Prime Minister Jacinda Ardern has fronted the business community today, where she confronted the spectre of falling confidence levels and announced a new advisory council to be chaired by Air New Zealand boss Christopher Luxon.
Ardern, speaking at a Westpac breakfast event this morning, says slumping business confidence "was not the elephant in the room, it's a flashing great neon sign with giant lights and fireworks going off behind it".
The Prime Minister told the breakfast that she wanted to build a closer relationship between business and Government and was setting up an advisory council that would "provide high-level free and frank advice" on key economic issues.
Luxon and the Ardern will determine the full makeup of the council and its initial work programme in the coming weeks.
"The council will provide a forum for business leaders to advise me and the Government and to join us in taking the lead on some of the important areas of reform the Government is undertaking," Ardern said.
Ardern started her speech this morning addressing low business confidence, which has slumped to levels not seen since the global financial crisis.
"When you line up business confidence with key economic performance measures over the last two governments there appears to be an inverse relationship between business confidence and the actual performance of the economy," Ardern told the audience.
"For instance, average business confidence scores under the Clark/Cullen Government were much lower than the Key/English Government, despite Clark and Cullen delivering higher average growth, lower unemployment, lower debt, larger surpluses and stronger wage growth than their successors," she said.
Ardern said the sixth Labour Government appeared to have inherited a similar "conundrum".
"We've run a strong surplus, have the best net international investment position ever recorded, stable and low interest rates forecast for some time which ought to spur investment and the lowest unemployment rate in a decade."
Ardern said it was wrong to paint results from business group surveys as being "about party politics" and said that it was probably more about certainty than confidence.
"But certainty shouldn't be confused for stasis and complacency, which are the enemy of progress, and for that matter the enemy of innovation."
Ardern said that the New Zealand economy faced a number of global challenges and that the country needed to confront them "to protect our long term prosperity".
"Skills shortages, lack of investment in the productive economy, a shallow national pool of capital, an infrastructure deficit, low productivity, building sustainable business practices in the wake of environmental degradation, and the challenges of what can broadly be called the future of work.
"Our choice when faced with these challenges is to do nothing, maintain the status quo and hope it resolves itself, or prepare now to enhance our prosperity for future generations."
Ardern raised the spectre of the 1980s in how New Zealand had been caught short by not moving fast enough to adapt to a changing world.
"It is time to retool our economy to make it work within the limits of our environment, shape it to deliver on the hopes and aspirations of all our people, and for our economic purpose to be bigger than just profit," she said.
"From reform of the Reserve Bank where we are including maximum sustainable employment as an objective, to getting active in the housing market, building modern transport infrastructure and setting ambitious emission reduction targets - we are renovating the existing legislative and policy architecture to bring it up to the new code our economy needs," Ardern told the audience.
"These are all things required for a new economy fit for the 21st century".