TheChineseeconomicslowdownisthemajorinternationalrisktobusinessconfidenceinNewZealandaccordingtoCEOsanddirectorsrespondingtothe Herald’s2023ElectionSurvey.
Thisriskisparticularlytopofmind fortheagribusinessexportsector whichhasalargeexposuretothe ChinesemarketandhasalreadyimpactedNewZealand’slargestcompany,Fonterra,whererevenuehas declinedduetomilkpricepressures andtheslowChineseconsumerrecoveryinthewakeofCovid.
Butitalsoaffectsthetourismand exporteducationservicessectors whichcametoastandstillasfaras Chinawasconcernedduringthe Covidpandemic.
Lastweek,China’stopeconomic planner,theNationalDevelopment andReformCommission(NDRC),said theeconomyfacesalotofdifficulties andchallenges.
Ataspecialbriefing,theNDRCsaid thatitwouldrolloutpoliciesto“restoreandexpand”consumptionwithoutdelayasconsumers’purchasing powerremainedweak.
ReutersearlierreportedChina’s factoryoutputandretailsalesgrew atafasterpacelastmonth,butpersistentweaknessinthecrucialpropertyindustry,afalteringcurrency andweakglobaldemandforits manufacturedgoodscontinuetoimpact.
Beijing’sofficialgoalwasforannualgrowthtohit5.5percentthisyear. TheeconomycameclosetocontractingduringtheJunequarter.Buta Reuterspollof76analystsbasedin andoutsideChinapredictedthe economywouldstillgrowat5per centthisyear.
DameThereseWalsh—chairofAir NewZealandandASBBank—predictsthatwhileNewZealandhas beenvergingontechnicalrecession, “wecanseetowardtheendof2024 thattherewillbesomerelief.
“Theglobaleconomyisamixed bagandweneedtobefocusingon theopportunitiesinAsia-Pacwhere thereisfastgrowth.”
Othersarelesssanguine.
ContactEnergyCEOMichaelFuge forecasts,“severeheadwindswiththe interestratehikesreallystartingto crunchcombinedwiththedramatic slowdowninChina”
PrecinctProperties’CraigStobo explainsthat“higherbusinessfundingcosts,unsustainablylargefiscal imbalances,andaslowingChinaall
CEOsratetheimpactof internationalriskson businessconfidenceinNZ.
Theglobaleconomyisa mixedbagandweneed tobefocusingonthe opportunitiesinAsia-Pac wherethereisfast growth.
DameThereseWalsh
volatilityas“extremeconcerns.”
Histopbusinessprioritiesareexternallyfocused:Maintainingthe momentumtofostertradelinkswith India,andadvocatingforexpansion oftheComprehensiveandProgressiveAgreementforTrans-PacificPartnership.
KiwiRailCEOPeterReidyagrees. “Atthisstage,it’slookinglikeayear oftwohalveswithalotridingonan improvementinglobalconditions (forthatreadlargelyChina)thathas animpactbackinNewZealand.”
Reidyalsoflaggedinsurancesecurityandcompetitivepricing,ratedthe fifthmostconcerninginternational riskbyCEOsat6.77/10asadevelopingmajorissueforNewZealand infrastructureownersandcontractors.
increaserisksforNewZealandbusinesses”.
StephenJacobi,whoheadsthe NewZealandInternationalBusiness Forum,observesNewZealandisnot immunetoglobaldevelopments.
“Oureconomyhasbeenresilient butlowglobalgrowthandworsening termsoftradearehavingtheirimpact.”
Jacobiratedprotectionism,the Russian-Ukrainewarandgeopolitical
Otherinternationalfactorsaffectingbusinessconfidenceincludegeopoliticalvolatility(7.21/10),cyberattacks(7.09/10),majorweatherevents (7.01/10)andtheimperativetoput policiesinplacetocombatclimate change(6.98/10).
BecaGroupexecutivechairDavid Carternotedthecyberthreatlandscapecontinuestoevolverapidly necessitatinggreaterinternalawarenessandinvestment.
“Volatileconditionsglobally,combinedwiththeimpactofinflationand policyuncertaintyarecausingcommittedprojectstobereviewed.”
● Chinaslowdownimpacts agribusinessoutlookB28-31
TheHerald’sMoodofthe BoardroomElection2023CEOs Surveyattractedparticipation from120respondents.
Thisyear,100chief executives,14seniordirectorsor chairs,andtheheadsofsix businessorganisations participated.
TheyincludeleadersofNew Zealand’sbiggestcompanies rangingacrossagribusiness, bankingandfinance,manufacturing,aviationandtourism, transportandlogistics, education,telecommunications, environmentalservices,energy, insurance,professionalservices, andmore.Thesurveywasinfield fromAugust28-September20.
Resultsfromanearlier BusinessNZelectionsurvey takingthepulseonsomekey issuesareonB36-37.
The Herald’sCEOssurveywas launchedin2002withina Herald StateoftheNationreport. Thisisthe21steditionofMood oftheBoardroom. Thedebatebetweenthe financeministerandtheir opponentisafeatureofthe annuallaunchbreakfast.Ithas featuredFinanceMinisters:the lateSirMichaelCullen,SirBill English,StevenJoyceandGrant Robertson.Theopponentshave includedDonBrash,SirJohnKey, DavidCunliffe,AmyAdams,Paul GoldsmithandNicolaWillis. Ahugethankyoutoeveryone whohasplayedaroleinthis year’ssurvey,particularlythe participants. Weappreciateyoureffort. FranO’Sullivan ExecutiveEditor MoodoftheBoardroom
Confidenceandconcerns: TimMcCready,Duncan Bridgeman—B6-7
Thefinancialchallenge: GrantRobertson—B10
Thefinancialchallenge: NicolaWillis—B11
ThomasPippos:Supporton taxwanesfurther—B17
LiamDann:DoestheRBNZ mandateneedtochange? —B18
GrantRobertson
NicolaWillis
MurrayKirkness
TheMoodoftheBoardroomwill belaunchedonnzherald.co.nz from7.40amthismorning,atan eventhostedbyNZMEEditor-inChiefMurrayKirkness. FranO’Sullivanwillpresentkey findingsfromthisyear’sCEOs Electionsurveyandsummarise “themood”amongchief executives.
Kirknesswillthenmoderate FinanceMinisterGrantRobertson andNationalfinancespokesperson NicolaWillisinadebateonthe surveyfindings.
MoodoftheBoardroom
ExecutiveEditor: FranO’Sullivan
Writers: BillBennett,Duncan Bridgeman,LiamDann, TimMcCready,TamsynParker, GrahamSkellern
Subeditor: IsobelMarriner
Cover: RichardDale
Graphics: RichardDale,Isobel
Marriner
Proofing: NataliaRimell
Online: TennessyWeir
Advertising: NeilJackson
EventDirector: KatyRiddell
MoodSponsors
The2023MoodoftheBoardroom issupportedbysponsors:
BusinessNZ,Barfoot&Thompson, Brother,Deloitte,Dentons KensingtonSwan,EMA,Genesis Energy,Morrison&Co,Portof Tauranga,SparkandWestpac.
TheLabourGovernment’s poorrecordonpolicydeliveryhasundercutitsstandingwithCEOsasitheads intothe2023election.ButthescepticismisnotconfinedtoLabour.
Theproposedfundingof National’s$14.6billiontaxcutspackagehasdominatedpoliticaldebate duringtheelectioncampaign.
Chiefexecutivesratedtheproposalatanaverage3.17/5onascale where1equals“notcredible”and5 equals“verycredible”inthe Herald's MoodoftheBoardroomCEOsElection2023survey.
ButtherewasconsiderablescepticismoverWillis’refusaltoprovide National’sfullworkingcalculations.
“Failingtodisclosethedetailsbehindtheircalculationsofthepackage increasestheriskthatthisisjustmore politicalrhetoric,”saidMainfreight CEODonBraid.“Fixthefundamental issuesaroundtheeconomicmalaise ratherthantryingtobecutewithtax breaks.”
FromQueenstownAirportchair AdrienneYoung-Cooper,“theindependentanalysisdoesnotstackup. Andthisspeaksofshort-termism.
“Addressinginflationhead-onis whatisrequiredonanongoingbasis. Andprovingadeepermuchmore thoughtfulstrategyforeconomic growththatprotectsouruniquepreciousbiodiversityandnaturalenvironment.”
Thereisexactlyzeropossibilityof thesetaxchangesbeingfundedfrom theintendedsources.Particularlynot giventheircoalitionoptions.Theidea thattheywouldbeabletoobtain publicservicecutsof6.5percent withoutaffectingfrontlineservicesis populistnonsense.
TheNationalParty’sproposal includesadjustmentstopersonaltax brackets,anextensiontotheindependentearnertaxcredit,andincreasesinchildcareandin-worktax credits.
Nationalplanstofundthesetax cutsthroughpublicservicecuts,tax changes(includinga15percent foreignbuyertaxonthepurchaseof housesover$2million,taxing offshore-basedonlinegambling,userpaysimmigrationleviesandending commercialbuildingdepreciation tax),andthroughtheEmissions TradingScheme.RuralLandCochair RobCampbellsaysthereisnodoubt anintentiontomakecuts,but“No
certaintytheywillbeasdescribed.No credibilityinfunding.”Thatwasa sentimentechoedbymanywhosaid themathsdoesnotaddup.
PrecinctPropertiesCraigStobo saidtheproblemwasthatthe proposed“taxpackage”isisolated fromthemainfiscalissueswhichare ballooninggovernmentexpenditure andpublicdebt.
“Theself-fundingoptionsforthe taxpackageeitherlackconsultation withthesector(suchastaxdeductibilityofcommercialbuildingexpenditureondepreciation),orareunable toclearlyarticulatecredibilityofthe volumesofsalesofhousesover$2m andexpectedhousepriceinflation fromforeignbuyersofNewZealand houses;orthemostfavourednation taxtreatyimplicationsforallNew Zealandcitizenswhowanttobuya $2.1mhomeinNewZealand.”
EconomistCamBagrieobserved, “weshouldaspiretorewardworkby havingalowtaxburden,subjectto generatingsufficientrevenuefor deliveringkeyservices”.
“Taxcutsarehoweverthewrong policyresponseatthisjuncture,”said theCEOofBagrieEconomics.
“Thepackagebyitselfisinflationary.Evenifitwasfiscallyneutral (andthenumbersstackedup—which Idoubt),thatdoesnotmakeitinflation-neutral.
“Theforeignbuyertaxisnew moneyintotheNZeconomy.The needforfixingbracketcreepappears tohavebeenusurpedbypoliticsand thedesiretodeliverasizeabletaxcut inoneyear.
“Interestingtoseearecentpoll withalmosthalfsayingtheywould saveanytaxcut.Thissuggestspres-
sureonthesqueezedmiddleisoverblown.”Andfromtheheadofa business-relatedorganisation,“the projectedrevenuefromthetwonew taxescouldturnoutillusory.
“Itisnotgoodpolicytoendthe commercialbuildingdepreciationtax break.Infact,thisisnotataxbreak butanormalkindofdepreciation,so abolishingitmakesnosense.
“Nationalshouldnothavefound itdifficulttofindsavingsingovernmentexpendituresinceLabourhas increasedspendingdramatically overthepastsixyears.ButNational wasunwillingtodothatandsoit resortedtosomeunrealistictaxplans instead.”
Thereisanotherstrandtothe debate.
DevonFundsexecutivechairman PaulGlasssaidtheeconomyisflat atbest,andbusinessandconsumer confidenceisdown.“Asanation we’velostourmojo.Eventhoughthe taxchangesaremodest,hopefully theywillstarttoimprovesentiment.
“Themediaseemtobeobsessing oversmallfundingdetailsin National’staxplanwhenweareall awareofthemassivescaleofthe wastagethatiscurrentlyoccurringin governmentexpenditure.
“IfNationaldon’traiseenough throughtheforeignbuyertax,there mustbeplentyofscopetomakeup foritthoughshrinkingNewZealand’s bloatedgovernmentbureaucracy.”
DeloittechairThomasPippos added,“standingbacktheissueis howtoensurethattheoveralleconomyperforms,andthatGovernment expenditureisefficientandeffective. Thecurrentdebatelookstodeflect fromthisforpoliticalgain.”
Somerepondentssuggestedother mechanisms.
FromJarden’sSilvanaSchenone: “thefocushasbeenonthe15percent foreignbuyertax.Personally,Ithink thisisnothighenough(it’s60percent inSingaporeandworkingwell!)and shouldhavebeenhigher.”
WhenitcomestoLabour’sown$4 billionspendingcutsprogramme, announcedaheadofthepre-election economicandfiscalupdate—some 80percentofCEOsweresceptical Labourwouldmanagedebtdown.
Thecutswereslammedastoo little,toolate.“Iftheywerereally intentionalaboutanyoftheaboveit wouldhaveallbeenaddressedmuch earlier.Itsisallvotebuyingand politicalpositioningwithverylittle authenticity.
“Oneonlyneedstolookbackon whattheycampaignedonlastelectionandtheonebeforetoknowthat alloftheseareemptypromisesthat theywillnotdeliveron.Theydon’t knowhowtodeliverandareuncapableofdelivering.Theyobviously thinktheelectorateisthickandcan’t seethroughit.Whywouldanyone choosetobelieveagroupofpeople whofailedsospectacularlytodeliver anythingtheysaidtheywould. VotingforLabouragainwouldbelike goingbacktoanabusivepartner!” saidanAuckland-basedCEO.
Fromalogisticsboss:“Toolittletoo late.Idon’ttrusttheywilldeliver anything.Iamstillwaitingfor1cmof thelightrailtoMtRoskillJacinda Ardernpromisedinherfirstcampaign.Seriouslynobusinesscase after6years.”
●
B14-B15Spendingcuts challengeNationalhasunveiledfurther electioncommitments.Someof theseinclude:
● Immigration:Aninternational graduatesvisa,anewglobal growthtechvisa,adigitalnomad visa(12-monthvisatoattract skilledmobilepeople).
● Transport:Invest$257million overfouryearsinelectricvehicle (EV)chargers,endthecleancar discountand“utetax”.
CEOswereaskedwhetherthey hadanycommentsontheseor otherpoliciesreleasedsince thesurveywentintothefield. Here’swhattheyaresaying:
● “Increasingskilledmigrationis smart,let’shopeit’snota sacrificiallambincoalition negotiations.
● “Agreewithendingthe euphemistic“cleancar”discount (sinceproductionofEVsismuch morecarbonintensivethanpetrol cars).ButwhydoesNational committospend$257mof taxpayer’scashonEVchargers? Whycan’ttheprivatesectorset thisup?”—CraigStobo ● “I’mnotsureabouttheEV chargerinvestment...shouldn’t thisbeinhandsofprivatesector?”
—SilvanaSchenone
Labourhasunveiledfurther electioncommitments:
● Health:Freedentalcarefor under-30sby2026,raisebreast cancerscreeningagefrom69to 74,introduceanational endometriosisactionplan,make cervicalscreeningfreebetween ages25-69.
● Energy:Rebatesofupto $4000onrooftopsolarpanels andbatteryinstallations,andan extra$20millionforcommunity energyprojects.
Here’swhattheCEOsare saying:
● “Ithinkvotersarejust acceptingachangeinfinancial managementisneeded.Itisvery hardtovoteforthepeoplewho createdtheproblem.Ithinkitis assimpleasthat.Itisludicrous that$53billionwasborrowedfor onehealthinitiative,Covid.”— Privateequityboss
● “Dentistrychangeislong overdue.”—MichaelLorimer ● “Excellentinitiativesthatthe Natsifingovernmentshouldalso adopt.”—AdrienneYoung-Cooper ● “Ifullysupportmoreequitable healthoutcomesforKiwis.Ialso supportmakinggreenenergy decisionsmoreaffordable/ accessiblefortheaveragefamily household.”—AndreaScown
FranO’Sullivan
NationalLeaderChrisLuxonhasthe edge(sofar)whenitcomestoelection campaignperformances,accordingto CEOs.
OnMonday,weaskedrespondents tothefullMoodoftheBoardroom surveyhowtheyratedthecampaign performancesofthetwoleadersvying tobeNewZealand’snextprime minister.
ThiscameafterLabour’sChris HipkinsandNational’sChrisLuxon facedoffinthe 1News liveLeaders’ Debate.Italsocameaftermorethan threeweeksofsolidelectioneeringby bothleadersfollowingtheirrespective partycampaignlaunchesinAuckland onSeptember2and3.
TheCEOshadaclearview.
TheyratedLuxon’sperformanceat 3.36/5onascaleof1-5where1equals “notimpressive”and5equals“very impressive”.Hipkinswasratedat2.5/5.
“ChristopherLuxonprojectedasa crediblefutureleaderwithdirected passion,energyanddrive,whichwas important,givenhisrelativenewness intopolitics,”saidDeloittechair ThomasPippos.
TheTVNZdebatedominated comments.
Saidanexportleader,“Ithoughtit wasareasonablygoodandinformed debate,withChrisLuxonhavingthe edge.Iknowthemediadidn’tthink therewasenoughblood,butsurely thatisnotthepoint.”
Otherswerecritical.
“Thedebatewasanon-event becausebothcandidatesonlywent throughtheirwell-rehearsedtalking pointswithoutengaginginanactual argument.
“Theshallownatureofthe questionsandtheunwillingnessofthe presentertoallowaproperdebatedid nothelp,either,”saidabusinessrelatedorganisationhead.“Besides,
Theirbeigeperformance confirmswhytheir combinedshareofthe voteisdeteriorating. Neitherwanttoaddress whatvotersvariously wanttohear…
CraigStobo,PrecinctProperties
theamountofagreementbetweenthe twoleaderswasworrying.Thecountry needsaturnaround,andjudgingby therelativelyharmonious‘debate’, suchaturnaroundisnotonofferat thiselection.”
ThisviewwasmirroredbyPrecinct Properties’CraigStobo:“Theirbeige performanceconfirmswhytheir combinedshareofthevoteis deteriorating.
“Neitherwanttoaddresswhat votersvariouslywanttohear,sovotes areshiftingtotheperiphery.
“Whattaxincreasesorexpenditure cutsareyougoingtomaketobalance theBudgetandreigningrosspublic debt?Whowillpayfortheclimate changetransition?Howareyougoing tomanageco-governance expectations?
“And,howareyougoingtoheal divisionscausedbyLabour’sCovidjob mandates?”
“LuxondidmuchbetterthanIwas expecting.Theissueisalotofpeople arenowdisinterestedandIsuspectthe non-votewillbeadecider,”said SkellerupHoldingDavidMair.
Jarden’sco-headofinvestment banking,SilvanaSchenonesaid neitherleaderimpressed.
“Hipkinsseemstobefocusedon minutiaeandLuxonwassurprisingly under-preparedforsomecritical questions.”
Othersnotedithasbeenalacklustre, banalcampaignforbothmajorparties andleaderswiththeonlyreally thoughtfulpoliciesandperformances comingfromthirdpartyleaders.
“LuxonisbetterthanChippie,but neitherisoverwhelminglyimpressive. Butitisn’tjustaboutthem.IthinkDavid Seymourmakesthemostsense,and thepartyheleadshasthemost sensiblepoliciesevenifheisn’tmade forTV,”saidagasindustrychief.
Finalwordsonthedebate “Almostunwatchable.Evenfora politicsnerd,”—professionalfirmboss; “Boringanduninspiringfromboth leaders,”—Mainfreight’sDonBraid. Acompanychair:“Hipkinsseemsto betheawkwardone.Withoutapodium heisafishoutofwater.Mightbebetter suitedtostudentpoliticsagain.Not surewhotheothermanisotherthan thehandmadecheeserolleater.”
Formereducationminister ChrisHipkinswasthesole nomineefortheLabourParty leadershipwhenJacinda ArdernsuddenlyresignedinJanuary.
Aftersixmonthsinthejob,the HeraldaskedNewZealand’sbusiness leaderstorankhisperformanceas primeminister.Hescoredanaverage of2.9/5onascalerunningfromone, ‘notimpressive’,tofive‘veryimpressive’.Justfivepercentofrespondents markedHipkinsasveryimpressive, although28percentscoredhimat fouroutoffive.
DeloittechairThomasPipposhas somecontext:“Asissometimesthe case,leadersbecomeleadersatthe wrongtimesandarejudgedaccordingly.”
