David Cormack: Business confidence giving the Government a headache

COMMENT:

Years ago I was working with a client who had a huge workforce. The CEO was trying to do some long-term planning because that's what businesses do. She said that she might want to build a factory which is going to only be beneficial in 10 years time, but in order to make that decision she needed to have a reasonable expectation of what the landscape is going to look like in 10 years time.

She told me that she didn't mind if there was going to be regulation that may negatively affect her bottom line but she just needed to know what was coming so that she could plan for it.

That's a large part of business confidence. And business confidence is giving the Government a headache.

I'm not that in favour of policies that focus on making businesses confident as these can often come at the expense of the worker. But this Government obviously cares. The last survey had business confidence at its lowest since the GFC in 2008, and while the situation is nowhere near as dire as then - in fact the "fundamentals" of the economy are strong with low unemployment, a booming sharemarket and steady growth - there is something the Government can be doing better.

They need to communicate certainty. There are some mitigating circumstances about the survey: it's self-selecting, so people with an axe to grind are far more likely to respond; it asks business owners who are largely profit driven, whereas workers and managers who are on a salary may have different perspectives; and of course the political bias for these polls has been well canvassed. But these factors don't excuse what has been a lack of communication about the Government's plans for our country's workers.

I have had a number of people complain to me that this Government is dragging us back to the "bad old days" of the 1970s with strikes and lock-outs; and while that is fear mongering, there is a lack of clarity of what it will be doing. Working groups everywhere but not a lot to think.

You can only carry on with a mantra of governing with kindness for so long until people start asking what that kindness actually means.

However it's not all doom and gloom. The working groups will begin reporting back soon. I understand that a draft of the tax recommendations will be out in September, and as these reports start coming in we'll get a feel for what the Government is going to do. Also consumer confidence has remained high and so long as that stays the case then the sector that seems most lacking in confidence - retail - will continue to see customers coming in and spending money.

All this isn't hurting them at the polls though. The latest poll still has the Government with a comfortable lead over the opposition, and Simon Bridges' preferred PM rating in the sewer. He's been compared to Andrew Little. But Little had a preferred PM rating of 10% while his party was on 25%, Bridges has 10% in a party that is polling in the mid 40s. His exercise in getting out and introducing himself to people has actually caused his popularity to decrease.

And it's going to get harder. Once the Government has something concrete it can announce I think we'll see business confidence improve. And of course it should be noted that it's really business leaders' confidence. I'm sure that if you asked someone on minimum wage in a large company how they were feeling, they'd be pretty happy at the increase in Working for Families, as well as the minimum wage going up. Their certainty has improved because they know they'll be getting more money in their back pocket.

I've previously said that this Government has at times looked like a bit of a disorganised rabble but we should judge it on its outcomes. They must not forget that we need to know what the plan is. Right now low confidence isn't affecting people's day to day lives, but the second that it begins to we'll really start to hear people scream.

• David Cormack is the co-founder of communications and PR firm, Draper Cormack Group. He has worked for the Labour Party, the Green Party and interned for Bill English while studying.