Pity Finance Minister Grant Robertson. The former student leader, junior diplomat and political staffer has done almost everything right to avoid repeating the Winter of Discontent that rocked Helen Clark's first term.

He has assiduously networked with industry groups and tries hard to bond with businesspeople despite the enormous gulf between his outlook and theirs.

His fiscal rules were designed to avoid allegations of profligacy to the extent of upsetting the Labour left.


Expensive promises opposed by business like fees-free tertiary education were dealt with before Christmas.

Since then, it's all been fairly orthodox. Changes to the Reserve Bank Targets Agreement were cosmetic.

Despite a cool $20 billion of new operating and capital spending over the next five years, the Crown's surplus and debt tracks are both respectable. Fiscal conservatives can be happier than teachers and nurses.

Moreover, as Acting Prime Minister Winston Peters points out, the sharemarket is at a record high, which hardly suggests fund managers are worried about future dividends.

Businesses report reasonable confidence about their own prospects.

In the short-run, the US and world economies are likely to be boosted by the Trump tax cuts. The CPTPP has been finalised, New Zealand and the EU have launched free-trade talks and the UK may not be far behind.

Notwithstanding all the pre-election rhetoric from Labour and NZ First, there is no plan to restrict mass immigration on which aggregate GDP has so strongly depended.

Despite all this, headline business confidence is sharply down and the dollar is declining.


Recent GDP data and the April tax out-turn were a smidgen below forecast. Any hope of a fiscal surprise on the upside to solve issues like the nurses' pay dispute is evaporating.

While borrowers will be happy the Reserve Bank is just as likely to cut as raise interest rates, that also indicates a flat economic outlook.

Some of the reasons for business's trepidation are outside the Government's control, including Mycoplasma bovis and the risk of the rules-based multilateral trading system collapsing as a result of the antics in the White House.

Former Prime Minister Helen Clark worries that the US could even pull out of the UN, collapsing any semblance of a rules-based security order.

After the events of 1987, 1997 and 2007, the world seems overdue for another financial shock.

But the lack of business confidence is also driven by huge policy uncertainty at home.

Compared with the previous Government's target of a 50 per cent reduction in net carbon-equivalent emissions by 2050, the Prime Minister's "nuclear-free moment" of a carbon-neutral New Zealand by the same year is projected by NZIER to cause real GDP to drop by an average of $7.8b a year, hitting the primary and manufacturing sectors hardest.

The unanticipated oil and gas decision has rocked other sectors, wondering if the Government will come for them next.

One export water-bottling project was ticked off by Conservation Minister Eugenie Sage but her Green party will split if there is another.

Unusual moves like the Government's attempt to exempt a single property development from its ban on overseas buyers, apparently at the behest of Regional Development Minister Shane Jones after lobbying by Sir John Key, raise questions about Government's decision-making processes.

For whatever reason, businesses worry they will face costs their international rivals won't, while their domestic competitors are granted some sort of special relief.

However diligently Robertson networks the boardrooms and prudently keeps the Government's books, there is really nothing he can do about any of this.

The Government consists of three parties, two of which are on the cusp of oblivion. For its part, Labour is polling consistently below National and knows Jacinda Ardern will end up one of New Zealand's shortest-ever-serving elected prime ministers if there is an early election.

NZ First and the Greens know they must achieve unexpected policy wins if they are to survive — and everyone involved knows that if Winston Peters or James Shaw and Marama Davidson are firm on a demand, Labour dare not disagree.

As the election emerges on the horizon, the pressure on NZ First and the Greens to make ever-more outlandish demands will only increase and Labour's ability to say no will decline. Even the most peculiar policy proposal or sudden carve-out for your competitor will become possible. No one can really anticipate what will happen.

But only the most brave or reckless businesspeople will see the next two years as a good time to take a risk.

- Matthew Hooton is managing director of PR and corporate affairs firm Exceltium.