ExecutivechairmanofDevon FundsPaulGlasssays:“He’sbeen handedahospitalpassanddoesn’t havetheskillsettogetusoutofthis mess”.RobCampbell,whochairsthe NZRuralLandCoandrenewable energycentreAraAkehasadifferent perspective:“Ithinkheisacaretaker andavoideroftherealissues”.
SimonBennett,whoisthechairof Accordanttakesaharderline.He says:“Givenhewasresponsible directlyforhealth,educationand policeitishardtotakewhenhetook noresponsibilityfortheoutcomes. HisTePukengaperformancealone wouldbeasackableoffenceinthe privatesector,somehownooneis beingtakentoaccounthere”.
RogerPartridge,chairmanofThe NewZealandInitiative,goesfurther: “HipkinssharesArdern’slegacy: havingbeenacorememberofa Labourcabinet—andthenitsleader —that,overtwoterms,hasleftthe countryeconomicallyweakened, culturallylessambitious,andpoliticallymoredivided,withapublic servicesthatislesscapableandfar lessaccountableforcorepublic services,includinghealth,education, andlawandorder.”
Hipkins’firstoverseasmissionas primeministerwastoBrisbanewhere hejoinedAustralianprimeminister AnthonyAlbanesetocommemorate AnzacDayandattendacitizenship ceremony.
InMay,heattendedthecoronation ofKingCharlesinLondonandmet BritishprimeministerRishiSunak shortlybeforethefreetradeagreementwiththeUKcameintoforce. InJune,Hipkinsledatradedelegation toChinawherehemetPresidentXi JinpingandPremierLiQiang.July sawHipkinsflytotheLithuanian capitalVilniusfortheNatoLeaders’ summit.
Businessleadersaresupportiveof thistradeactivity,ratinghisperformanceatpromotingNZbusinessinternationallyat2.7onascaleofoneto five,whereoneis“notimpressive” andfiveis“veryimpressive”.Alittle overaquarter,28percent,of respondentsscoredhisperformance atfouroutoffive.Hisscorefor administeringtheNationalSecurity andIntelligenceportfoliois1.82/5. CEOsareunderwhelmedby Hipkins’performanceleadinga cohesivecabinet.Fouroutof10 respondents,41percent,rateitas“not impressive”.Hegotanaveragemark of1.78/5.
Thisisnotsurprisinggiventheloss offourCabinetMinisterssinceFebruary:FormerPoliceMinisterStuart Nashresignedafteritwasdisclosed hehadleakedconfidentialCabinet dealingstodonors;formerTransport MinisterMichaelWoodstepped downafterhewastardyindisclosing shareinterests;formerCustomsMinisterMekaWhaitiridefectedtoTePa¯ti
Ma¯oriandformerJusticeMinisterKiri
Allanfaceschargesrelatingtoacar accidentandhasresigned.
Despiteflyingnorthforameeting withbusinessleadersattheAuckland BusinessChamberonhissecondday asprimeminister,respondentsrate Hipkinsat2.03/5forhisperformance atbuildingconfidencewiththebusinesssector.
OneofHipkins’firstactsasprime ministerwastojettisonaseriesof policiesadmittingthegovernment had“triedtodotoomuch,toofast”.
Themoveincludedabandoningthe RNZ-TVNZmergerandputtingthe socialinsuranceschemeonthe backburner.Thispolicybonfirehad amixedreceptionfromNewZealand’sbusinessleaderswho,collectively,rateitat2.5/5.
FormerAirNewZealandCEO ChristopherLuxonisstill relativelynewtopolitics.He enteredParliamentin2020 andbecametheNationalPartyleader in2021;theparty’sfifthleaderinfive years.
Nothavingahistoryinpolitics helpedLuxonunitewhathadbecomeafractiouscaucusplaguedby infighting.
YoumightexpectNewZealand’s businessleaderstowarmtoLuxon, heis,afterall,oneoftheirown.
Hespeakstheirlanguage.Yetwhile thereissupportfortheman,it’snot withoutreservations.
The Herald’sMoodoftheBoardroomCEOs’surveyaskedrespondentstorankLuxon’sleadershipin thelastparliamentarytermonascale ofonetofivewhereoneis“not impressive”andfiveis“veryimpressive”.
Theweightedaverageofresponseswas3.3/5,whichcanbereadas “impressivebutnotoverlyso”.
Fewrespondents,amerethreeper cent,rankedLuxonas“notimpressive”whileonlysevenpercent markedhisperformanceas“very impressive”;12percentratedhim2/5, 42percent3/5and33percent4/5.
Luxon’slackofpoliticalexperienceisonsomecommenter’sminds.
DeloittechairmanThomasPippos makesthispointsayingLuxonis “verymuchstillaworkinprogress fromapoliticalleadershipperspective”.AnenergysectorCEOalso describeshimasaworkinprogress, butsaysheisprogressing.
StephenJacobiofJacobiConsultinggoesalittlefurthersayingheis: “…untested.Comesacrossasglib”.
Severalbusinessleaderspraisethe wayheunitedhisparty.
Oneprofessionaldirectorsays:“he hasunitedthepartyveryeffectively” whileacommunicationssector leaderexpandsonthisthought.
“Hetookanin-fightingrabbleof MPsandbroughtthemtogether underonebanner—averydifficult feattoachieve—justlookatthe currentgovernment.”
MatthewCockram,CEOofCooper andCompanysays:“Hehasdone verywellexertingcontrolover caucus.
“Hehasdonewellinthefaceof ahostilemedia.Ingovernmentheis toprovehimself.
“Iamoptimistichismanagement skillsandeconomicinstinctsare whatweneedforthecountry—in thatithasessentiallybecomeaturnaroundproject”.
Therearemorecriticalviews. JardenmanagingdirectorSilvana SchenonepointsoutLuxonis“not strongwiththewomen’svote”.
AnindustrialCEOnotesheis:“Too corporate,norealconnection”.
AnneGaze,founderandCEOof CampusLinkFoundationsays:“He hashis100days.Labourhastanked somuchofNewZealand.National willsecurevotesnotdeserved,but fromthosedisillusionedbyLabour’s appallingoutcomes.”
The Herald askedrespondentsif Luxonhasforgedacohesivegovernment-in-waiting.Aclearmajority,57 percentsay“Yes”,while13percent say“No”.
Almostathirdofthem,30percent, saytheyare“Unsure”.
MainfreightdirectorDonBraid speaksforthislastgroupwhenhe says:“That’stheissueisn’tit?Wehave noideaiftheyarecapableornot.” ContactEnergyCEOMichaelFuge answersthequestionsuccinctlywith asingleword:“…just”.
PeterReidyfromKiwirailsays:“It’s tight,onmessagepre-election.The narrativeneedstoshiftfromwhat’s
HasChrisLuxonforgeda cohesiveGovernmentinwaiting?
57% Yes
13% No
30 %
Unsure
goingtoberepealedtoAnAmbitious VisionforAotearoaNewZealandthat wecanbeproudof.”
SamStubbs,theco-founderand managingdirectorofSimplicitysays wewillsoonknow:“Aftersomany yearsonthebench,theproofwillbe inthepudding.
“Anygovernmentwillhavesome verytoughdecisionstomakeearly on.Therealtestliesinbeinghonest inadmittingtheproblems,and havinganadultconversationwith theelectoratethatanysolutionswill behardtofindandtakebothtime, moneyandsacrificefromallofus.”
WhenChrisHipkinsreplacedJacindaArdern asprimeministerinlate Januaryitwasinitially seenasaelectiongamechangerfor Labour.
Hipkinswasquicklyoutofthe stalls,injectingnewpurposeintoa Cabinetthathadbecomemoribund afteratorridthreeyearscombating theCovidpandemic,surginginflation andthecostoflivingcrisis.
Therewashispolicybonfire.The cosyinguptoAucklandbusiness. MeetingswithAustralianPrimeMinisterAnthonyAlbanese.TheAucklandfloodsandCycloneGabrielle whichprovidedanopportunityto demonstratedleadership.Buthis Cabinetreshuffleturnedbadwhen twoministershepromotedhadto resigntheirwarrantswithinmonths.
“Atthebeginning,itlookedlikea goodoptiontorefreshtheLabour leadership,butChrisHipkinsdidn’t maintainthemomentum,”said Jarden’sco-headofinvestmentbankingSilvanaSchenone.
Butinreality,observedtheNew ZealandInitiative’sRogerPartridge, “Hipkinsreallybroughtmoreofthe same.Hewasthearchitectofthe Ardern-ledgovernment’sreformsto education,thepublicserviceandthe Covidpolicy.
“Thechangesintroducedbythesocalledbonfireweresuperficialand didnotaddressthegovernment’s anti-growth,anti-accountabilityapproach,noritsfiscalill-discipline.”
“Itlookedlikeagamechanger,but Ireckonhispoliticsweredominating fromlate2022anyway,”saidNZRural LandchairRobCampbell.“Ithinkhe isacaretakerandavoiderofthereal issues.”Aninvestmentchairagreed, “itishardtoseehowChrisHipkins hasmateriallychangedLabour’s chancesevenafterhisbonfire.Asa Ministerhewasattheheartofthe manyproblems.Health,education andlawandorder.”
CEOsrespondingtothe Herald’s MoodoftheBoardroomElection 2023Surveywereaskedifthey thoughttheleadershipshufflehad beenanelectiongamechangerfor Labour.Some27percentagreed.But themajority,59percentsaid“No”. and14percentwere“Unsure.”
ContactEnergychiefexecutive MichaelFugesaidHipkinsstarted wellandhecouldn’tfaulthisinstincts
andenergylevels.“Butthelevelsof idiocywithinhisowncaucusoutside WoodsandRobertsonbeggarsbelief.”
Realpolitikisalsoatplay.Some observedthattheshuffleprevented acertainloss.Buttheministerial chaosrobbedHipkinsofhischance.
“ItmadeLabourmorecompetitive andgivesitafightingchancenow. ChrisHipkinshasdoneagoodjob, oratleastasbestascouldbedone, inthecircumstances,ofmovinghis partyfromtheprogressivelefttothe centre.Nationalhashadtotryharder andbemorevisiblebecauseof Hipkins.Priortohimitwaswinning justbydoingnothing,”saidanAucklandbasedCEO.“Heisthemost experiencedandablepersontolead Labourrightnow.Inthatregardhe hasmuchmorepoliticalexperience thanChristopherLuxon.
“RegrettablythoughforHipkinshis benchstrengthispoor,andhis FinanceMinisterGrantRobertson hadhisheadoutofthegamefor muchofthisyear.Business’preferenceforacentre-rightgovernment willbeverystrongthiselectionbut attheverytopHipkinsisthestronger leaderevenifhisbasicteamandpolicyprescriptionsaren’tveryattractive.Thisyearitreallyisachoiceat theelectionsofwhoandwhichyou dislikeoverallleast—apunchinthe armorakickintheleg.”
CEOswereaskedtorankHipkins andLuxononwhohasthebest attributestoleadNewZealand throughchallengingtimesasournext primeminister.TheNationalleader wasclearlyaheadwithanaverage scoreof3.49/5totheLabourleader’s scoreof2.95/5.Hipkinswasaheadon justoneattribute—politicalmanagement:3.04/5toLuxon’s2.76/5.
Anadvertisingchief:“greatpolitician.Butthat’swhatheis—every-
CraigStobo, PrecinctProperties
thingispolitics.Can’tseemuchinhim beyondwinningthegameofpolitics —ourcountrydeservesbetter.”
Anotherobserversaid,“Chris Hipkinshasdonebetterthananyone elseinthecurrentParliamentcould havewiththe(lackof)cardshehas beendealt.Issuesaroundministers andothermessyfeaturesaren’tso muchhisfaultasalegacyfrom JacindaArdern’stimewhichhe’s dealtwithmuchmoresure-footedly anddecisivelythanshewouldhave.
“Healsoseemstohavemoreofa coherentsenseofwhatLabouris about.Underher,muchofwhat seemedtomatterwastheemotion theannouncementelicited,whereas hisannouncementsseemtohang togetherbetter.Thatsaid,hisisstill notapro-businessgovernmentby anystretch,evenifhe’smorewilling togenuinelyengageandnegotiate withbusinessthanArdernwas.At leastheturnsupandlistensevenif theanswersaren’toftenwhatwe wantfromhim.”
Fromaninvestmentbankinghead, “thisistheworstgovernmentever. Wehaveballooningnationaldebt, civilservicecostsareup44percent since2017,yeteverythingisworse; everything—health,education,cost ofliving,infrastructure,mental health,inequality,crime.”Others pointedtoLabour’slackofdelivery onkeypolicies—ThreeWaters,KiwiBuild,AuckLightRail,Healthreorganisation,broadcastingreorganisation. NotallofwhichcanbelaidatHipkins’ doorgivenhisshortprime ministership.
Luxonahead CEOsrespondingtothe Herald’ssurveyratedNational’sChrisLuxon aheadofHipkinsonallkeyattributes apartfrompoliticalmanagement.
Angerisintheair.Angeratjob mandates.Angeratracialprivilege. Angeratthecostofliving.Leaders wouldlisten,acknowledge,respect andapologisetoenableforumsfor reconciliationtoemerge. Taxationpolicyfollowsour expendituredecisions.Government expendituresduringlockdowns wentintooperatingcashflowsnot capitalexpenditures.Weareleftwith aparabolicgrosspublicdebtprofile, risinginterestcostsandadiminishingbufferfornaturaldisasters. Theexperimenttofurthercentralise deliveryofgovernmentservicesis notmeetingexpectations.Constrainedfiscalcircumstancesrequires arethinkofdelivery,including askingbusinesstohelp.
MikeHorne,Deloitte Alackofacoherent,competitive educationsystemtoequipour youngpeoplewiththeskillsthey need.Thisisfundamentaltoequity andtolongtermprosperityasa nation.Somewhatofareturnto basics,elevationoftheimportance ofSTEM,andrewardingeducational performanceandoutcomes. Poortrackrecordoflongterm investmentandpoliticisationof infrastructure.Weneedclear, coherentlongtermplanswithcross partysupport,public/private partnershipsanddeliberatechoices thatfocusonproductivity enhancement.
Weneedtore-engagewiththeworld onallfronts.Wehaveturned increasinglyinsularandyetneedto betakingtheoppositeapproach whilealsoshowingsomerealfiscal restraint.Wedon’thaveatax problem—wehaveaspendingone. GregForan,AirNZ Weneedtoincreaseproductivityby creatingbetterjobssoNew Zealanderscanembrace,notfear, automationanddigitaldisruption. Thisinvolvessharingthegainswith employeesandcreatingrewarding andengagingwork.Liftthestandard ofeducation,sowehaveaworkforcecapableofcontributingtoan increasinglyproductiveeconomy.
Histhreehighestratingswerefor economicmanagement,3.99/5;couragetomaketherightcalls,3.64/5and integrity,3.58/5.“Chris’politicalskills appeartobegrowingandisleading amoreunitedteam,”saidBecaexecutivechairDavidCarter.“Courageto maketherightcallsonbehalfofa nationasopposedtopolitickingis bothamatterofopinionandcanonly bejudgedintime.”
Hewaspraisedforhavingan100 dayplanofaction—policiestoimplementifheisinapositiontoform agovernmentaftertheOctober14 election.
“DonotunderestimateCML,his visionforNZandhisdisciplineand executionbias.Hedeliverswhathe commitsto,”saidaCEOwhohad workedwithLuxonwhenhewas chiefexecutiveofAirNewZealand.
Otherspointedtotensionsahead: “WorkingwithActwillbehischallengeastheywillholdNationalaccountableoneverycorner.”
Achairwarned:“Wecannever anticipatethechallengesanincoming governmentwillhavetoface—think CovidandtheChristchurchearthquake.Wedesperatelyneedagovernmentthathasthejudgementand experiencetodevelopmitigation strategiesandbeabletoexecute them.
“Ifatthisstageitisthemostlikely outcome—ChristopherLuxon becomesPrimeMinister,he’llhave hadthequickestascendancytothe topever,bynearlytheleastexperiencedpoliticianimaginable,”saidan Auckland-basedCEO.“Thislackof experienceshowsandespeciallyso inhisinabilitytomakedifficult decisionsandcalls.Asaresult,we havelessknowledgeofwhataLuxonledgovernmentwillreallybelike thaneverbefore.
“Sofarallwereallyhearisthe currentgovernmentishopeless (whichistrue)andwewillbebetter (whichwouldn’tbetoohard).How muchbetterthoughisanyone’s guess,andgiventhelackofbold policyannouncementsonecould suspectLuxonthinksthemerefact ofhimasPMwillmakethingsmuch betterwithouttheneedforalotof change,whichisnaive.
“DoesLuxonhaveasubstantive economicreformagenda?Ifsolet’s seeit.Withoutseeingit,it’stempting tothinkhemaybeacentre-right versionofJacindaArdern,savewithoutthepersonalpopularityearlyon.”
Seniorbusinessleaders’optimismintheoutlookforthe NewZealandeconomyhas waned.
Buttheyremainrelatively sanguineabouttheoutlookforthe globaleconomyandwithintheir ownindustries.
Respondentstothe Herald’s MoodoftheBoardroomsurvey ratedtheiroptimismintheNew Zealandeconomyat1.82/5onascale of1-5,where1signifies“muchless optimistic”and5equals“muchmore optimistic”.
Thisyear’sscorecomparesto 1.86/5in2022andafargreaterlevel ofoptimismin2021at2.70/5.
Despitethelowerlevelofconfidence,itstillstandsabovetherecord lowexperiencedduringtheCovid19pandemicin2020,wherethe scoreplummetedto1.36/5.
Aprevailingsentimentisthatwe areatthenadiroftheeconomic cycle.
SimplicityfounderandCEOSam StubbssaysthatwhileNewZealand’seconomyisinarelatively poorpositionrightnow,thelongtermoutlookismorepositive.
“WearewhereAustraliawasin theearly1980s—abouttogetslowly morecapitalrichviaKiwiSaver.”
Aprofessionaldirectoragrees.
“Wewilllikelystayherefora whileandthenthingswillimprove”.
Chairandco-founderofTheNew ZealandInitiative,RogerPartridge, saysthescoreisreflectiveofa combinationofexcessivepublic spending,inflationarymonetary policyandanti-growthregulatory settingsincludingimmigration, foreigninvestment,thelabourmarketandCovid.
“ThishasbatteredtheNewZealandeconomy,andleftitcruelly exposedtoglobalforces,”hesays. “Thenextgovernmentwillinherita perfectstormofeconomic challenges.”
MoreencouragingisCEOoptimismintheglobaleconomy,at2.23/5. Thisisanotableincreasefromlast year’sratingof1.83/5,underscoring amodestupswinginconfidencein theglobaleconomiclandscape.
Asistypicalinthissurvey,chief executivesratedoptimismintheir ownindustryhigherthanthatfor theNewZealandeconomyorthe globaleconomy,withaweighted averageof2.47/5.Thisisslightly downfromlastyear’sscoreof 2.70/5.
Asexpected,optimismvaries acrossdifferentindustries.
Thehighestconfidencewasexhibitedintheentertainmentand leisuresector—anaveragescoreof 3.7/5.
Theutilities,energyandextractionindustryalsoreflectednotable optimism—3.1/5.
CordismanagingdirectorFranz Mascarenhasisupbeataboutthe hotelindustry’simprovingcircumstancesinthecomingyear.“Withall internationalmarkets—including China—openingup,andwithsome rationalisingofairlinefaresoverall travelshouldimprove,”hesays.
Attheotherendofthescale, transportationanddeliverywas amongthelowestscoring—2.1/5.
Boththeconstructionsectorand theeducationsectorreceiveda scoreof2.3/5.
Realestatescored2.6/5,reflecting thecyclicalnatureoftheindustry.
CooperandCompanyCEOMatthewCockram,notes“adownward cyclecombinedwiththeaccelerationoftrendssuchasflexibleworking—andhighinterestratesand inflationareanunwelcomeconfluenceofnegativity”.
Domesticconcerns
Executiveswereaskedtogaugetheir concernonvariousdomesticissues.
Wearewhere
Australiawasinthe early1980s—aboutto getslowlymorecapital richviaKiwiSaver.
SamStubbs, SimplicityCEO
Government borrowing,coupled withfallingtermsof trade,willseeNew Zealandunderperform theglobaleconomy.
RalphNorris, CraigsInvestmentPartnerschair
Unusuallyforthe Herald’sCEOs survey,thetopfiveconcernsall stemmedfrommattersrelatedto governmentanditspolicies.
Ofmostconcernwastheleveland qualityofgovernmentspending,at 8.17/10(onascalewhere1reflects“no concern”and10“extremelyconcerned”).
