equity and leasehold to help. But again, having some bipartisan certainty over some of the core spine of that work, would be great.”
McGrath wasn’t sure how much more policy uncertainty there was under a three-party government than a single or two-party one, however she recognised having more decision-makers involved could complicate things.
All the drama around the resignations of Reserve Bank Governor Adrian Orr and board chair Neil Quigley hadn’t dented McGrath’s confidence in the bank’s ability to do its job – maintain price stability and financial stability, including by regulating banks.
“From a supervision team perspective, which is what, if I was the public I’d be pretty focused on, they haven’t missed a step. They’re still having all the same conversations with us that they always have done.
“And so, I think in some pretty tricky circumstances, the team on the ground is doing a great job at just continuing to do their jobs really well.”
An issue that was of greater concern to McGrath was the impact divisive “anti-woke” rhetoric in various pockets of society was having on staff.
“But I think it’s even more important to talk about it now, given if you’re in a community that doesn’t always feel included, you probably feel more marginalised now because of some narrative globally than you might have done before,” she said.
“I think the world feels like a less inclusive place than it might have felt a couple of years ago, and the reassurance that I continue to give the team here is that nothing’s changed [at Westpac]. We still continue to do the same mahi that we’ve always done.”
Westpac is an advertising sponsor of the Herald’s Mood of the Boardroom report.
Jenée Tibshraeny is the Herald’s Wellington business editor, based in the parliamentary press gallery. She specialises in government and Reserve Bank policymaking, economics and banking.