Prime Minister Jacinda Ardern said she had targeted today's speech – to a breakfast of business leaders at Westpac's Britomart head office - as a big one the moment she returned from maternity leave.

She needed to. In her absence business confidence has plunged (to lows not seen since the GFC according to some surveys).

Ardern didn't disappoint.


Ardern: Slumping business confidence 'a flashing great neon sign with giant lights'
Comment: Why Jacinda Ardern's posting for Christopher Luxon is a masterstroke

As a performance it was passionate, conciliatory and highly polished.

She didn't dismiss plunging levels of business confidence as pure politics and she didn't rubbish the surveys that measure it.

She did argue that they don't historically correlate well to GDP performance, which is true but perhaps a little disingenuous.

That's because she didn't mention the measures of businesses' confidence in their own outlook, which have also fallen.

These are business-confidence indicators that economists care about and they do correlate more closely with GDP growth.

The PM also avoided mentioning the downgrading of growth forecasts by most economists in the past few months.

Regardless, she made it clear the Government was listening. She said she was taking on board concerns about a lack of certainty and she promised to do better on that front.


She reassured, for example, that there will be no more than two more industry-wide fair-pay agreements done this term.

Prime Minister Jacinda Ardern addresses the business community and announced a new advisory group chaired by Air NZ boss Christopher Luxon.

That meant most employers would not need to deal with them this term and would be able to sit back and see how they work, she said.

Certainty however, "should not be confused with stasis and complacency", she warned.

We had made the mistake of not transforming our economy in the 1970s and early 80s and we had paid a price for that with the speed of reform that had to come after, she said.

This Government still plans to transform the economy – broadening the economic focus beyond GDP – and it wants business to come with it.

With that in mind, she announced the minor coup of roping in Air NZ chief executive Christopher Luxon (a name that has been closely associated with John Key and the National Party) to head a new business advisory council.

Will all this be a silver bullet for business confidence? No, there are too many outstanding policy issues that employers just don't like.

There is only so much ground this Government can concede to business before it starts to betray its left-leaning base.

The critics won't be silenced. Some have voiced concerns that business advisory councils and partnership agendas look like yet another lay of "working group" bureaucracy.

It was a line that the Opposition ran with.

National leader Simon Bridges suggested the new advisory council took the number of working groups set up by this Govt on business issues to ten.

But BusinessNZ chief executive Kirk Hope welcomed the move describing it as a "positive step" and a sign the Government was heeding the concerns that business had raised.

The PM's audience today was the big end of town – from a corporate world dominated by liberal progressive HR regimes.

Smaller businesses in the regions may not be so enamoured of the grand vision.

In the end, though, it is the fortunes of this economy that will decide things.

If growth rebounds next year - as many forecast – then the business confidence issue may fade into the background.

But there is a risk of low confidence becoming self-fulfilling so, short term, this speech matters.

If there was any doubt that Ardern's return could bring some much-needed diplomacy back to the dialogue between government and business, this should end it.

Sign up to the NZ Herald Business page on Facebook for latest news, commentary, data and analysis