WhiletheTreasury’spre-election economicandfiscalupdate(Prefu) showedeconomicgrowthforecasts tobemoreupbeatthantheMay Budget,italsonotedthatCrown expensesremainedelevatedthisfiscalyear,dueto“decisionsatBudget 2023,therephasingofunusedspendingfromthe2022/23fiscalyear,the responsetotheNorthIslandweather events,andtheincreasingcostsof debtservicing”.
CraigsInvestmentPartnerschair SirRalphNorris,aformerleading Australasianbanker,predicts“governmentborrowing,coupledwith fallingtermsoftrade,willseeNew Zealandunderperformtheglobal economy”.
Inflationwasthesecondhighest domesticconcern—CEOsratingitat 7.82/10.
Thisworryiscloselylinkedto interestrates,whichemergedasthe fifth-rankedconcernat7.26/10.
Treasury’sshort-termforecasts,as outlinedinPrefu,forecastinflation wasprovingtobemorestubborn thanoriginallyexpected,withthe prospectofinterestratesremaining higherforlongeruntiltheendof2024 —includingthepossibilityoffurther hikestogetinflationundercontrol.
Theresultingimpactoneconomiesasgovernmentsrightlyseekto bringdowninflationisuncertain,” saysBecaexecutivechairDavid Carter.
“Thisuncertainty,combinedwith inflationpressuresandincreasesin costofcapital,isunderstandably causingclientstoreviewtheircapital commitments”.
Aleadingrealestatebossadds: “Untilinflationratescomeundercontrolandreducearoundtheworld,we aregoingtoseehardshipinmany businessesastheyhavehadextra costsaddedtothemoverthepast yearandwithsalenumbersslow,so areprofits”.
Roundingoutthetopfivedomesticconcernsareinfrastructure constraints(7.72/10)andcrime (7.34/10).
Apotentialshiftingovernment,as notedbysome,raisesexpectations amongbusinessforanimprovedoutlookintheNewZealandeconomy.
“Theeconomyisnotinagood placerightnowandtheGovernment hashindered,nothelpedit,”saysan advertisingexecutive.
Sharingthisperspectiveisaprofessionaldirector,whoexpresses hopethatthereis“lightattheendof thetunnelfromthelikelihoodofa morebusiness-awaregovernment thatunderstandstheimportanceof wealthcreationonourmedium-term prospects”.
Echoingthissentiment,theCEOof anenergyexplorationfirmreckons “achangeingovernmenttoNational/ Actwillimprovemyoptimism aroundNZeconomybutIbelievewe areinforadifficultglobalenvironment.”
Suchconcernsrelatingtogovernmentandtheloomingelectionhave notablyshifteddownwardsthetraditionalbusinessconcernstypically seenheadliningthissurvey.
Lastyear,themostpressing domesticconcernwasskillsand labourshortages,receivingascoreof 9.0/10.Thisyear,however,ithas fallentotenthposition,atalower scoreof6.81/10.Similarly,immigrationrestrictionswereasignificant worrylastyear.Theyhavenowdeclinedto6.13/10from8.52/10.
Surveyrespondentswereencouragedtoputforwardanyother pressingconcernstheyhaveregardingdomesticissuesbeyondthose specificallypolled.
Educationemergedasanarea severalexecutivesaredeeplyconcernedabout.
“Education,morebroadlythanjust skills,isakeyconcernofmine,”says theCEOofaprofessionalservices firm.
“Thestateofoureducation—both insyllabusandattendance,”says socialentrepreneurAnneGaze.
“Anentirecohort,agenerationof childrenneedengagementandrelevantcurriculum.”
Everyonehastherighttofeelsafewhentheyworkandshop
ChrisQuin CEO,Foodstuffs “Optimismcomesfromstrategy, certaintyandtrust.
“Ourindustryhasbeenfacingthe threeR’s—recession,regulationand retailcrime.
“Thesearestillmajorunknownsfor ourindustryandtheirtrueimpactis yettobefelt.
“IammoreoptimisticthanIwas ayearagoabouttheoutlookfor reducedfoodpriceinflationinthe globaleconomywithcommodity pricescomingoffrecordhighsand theglobalsupplychainsettling. However,volatilityinoilpricesstill posearisk.
“Domestically,StatsNZ’sFood PriceIndexappearstohavepeaked inJune,andsincethenfallenbackinto singledigits.
“Butitremainsstubborn.
“Thisdownwardtrendisreflected inourowndata.Thecostincreases onthegoodswebuyfromsuppliers toputonshelfarealsoeasingback fromrecordhighs,buttheinflation battlewillbehardwon.
“Aswesawthisyear,weatheris thewildcardforeveryonegrowing, manufacturingandretailingfood.In theabsenceofaclearstrategyto tackledomesticinflation,the uncertaintyandcostsimposedby Governmentonbusinesshasputour
domesticeconomyonthebackfoot.
“IammuchlessoptimisticthanI wasayearagoaboutNewZealand beingabletoaddresstheriseofcrime affectingtheretailindustryinNew Zealandandoverseas.
“Itisbecomingmorebrazenand itisgettingmoreaggressive.
“Wearefacingaseriousissuewith careercriminalswhoarerepeat offendersandalltoowillingtoget uglyandevenassaultstaffwhen confronted.
“Everyonehastherighttofeelsafe whentheyworkandshop.
“Retailersneedpublicandpolitical supporttousemoderntechnology toolstokeepourstoressafe.”
indingandretainingstaffis anissueforchiefexecutives butfarlesssothanthistime lastyearasconcernshifts moretowardfindingrevenuegrowth andmanagingprofitexpectations.
Thistrendisborneoutinthe Herald’sMoodoftheBoardroom surveywithCEO’sfocusinghardon howtheirbusinesseswillperformin asluggisheconomy.
Lastweek’sGDPfiguresshowed theeconomygrewjustshyof1per centinthesecondquarterand,based onrevisionstoearliernumbers,the countrymayhavejustavoidedbeing inatechnicalrecessionthroughthe DecemberandMarchquarters.
Thelatestdatawillhavebuoyed businessownersandCEOs,especially thoseprovidingbusinessservices andinmanufacturing,whichsaw increasedactivityintheJunequarter afterfivesuccessivedeclines.
However,thestructuralchallenges intheeconomyremain.Better-thanexpectedeconomicgrowthcouldbe seenasadouble-edgedswordin termsofarousingtheinflationbeast thatthecentralbankhasbeen battlingtoputbackinitscage.
MarketreactiontotheGDP numberssuggestsrisksarenowtilted towardfurtherinterestratehikes, which,combinedwithlowexport prices,couldeasilytipthecountry intorecessionlaterthisyearandinto 2024.Notwithstandingthis uncertainty,CEOsarepessimisticin theshorttermatleast.
Askedwhichissuesaremostlikely tokeepthemawakeatnight,31per centsaidachievingtop-linerevenue growthand30percentsaid managingprofitexpectations.Those areupfrom23percentand13per centrespectivelyonlastyear.
Aslightmajorityofthosesurveyed areexpectingtoincreaserevenue growthinthenext12months(55per cent)with23percentexpectinga decreaseand18percentexpecting flatrevenue.Intermsofprofit,44per centsaidtheywereexpectingan
increase,28percentadecrease,and 21percentsaidnochange.
CEOcommentsonthesurvey indicatedsomeofthepressurepoints. “Thetransportmarketissoftening— particularlyimportandexport containervolume,”saidPeterReidy atKiwiRail.
“Revenueswillbedowndueto milkpricepressureandslowChina recovery,”saidadairyindustryCEO.
“Itseemsconditionswillbetight andtoughuntiltheendof2024,”said awinecompanyboss.“Attheluxury endofwine,thisimpactsmybusiness directlyasconsumersflocktovalue wineingroceryaroundtheworld.”
Arespondentfromtheprofessionalservicessectorininfrastructure said:“Thisreallydependsonwhat happenspost-electionandhow quicklyinfrastructureprojectscome tomarket,andwhatgetsdelayed, postponed…”
Sourcingandretainingskilledstaff isstillseenasthebiggestissuewith 37percentofCEOscitingitaskeeping
themawake,butit’swaydownonthe 83percentwhoselecteditinlast year’ssurvey.Regulatorychallenges (35percent)andtheimpactofpolicy uncertainty(32percent)werealso highontheworrylist,whilecybersecurityhasbeenelevated,with24 percentselectingitastheirmain worry,upfrom11percentayearago.
Otherissuesthisyearwere improvingoperationalefficiencies (23percent),costreduction(15per cent)andmotivatingkeyreports(9 percent).Theywereallhigherareas ofconcerncomparedtolastyear.
Therecentlistedcompanyreportingseasonhighlightedthesomewhatsofteroutlooksmostfirmsare facing.InvestmentfirmJardensaid thereportingseasongenerally showedimprovedearningsbut temperedoutlooks.Inflationary pressures,highinterestratesand electoraluncertaintymadeithardfor corporatemanagementteamsto predictthefuture.
Jarden’sanalysis,reportedby
BusinessDesk,said79percentofthe 37companiestheycoverwereinline withrevenuepredictions,47percent metexpectationsforearningsbefore interest,tax,depreciationand amortisation(Ebitda),whiledividendspersharemetJarden’sforecasts56percentofthetime.
Jardenupgradeditstargetprices on11companiesanddowngraded20, sayingearningsshowedskinnier marginsasfirmsgrappledwith increasedcosts.Itsanalystsnotedthe bottomlinesweregettingsqueezed byrisinginterestrates.Whilesome companies—likeAirNZ—had extraordinaryprofitslastyear,it’s uncertainwhethertheycancontinue thosenumbers.
Fonterrahadarecordprofitinthe 2023financialyear,butmanyofits farmershareholdersuppliersare strugglingtomakeendsmeetwiththe lowmilkpriceatthemoment.
Atleastonebiguncertaintyshould hopefullyberesolvedsoonandthat’s thegeneralelection.
BusinessNZCEOKirkHope hasonesimplerequestfor thenextgovernment:“Itwill behelpfulifyoutreatbusinessaspartofthesolution,notthe problem.”
Hopesaysthere’sbeenalackof trust.TheLabourgovernmenthas beeninvolvedinmostthingsbusinessdoes:“There’stheopportunity forgovernmenttoworkcollaborativelywithbusinessandbuildthat trust.”
Hesaysthegeneralbusinessenvironmenthasdeteriorated—The Treasuryforecastseconomicgrowth at1percentandtheInternational MonetaryFund(IMF)0.8percent.
“Thisspeaksofaneconomic downturnandthepoliciesbusiness hashadtoworkwith,besideCovid, haven’tbeenfriendlyforincreased productivityandgrowth.”
Hopewarnedthatifpolicysettings, suchasforthelabourmarket,immigrationandforeigndirectinvestment aren’tcorrected,thenbusinessesmay gooffshorefortheirgrowth.
“Businesseshaveaccesstoskills andcapitalinothermarketstohelp themgrow.
“Theirsettingsaremorewelcoming.Itwouldbegoodifthatgrowth occurredinNewZealandwiththe rightsettings.”
Hopesaysthechallengeistoincreaseproductivityand“youneed capitaltodothat.Thereareevertighteningrulesaroundforeigndirect investment;thesettingsaroundthe labourmarket,educationandskills don’tpresentahealthypicture.
“Businesshasbeensayingthisfor sometimeandtheGovernmenthas mostlyignoredthesemessages,and
thishasledtoahighdegreeof frustration.”
Hesaysimmigrationsettingsare constantlychangingastheGovernmenthastakenalongtimetodecide whattheywant.“Therewasarush toaddressthelong-termskillsshortageacrossalllevels—high,medium andlowskills.Theaccreditedworker schemecontainshighlevelsofrisk andthiscanaffectNewZealand’s internationalreputation.
“Wearelookingatashortageof 250,000workersby2048,about8per centoftheworkforce,andyoucan’t shrinkyourselftogreatness.”
HopesaysNewZealandshould attractlong-termskillsfrompeople
whowanttolivehereandhelpthe countrygroweconomically.“Theimmigrationrulesneedtobesimplified, andmakeitclearwhoyouare prioritisingtocomeintothecountry.
“Itwouldbebettertoenablebusinesstoworkinternationallyandget thesepeople.Businessisprettygood atthatbutatthemomentit’schallenging[becauseoftheimmigration rules].
Hopesaysthelabourmarketsettingsshouldbemorereflectiveof growth.“NewZealandpayislow,and thefairpayagreementsarenothelpfulforwagegrowthandproductivity inanyshapeorform.
“Whylockpeopleintovastcollec-
tiveagreements?Ithasn’tbeenwell thoughtthrough.EvenTreasuryadvicetotheMinisterofFinancewas ‘whatistheproblemyouaretrying tofix?’
“Thecostoutweighsthebenefit, andthelabourmarkethasbecome morerigid.Whydothatwhenyou arecompetingwithothermarketsfor skills,innovationandgrowingthe economy.I’mnotsurewhattheGovernmentistryingachieve,there.”
Hopesaysthegovernmentcould haveachievedthesameresultby increasingresourcessuchastechnologyanddataandworkplaceassessors,ratherthancreatingadditional regulationandenforcement.
Wearelookingata shortageof250,000 workersby2048, about8percentof theworkforce,and youcan’tshrink yourselfto greatness.
CatherineMcGrath
TamsynParker
NewZealandisfacingarange ofchallengesthatwillrequireinnovativethinkingto solvethem,Westpacchief executiveCatherineMcGrathsays.
“NewZealandisfacingabigrange ofchallengesthatwearehavingto stepupandtackleabitfasterthan wethought.
“Whetherthat’stheclearimpacts ofclimatechangeortheimpactthat thathasonourinfrastructure.
“Housingisanotherbigissue.But alsohowwegetallNewZealanders, asfaraspossible,towalktogetherat thesamepaceandbethebestofus ratherthanstarttopullapart.”
McGrathsaidissueslikeclimate changedidnothaveanevenimpact oneverybody.
“I’mreallyconsciousthatwalking togetherandsolvingitasacountry overthelonger-termbecomesreally important.”
Facingintoanelection,McGrath saidoneissuewasthattacklingmost ofthesechallengeswasafarlonger problemthanthreeyears.
“Particularlyoninfrastructureand housing,howwegetcollaborative actionthatisadecisionthatwemake asacountryirrespectiveofwhois leadingitatthetime,seemreally important.”
McGrathsaiddespitethechallengesNewZealandwasfacingthere werestillplentyofreasonsforoptimism.“There’sarealopportunityfor NewZealandtoworkouthowtodo itdifferentlythanit’sdoneintherest oftheworld,anddoitwell.
“IfIlookatinfrastructure,wecan seeareally,reallyclearneedforthat; havinga10-yearroadmapwouldbe great.
“Weneedtothinkaboutpublicprivatepartnershipsforbigprojects.”
NewZealandisfacingabigrangeofchallengesthat wearehavingtostepupandtackleabitfasterthan wethought.Whetherthat’stheclearimpactsof climatechangeortheimpactthatthathasonour infrastructure.Housingisanotherbigissue.Butalso howwegetallNewZealanders,asfaraspossible,to walktogetheratthesamepaceandbethebestofus ratherthanstarttopullapart.
CatherineMcGrathShesaidtherewereiwiwithquite abitoffinancialresourcewhocould bekeentolookatlonger-terminfrastructureprogrammesaswell.
“There’sarealopportunitytothink abouthowwedothatandtothink abouthowwedoitsustainably— that’sareasonforoptimisminNZ— andthatwecantacklesomeofthese challengesdifferentlyandchooseto leadtheworld.”
McGrathsaidNewZealanders oftenthoughtabouthousinginavery traditionalway.
“Whichiseitherthatyourentor buyandbuylandandhouse—Ithink thereareplentyofdifferentmodels likesharedequityandleasehold models,andthere’sgreatwork happeningwithKa¯ingaOra.
“Again,youcanchoosetostepinto thesechallengesslightlydifferently thanothercountrieswill,anddo thingsinawaythatisuniquelyNZ, butshowstheworldhowyoucan tackleinfrastructuresustainability andhousingtogether,ratherthansee themasseparateproblemsthathave nointer-linking.”
McGrathsaidhouseholdsandbusinesseswerefeelingpressurebutmost ofitscustomerscontinuedtobewell placedtocopewithit.
McGrathsaidpeoplewerefalling intotwogroups:
“[Thefirstgroup]havemade adjustments.
“Thatmeans...theyarenowina sustainableplace,they’velearned howtocopewithitandtheyare okay.”
Butshesaidtherewasanother groupwheretheyhadlessresilience.
“Wealsohaveagroupofcustomerswhereinterestratesbeing higherforalongerperiodoftime mightjuststretchtheirresiliencea littlebittoofar.”
McGrathsaidshewasworried abouthowsomedairyfarmerswould servicetheirloanswithmilkprices comingdown.
“Alotofourcustomerswillbefine butifyouwerejustevenlybalanced intermsofingoingsandoutgoings thenonemorethingcangiveyouthat shock.”
McGrathsaidasoftodayitsdata showedNewZealandersweredoing okayintermsoflownumbersof mortgageesalesandforcedfarm sales.
“Wehavedoneokaysofarasa countryandIthinkwewillcontinue todothatiswhatthedataistelling me.”
Lookingatfutureshocksthat couldcomethereweresomesectors thatweremoreworryingthanothers, shenoted.
“Butatthemomentitishappening inquiteanorderlyandmanagedway andthere’sbeennodominoeffect.”
TimMcCready
LeadinguptoOctober’selection, thereisaprevailingsenseofdisillusionmentamongNewZealanders aboutthewaythingsare.
HaydenWilson,chairandpartner atDentons,saysthatthissentiment istheproductofamultifacetedset ofissues,includingthestateofthe economy,theresidualresponseto thechallengesofCovid,andageneral senseofhardship.
Hesaysthatelectionstypicallyfall intotwocategories:stabilityelections orchangeelections,andinthisinstanceitappearstobethelatter,with manyNewZealandersfeelingthat somethingmustbedonedespitenot beingsurequitewhatthatis.
“ItisparticularlyacuteinAuckland,”hesays.
“IfeelitwhenIgotoAucklandand talktoclientsandbusinessesthere. Andit’snotthatthereisanidentified alternativethattheywant,butthey justwantsomethingdifferent,anda breakfromwhathasfeltoverthelast threeyearstobequiterelentless.”
Inthe2020election,theLabour Partywonalandslidevictory,with enoughseatsforarareoutrightparliamentarymajority.
YetWilsonpointsoutthatasubstantialportionoftheelectoratefeels disappointedandbelievethegovernmentdidnotcapitaliseonthemajoritythatithad.
“Theywouldsaythey’vebigchan-
geswhichhaveyettopayoffand they’vegotusthroughCovid.
“TheproblemisthattheNewZealandelectoratelooksforward,not back.
“Peopledon’tfeellikethey’ve madeadifferencetotheirlivesinthe
immediatefuture.Thatisarealchallengeforthisgovernment.” Wilson,whoisalsoamemberof Dentons’globalboardandwasrecentlyrecognisedasoneofNew Zealand’smostinfluentiallawyers, sayswhilethenegativesentimentof
NewZealandershasnodoubtbeen heightenedbytheeconomicsituation,NewZealandisnotmuchdifferentfromtherestoftheworldinterms ofeconomicmanagement.
“Mytheoryhasalwaysbeenthat NewZealandbasicallytracksabout threetosixmonthsbehindAustralia andaboutsixto12monthsbehind theUnitedStatesandEurope,”he says.
“TheUSandEuropewereina prettydirepositionaboutayearago, andtalkingtomycolleaguesinthe UK,Europe,theUSandinAfrica,they arestartingtofeellikethey’veturned acorner.”
Henotesthateconomicconditions inthoseregionsaregettingbetter,and inflationiscomingundercontrolin mostplaces.
“Thereisafeelingofrevival.New Zealandisnotthereyet,butyouhope inaneconomicsensethattheshift intheglobalmoodbecomingmore buoyantwillperhapspullusoutof ourfunkabitfasterthanwewould otherwise.
“Atthestartoftheyeareveryone wenttoarisk-offposition,butweare nowstartingtoseeafewmoretransactionscomingthrough.
“Wearealsostartingtoseeincreasesinthenumberofliquidations andreceivershipsatthemoment.”
Challengesforwhoeverwins AstheOctober14electionapproaches,Wilsonsayspoliticianshave
notprovidedclearanswerstomake thechangethattheelectorateis seeking,whichplacestheincoming governmentinaprecariousposition.
