Finance minister Grant Robertson got the highest rating from business leaders. Photo / Michael Craig
Business confidence has plunged to its lowest level in nearly two decades amid the fallout from Covid-19 and leaders say neither major political parties are offering economic policies that make them feel reassured.
In the run-up to the general election, the Herald's Mood of the Boardroom has surveyed 165 business leaders from across the spectrum about their views on the local and international economy, biggest worries, and how they rate the performance of political leaders.
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Mood of the Boardroom executive editor Fran O'Sullivan said it was heartening that a record number of CEOs took part in the 2020 Survey against a background of the Covid-19 pandemic.
"Optimism may have been at the lowest levels seen in the survey's history but their responses demonstrated their own commitment to turning the economy around."
O'Sullivan said despite the admiration for Prime Minister Jacinda Ardern's leadership during the Covid-19 crisis there was a sense that the private sector's own ideas were not filtering through to either Ardern or finance minister Grant Robertson.
"Business has had almost enough of "9th floor" reign and wants a full seat at the table," O'Sullivan said.
Mainfreight chief executive Don Braid said it was time for the Prime Minister to embrace the business community rather than relying on the bureaucrats for advice and execution.
"There are many willing to devote time, energy and ideas in areas that allow New Zealand to find the right environment to operate in a post-lockdown economy."
A snapshot survey taken after the major political parties announced their tax policies found both lacked economic policies that gave business confidence.
Business leaders rated Labour's economic policies 2.44 out of 5 and National's slightly better at 3.42 out of 5.
Kirk Hope, Business New Zealand chief executive, said Labour's economic policy response to Covid had underpinned the economy in challenging times.
"However the long term plans are less well understood, They will need to do a hard sell."
Hope said National's plans were slightly more pro-business but both parties needed to show how quantitative easing enabled them to maximise a reduction in borrowing costs to help the economy.
One high-profile company chair said both parties were seriously lacking in any policies to give confidence the could stimulate economic recovery by opening the borders safely.
Braid said the policy in general from both main parties was weak and uninspiring.
Business leaders worry Labour's plans to increase the minimum wage, extra sick days and another public holiday will add more pressure on employers and result in further redundancies.
National's tax policy is seen as more appealing to business and its proposal to reintroduce the ability to end an employment contract within 90 days is attractive.
But the recent mistakes by its finance spokesman Paul Goldsmith had some questioning the party's competence.
National has promised a temporary tax cut while Labour wants to tax higher earners.
Deloitte chief executive Thomas Pippos said tax promised to be a very complicated and emotive topic that would either be centre stage at this election or not far from it.
"The bet being placed by Labour is that it's worth waking up a few of the sleeping dogs, that are no doubt viewed as unfriendly, leaving the taxation of capital and wealth in the too hard basket.
"National on the other hand is betting on offering a path to nirvana — lower taxes and crown debt, while still enhancing services, in part through curbing what they view as wasteful spending and suspending Super Fund contributions."
David McLean, chief executive of Westpac New Zealand, said business needed to see policy that supported the economy to grow and rebound from Covid-19 for the benefit of all of its customers, whether they're households or businesses.
"The future has never been so uncertain, but that means that the need for crisp and clear policies and plans has never been greater.
"We need to see pathways mapped, not just for how to escape from the current Covid-19 crisis, but to take us toward a better future by addressing some of the big challenges we face beyond Covid-19, such as increasing our productivity and tackling climate change."
Spark chief executive Jolie Hodson said the pandemic had fundamentally shifted the way New Zealanders work, learn and connect and the global recovery could take a number of years.
"Therefore our recovery needs to be focused on building for the 'new normal', and accelerating New Zealand towards the opportunities it presents, versus simply rebuilding what we have known in the past."
Prime minister Jacinda Ardern was rated 3.88 out of 5 for her leadership over the last past three years with many admiring her handling of the Christchurch terror attack, White Island disaster and the pandemic.
But executives say she has been let down by her MPs and Labour's inability to deliver on 2017 election promises including KiwiBuild and Auckland's light rail.
National party leader Judith Collins was rated highly for her courage in leading the party into next month's election with a rating of 4.2 out of 5 but some believe her run for government is too little, too late.
Collins was rated highly on economic and political management but had lower ratings for integrity, trustworthiness and the ability for National to form a coalition.
Finance minister Grant Robertson was rated the top performing minister in the current cabinet with a score of 4.18 out of five while Ardern was second followed by Kris Faafoi who was rated top in last year's Mood of the Boardroom.
Robertson is seen as capable, calm and credible but many believe if Labour is re-elected the real test for him is still to come.
Beca CEO Greg Lowe said Roberson had a good grip on the economy, its drivers and what made it succeed.
"He is a hardworking and capable minister. Engagement with business is good but we could improve the teamwork between government and business."
Business leaders in particular have given the thumbs up for Robertson's decision to quickly roll out the wage subsidy in response to Covid-19.
But some are concerned about the rise in Government spending and the huge level of debt taken on to pay for Covid stimulus packages.
Rival National's finance spokesman Paul Goldsmith has yet to make a major impact with many top business leaders.
When asked if Goldsmith presented as a credible future minister of finance 53 per cent of respondents said yes and 22 per cent said no. The remainder said they were still unsure.
The survey found business confidence is at its lowest level in nearly two decades and is well down on that following the 2008 Global Financial Crisis.
Around 40 per cent were much less optimistic about the general business situation for their industry, nearly 70 per cent felt much less optimistic about the local economy and 87 per cent were much less optimistic about the global economy.
Business leaders were most concerned about New Zealand having quality border protection against Covid-19, the level and quality of Government spending and level of Government debt.
The potential for community transmission and general uncertainty around the impact and direction of current or proposed government policies was also a worry with one in four citing it as extremely concerning.
Just under 31 per cent were extremely concerned about further waves of Covid-19 and 21 per cent were worried about a lack of international political leadership.
Business leaders say the biggest things keeping them awake at night are protecting business and staff from Covid-19, achieving top line revenue growth and sourcing and retaining skilled staff.
ANALYSIS: We already know what happens to NZ's economy when the borders are closed.