“Therealchallenge,andoneofthe reasonsIdodespairalittlebit,isthat becausethisisanelectionthateveryoneistryingnottoloseratherthan peoplearetryingtowin,wearegoing throughanotherelectoralcycle wherepeoplearenotgrapplingwith thechallengesthatNewZealand facesandbusinessfaces.”
Hehighlightstheabsenceofdebateoncriticalissuesandinspirationalideasonareasincludingintergenerationalincomeinequality,climatechange,andourtaxationsystem.
“Ononehand,wehavegotLabour takingGSTofffreshfruitandvegetables,andontheotherhandwehave gotNationalreleasingataxpolicythat MichaelCullencouldhavereleased withthestraightface.”
WithrespecttoNewZealand’sresponsetoclimatechangeandadaptation,Wilsonsaysrecenteventslike theAucklandfloodsandCyclone Gabrielleserveasstarkremindersof thechallengesourcountryfaces.
“Theimpactthatthesehavehad onregionalNewZealandwillrequire significantinvestmenttoensurewe areresilientasacountry—whichis whatbusinessneeds,”Wilsonsays.
“Buthowwillwedothatifweare stilllockedintoaveryold-fashioned approachtohowwefundgovernmentandwhatgovernmentdoes?”
CEOscontinuetobackGrant RobertsonasacredibleMinisterofFinance.Some58per centsayhehasbeencredible intheposition,acknowledginghis adeptnessandconfidenceinhandlingeconomicmatters.
Ahigh-profiledirectorsaysRobertsonis“acrossthedetail,andrarely screwsup.”TheCEOofadairyfirm commendshimforbeing“outstandingandtrustworthy”.
But35percentofrespondentssay otherwise,and7percentareunsure.
ThedeclineinRobertson’scredibilityscorefromtheboardroomsince 2020isnoteworthy,representinga distinctshiftfromthehighlevelshe receivedduringthepeakofthe Covid-19pandemic.Inthatelection year,CEOsawardedhimanimpressivecredibilityscoreof91percent.
Duringhistimeasfinanceminister, RobertsonhasnavigatedNewZealandthroughsignificantcrises,many ofwhichwereoutsidehiscontrol.
Thereisstillwiderecognitionfrom businessleadersoverRobertson’s adeptnessinmanagingeconomic affairsamidthechallengingperiodof thepandemic.OthercriseshaveincludedRussia’sinvasionofUkraine, whichsignificantlydisruptedsupply chainsandescalatedinflation.This year,NewZealandhasgrappledwith theaftermathoftheAucklandAnniversaryfloodsandthedevastation wroughtbyCycloneGabrielle.
Robertsonwillhavebeenbuoyed bylatestGDPfigures,whichshowthe economyexceedingexpectations andgrowing0.9percentinthe secondquarter.Hesaidthisdemonstratestheeconomy’sresilienceand strengthamidstachallengingglobal environmentandtheimpactofextremeweatherevents.
Treasury’sPre-ElectionEconomic andFiscalUpdate(Prefu)alsodefied expectations,projectingtheeconomytogrowbyanaverageof2.6per centoverthenextfouryearsand returningtosurplusby2027.
However,CEOsexpressconcern regardingthescaleofborrowingand “recklessgovernmentspending”duringandpost-lockdowns.Criticsargue thisapproachnotonlyfailedtoyield results,butalsoplayedarolein fuellinginflation,accumulatingexcessivedebt,andcontributingtoan economicdownturn.
“Robertsonwasaverycredible andadmiredministeroffinanceup toCovid,”commentsaninvestment firmboss.“Heshouldhavesaid‘no’ tomostoftheborrowingfortheCovid effort.Hemayhavebeendismissed, butheprobablyshouldhavemade thatstand.”
AdirectorsaysRobertsonhas displayed“terriblefiscalperformance,withpoorlytargetedpayments thathavemadeinflationworse”.
AnotherconcernCEOspointtois Robertson’srecentpolicyinconsistenciesthathaveemergedoverthe campaignperiod.Hehadpreviously criticisedthenotionofeliminating GSTfromspecificfoodproducts,referringtoitasa“boondoggle”.Aspart ofitscost-of-livingpolicy,Labourhas announceditwillremovethetaxoff freshfruitandvegetables.
ThishasrequiredRobertsonto reconcilehispaststatementwith Labour’selectionpledge.
Businessleaderssaythishasgiven theappearancethatheisbeingpulled innumerousdifferentdirectionsby interestsinhisownpartyandhas placedpoliticsandstayinginpower aboverationalpolicy.
“Itishardtojudgeorunderstand Grant’spersonalpreferencesversus party-influencedactionsanddecisions,”saysonecorporatedirector.
CooperandCompanyCEOMatthewCockramcontendsthatthe“recentstatementsanddissemblingof obviousfactsandcircumstances,includingthebudgetblowoutandGST, havedestroyedanycredibilityhe hadinmymind”.
Therearecommentsfromseveral businessleadersthatsuggestRobertsonhasbeenmissinginactionlately andhaslackedthesupportofthe PrimeMinister.
“MaybehehassomepersonaldisappointmentaboutJacindaArdern’s departure,”saysone.“Butwhatever thereason,heneedstostayfocused onhisroleandonguidingtheeconomytothebestofhisability.”
Whereistheco-ordinatedplan?
ThebusinesscommunityisconcernedaboutLabour’sstrategyfor ensuringNZ’ssustainableeconomic performance,witharesounding85 percentofCEOsexpressingscepticismthatithasaco-ordinatedplan ofactionfocusedonbolsteringthe country’seconomicstability.
Onebankerexpressedalackof confidence,statingtheyhaven’tobservedorheardanythingindicating awell-coordinatedplan.Similarly,a CEOinthehospitalitysector mentionstheambiguitysurrounding Labour’sprimarypolicies,emphasisingtheneedforclearerdirection.
“Noideasleftexceptborrowand spend,”saysapublicsectorCEO.
Only4percentbelieveithasacoordinatedplanofaction,andafurther 11percentareunsure.
Manyofthosewhocommentedon thisquestionsuggestthepartyis makingpoliticalmanoeuvres,rather thanformulatingpoliciesdrivenby genuineeconomicconcerns.
“Theytreattheelectoratewith contemptwiththeirpolitically motivatedannouncements,”saysan advertisingexecutive.
“Forexample,thespendingcuts announcedrecently—itseemslike theythinkwewerebornyesterday!”
Othersbemoanaperceivedlackof ambitionandabilitywithintheparty, suggestingtheirideashavestagnated tothepointwhereborrowingand spendingweretheonlystrategiesleft.
CEOsemphasisethecriticalneed foreffectivepoliciesthatincentivise ratherthanburdenbusiness.
“Regrettably,Labourseemsto thinkbusinesswillkeeponkeeping on,regardlessofthepoliciesimposed onthem,”saysone.
“Listeningandimplementinggood policiesforbusinesswouldmake NewZealandmoresuccessfuleconomically,thereisnodoubtaboutit.”
NewZealand’stopchiefexecutivesareimpressed withNational’sfinance spokespersonNicolaWillis. Significantly,83percentofrespondentstothe Herald’sMoodofthe Boardroomsurveybelievethatshe haseffectivelyportrayedherselfasa crediblefuturefinanceminister, shouldshehavetheopportunityfollowingtheelection.
BusinessleaderscommendWillis forheradeptpoliticalacumen,impressivedebatingprowess,andher overalleffectivenessasapolitician.
Atopbankercommendsher,saying,“Nicolaappearstobeoverthe detailanddoesinspiresomeconfidence”.
Thesesentimentswereechoedby anotherexecutiveintheenergysectorwhonoted“shehasbeenimpressiveandisgettingmoreso.”
Only4percentofrespondentssay Willishasn’tpresentedherselfasa crediblefutureministeroffinance, with13percentunsure.
“Shedoestendtobeschoolmarmish,andfallsintoLuxon’strapof talkingplatitudinously,withoutany actualanswersaroundwhatwill change,”saysoneCEO.
“IfwewantaWhitneyHouston songwewilllistentoit—wewant morethanthatfromthealternative financeminister.”
Despitethepraise,somerespondentsraisedquestionsaboutthe depthofWillis’experienceincomparisontopastfinanceministers,particularlyinmanagingtheeconomic complexitiesoftheroleeffectively.
Willistookonthefinanceportfolio justover18monthsagowhenSimon Bridgesvacatedthepositionupon leavingpolitics.
Therearereservationsabouther relativelyuntestedfinanceand economicskills,butacknowledgementthathertruecapabilitieswill onlybefullyrealisedifandwhenshe isinchargeofthecountry’sbooks.
AsMainfreightchiefexecutive DonBraidaptlyputsit,“Theproofwill beintheperformance.”
DeloittechairThomasPipposacknowledgedthatwhileWillisisstill verynewinthisdomain,sheisstartingtoprojectherselfeffectivelyfor suchapivotalrole.
“Itwillbecriticalthatshesurroundsherselfwiththerightpeople,” hesays.
RespondentshighlightthatWillis willneedtoconcentrateonnavigatingthe“Treasurymorass”and translatepartyandthird-partyideas intoactionablepolicies.
SeveralCEOssuggestthatWillis wouldmakeasuperiorleaderforthe NationalPartycomparedtoChristopherLuxon.Oneobservesthat“she hasbeenpolished,andmoresothan Chris”.“Shewouldbeafabulous leader,”saysanother.
Aco-ordinatedplanofactionfor NewZealand Businessleaderswereaskedtoassess whethertheNationalPartyhaspresentedaco-ordinatedplanofaction fortheupcomingelectionfocusedon ensuringNewZealand’ssustainable economicperformance.
Justoverhalfofrespondents—
some55percent—believeithaspresentedaco-ordinatedplanofaction, highlightingNational’semphasison disciplinedpublicexpenditureand advocacyforpublic-privatepartnershipsincriticalareaslikeinfrastructureandclimatetransition.
RogerPartridge,chairofTheNew ZealandInitiative,commendsNational’sdedicationtorestoringdiscipline togovernmentspending,thereintroductionofpublicservicetargets,and anarrowingoftheReserveBank’s focus.
“Butfundamentalregulatoryreformisalsoneeded,”Partridgesays. “Formforeigndirectinvestment,the labourmarket,immigrationsettings, and,ofcourse,totheResourceManagementAct(RMA).Nationalhassignalledclearchangesinsomeofthese areasbut,inothers,itspositionsare lessclear.”
Another14percentofbusiness leaderssayNationalhasn’tpresented aclearandco-ordinatedplanofaction,andasignificant31percentare uncertain.“Ihaven’tseenaplanthat wouldevidenceit,”saysafinance executive.“However,theyaremakingtherightnoises.”
AnotherCEOpointedoutthelack ofsignificanteconomicpoliciesfrom NationalthatcouldenhanceNew Zealand’sproductivityandperformance,indicatingroomforimprovement.
Aprevailingissueamongrespondentsisthepalpableabsenceoftransparencyandin-depthpolicydetails fromNationalduringthecampaign. Somenotethatadisappointingaspectoftheelectionhasbeenthe populisttoneofpolicyannouncementsandtheabsenceofmeaningful debateoncrucialstrategicmatters.
Anexamplecitedbyrespondents istheparty’spropositionfortaxcuts, whicharepartiallyfundedbyreopeningthehousingmarkettoforeign buyersforpropertiesexceeding$2 million,witha15percenttaximposed ontransactions.
Theboardroomacknowledges National’staxcutplan“soundsattractive,providedthefundingformulasareaccurate”,buttheyraiseconcernsabouttherevenuegeneration thatwillbenecessarytosustainit.
“ItissurprisingNicolaWillisdidnot critiquethetaxplanmore,”saysexecutivedirectoroftheNZInternational BusinessForumStephenJacobi.
CameronBagrie,managingdirectoratBagrieEconomics,expressed surpriseatWillis’stanceof:‘yourtax reliefiscomingnomatterhowbadly Labourhaswreckedthejoint’. “Financeministersneedtobestewards,”hesays.
AbusinessservicesCEOsuggests thatNational’sfavouredapproachto policies—includingitstaxplan—is topointoutthethingsthataren’tgood enough,andthenconcludewithout anythingtobackitupthattheywould dobetter.
“Thebusinesscommunityand NewZealandersdeservemuchmore ofaplanfromtheminadvanceof theelection.Otherwise,wecan reasonablyconcludetheywon’tdo thingsmuchbetterthanLabourhas.”
Suggestsanother:“Thisannouncementissimplypoliticalinnature aimedatattractingvotesfromtheir so-called‘squeezedmiddle’.”
BillBennett
CycloneGabrielleandthe severeweatherthatfollowedthrewSparkintothe climatefrontlineby disruptingthecompany’smobileand broadbandservicesinpartsofthe NorthIslandearlierthisyear.
Whilelineswerecutandthere wasdamagetoequipmentontowers,thedisruptionowedasmuchto poweroutagesasseveredconnections.Moderndigitaltechnologies relyonelectricitytofunction.The couplingbetweenthetwounderlinedtheneedforabroaderapproachtoinfrastructureresilience acrossindustrysectors.
CEOJolieHodsonalreadyhad climatechangeonhermindbefore Gabrielle.Sheplaysanactiverolein theClimateLeadersCoalitionandis theconvenoroftheCEOSteering Group.ShesaystheCoalitionhas: “Laidoutaclearsetofpoliciesthat wethinkaregoodacrosstheboard. Andwe’vediscussedthemwitheach ofthepoliticalparties.”
Hodsonsaysbusinessesarenaturallygoodatmakingthenecessary operationalriskmanagementinvestmentchoicestotackleclimate challenges,ifthey’vegotaclearline ofsighttoseewherepolicyisgoing. Thatlastlineisthekiller,whilethere isabipartisanapproach,therestill tendtobepolicyshiftswhengovernmentschange.
It’smuchthesamewhenitcomes toinvestinginthedigitaltechnologiesneededtoimproveproductivity.Shelooksforgreatercertaintyandasks:“Howdoyou incentivisebusinessestoinvestin digitaltechnology?”
“IfyoulookacrosstheTasman, we’veseengovernmentinvestment incybersecurityandincentivesfor thegamingindustry.There’sbeen somemovementinthatareaonthis sideoftheTasman.Weneedincen-
JolieHodson’stopthreebusinesspriorities
● Growthinvestmentsinnewdatacentrecapacity,5GStandalone,anddigitalidentity
● Innovatingincoremarketswithanimmediatefocusonsatellitecapacityinmobileand broadbandandhybridcloudforourbusinesscustomers
● HarnessingthepoweroftechnologytohelpNewZealandbusinessesbecomemore productiveandsustainable
tivesforsmallbusinessestoinvest indigitaltechnologyintheformof beingabletoclaimearlydepreciationontechnologyinvestment.
“It’sintheeconomy’sinterestto getmorepeopleusingthesetools. Weneedtospeedupadoption.It’s notaboutgivingmoneyaway;it’s aboutbringingforwardwhencompaniescanclaimdepreciation.Australiahashadgoodincentivesinthe recentpast,thesearen’taroundfor alongtime,buttheycanencourage everyonetomoveforward.”
HodsonseesSparkoperatingasan enablerforothersectors.Shesays thecompany’stechnologyishorizontal,sittingunderotherindustry sectorsandithasaroletoplay tacklingclimateproblems.
“Weareoptimisticaboutthe periodaheadandtherolethattechnologycanplayinsupportingAotearoa.Weknowwewanttobemore productive,andweknowwewant alowercarboneconomy.That’swhy weneedbusinesseslikeSpark investingintheseareas.”
OneareawhereSpark’stechnologycanunderpinmovesbythe energysectoriswithelectricvehicle charginginfrastructure.AnothersectorHodsonsinglesoutisagriculture. Sparkoperatesnationwideinternet ofthingsnetworksthatcanmonitor waterqualityandensurewemake thebestuseoftheresource.
Sparkrecentlysolditsmobile towernetwork.Hodsonsaysthat enabledsignificantreinvestmentin datacentreinfrastructureand upgradingthe5Gmobilenetwork.It offerslowerlatency-that’sthetime takentorespondtoasignal-aswell ashigherdataspeeds,bothneeded formoreadvancedwirelessapplications,andallowsorganisationsto buildsophisticatedcampus-wide wirelessnetworks.
GenesisEnergychiefexecutive MalcolmJohnshasconcernsabout NewZealand’senergysecurityinthe nextdecade.Hesays:“Whilewehave alotofwindandsolargeneration capacitycomingonstream,therealityistheyareintermittentsourcesof energy;theycomeandgowhenthe windblowsorthesunshines.
“Atthemoment,themajorityof thatisbacked-upbyassetslikegas turbineswhichcancomeonatshort notice.TheMinistryofBusiness,InnovationandEmployment—MBIE’s assessmentofthenation’sgasreservessuggeststhe2030slookproblematicfromthatperspective.
“Andwe’veyettoidentifyacustomersegmentthatislookingforcold showersbycandlelight.Keepingthe lightsonisessential.”
Thisbecomesevenmoreessential astheeconomybecomesincreasinglybasedonelectricity.
Johnsseesthequestionasoneof howunstablethegridwillbewhen wepushpast95percentrenewable energy.
Hesaysbatteriesare,atbest,a short-termsolutionforanhouror evenaday,butnotbeyondthat. Hydrolakesareneededforthebaseloadenergygenerationand,anyway,
aboutoneinfiveyearsitistoodry forthemtobeareliableanswer.
MBIEestimatesthatgenerators willneedtoimportgasstartinginthe secondhalfofthenextdecade.Johns describesthisas“potentiallyconcerning”butthereisanotheroption: “Largegasturbines,liketheonewe operateatHuntly,canrunonhydrogenwhichisazero-carbonfuel”.
MalcolmJohns’Top3 businessissues
● Theinflationmonster
● Governmentandregulatory issues
● Growth
prosperity.Iwanttoseerenewable electricitybecomeaneconomicdevelopmentplatformalongsidethe productionofproteins.”
Onthisbasis,JohnsthinkstheZero CarbonAct’sgoalofbeingcarbon neutralby2050isunder-ambitious. Hesayswehavea10-to-20-yearhead startonourmaintradingpartners whenitcomestorenewableenergy, andweneedtomakemoreuseof thatadvantage.
Johnsisconcernedaboutgovernmentspendingandhowthatleaves thecountryvulnerabletofuture shocks.Hesayswehadastrong balancesheetthatallowedusto navigatedisasterssuchastheChristchurchearthquakes,therecentAucklandfloodsandCycloneGabrielle.
Whichmeansgashasaroletoplay aswedecarbonise,butinthemeantime,therewillbeproblemswith importinggas.
Johnssaysthatwhentheproportionofelectricitygeneratedgoes past90percent,thefocusneedsto goonelectrifyingtheeconomy.He wantstoseepoliciesthatencourage thiselectrification,buthewantsthe
governmenttogomuchfurtherand useittogenerateforeignexchange.
“Wecan’texportourelectricity becausewearetoofarfromany customers,butwhatwecandoisto workhardtobringcompanieshere sotheycangreenthemselvesoffthe backofourelectricity.
“Thishasthepotentialtogenerate theforeignexchangeweneedforthe nexttwoorthreegenerationsof
“Evenifwedoeverythingwecan tomitigateclimatechange,weare goingtofacemajornaturaldisasters inthiscountry.Everytimewespend frivolously,orweletspendingget aheadoftheproductivityoftheeconomy,weweakenourabilitytobeable torespondtothoseevents.Icansee theamountthegovernmentwillneed tospendondisastersgrowingconsiderably.
“Weneedtothinkforward20-to50yearsintermsofbalancesheet managementorweriskrunningout ofthecapacitytorespond.”
Weareoptimisticaboutthe periodaheadandtherolethat technologycanplayin supportingAotearoa.Weknow wewanttobemoreproductive, andweknowwewantalower carboneconomy.
We’veyettoidentifya customersegmentthatis lookingforcoldshowers bycandlelight.Keeping thelightsonisessential.BillBennett
NewZealandshouldbuilditswealth byexportingmoreofitsexpertiseand notjustcommodities,saysPaul Newfield,chiefexecutiveofinvestmentandassetmanagerMorrison& Co.
“Thebiggestthingishavingalongtermvisionandfocusonwhatwill giveustheNewZealandwewantto liveinoverthenext50years,” Newfieldsays.
“Wewanttobeahealthy,egalitariansocietywithopportunityfor everyone.Weneedtotakecareofthe environmentandbewealthyenough toaffordallofthat.”
NewfieldsaysNewZealandcan takeitsexpertiseincertainareasto theworld,createvalueandsendthe profitsbackhome.
“NewZealandisagloballeaderin renewableenergynotthroughcentralplanning,butbeingbeenblessed withwindandrain.Wehavegreat capabilityinfilmandtelevisionproduction,formsofengineering,digital infrastructureandelementsof healthcare.
“Electricitygenerationforusislike trainingataltitude–wehavedone itfordecadesandtheworldiswaking uptoit,”saysNewfield.
Morrison&Co,whichmanages public-listedInfratil,hastakenthat stepofexportingexpertise.Infratil hasmajorityownershipofSingaporebasedGurinEnergy,arenewableenergydevelopmentplatform,andhas committedUS$233m(NZ$392m)for windandsolarprojectsacross SoutheastAsia,NorthAsia,Indiaand Japan.
“NewZealandshareholdersare participatinginthegrowthofrenewableenergyinNorthAmerica,Asia
Governmentshavebeen focusedonbuilding concreteinfrastructure andtheycanleanmore ontechnologyandbuild digitalinfrastructure.
andEurope.WearetakingNewZealandexpertisetosolvebigproblems intheworld,”saysNewfield.
Infratilhasalsoinvestedinradiology.“Wehaveastronghealthcare systemandthiscanbeturnedinto anexportearnersuchas teleradiology.Theideaofhaving medicalspecialistcaredeliveredby aNewZealanddoctorisappealing.
“DoctorsinNewZealandcanread MRIscansfromaroundtheworld, evenovernighttoUKpatients.
Newfieldsaysgovernments(in NewZealand)havebeenfocussedon buildingconcreteinfrastructureand theycanleanmoreontechnology andbuilddigitalinfrastructure.
“Wecandeveloptelemedicine ratherthanbuildingbighospitals;we canuseroadpricingtospreadthe demandonroadsratherthanbuild
bighighways;wecanalsointroduce demandmanagementandpeakgenerationtechnologiesratherthan buildingLakeOnslow–a Muldoonismbigthinkproject.
“Thereisariskofgovernment gettingintheway.TheLakeOnslow hydroprojectisanexampleofgovernmentover-reach–itfeelslikea solutionlookingforaproblem.
“Technology,privatecapitaland therightmarketsettingswilladdress that,”saysNewfield.“Weneedto buildfora21stCenturysociety,not the20thCenturywehavelivedin.”
NewfieldisworriedthatNewZealandhasanundevelopedcapitalpool towrapanecosystemofcapability aroundit.
“NewZealandneedsmorelongtermpoolsofcapitallikeKiwiSaver andNZSuperFund.Weneedthe peoplemanagingthosepoolstohave
theconfidencetolookahead10or 20years,andnotworryaboutliquidityandmemberswantingtocash-in intheshort-term.
“TheAustraliansuperfundsare veryhappytolockmoneyawayfor 20yearsandinvestingreatthings insociety.”
HesaysNewZealandfretstoo muchwhentalentedpeopleleavefor overseas.Theyendupcontributing tothecountryoffshore.“Ofcourse, wewantafreeflowoftalentinboth directions,andtheabilitytobringin expertisewhenweneedit.
“Inourbusiness,wesendtalented peopleoverseasandhelpshareholdersinInfratilmakegood investments.TheyfunneltheirknowledgeandexpertisebacktoNew Zealand.
“TherearelabourshortagesinNew Zealand–it’soneofthethingsdriving inflation.
“Butstrangely,whereverIgointhe world,there’salabourshortage.Ijust don’tknowwherethepeopleareor havegone.”
Onthetaxfront,Newfieldsays NewZealandbusinessdoesitselfa disservicewhenitharpsonabout lowertaxesandnotwantingacarbon price.
“Weshouldfocusonhowwecan winglobally.NewZealandhasa relativelylowtaxenvironment especiallyforwealthypeopleandwe havetheopportunityofleadingthe worldwithdecarbonisation credentials.
“Weneedapropercarbonprice andnotcontinuesubsidisingfossil fuels.Itdoesseemoddthatwetax peoplewhoworkandconsumebut wedon’ttaxpassiveearningsfrom inheritanceandothersources.Weare probablytaxingthewrongthings.”
ThenextGovernmentcould conceivablyliquidatethe $65.4billionNewZealand SuperFundandrenegeon makingoffshorepaymentsonclimatechangecommitmentstopay downcostlyGovernmentdebt.
Butsuchstratagemsdon’tflywith NewZealand’sseniorcorporatecommunity.
Inthe Herald’s2023Moodofthe BoardroomCEOssurvey,business leaderswereemphatic;over87per centsentastrongmessagethatliquidatingthefundwasnoton.Just3per centsaiditshouldbeusedtorestore thecountry’sbalancesheet.Afurther 9percentsaidtheywere“unsure”.
Ahigh-profilechairpersonsuggestedthat—giventhepoorfiscal managementseeninrecentyears— ratingagencieswouldrespondvery negativelyinsuchacase.“TheNew ZealandSuperFundandinvestment expertisecaninsteadbeusedfar moreeffectivelytosupportinfrastructurebuild.”
ButNewZealandInitiativechairmanRogerPartridgeisinfavourof “ideallywindingthefundup”and payingdowndebt.
Thefundisdesignedtohelppay fortherisingcostofproviding NationalSuperannuationpayments forNewZealanders.BothLabourand Nationalhaveflaggedtheywillcontinuemakingcontributions.
National’sfinancespokesperson NicolaWillissaidherpartyiscommittedtocontinuecontributions.
“Idothinkit’sprudentandresponsibletoalwaysbelookingat...isthat thebestplacetobeputtingourdollars now?Butmyintentionisthatwe wouldcontinuecontributions,”she toldTVNZ’s Q+A earlierthisyear. Labourhasalsocommittedtocontinuepayments.
Initsalternativebudget,Acthas proposedhaltingcontributionstothe SuperFundwhilegovernmentdebt isoutstanding.Itsuggests,“iftaxpayerswishtoinvestinthestock market,theyareallowedtodoso.
“TheGovernmentshouldnotforce themtodosoviaproxy.”
Itappliesthesamerationaletothe government’sventurecapitalfund.
In2009,theformerNational-led governmenthaltedcontributionsin responsetotheGlobalFinancial Crisis.Theywererestartedbythe
Labour-ledgovernmentin2017.
SimplicityfounderandCEO,Sam Stubbs,saysliquidatingthefund wouldeliminateaworld-leadinginvestmentteamthathasprovided returnstotaxpayerswellinexcessof anydebtrequiredtofundit.
“Ultimatelyourincreasingpublic debthastobepaidback,”addsPrecinctPropertieschairCraigStobo.“If thepublicdoesnotwanttocut entitlementsorincreasetaxeswe havetosellassets.Therearestate assetsthatshouldbesoldwellbefore theNZSuperFundisliquidated.”
Aformerbankerdrawsahistoric parallel:“Notagoodidea.Itwouldbe similartodoingawaywiththeSuperannuationfundbyMuldoon.”
Jarden’smanagingdirectorandcoheadofinvestmentbanking,Silvana Schenone,acknowledgesthecomplexityofsuperannuation.“Ibelieve compulsorysuperannuationinNew Zealandwouldassistwithfinancial literacyandmanyotherissuesthe countryisfacing,”shesays.
PayingthePiper
AGovernmentreporthasforecastwe couldbeupa$24billionbillleading upto2030inordertomeetits internationalclimatechangetargets. Thisprojectionispredicatedon maintainingourcurrentgreenhouse gasemissionstrajectorywithoutsignificantreductions,againstahigh internationalcarbonpricetooffset
emissionsabovethecountry’starget.
UndertheParisAgreement,New Zealandhascommittedtoreducenet greenhousegasemissionsin2030by 50percentbelowgrossemission levelsin2005;partofglobalefforts tolimitwarmingtobelow1.5C.
Businessleaderswereaskedifthe countryshouldrenegeonthese commitmentsandfocusoninvesting ingreentechnologyandotherdirect emission-reducingmeasures.
Aclearmajorityofrespondents,62 percent,answeredaresounding“no”. Theyemphasisedtheimportanceof suchcommitmentsasavitalaspect ofglobalco-operationincombating climatechange,andthesevere implicationswalkingbackcommit-
RogerPartridge
NZInitiativechair
Retirementspendingandthesizeof thepublicserviceastwoobvious areasforexpenditurecuts.Significant savingsareavailablefromthereform ofretirementincomepolicy.
Reformsshouldinclude:(a)
AbolishingsubsidiestoKiwiSaver;(b)
AmendingindexationofNZSuperannuationandraisingtheageof eligibilitybytwoyears,linkingfurther changestohealth-adjustedlife expectancy;(c)SuspendingNZSuper Fundcontributions(andideally windingupthefundandusingthe proceedstorepaygovernmentdebt).
Thecorepublicservicehas increasedfrom47,000fulltime equivalents(FTEs)in2017toover 62,000.Meanwhile,publicservice outcomeshavedeclined(justthink education,healthandlawandorder).
Thebulkofthegrowthinheadcounthasbeeninadministrationand management—notfrontlinestaff.
TaketheMinistryofBusiness InnovationandEmployment(MBIE) asanexample.From3336FTEsin 2017,itgrewto5832in2022.Over
thattime,thenumberofitsmanagers grewby44percent,anditnowalso employsmorethantwicethenumber ofclericalandadministrative workers.Itisthesamestoryacross practicallyeveryothergovernment department.
EmploymentattheMinistryof Transportisup102percentatthe MinistryofEducation55percent,and attheMinistryfortheEnvironment, 137percent.Thesizeofthecore publicserviceshouldbereturnedto 2017,attheveryleast.Numerous otheropportunitiesexistforreducing publicspendingbyidentifyingand reducinglow-qualityexpenditure.
Theincominggovernmentshould thoroughlyinvestigateotherpublic sectorprogrammesandinitiatives thatfailtomeettheirobjectivesor providepoorvalueformoney.
KiwiBuild,FeesFreetertiary education,andtheProvincialGrowth Fund(PGF)arestrongcontendersfor removingsuchwastefulexpenditure. Identifyingineffectiveprogrammesandinitiativesisnoteasy. Andrigorousevaluationofpolicy programmesandinvestment projectsisrelativelyrareinNew
Zealand.However,withoutproper cost-benefittests,projectsthatareof poorqualityandofferlittlevalue couldburdenfuturegenerationswith massivedebtandtaxation.
Followingtheglobalfinancial crisis,manycountries,particularlyin Europe,undertookcomprehensive expenditurereviewstoreducelowqualityexpenditure.Asimilar exerciseshouldbeundertakenin NewZealandtoidentifyandeliminate wastefulexpendituresinadditionto thoseidentifiedabove.Forexample, theInitiative'sreport,DecadeofDebt: Thecostofinterestfreestudentloans (2016),showedthattheinterest-free studentloanschemeisnotfitfor purpose.Nocompellingpublicpolicy caseforuniversalsubsidisedstudent loansexists.Thepolicyhardlymoved tertiaryparticipationrates.Nordidit leadtoanyimprovementintertiary equity.Yet,by2016,theschemehad resultedinalmost$6billionof taxpayers’moneybeingwrittenoff. Ourresearchshoweditisacostly,illtargetedschemeandshouldbeabolishedinfavourofmeans-testedscholarshipsandstrongerpreparationfor post-secondarystudy.
mentscouldhaveonNewZealand’s traderelationships.
Conversely,anotable18percent ofrespondentsalignedwiththeidea ofprioritisinginvestmentsingreen technologyanddirectemissionreductionmeasuresoverstrictadherencetointernationalcommitments. Theremaining20percentof respondentsare“uncertain”.
ProfessionaldirectorDame ThereseWalshsays,“thecredibility ofNewZealandinrelationtoclimate changegloballywillbesignificantly impactedifwedonotmeetour internationalcommitments.”She notesourabsencewouldundermine thelevelofpressureonother countriestodothesame.
Anotherdirectormakesthepoint thatifwerenegeontheclimate commitmentsourrelativecostof capitalwillincrease.
“Theeconomygetshitbothways onthis.Theonlyansweristohave aco-ordinatedplantodelivertothe targetsthattheGovtdoesnotunderminewithpolicydecisions,likeprovidingfuelsubsidies.”
“Itisnotaneither/orquestion,” saysFreightwayschairMarkCairns. “Weneedtobedoingboth.”
Butconversely,anotable18per centofrespondentsalignedwiththe optionofprioritisinginvestmentsin greentechnologyanddirectemission reductionmeasuresoverstrictadherencetointernationalcommitments. Theremaining20percentof respondentswereuncertain.Precinct PropertieschairCraigStoboisscepticalofthefeasibilityofachievingthe 2030Paristargets,“bothintermsof likelysuccessandballooningtaxpayercosts.”
“Only25percentoftheglobeis subjecttocarbontaxesorprices.We shouldworkwithotherfoodexporterstooptoutunderArticle2.1ofthe Agreementcitingfoodsecurity.”
Goingfurther,serialsocialentrepreneurAnneGazestronglycriticisedthedecisiontosigntheParis Agreement.
“Phenomenalincompetenceto haveeventhoughtofsigningthis! WhatapuffedupMinister’segoto havedoneso.”
Governmentspendingsoared asNewZealandcharteda paththroughtheworstof theCovidpandemic.
Withthebillforthatspendingnow fallingdue,thereisaclearmessage fromNewZealand’sbusinessleaders; fouroutoffive(78percent)saythey wanttheincominggovernmentto makemajorspendingcuts.
Onein10disagrees,whileanother 12percentareuncertain.
“Whilethedebtlevelisnot alarmingbyInternationallevels,the situationwillcontinuetoworsenas wecontinuetolivebeyondour means”—aformerbankerneatly sumsuptheconsensusviewofNew Zealand’sboardroomsaswehead intoanelectionwheregovernment spendingisunderthemicroscope.
KiwibankCEOSteveJurkovich wantsthenextgovernmentto“drive higherreturnsfromareducedspend”. Athirdbankersays:“theincoming governmentneedstotakeacritical lookatthe40percentspending increaseinrecentyearsandaskwhat isbeingdeliveredforit”.
Anotherbankersaysmorefiscal prudenceisrequired.
Weaskedsurveyrespondentsto nominateareasforspendingcuts. ManyofthosewhocommentedfocusedontheGovernmentpayroll.
MainfreightdirectorDonBraid speaksformanywhenhesays:“Reducethebureaucracyandasaconsequencethecostofgovernment acrossthenation”.
Harcourtsmanagingdirector BryanThomsonwantsspendingon supportstaffrefocusedonfront-line services.
Hesays:“Thenewgovernment needstoaddressspendingandremoveitfrombackofficetofocuson frontlinesuchashealth,education, policeandsocialsupport.
“Removethemiddlemanagers andPRcommspeopleandreplace themwithpeoplewhoactuallydo somethinginthefield.”
Governmentspendingonconsultantsisalsointhebosses’sights.David Mair,CEOofSkellerupHoldings, nominatescutting“Government spendingonconsultantstodoThink Bigprojects”.
KevinJohnObern,themanaging directorofOfficeMaxwantsboththe generalcentralgovernmentandthe spendingonconsultantscurtailed.
Acompanydirectorsuggests
downsizingministries.“Theyare over-resourcedwithstaffbusygettinginthewayofgettingthingsdone atthecoalfaceandwithlimited experienceinpolicyandstrategy”, whileacompanychairsays:“Governmentfulltimeemploymentneedsto beshrunkacrosstheboard.
“Youdothisthroughsettingacap forinvestmentandrelentlessprioritisationofthatspend.”
MatthewCockram,CEOofCooper andCompanysingledoutspecific areasforcuts:“Communications,MinistryofEducation,MinistryofBusinessInnovationandEmployment (MBIE)JobSeekerscam.”
CameronBagrieofBagrieEconomicshasamorenuancedviewofspendingcuts:“Developaneconomicplan andchartafiscalcourse.
“Wedonotneedextrememove-
Developaneconomicplanandcharta fiscalcourse.Wedonotneedextreme movementsinfiscalpolicysettings.Fiscal policyshouldnotbeslavishlydictatedby fiscaltargets.Yes,weneedsomediscipline aroundthem,butwealsohaveextensive socialandinfrastructuredeficitsto address.
mentsinfiscalpolicysettings.Fiscal policyshouldnotbeslavishly dictatedbyfiscaltargets.
“Yes,weneedsomediscipline aroundthem,butwealsohaveextensivesocialandinfrastructuredeficitstoaddress.”
Aseniorbankerwarns:“Whileextensivecutscouldbedamaging,a plantoreducecostsovertimeis necessary.”
TheMoodoftheBoardroomsurveywasinthefieldwhenTreasury releasedthe2023Pre-electionEconomicandFiscalUpdateorPrefu.
Therehadbeenwidespread understandingwithinthecommercialcommunitythatthiswouldprojectsignificantlylowertaxrevenue andanincreaseingovernmentdebt.
Intheevent,thenumberswere betterthanexpectedwiththecoretax revenuecominginat$121.6billion comparedwithabudgetforecastof $123.2b.
Governmentborrowingforthe nextfouryearsissettoincreaseby $9b,whichishigh,butforecastsbeforetheannouncementwereinthe $10bto$15brange.
Respondentsweresplitthreeto onebetweenthosewhoweremore concernedaboutthePrefuupdate thaninthepastandthosewitha similarlevelofconcern.
Nonesaidtheyhadareducedlevel ofconcern.
Oneinvestmentbankercommented:“Thisgovernmenthasgreatly increaseddebtandhassteadily
dismantledtheeconomythatis meanttopayforit.”
Thebossofanenergycompany sayswehaveborrowedtoomuch, andtheinvoiceisarriving.
ManagingDirectorofCordishotels FranzMascarenhassays:“Ultimately thiswillbecomeaburdenonthe commonmanintheyearsahead.”
Bagrieadds:“Thetaxinthetaxtake hasbeenakeyeconomicdevelopment.Itillustratesthatyoucannot divorceideologyfromeconomicreality.Inflationisequallybrutalfor businessesasitisforhouseholds.”
Bossesareunimpressedbythe Labourgovernment’sannouncement inlateAugustthatitwouldcutspendingbyalmost$4billionontopofthe $4bincutsannouncedintheMay Budget.
FinanceMinisterGrantRobertson madeitclearthatwouldinclude reducedspendingoncontractorsand consultants.
WhenaskedifafutureLabour-led governmentwouldmanagethedebt track82percentsaidno.Onlyseven percentsaidyes.
Manyleaderscommentedonthe relativelysmallsizeofLabour’sprojectedcuts.Anenergysectorboss notesthatwhilegovernmentspendinghasgrownbyaround36percent, $4billionincutsisasmallstart.
Anagribusinessdirectorsays:“A token2percentcutacrosstheboard. Showsnostrategicoroperational focus.Knee-jerkingaheadoftheelection.”
MatthewCockramofCooperand Companyechoedthesentimentsaying:“Tokenisticanddesperate”. Alogisticsbossdescribedthecuts as:“Toolittletoolate”.Hesaysit amountstoapoliticalstunttoimpact Prefu.
Amediachiefusedexactlythe samewords:“Toolittletoolate”. OthercommentersweredistrustfulofLabour’srecord.
HarcourtsbossBryanThomson says:“Thebestpredictoroffuture behaviourispastbehaviourinthe samecontext”.
Anadvertisingchief:“Theyhave donenothingtomanagedebttodate sowhyonearthwouldanyone believetheywillchangenow.It’spure politics.”
Aninvestmentfirmchiefisonthe samewavelength,saying:“Theirrecordhasbeenabysmal,whywillit change?”
LABOUR
● Maketheapprenticeshipboostschemepermanent 3.76/5
● Increasesentencesforcriminalswhouseorrewardchildrenforcommitting crime 3.69/5
● Makefinancialliteracyeducationmandatoryandmakereading,writingand mathsteachingconsistentwithmandatoryCommonPracticeModel 3.53/5
● 20hoursfreeearlychildhoodeducationforagestwoplus 3.24/5
● Licenceallvaperetailersandreducetheirnumberto600 3.17/5
● Newoffencetotargetramraidingandallowages12/13tobechargedin youthcourtforramraiding 3.05/5
● Prioritise14projectswith$20b,plusaboosttoroadmaintenancewitha 4cincreasetofueltaxeseachyearfromlate2024 2.64/5
● Buildtwonewyouthjusticefacilities 2.95/5
● Fourweekspaidparentalleaveforpartners 2.92/5
● ThreetunnelsacrossWaitemata¯harbourwithtwoforvehiclesandonefor lightrail 2.38/5
● ContinuewiththeThreeWaters/AffordableWaterandRMAreplacement programmes 2.04/5
● Nochangetosuperannuationage 2.28/5
Whattheyaresaying
● Apoorlytargetedmixofpolicyprescriptionswithnocoherentsupportive strategyorfundingtomadesuretheyareimplementedinaneffectiveway.
—Agribusinessdirector
● “IfindithardtobelievetheLabourgovernmentwouldmakeashiftto normalcyineducation.Decolonisingseemscountertowhatiwouldconsider commonpracticemodel. —SimonBennett,Accordant
● Itisimpossibletobeimpressedinretrospectorinadvanceofanything theyannouncegiventrackrecordtodate —MatthewCockram,Cooperand Company
● Vapes:greattolicensethembutsadlythehorsehasbolted—howdoyou choosewhichbusinessestoshutdownwhenthey’vebeenstartedingoodfaith?
—Leadingbanker
NATIONAL
● InfrastructurewouldbeplannedforbyanewNationalInfrastructureAgency witha30-yearinvestmentpipelinemakinguseofPPPs,valuecapture(likeroad tolling),fast-trackconsenting 4.19/5
● Anautomaticsix-monthtemporaryvisaforqualifiedoverseasnursesand midwivesandtheirfamilywithoutneedingajob 4.14/5
● Requireonehourperdayonaverageoneachofreading,writingandmaths atprimaryandintermediateschools 4.08/5
● Rewritetheprimary-intermediatecurriculum,requirestandardisedtesting twiceayearforYear3toYear8— 4.02/.5
● A$24.8bspendover10yearson13roadsofnationalsignificance,public transportprojectsinAucklandandthelowerNorthIsland,andarangeof resilienceupgrades 3.99/5
● Ringfence$70mayearforPharmaccancertreatments,paidforbyreimposing $5prescriptionsforallbutsuperannuitantsandthoseonlowincomes 3.77/5
● FamilyBoost,a$75aweekchildcaretaxrebate 3.53/5
● ScraptheThreeWatersentitieswithin100days 3.45/5
● SetupathirdmedicalschoolatWaikatoUniversity 3.38/5
● Allowunder-30stouseKiwiSavertopayforrentalbonds 2.5/5
● Allowcouncilstooptoutofthemedium-densitylaw 3.24/5 Whattheyaresaying
● Transportpricingistheburningplatformthatneedstobeaddressedtorestore fundingsecuritytothenationallandtransportfund.Apotholefundisnotfixing therootcauseoflongtermroaduserpricing. —PeterReidyKiwiRail
● Mostofthesepoliciesaddressimmediateissuesbutwillrequiremore comprehensiveandintelligentsupportingprogrammesovertime. — Agribusinessdirector
● SomegoodproposalsbutequallydaftoneslikeusingKiwisaverforrent bondsandthirdmedicalschoolinsteadofincreasingcapacityandsupportfor currentschools.Justpaynursesmore,thatbondiswindow-dressing. —Exporter
● ThereisnoneedforathirdMedicalSchool,theAucklandandOtagoMedical Schoolsshouldbeexpandedinstead. —Investmentfirmchair
We'reseeing Government spending increaseswithout apparent measurementof results,including lackoftargetingof somerecent policiestothose whohadreal need. Leadingbanker
Surveyrespondentsweregiventheopportunitytocommentonthetopissuesandhowtheywouldresolvethem
MichaelFuge
ContactEnergy
● Cloyingregulationgettinginthe wayofrapiddecarbonisation.Get policysettingsrightthengetoutof theway.
● Outofcontrolgovernment spendinglinkedtoarapidgrowthin thebureaucracywithacorrespondingcrashinbasicfrontlinedelivery: Healtheducation,crimeprevention, immigration.Eventheairport resemblesathirdworldarrivalhall.
● Collapseintheeducationsystembasicliteracyandnumeracyfalling welldownworldrankingsand appallingabsenteeismatsecondary schools.Thelegacyofnonsensical extremelefteducationdogmais goingtostaywithusforgenerations.
AndreaScown
Mitre10
● Violentandaggressivebehaviour, morefrequentlydirectedtowards frontlineteammembers:weare dealingwiththeambulanceatthe bottomofthecliffwithgreatersafety trainingforourteams.Beyondthe obvioussocietaldriversofpoverty, costofliving,socialisolationandso on,areuncontrolledsocialmedia platformssuchasTikTokexacerbatingcopycatbehaviours.
● Ineffectivegovernmentpolicy thatisdoinglittletoboostconsumer confidence.Effectpositivesocietal change,orencouragecapital investment.MyhopeisthatNew Zealanderswilltaketothepolls placingtheirvotesonpolicy—not peopleorparties.
● Thewealthgapandhousing
affordabilityfortheaverageKiwi. Wealthgap:Solvingthisrequires morefocusonliftingproductivity, improvingeducationoutcomes. Housingaffordability:Radically improvingtheproductivityofthe constructionsectorthrough technology,consenting,skilled labour,effectiveurbanplanning.
ChrisQuin FoodstuffsNorthern
● Lackofstrategy,visionand conviction.Getrealabouttheissues thecountryisfacingandwhat’s neededtoaddressthem.It’stimeto dothehardthings,nottheeasy things.Andwelcomeforeign investmenttogrowoureconomy.
● Lackofclarityontherole everyonecanplayinforgingthe futurewewant.Weneedcertainty, stabilityandtoplayasatightteam withGovernment,businessand communityconnectedandall workingshouldertoshoulder.
● Lackofclearpriorities,focused executionandaccountabilityfor outcomes.Governmentneedsto knowwhereitsfocusshouldbeand bepreciseinhowittargetsspending tofixproblems.Accountabilityfor outcomeswillbecriticalforthenext Government.
RobCampbell Director
● Climate/Environment— genuinelyfacethecrisis.
● Inequities—faceanddealwith.
● Efficiencyandeffectiveness— faceanddealwith.
SimonBennett Accordant
● Labourmarketefficiency. Moderniseemploymentframework forfuturestate(andcurrent— HolidaysActstillbroken).
● Lowproductivity.Simplify incentivisationofemployees,don’t fixtolowestcommondenominator.
● Lackofvisionandcertaintyin pathwaytogrowth.Getbusinessto helpsolvetheproblems,workingin tandemwithgovernment.Foreign DirectInvestmentmaynotbeour answerbutfollowIreland’sleadby givingbusinesseslong-term certaintyofthelegislativeeco -system.
EricaCrawford LoveblockWines
● Longtermplanningforanageing population—howwillthisbe funded?Itaffectstaxpolicies,health &disabilitystrategies,fewertax payers,andskillsgapvacatedby retiringboomers.Ibelievethatitis timefortheimplementationofwell managedcapitalgainstaxpolicy beforetheflushboomersretire.
● Climatechange.Period.
● Notenoughtaxincome.Most areasofsocialservices,healthand educationsystems,infrastructure anddoonareallunderfunded.The incomesimplyisnotthere.Iamalso astoundedatthelargeandliberal promisesmadebythepollies.
PaulNewfield MorrisonandCo
● Breakingoutofbeingasmall,low income,lowproductivityeconomy.
byexportingexpertisenot commodities.
● Buildingsocialcohesionand reducinginequalitysothatwecan avoidthepathofpopulismand dysfunction.
● Makingthemostofour competitiveadvantagesina decarbonisingworld
DonBraid Mainfreight
● Economicstability.
● GDPgrowth.
● HealthandEducationstandards acrossthenation.
ProfessorDawnFreshwater UniversityofAuckland
● Division(aroundTeaoMa¯orifor example).
● Lackoffocusonnational priorities(researchandeducationis agoodexample).
● Betterco-ordinationand collaborationbetweenandacross Sectorsratherthansilos;needtouse ourpotentialagilitytotradeforthe lackofscaleandconcentration.
SamStubbs Simplicity
● Fiscaldragviahigherinterest rates.CoreGovt.spendingdiscipline iscritical.Toughasitis,wehaveto walkbackfromourmassiveincrease incoreGovernment.spending.
● Gettingnewsourcesofcapital, namelyKiwiSaver.Betterinvesting ininfrastructure.
● Creatingabetternarrative.Weare talkingourselvesintoarecession thatcouldbeworsethannecessary.
StephenJacobi InternationalBusinessForum
● Chineseover-reactiontoNZ growingclosertotheUS:encourage theGovernmenttomaintainbalance andindependence.
● Termsoftradeandprotectionism inoverseasmarkets:Boostexport support.
● Decliningcompetitivenessand productivity:Attractmorecapital, boostinfrastructureinvestment.
ToddLauchlan JLL
● Managinggovernmentspending.
● Long-termvision.
● Infrastructure.
MarkCairns Freightways
● Slowingdomesticeconomy.Need anacutefocusongovernment spending.
● Climatechange.Needtomove faster.Transportemissionsand industrialheatbiggestopportunities forenduringcarbonreductions.
● Healthsystemisbroken.Itispoor formhowlongithastakentoresolve paydisparitywithnursingstaff.
HaydenWilson DentonsKensingtonSwan
● Intergenerationalincome inequality—realignmentoftaxation prioritiesisrequired.
● Shorttermthinkinginpolitical partiesinrelationtothecountry’s challenges.
● Lackofaspiration—inpoliticsand inbusiness.
Giventheimpendingelection, surveysandpollscarrya greaterrelevance.
Andliketherecentpolls,the 2023 Herald CEOssurveypaintsa challengingpictureforthe GovernmentandLabourparty.
The2023resultsshowLabour’s policiesarenotlandingwithbusiness leaders.Influencednodoubtbythe morechallengingeconomicissues currentlybeingfaced,andthehigher standardasecond-termGovernment, largelyunencumberedbycoalition partners,isbeingevaluatedagainst.
Acceptingthiscontext,and movingtothetaxquestions surveyed,theGovernment’sactions failtoresonate.
GST Atthemostextreme,hardlyany respondentsseeanymeritinthe LabourParty’splantoremoveGST onfreshfruitandvegetables,with86 percentseeingnomeritinitatall.
Marginallyless(81percent)seeno meritinTePatiMa¯ori’sproposalto removeGSTonallfooditems,with asimilarnumber(79percent)seeing nomeritinNZFirst’sanalogousGST initiativeofremovingGSTonallbasic foods.Drivingthelackofsupportis theuntargetednatureofthese initiatives,resultinginwhatmanysee asanunwarrantednetcostto Governmentcoffers.
Theexisting39percenttop personaltaxrate,nowsoughttobe extendedtothetaxationoftrustees, remainsunpopular,withonlyaround 11percentofrespondentssupporting theseinitiatives.
Whilethetaxationof capitalgainsremainsa polarisingtopic, sentimenthaspossibly softenedwiththe evolvingcontext,that includesthetaxation ofcapitalgainsbeing seenasmorepalatable thanawealthtax, whilealsoreducing theriskthatawealth taxissuccessfully advanced.
ThomasPippos,DeloitteGST
86%
ofrespondentsseenomeritinthe LabourParty’splantoremoveGST fromfreshfruitandvegetables.
Thelackofsupportforthetrustee rateflowsinpartfromthemeasure alsobeinguntargeted,andsimplya politicalsoptotherecentHighNet Wealthproject.Whileitsounds credible,it’snot.Onlyafractionofthe hundredsofthousandsoftrustshave beneficiariesthatarelargelytaxedat the39percentpersonalrate.It’snot goodtaxpolicy,andscores accordingly.
Property
Thetaxationofresidentialproperty alsoremainsunpopular,accepting thatthisisapolarisingtopicacross theentirepoliticalspectrum.
TheLabourGovernment’s initiativescontinuetoattractminimal support,withbetween4-7percent fullysupportingthevariousinitiatives,andwithmostthereafter(circa 40percent)notsupportiveatall. Lookingatthisissue,fromthe perspectiveofNational’sproposalsto reducethebright-linetestandrestore interestdeductibility,respondents weremorepositive,butstillonly around40percentwerefully supportiveofrestoringinterest deductibilityand26percentforthe brightlinereduction,witha
statisticallysignificantnumbernot supportingtheirremovalatall(12per centregardingrestoringinterest deductibilityand20percentonthe proposaltoreducethebright-line test).Again,apolarisingtopic.
Pivotingtothelatestpolitical football,beingtheremovalof depreciationoncommercial property,Nationalhasfoundnoreal friendshere,withonly6percentof respondentsfullysupportiveand35 percentnotsupportiveatall.Again, notsurprisingasit’snotgoodtax policy.Commercialpropertydoes depreciate,withcommercial landlordsjustthelatestpolitical casualty,inthiscasetohelpfundthe popularindexationoftaxthresholds thatrespondentsoverwhelmingly support,withnearly84percentnet positiveandaround52percentfully supportive.
Taxrates
Unsurprisingly,increasingthehighest marginaltaxrateto45percentas proposedbytheGreenshasvirtually nosupport,with86percentnot supportiveatall,andover90percent
86% ofrespondentsdonotsupportthe GreenPartypolicyofraisingthe highesttaxrate.
It'soddthatwealthyKiwissuggestthat taxwillmakethemmoveoverseas.The topmarginaltaxratesandlackofcapital gainstaxmakeNewZealandan unusuallylowtaxenvironmentfor wealthypeople.ReturningtoNew ZealandafteradecadeoverseasIfound thattaxeswerelowbutthatsocial inequityhadgonethroughtheroof.
PaulNewfield,Morrison&Co.Only11% ofrespondentssupportextending the39percenttoppersonaltaxrate totrustees.
alsototallyunsupportiveofTePati Ma¯ori’sproposaltomovetherateto 48percent,butatahigherthreshold. Act’sproposaltoreducetaxratesalso failedtofinduniversalfavour,with lessthanhalfofrespondentsreasonablyortotallyattractedtothesame, andwiththemajorityeithernotor onlysomewhatsupportive,influencednodoubtbytheiraffordability givenoureconomicreality.
Wealthandcapitalgainstaxes
Intermsofthenexusbetweentaxand wealthinequality,respondentswere alsonotattractedtoawealthtax,with nearly90percentnotsupportiveof theGreen’sinitiativeinthisarea,and withthatamountliftingtoaround93 percentwhenreferencingtheTePati Ma¯oriwealthtaxinitiative.
Contextualisingthis,virtuallyall respondentsacknowledgewealth inequality(materiallydrivenby housingownership)asarealconcern, withoverhalfsayingit’saheightened concernrelativetothepast.Around halfalsoseetheGovernments’role
indealingwithwealthinequalityas ensuringsuitablelevelsofwelfare andincome,witharoundaquarter supportiveoftaxingrealisedcapital gainstohelpaddressthesame.
Whilethetaxationofcapitalgains remainsapolarisingtopic,sentiment haspossiblysoftenedwiththe evolvingcontext,thatincludesthe taxationofcapitalgainsbeingseen asmorepalatablethanawealthtax, whilealsoreducingtheriskthata wealthtaxissuccessfullyadvanced.
Thecurrenteconomicoutlook, includingtheGovernment’sfiscal position,mayalsobeinfluencing sentiment,aswithoutquestion,the stormcloudsarefrontandcentrein manyminds,asaretheomnipresent fiscaldeficitsandlevelsofnetcore Crowndebtthatneedtobe addressed.Ofcourse,softened doesn’tmeansupportive.
Consistentwiththisoverlay, respondentsoverwhelmingly(80per centupfrom33percentin2021)feel thattheGovernment’spriorityand actionstoreturntosurplus,stabilise andreducenetcoreCrowndebt,are nothighenough.
Asimilarlevel(85percentupfrom 62percentin2021)haveaheightened concernaroundtheefficacyof Governmentspending(adamming resultreally,withonerespondent stating,“it’soutofcontrol”,thatno
Itwouldbegreatforapartytohavethecourageto implementarealisedcapitalgainstax. Youcoulddoitonassetspurchasedfromnowata concessionarytaxrate,whichiswhatIbelieveAustralia did.Wehavetostartsomewhere.
Leadingbankerdoubtinfluencestheoverall sentimentofrespondents,including aboutbeingtaxedmore),witha majority(60percent)alsohavinga heightenedlevelofconcernaround ourabilitytoattractmobilecapital andlabour.
80%
ofrespondentsfeelthe Government’spriorityandactionsto returntosurplus,stabiliseand reducenetcoreCrowndebt,arenot highenough.
Aswithwiderpollresults,the surveysentimentsprojecta heightenedlevelofconcernthatisn’t justattributabletoexternalities,but alsototheactionsoftheGovernment inaddressingthesameanddelivering outcomes.
Notthescorecardany Governmentwouldlookfor,and materiallydifferentfromthe sentimentaroundthelastelection.
QuotingWarrenBuffettandusing amarketanalogy,“intheshortrun themarketisavotingmachine,but inthelongrunitisaweighing machine”,withthecurrentsurvey resultsweighingupthepresent-day realitiesoverthepreviously evaluatedrhetoric,withsobering consequencesfortheGovernment.
● ThomasPipposischairmanof Deloitte.
Abrightlinetestisaformofcapital gainstaxsowecouldn’thaveboththat andwealthtaxes.Increasedtaxeswill meancharitiesandotherentitiesthat relyonfundingfrom businessandthepublicwillfind donationslessenwiththe amounttakenawayfromthemdueto highertax.
Realtor
minds,Governmentactionsarefailingtoresonate withbusinessleaders,writes ThomasPipposAsinvestorWarrenBuffettobserves,“intheshortrunthemarketisavotingmachine,butinthelongrunitisa weighingmachine”.Thisappliesjustasmuchtopoliticsastomarkets. Photo/AP
MostoftheBoardroomleadersareinfavourofareturntoasinglefocusonmeetinginflationtargets
TheMoodoftheBoardroom surveyaskedthequestion:“Giventhe sizeofmortgagerequiredtobuya house,isourrelianceonmonetary policytobeatinflationputtingtoo muchoftheburdenontheyounger generation?”
WiththeReserveBank’s interestratehiking cycleatornearitspeak, andmortgageratesnow above7percent,thesqueezeisgoing onhomeowners.
YoungerKiwiswhohavebought homesinthepasttwoyears especiallyfacesomeseriouspain whentheirfixedmortgagesrolloffon tomuchhigherrates.
That’sraisedquestionsabout whethermonetarypolicyputstoo muchofaburdenononesegment ofthepopulation.
Andifitdoes,who’stoblame?
Couldwehaveavoidedsomeof thepost-pandemicinterestratepain ifwehadretainedaReserveBank mandaterequiringasingularfocuson inflation?
Monetarypolicy
56.5%
ofrespondentsbelievedtheReserve Bank’smonetarypolicyshouldbe solelyfocusedonmeetingits inflationtarget.
ThisyeartheMoodofthe Boardroomsurveypolledcorporate leadersonbothofthesetopics.The resultswereprettystark.
Thedecisiontoaddemployment totheReserveBank’sfocuswasmade byLabourin2018—bringingitinto linewithdualmandatepoliciesinthe UnitedStatesandAustralia.
Nationalhascampaignedon reversingthatdecision,whichit argueshasbeenonefactorbehind allowinginflationtorisesofaroutside thetargetbandof1-3percent.
Asked:ShouldtheReserveBank’s monetarypolicysettingsbesolely focusedonmeetingitsinflation target?Asizeablemajorityof respondents—56.5percent—said “yes”.
Just29.6percentpercentsaid“no” andtherestwere“unsure”.
Thatremainsroughlyinlinewith resultslastyearwhen59percentof theMoodoftheBoardroomsurvey respondentssaidtheysupporteda returntothesinglemandate,30per centsaid“no”,and11percentwere “unsure”.
ReserveBankGovernorAdrian Orrhassaidhedoesn’tbelievethe dualmandateaffectedhisorhis Committee’sdecisionsthroughthe pandemic.Butmanyleadersaren’t convinced.
“Theincominggovernmentshould amendtheReserveBankofNew ZealandAct2021tospecifylong-term pricestabilityasthesinglemonetary policyobjective,”saidNZInitiative chairRogerPartridge.
“Multipletargetsconfusethe situationandevenwithmultiple targetsmonetarypolicywillalways havepriority,”saidoneformer banker.
Whileotherswerereluctantto commentingreaterdepth,theywere broadlysupportiveofNational’s promisetotightenthemandate.
“Policycertaintyinthisareahas serveduswell,”saidSimplicity founderSamStubbs.
Theexperimentofthelast6years
wasacaseinpoint,arguedone energyindustryspecialist.
Otherssuggestedthatdealingwith unemploymentshouldbethe preserveoftheGovernmentand fiscalpolicy.
Sympathyfortheideathat monetarypolicyisputtingtooheavy aburdenonyoungergenerationswas alsodivided.
ArecentblogbyformerReserve BankGovernorDonBrashraisedthe ideaofalternativemonetarypolicy tospreadtheburden. BrashsaidtheGovernmentshould considerempoweringtheReserve Banktotackleinflationbyliftingfuel taxes.
Acknowledgingthefactthat interestratehikesaffectpeoplein verydifferentways,Brashsuggested theReserveBankbegivenan additionaltooltoinfluenceinflation.
Mortgageburden
57.8%
ofrespondentsagreedthat,given thesizeofmortgagerequiredtobuy ahouse,ourrelianceonmonetary policytobeatinflationwasputting toomuchoftheburdenonthe youngergeneration.
Thisquestionalsodelivereda clearmajority,with57.8percent agreeingthattheburdenistooheavy, 34.7percentdisagreeing,and7per centunsure.
“Inflationislargelyamonetary policyissue,sothat’sthewayto addressit,”saidoneinfrastructure bosswhodidn’tfeeltheburdenwas toounfair.
“Thereareotherwaystoaddress inter-generationalequityissues(and remember,low-interestratesdrove housepricesupforalongtime).”
Oneformerbankeralsomadea strongcaseforthestatusquo: “Movingawayfromwell-managed monetarypolicywouldputNew Zealandonaninflationarypath troddenbythelikesofZimbabwe, Argentina,VenezuelaandTurkey.”
“Thereisnochoice.Unfortunately, higherinterestratesaretheprice everyonemustpayforpoorpolicy choicesbytheMinisterofFinance andRBNZ,”saidNZInitiative’s Partridge.
“Howelsecanyoubeatinflation,” saidSimplicity’sStubbs.
“Thecostofhousingand associatedcostofdebtisplacinga hugeburdenonthosethatcan’t benefitfromthe“familybank”.
“Iamnotsurethisisaproblem drivenbymonetarypolicytoolsable tobeusedagainstinflation,”said DeloitteNZchairmanThomas Pippos,whoputhimselfinthe “unsure”camp.
ButSilvanaSchenonefromJarden saidyes,shedidbelieveitwasan issue.
“Notonlybecauseofthesizeof expectedcontributioninitself,but alsobecausemanyofouryoung peoplewanttomovetoAustraliaor theUK,evenearlierthanbefore meaningthatwewon’thavea significantworkforce/talentand revenuecontributioninNZforthe nextgenerationifwecontinuedown thispath.”
“Bynarrowingthefocusofthe RBNZ’smandate,policymakers canensurethecentralbank remainsdedicatedtoitscore purpose.Long-termpricestability isessentialforfostering economicgrowthand,therefore, prosperity,asitallowsbusinesses andhouseholdstomakewellinformeddecisionsabout investmentandconsumption.”
saysNZInitiativeChairRoger Partridge.
Partridgearguestheyshouldgo furtherwithreforms.
“Theincominggovernment shouldalsoshifttheRBNZ’s regulatoryroletoanew institution,”hesays.
“Separatingmonetarypolicyand prudentialregulatoryfunctions iscommonelsewhereinthe world.”
TheReserveBankofAustraliais chargedwithjustmonetary policy,whiletheAustralian PrudentialRegulatoryAuthority (APRA)istaskedwithfinancial regulation.
“Separatingthefunctionsintotwo organisationswouldimprove governanceandreducetheriskof politicalinterferenceintheRBNZ’s coremissionofpricestability,” Partridgeargues.
“Creatingaseparateprudential regulatorybodywouldalsoensure amorestreamlinedapproachto financialoversight,allowingthe RBNZtofocusonmaintaining pricestability.”
“TheRBNZ’sbudgetshouldalso belimitedtocoveritsmonetary policyrole,preventingthe institutionfromengagingin mattersbeyonditsscope,suchas climatechangeandpromoting theMa¯orieconomy,”hesays.
“Whiletheseissuesareundeniably important,theyfalloutsidethe purviewofacentralbank.
“ByconstrainingtheRBNZ’s budgettoitscorefunction, policymakerscanensurethe centralbankremainsfocusedon itsprimaryobjectiveofprice stability.”
Noquestioninthe2023 MoodoftheBoardroom surveyelicitedasmany commentsfromCEOsas whenweaskedthemwhatdidthey believewasDameJacindaArdern’s legacyasPrimeMinister(thepositivesandanynegatives).Fully100out of120respondentstothe Herald’s CEOsurveychimedin.
Thereisgeneralconsensusthat Ardern’sprimeministershipwasa gameoftwohalves.
Shedisplayedcompassionwhen needed.SuchaswiththeMosque terrorismattackinMarch2019when 51Muslimswereslaughtered.
Thefollowingyearshe“helped andsupportedanentirenationto navigateoneoftheworstpandemics inlivinghistory”.
Adairybosssaidshedisplayed “outstandingcompassion”.
“ShemanagedtheoriginalCovid crisiswell,relatedexceptionallywell withtheyouthvoteandinternationallyputNewZealandonthemap. Butshewascompletelyoutofher depthinrunningthebusinessofNew Zealandandtoosoftoneducation andcrime.”
Anotherobserved,sherepositionedNewZealandontheworldstage asa“forwardthinking,progressive nation(notjustfarmsandscenery)”.
“Shedidagreatjobintheearly stagesofthepandemicwhencommunicationandbroadbuy-inwas criticaltoNewZealand’sresponse. Unfortunately,itfeltlikeacombinationoftheseexternaldisruptionsand alackofdeliverycapabilitywithin herGovernmentmeantshewasn’t abletomakesubstantiveprogresson coredomesticchallenges.”
Otherssaidtheupshotofherinitial pandemicleadershipwasthatCovidrelateddeathswerelowerthanin manyothercountries.AsMainfreight’sDonBraidobserves, “whetheryoulikeitornot,weatleast hadGovernmentstabilitythrough thepandemic”.
HerroleinputtingNewZealandon theinternationalstagewasmentionedbymany.Butwhenitcameto hersecondtermasprimeminister, afterleadingLabourtoanhistoric victoryin2020,shefailedtodrive performancefromherCabinet.“She wastootentativewiththemajority theyhadin2020-2023,”saidaleading legalfirmboss.
Ardernsurprisedsomewhenshe steppeddownasprimeministerin February.Shesaidthenshehad “nothingleftinthetank.”
Itwastimeforsome“familytime’ withherpartnerandyoungdaughter andtospendtimeregroupingand studyingatHarvard.
Shehascontinuedpubliclifeasa
Positive: Jacindahasbeenagood rolemodelforwomen,placing familyattheforefrontofpolicy, rejectingracismorotherradical views.Jacindaalsobroughtgreat comforttoNewZealandersearlyin thepandemic.Thecontrolsand restrictionsremainedfortoolong (butwereinitiallyeffective).Ialso believeracerelationsimproved underherleadership.
leadingmuchdisappointment fromthebusinesscommunity. —FranzMascarenhas,Cordis hotels.
Positive:Ageneralwhoralliedthe troopsinacrisis.Probablyourmost popularstatespersonever.
NewZealandenvoyfortheChristchurchCallandasamemberofthe boardoftrusteesofPrinceWilliam’s EarthshotPrize.
DameThereseWalshwhochairs AirNZandASBBank,saystravelling offshoreitisclearshehasenhanced thecountry’s’sreputationglobally”. Thereweresomefranknegatives.
“ThecollapseofNewZealand’s educationsystemwithbasicliteracy andnumeracyfallingwelldown worldrankingsandappallingabsenteeismatsecondaryschoolswas mentionedbysome.“Thelegacyof nonsensicalextremelefteducation dogmaisgoingtostaywithusfor generations,”saidContactEnergy CEOMichaelFuge.
“Herpersonalprofilewasincreasedontheglobalstage,”saidagas industryboss.“Theinitialstagesof crisesweremanagedwell,thepost crisisresponsenotsomuch.The negativelegacyisde-industrialisation,muchincreasedredtape,polarisationoftheelectorate.”
Negative: Ithinktherewasan unwillingnesstoactquicklyon inflation.InfactGovernment initiativesinflamedthis.Weare nowdealingwiththeeconomic falloutofthesedecisions. —AndreaScown,Mitre10.
Positive: Shewasveryimpressive ontheworldstageandhelpednail freetradeagreementslateinher term.
Negative:Shedividedourcountry. Shedictatedtothepopulation, includingthosearoundthisroom. Executionwaspoor,thefailuresin health,educationandlawand orderarenowvisibleforalltosee. —SimonBennett,Accordant.
Positive:Shewasagreat communicator,hadexcellent relationshipswithforeignHeadsof Stateandtothatextentcertainly improvedNewZealand’simage overseas.
Negative: Howeverdomestically, duringtheCovidperiod,Ibelieve thebalancebetweenthefocuson healthandbusinesswaslopsided
Negative: Lackofunderstanding ofeconomics,allowingthe Governmenttospendbeyondthe nation’sabilitytogrow.ForArdern, moreGovernmentwasalwaysthe solution.Butsometimesitcanbe aproblem.
—SamStubbs,Simplicity.
Positive: Themostauthentic leaderofthisperiod.NewZealand wasperceivedaskindand compassionateunderher leadershipandduringCovid.
Negative:Staggering incompetencewasdisplayedinthe secondperiod(theFirstPastthe Posttype)andNewZealandlostits shine.
—EricaCrawford,LoveblockWine.
Positive: Agreatcommunicator whosteeredussafelythrougha numberofmajorevents,including thepre-Deltapandemic.
Negative: Butalackofexecution capability.Asadlegacyisthatthe wayshewastreatedbymanyhas shownNewZealandisnobetter thanAustraliainitstreatmentof femalePMs,somethingIhas previouslybeenquitesmugabout. —Leadingbanker.
MostCEOsfavouredNational’sDonBrashforthetopjobbut incumbentLabourPrimeMinisterHelenClarkimpressedmost withherelectioncampaign.
CEOsratedherperformanceonthecampaigntrailat3.23/5 comparedtoBrash’s2.95/5.
Justover70percentpreferredBrashforPM.But28percent favouredClarkratingherleadershipskillsat3.78/5compared toBrash’s3.09/5.
Clarkalsotriumphedwhenitcametomanagement:3.64/5to Brash’s3.34/5.
ButtheNationalLeader—aformerReserveBankGovernor —hadtheedgeoneconomicmanagementat4.36/2.57.
CEOsviewedBrashastheretodoajob.“He’llonlygetone termtomakeadifferencebeforeoppositionsetsin.”
Clarkwas“moreintheJohnHowardmouldofcautiousstable leadership”.
AseriesofmishapskilledBrash’schances.
TheMoodoftheBoardroombreakfastdebatewasdominated byafeistyexchangebetweentheLabourFinanceMinister, thelateSirMichaelCullen,andNational’sJohnKey. Bothwereaskediftheywereacarwhatmodelwouldthey be?Keyflashedback,“AredFerrari”.
Cullensmirked:“AyellowLamborghini”.Labourwon.
MoodoftheBoardroom2002-2023
7
“GladiatorvBoadicea:NoContest”,ishowweheadlinedthe electionraceface-offbetweenHelenClark(Labour)and(now Sir)JohnKey(National)whotookoverfromBrashafterthe 2005defeat.Theywerelockedinafighttothepoliticaldeath inwhichtherecouldbeonlyonewinner:90percentofCEOs favouredKey.ButClarkwasaseasonedperformerwhohad contestedfourelectionsasLabour’sleaderandwonthree. Again,CEOsratedherleadershipskillsaheadofKey(3.9/5) to(3.6/5).Herexperienceandabilitytoformacoalition governmentwasaplus.ButKeywasaheadoneconomic management.Withtherecessionarycrunchingconfidence,and NewZealandinthethralloftheGlobalFinancialCrisis,Key’s financialmarketsexperiencecounted.
ThefactorthatmostworriedCEOswastheinternationalcredit crunch.Becomingmorea“productive”economywasan emergingconcern—asit’sbeenfortwodecadesnowwith littletoshowforit.
BillEnglish(NowSirBill),National’sfinancespokesperson debatedwithCullenattheMoodoftheBoardroombreakfast. Itwastypicallyfeistybutwithseriousundertones.Behindthe scenesbothsidesweretalkingthroughtheimplementation oftheCrownRetailDepositschemetomaintainconfidence intheNewZealandfinancialsystem.Nationalwon.
HeraldCEOsElectionSurveys—2005,2008,2011,2014,2017,2020&2023.
20
MoodoftheBoardroombreakfasts(onewasmissedduetoCovid).
3
FinanceMinisters—SirMichaelCullen(Labour),SirBillEnglish(National), GrantRobertson(Labour)haveheldswayatthebreakfastdebates. Upagainstthemoverthattime:DrDonBrash(National),SirJohnKey (National),SirBillEnglish(National):DavidCunliffe(Labour),DavidParker (Labour),GrantRobertson(Labour),PaulGoldsmith(National),AmyAdams (National),NicolaWillis(National).
2011Election
VirtuallyallCEOs—98percent—saidJohnKeydeserved anotherthreeyearsinthecountry’stopjob.The100CEOs alsorankedKeyaboveLabour’sPhilGoffonallmeasured attributes.Leadershipskills(4.25/5to2.07/5);hisabilitytoform acoalitiongovernment(4.29/5to2.06/5)weretop.Buthis economicmanagementskillswerealsoratedhighly(3.89/5 to1.96/5)—importantfactorsduringacrisis-riddenterm. Keyhadanotherplus:RichieMcCawhadledtheAllBlacks tovictory.Itmeanthewentintotheelectioncampaignwith thebenefitofastrongtailwindofnationaloptimism. TheNational-ledGovernment’seconomicprogrammewas impactedbytheGlobalFinancialCrisis,domesticrecession, theCanterburyearthquakes,the$1.75billionbailoutofSouth CanterburyFinanceandthedowngradingofNewZealand’s creditrating.Butitstillmanagedtoorchestratea“taxswitch” andretainbroadbusinessconfidence.CEOsmarkedKeydown onhisfailuretoputforwardacompellingvisionandstrategy forNewZealand,andhispoliticalcourage. WhenitcametotheMoodoftheBoardroombreakfast,Labour’s financespokesmanDavidCunliffewasupagainstSirBill English.Cunliffemadeavaliantcaseforacapitalgainstax, compulsorysuperannuationandraisingthequalifyingagefor NationalSuper.Nationalwon.
When50ofNewZealand’stopchief executivesdeclaredthatthecountry hadnogrowthstrategy—itwastime tositupandtakenotice.
That’showIintroducedthefirst MoodoftheBoardroomsurveywithin a Herald StateoftheNationreportthat IeditedinNovember2002.
The2023ElectionSurveyisthe21st editionoftheCEOs’Survey.
It’sbecomeavaluedandtrusted barometerofCEOopinion. Onbusiness.Politics.Personalities.
Policies.Issuesoftheday.Riskfactors andmore.
Whenwelaunched,itwasa differentage.Surveyswerefaxedto CEOs.Wedecipheredtheir handwritingandcalculated percentages. Iamsuresomearegratefulthat electronictoolstakecareofthatnow. Lessroomforerror.
Wewentontoforgeavalued relationshipwithBusinessNZtotake thesurveywiderthantheC-suite.
In2004,weheldthefirstdebate betweenthefinanceministerandtheir opponentatabreakfastseminar. Iwouldliketothankallallthose whohaveparticipatedeitheras financeministerortheiropponentfor takingpart.
Also,themanyCEOswhohave takenpartinthe21surveys(sofar). Andoursponsorswhosesupport makesthispossible.
2014Election
The“MoodoftheBoardroom”changedmarkedlyduringthe threeweeksthe Herald surveyedCEOsonelectionissues,their company’sprospectsandwhatwould“maketheboatgo faster”.Majorbusinessesexpectedtomakemoreprofitsand employmore.Buttherewasachangeinthepoliticalair promptedbytheDirtyPoliticsrevelationswhich62percent believedhaddamaged“BrandKey”andwithittheprime minister’sstanding.
Irrespective,97percentstillwantedJohnKeybackasprime minister,overwhelminglypreferringhimoverLabour’sDavid Cunliffe.ButhewasnolongerseenasTeflonJohn.Onevery metric:leadership,throughtotrustandcourage,theCEOsrated KeyaboveCunliffe.Hewasseenasthenation’scheerleader andwithSirBillEnglishasfinanceministerhadpresidedover sixstableyearsingovernment.“
AttheMoodbreakfast,EnglishfacedoffwithDavidParker whopromotedLabour’splantolaunchKiwiBuildandMake KiwiSavercompulsory.
ChrisLuxon(thenAirNZCEO)madeanappearanceinthe surveysaying,“EnglishwasthebestTreasurerwe’veeverhad …it’snotalwayspoliticallyeasybutthey’vefoundwaysto managethepoliticsaswellasdotherightthingeconomically.” Wordshemayreflectonyet.Nationalwon.
In2017,anoverwhelmingmajorityofchiefexecutivesviewed JacindaArdern’sconfirmationasleaderoftheLabourParty asanelectiongame-changer.
Some88percentsawArdern(nowDameJacinda)asthe lightningrodwhichcouldcatapultLabourtopoweratthe2017 election.Buttheirappetiteforregimechangewastempered byLabour’sfailuretobeupfrontaboutitsintentionsonmajor policiesaffectingbusiness,likecapitalgains.
Ardernfinallyaddressedthisbyrulingitout.
PrimeMinisterBillEnglish,whotookoverfromJohnKeyas PMinDecember2016,wasadmiredbychiefexecutivesfor hisfinancialprowess.
Buttheyfelthehadalackofboldnessandpoliticalchutzpah. “Thereisclearlyalevelofenthusiasm,energyandcommitment towhatislackinginNewZealandatthemoment,”said Mainfreight’sDonBraid.
Englishstilloutpointedtheneopyhteonmultiplemetrics: Economicmanagement—4.7/5to3.63/5,integrity4.2/5to Ardern’s3.51/5andtrustworthinessto4.17/5to3.34/5. ThePrimeMinisterwasalsoaheadontheabilitytoforgea coalition. ButthisreckonedwithouttheinterventionofNZFirst’sWinston Peters,whochoseLabour.Labourwon.
Bythetimeofthe2020election,JacindaArdern’sleadership hadbeentestedforthreeyears:theChristchurchterrorattack, Whakaari/WhiteIslanddisasterandtheCovid-19pandemic wereallfrontofmindforrespondentstothe Herald’sMood oftheBoardroomElectionsurvey.CEOsratedherleadership at3.88/5—aheadofheropponentNational’sJudithCollins. Butconfidencehadalsoplungedtothelowestlevelsseensince the Herald begansurveyingthenation’sleadingchief executives.
CEOswereparticularlyconcernedaboutthemaintenanceof astrongborderagainstCovid-19,whichtheyratedatan extremeconcern.
CollinsalsooutpointedArdernonseveralratings:courage,4.2/5 to3.67/5andoneconomicmanagement,3.88/5to2.17/5. Some165respondentstookpartinthe2020survey,comprising 150CEOsandagroupofhigh-profiledirectorsfromacross thespectrum.
Labour’sdecisiontoraisepersonalincometaxesonjust2per centofNewZealanderswereslammedbysomeas“tokenistic”. AttheMoodbreakfast,Labour’sfinancespokesmanGrant RobertsonwasupagainstNational’sPaulGoldsmith—who hadnotbeenlongintherole. Labourwon.
1. DamienO’Connor(Trade)
3.20/5
2. JamesShaw(Climate)3.07/5
3. KieranMcAnulty(Regional Development)2.85/5
4. GrantRobertson(Finance)
2.84/5
5. ChrisHipkins(PrimeMinister)
2.79/5
InaCabinetcriticisedbybusinessforitsinabilitytoexecute onsomeflagshipLabourpolicies,DamienO’Connorstands outfor“gettingstuffdone”.
He’saninternationaltradeworkhorse—amonikerO’Connorwould wearwithaplomb.Butit’shisproven successatstitchinguptradedealsin thethickofapandemicthatsawthe MinisterforTradeandExportGrowth catapultedtothetopofthe2023 rankingsinChrisHipkins’administration.
TheUKfreetradeagreement,a dealwithEurope,thesuccessfulupgradeofthebilateralChineseFTA, NewZealandjoiningnegotiationsfor theUS-ledIndo-PacificEconomic FrameworkforProsperity(IPEF)— areallfeathersinO’Connor’scap.
HisriseresultedinMinisterfor ClimateChangeandGreensco-leader JamesShawdroppingtosecond placefromhistoprankingin2022.
Shawhasstrongconnectionswith CEOswhogenerallyrespecthisconsultativeapproach.MoreCEOs(13.64 percent)foundhisperformance “veryimpressive”comparedtoany othercolleague.
Incontrast,hisco-leaderMarama Davidsonwhoholdstheportfolio, PreventionofFamilyandSexualViolence,andlikeShawisaMinister outsideofCabinet,wasranked21st, with39percentofrespondentssayingherministerialperformancewas “notimpressive”.
Thebigsurpriseinthisyear’s rankingsistheswiftelevationof KieranMcAnultyfrom13thinlast year’srankings,whichweretaken justmonthsafterhewasappointed toCabinetinJune2022.
Hestillhassomewaytogotoforge hisconnectionswithbusiness.Asignificantnumber—17percent—were “unsure”abouthisperformance.
WiththepoliticaldemiseofpotentialLabourleadersMichaelWoodand KiriAllan,McAnultymust,however, bemarkedforfutureleadership.
Hisstandingwiththebusiness sectorwasboostedbyhisappointmenttothelocalgovernmentand emergencymanagementportfolios justaheadofthetheAucklandfloods andCycloneGabrielle.Hehasa strong“cando”approach.
Hipkinshasworkedassiduouslyto forgeastrongworkingrelationship withbusiness.ButitistellingthatCEO respondentsreportthatmanyof thoseratedareinvisibletothem.
“Thisgovernmentcentresand concentratespowerandpublicityin afewpeople,”saidaprivateequity player.
“ToomanynewMinisterstoobe sure!”,quippedStephenJacobiwho headstheNewZealandInternational BusinessForum.”
NotallMinistershavefollowed Hipkins’exampleingettingtoknow theirbusinessstakeholders,which somefindirksome.
Otherstorankinthetop10are
6. AndrewLittle(Defence)2.63/5
7. MeganWoods(Energy)2.44/5
8. CarmelSepuloni(Social Development)2.32/5
9. PeeniHenare(Tourism)2.25/5
10. AyeshaVerrall(Health)2.23/5
11. DavidParker(Environment)
2.16/5
12. RachelBrooking(Fisheries)
2.12/5
13. BarbaraEdmonds(Revenue)
2.12/5
14. DuncanWebb(Commerce)
2.10/5
15. PriyancaRadhakrishnan (EthnicCommunities)2.05/5
16. NanaiaMahuta(Foreign Affairs)2.11/5
17. GinnyAnderson(Police)
2.03/5
18. JoLuxton(Customs)1.94/5
19. Willow-JeanPrime (Conservation)1.87/5
20. DeborahRussell(Statistics)
1.85/5
21. MaramaDavidson (PreventionFamilyViolence)
1.75/5
22. RinoTirikatene(Courts)1.72/5
23. KelvinDavis(MaoriCrown Relations)1.66/5
24. JanTinetti(Education)1.62/5
25. WillieJackson(Broadcasting &Media)1.52/5
Underacloud StuartNash(Forestry)2.25/5
KiriAllan(Justice)2.05/5
MichaelWood(Transport)2.09/5
MekaWhaitiri(Customs)1.46/5
FormerPrimeMinisterJacinda ArdernheadsthelistofCabinet Ministerswhohavevoluntarily resignedtheirwarrantssincethe 2020election.
Otherstogoinclude:KrisFaafoi, SpeakerTrevorMallardwhois nowAmbassadortoIreland,Poto Williamswhocameunder pressureforherhandlingofthe policeportfolio,AupitoWilliam SioandDavidClark.
consistentperformers:GrantRobertson(Finance),AndrewLittle(Defence)andMeganWoods(Energy).
ThePrimeMinisterhowevercame inat5thplaceandhisdeputy,Carmel
Sepuloni(SocialDevelopment),at8th.
ThebottomthreeMinisterswere alldown-ratedbyCEOsthisyear.
Some49percentofCEOsfound theperformanceofDeputyLabour LeaderKelvinDavis,whoholdsthe Ma¯oriCrownRelationsportfolio, “unimpressive”.Thesamewentfor EducationMinisterJanTinetti.
BroadcastingandMediaMinister WillieJacksonwasbottom-ranked with55percentfindinghisministerial performance“unimpressive”.
DameJacindaArdern’sresignation gavehersuccessorChrisHipkinsthe opportunitytorefreshLabour’s parliamentaryfrontbench.
ButtwoCabinetMinistershepromoted—MichaelWoodandKiriAllan —flamedoutinspectacularfashion. Eachhadbeenseenasapotential successortoArdern.
Buttheystoodasidefromacaucus votewhenHipkinsemergedwith broadsupport.
InWood’scase,heresignedhis portfoliosasMinisterforAuckland andTransportafterundeclared shareholdingssurfacedthatpresentedaconflictofinterest.
“Woodwasahard-workingministergettingstuffdoneespecialinworkplacesafety”saidanAucklandbased CEO.“Hishubrisgotthebetterofhim. NowonderheisknowasLittle Napoleon.”
Otherscommentedtheycouldnot understandwhyhefailedtodisclose hisshareholdingsdespitemultiple requestsfromtheCabinetOffice.
AllanresignedherJusticeportfolio aftershewasinvolvedinacarcrash onEvansBayParadeinWellington. ShewastakentotheWellington CentralPoliceStation.
Shefacesvariouschargeswhich willnotbehearduntilafterthe October14election.
“ItissadtoloseKiriAllanfrom Parliament,”saysFreightwayschairmanMarkCairns.“Shewasavery hard-workingMinisterwhoactually listened.”
IhopeKiriAllanmakesareturn topolitics,”addsLoveblockWines’ EricaCrawford.
“Sheisbright,consideredanddecisive,withenoughwarmthandintegritytobebelievable.”
PoliceMinisterStuartNash,who wassackedearlierafteritwas disclosedhehaddiscussedconfidentialCabinetdiscussionswithhis donors,waspraisedbyCEOsforhis effortsinprovincialNewZealand.
AfourthMinister—MekaWhaitiri whoheldtheCustomsportfolio— blindsidedhercolleagueswhenshe defectedfromtheGovernmenttojoin TePa¯tiMa¯ori.Shedidn’tbothertotell Hipkinsinadvance.
Thethrustofthecommentaryon thefourformerLabourMinisterswas thattheyhadletthecountry,their party,andthepeopleofNewZealand down.
CEOsbelievetheNational Partypossessesaformidable pooloftalentcapableofleadinganewgovernment, shouldtheybegiventheopportunity.
TheMoodoftheBoardroomsurveyaskedthemtorateeachofthe top10-rankedNationalMPs.
ToppingthelistofNational’sfront benchintheeyesofCEOsisdeputy leaderandfinancespokesperson, NicolaWillis,whoreceivedanimpressivescoreof4.19/5.Thisisona scaleof1to5where1=notimpressive and5=veryimpressive.
EricaStanford,spokespersonfor educationandimmigration,was rated4.02/5andChrisBishop,in chargeofinfrastructure,housingand RMAreform,earnedascoreof3.68/5.
TheheadofalargeassetmanagementfirmexpressedsomedisappointmentinBishop’srecentU-turn onthebipartisanaccordfortownhousezoningthatallowsdevelopers tobuildmoremedium-density homeswithinexistingurbanareas.
“ChrisBishopislikeableandcapable,buthiswalkbackwillmakeit muchharderforNewZealandto addresshousingaffordability,infrastructureandclimatechange.
“Heissmarterthanthis,soperhaps itjustreflectsanattempttowinover small-mindedvoters?”
HealthspokespersonDrShane Reticameinfourth,scoring3.68/5— justaheadofleaderChristopher Luxonwitharatingof3.37/5.
Eventhelowestscoringofthe10, formerpartyleaderJudithCollins, receivedareasonablescoreof2.79/5.
CollinsisNational’sspokesperson forscience,innovationandtechnology,alongwithforeigndirectinvest-
ment,digitisinggovernmentandland information.Shehasbeenparticularlyactiveandadaptiveinherroles afterlosingtheparty’sleadership position.Collinssaysawillingnessto beinterestedinwhatevercomesher
wayhasbeenpartofherlongevity inpolitics.
Althoughshewasn’tspecifically askedabout,aCEOintheeducation sectorcalledoutfirst-termMPPenny Simmondsas“impressive”.
Simmondshadbeeninchargeof theSouthernInstituteofTechnology (SIT)for23years,whichofferedzero feesforlocalsandlong-distance students.Ranked16thontheNational Partylist,sheistippedaslikelyto
becometheministerinchargeof unravellingtheamalgamationof polytechnicsintothesingleentityTe Pukenga,shouldtheNationalParty formthenextgovernment.
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Businessleadersare dividedonwhether JamesShawandMaramaDavidson’sleadershiphaspositionedtheGreen PartyasacrediblecoalitionpartnerwithaLabour-ledgovernment.Some47percentsaytheir leadershiphashelped;41percent holdanopposingviewand12per centare“unsure”.
Whenevaluatingtheirpolitical performanceoverthepastthree years,ShawwaspraisedbyCEOs, receivingascoreof3.16/5ona scaleof1-5,where1=notimpressiveand5=veryimpressive.
Manyapplaudehisclimate policiesandadeptnessatfostering collaborationacrossthepolitical spectrum.
“JamesShaw’scommitmentto addressingclimatechangeand effortstoachievecross-party alignmentwherepracticableis worthyofrecognition,”saysBeca chairDavidCarter.
Shaw’smostnotableachievementsincludesuccessfully shepherdingtheZeroCarbonAct throughParliamentwithunanimoussupport,andreformingthe emissionstradingscheme.
Inthecurrenttermasclimate changeminister,Shawhascollaboratedcloselywithcompany directorstoshapetheFinancial Sector (Climate-related DisclosuresandOtherMatters) AmendmentAct,whichimposes mandatoryclimate-risk disclosuresforlargelistedcompaniesandfinancialinstitutions.
Theheadofalargeassetmanagementfirmalsoacknowledges Shaw’seffectivenessinsteering climatepoliciesinadirectionthat islikelytosurvivechangesof government.
“Hemaynotberewardedfor thatbyhisownvoters,butit’sthe rightwaytoapproachaproblem thatwillrequireactionacrossmultipleelectoralcycles.”
Aprominentcorporatedirector says,“JamesShawisimpressive, andhisorientationisgenuinely green,ratherthanwatermelon,” referringpejorativelytopoliticianswhocombinesocialand environmentalgoals.
Lastyear,Shawwasejected fromtheGreens’leadershipbya minorityofpartydelegateswho thoughthewastooclosetothe LabourPartyandnotstrong enoughonclimatechange. Althoughhewascomfortablyreelectedsixweekslater,thereis concernfromsomeCEOsthatthis
weakenedhisleadership.
“JamesShawhasallbutbecome irrelevantsincethen—evenLabour didn’tbotherlettinghimknowabout hisownportfolio,”respondedthe bossofanenergyfirm.
“Helooksweakandishavinginfluenceinlessandlesspolicy.”
Thisrelatedagovernmentsavings initiativewhichincluded$236million forclimatepolicy.Shawwasunaware ofthisuntilaftertheannouncement hadbeenmadebyPrimeMinister ChrisHipkinsandFinanceMinister GrantRobertson.
Incontrast,CEOshavelittlepositivetosayaboutDavidson,withsome labellingherasan“extremist”,and
expressingscepticismaboutherfinancialpoliciesandproficiency.
Forherco-leadership,Davidson receivedascoreof1.75/5.
“Maramaaddslittlevalue,”respondedabanker.
Davidsonfacedcriticismfor remarksshemadeatatransrights rallyinAucklandearlierthisyear whensheblamed“whitecismen”for causingviolence.Shelaterclarified thatshehadbeeninshockfrombeing struckbyamotorcyle.
“Ishouldhavemadeclearthat violencehappensineverycommunity.Myintentionwastoaffirmthat transpeoplearedeservingofsupport andtokeepthefocusonthefactthat menarethemainperpetratorsof violence.”
IftheGreensgettoplayaroleafter theOctober14election,severalGreen PartyMPscouldbeupforCabinet jobs,amongthemChlo¨eSwarbrick, theGreensspokespersonforahost ofportfoliosincludingeconomicdevelopment,digitaleconomyand smallbusiness,whoseperformance wasratedat2.51/5.
EricaCrawford,founderofLoveblockWine,saysthatSwarbrickis impressive.
“Withsomelifeexperienceunder herbelt,shecouldprovidestrong leadershipasPrimeMinister.”
Spokespersonforbuildingand
construction,energyandresources andfinance,JulieAnneGenter, receivedascoreof2.10/5.
Policies CEOsalsoratedsomekeyGreens’key policiesonascaleof1-5where1 equals“verypoor”and5equals“very good”.
Thehighestscoreof2.95/5wasthe Greens’policytoprovidehomeownersupto$36,000ingrantsand loanstomaketheirhomesmore energy-efficientandhealthy.
Theyalsoproposedtoallow landlordstodeductthetaxfrom $18,000ofupgradesmadetoupto tworentalproperties.
Alsoscoring2.95/5istheparty’s policytodevelopaclimate-resilient nationalfoodstrategy,toensureNew Zealand’sfoodproductionisresilient toachangingclimate,andworkwith Ma¯oritoensuretheirfoodsovereigntyaspirationsareincluded.
TheGreenshavegonefurtherthan Labouronitsdentalpolicy,offering freedentalcareforallratherthanfor thoseagedunder30.
Theyplantopayforthisthrough anewwealthtax,paidbycouples worthmorethan$4millionafter mortgagesandotherdebts,andindividualsworthmorethan$2m.
Thispolicyresonateswithsome respondents,althoughtheydisagree
withtheGreens’proposaltofundthis throughintroducingawealthtax.
“Theyhaveastronggroupofsupportersandtheirdentalpolicyseems tohavebeenwellreceived,”says JardenmanagingdirectorandcoheadofinvestmentbankingSilvana Schenone.
AbankingCEOrespondedthatfree dentalcareforthosewhocan’tafford itandforchildrenisexcellentpolicy, “butnotforthosethatcanaffordit, andnotpaidbyawealthtax”.
Consistentwithpastyears,businessleadersexpressedreservations onthechallengesfacedbyaparty championingbothenvironmental preservationandsocialissues.
“Iamconcernedthatanycoalition opportunitywouldbeheldhostage totheneedtoramdownmoreextremepositions,whichwouldinevitablyleadtoinstability,”saysanagriculturalindustryleader.
“Thepivottosocialissueswithout crediblesolutionshastakenthe Greenstoadifferentpoliticalspace andpossiblyrelevance,”saysthe chairofamanagementconsultancy.
“TheGreenPartycouldcontribute somuchtosizingandsolvingexternalitieslikeclimatechange,” respondsanotherchair.
“Thentheirideologykicksinwith cuttingcownumbersandatthat pointIsighandswitchoff.”
TePa¯tiMa¯ori,undertheco-leadershipofDebbieNgarewa-Packerand RawiriWaititi,hasemergedasavisibleandcombativeforceoverthelast term.
SinceenteringParliament,Waititi hascultivatedareputationasa provocateur,gainingworldwideattentionforbeingejectedfromthe debatingchamberfornotwearinga tie.Hewasrecentlysuspendedfrom theHousefor24hoursoverappearingtobreachnamesuppressioncurrentlybeforethecourts.
Ngarewa-Packerhaspushedfora “moreequitablesocietyforMa¯orito thrivein”.Shehasbeenavocalproponentofenvironmentalissues,includingthebanningofdeep-seamining. However,herattempttopassamember’sBilltooutlawitfailedtoprogress pastitsfirstreadinginParliament earlierthisyear.
RecentpollingsuggeststhatTePa¯ti
Ma¯oricouldsecurefourseatsinthe election.ThoughNationalleader ChristopherLuxonhasruledout workingwithTePa¯tiMa¯ori,itislikely
aLabour-ledgovernmentwouldrequirethepartyshoulditleadthenext government.Inthatsituation, Ngarewa-PackerandWaititicould
potentiallysecurerolesinCabinet.
CEOswereaskedtoscoretheir politicalperformanceoverthepast termonascalewhere1=notimpressiveand5=veryimpressive.They gaveNgarewa-Packerascoreof1.65/5 andWaititiascoreof1.60/5.
“TheTePa¯tiMa¯oriMPshavethe worstattendancerecordinthe House,theydon’trespecttheprocess,”saysapublicsectorboss.
CEOswerealsoaskedtoscore someoftheparty’skeypolicies,on ascaleof1-5where1equals“very poor”and5equals“verygood”.
Noneoftheirpoliciesresonated stronglywithrespondents,butthe highestscorescamefromapledgeto providefreepublictransportto studentsatalllevels(2.68/5)and incentivisingthetransitionaway fromintensivedairying(2.18/5).
Theparty’slowest-scoringpolicies includeestablishingadedicated$1
billionfundforMa¯ori-ownedcommunityenergyprojectsandsolar panelandinsulationinstallationson marae,schools,andhousingdevelopmentsonMa¯oriland.Thisreceived ascorefromCEOsof1.83/5.
Theirpolicytoestablisha$300m innovationandsupportfundto incentiviseMa¯orifarmerstotransitiontoregenerativeandvalue-added farmingpractisesscored1.94/5.
Thepartyalsopromisedtochange NewZealand’snametoAotearoaby 2026,whichscored1.60/5.
SomeCEOsexpressedconcerns thatthesepolicieswererace-based andcriticisedthemforbeingdivisive andunrealistic.“Thesepoliciesare primarilyracist,”saysonerespondent.
Anotheremphasisedtheirsupport forArticleThreeoftheTreaty,but indicatedoppositiontorace-based policies.
CEOssayActleaderDavid Seymourhaspropelledthe partytobeacrediblepartner inaNational-ledgovernment IfNationalistoformacoalition government,itisalmostcertainitwill needthesupportoftheActParty.
Anoverwhelmingmajorityof CEOsrespondingtothe Herald’s2023 CEOsSurvey,some82percent,agree thatDavidSeymour’sleadershipof thepartyhaspositionedthepartyto beacrediblecoalitionpartner.
Only7percentsayithasn’t,while 11percentareuncertain.
PraiseisdirectedatSeymourfor hisconsistentarticulationofpositionsandaclearvisionforchange throughAct’shistoryoftakingafirm stanceonpoliciesandissues.
CEOswereaskedtoevaluate Seymour’spoliticalperformanceas Actleaderoverthepasttthreeyears onascaleof1to5,where1=not impressiveand5=veryimpressive. Hereceivedahighratingof4.01/5.
“DavidSeymourhasbeenthe stand-outOppositionMPthisterm,” saysanAuckland-basedCEOorganisation.
“Thisisn’tquiteashighpraiseas itsoundsandismoreofareflection onhisexperienceandpoliticalacumenrelativetoothers.
“Nevertheless,Seymourhasconsistentlymadeclearhispositionon mattersandthereisnodoubt,whetheryoulikeitallornot,hehasa completevisionforchange.
“Thisistobecommended.”
Deloitte’sThomasPipposadds:
“Davidisveryeloquentandseasoned,acceptingthatoccasionallyhe doescrosstheline—hedoesbenefit fromthefacthewillneverbePM.”
Oncurrentpolling,Actcouldbring around15MPsintoParliament.CEOs werealsoaskedtoratethepolitical performanceofsomeActcandidates thatcouldpotentiallybebrought aroundtheCabinettable.
BrookevanVelden,Act’sdeputy leaderandspokespersonforforeign affairs,healthandtradereceiveda scoreof3.62/5.
Herrisingpopularityhas positionedherasastrongcontender topotentiallyunseatlong-term Ta¯makiincumbentSimonO’Connor, aseatthathasbeenheldbyNational for63years.
NicoleMcKee,spokespersonfor firearms,justiceandconservation, receivedascoreof2.44/5.Shehas
wouldbegreat”—lawpartner. “NationalandGreen(butitwill neverhappen)”—fund manager.
beenavocalcriticofthegovernment’sguncontrolmeasures,which shesaysfocusonguncontrolof responsibleownersanddonottarget illegalpossession.
Beyondthesecandidates,thereis arecurrentconcernraisedbybusinessleadersabouttheparty’sbench strength,withseveralrespondents expressingworriesaboutthelimited depthoftalentwithintheparty.
Therecentdepartureoffive candidateshasfurtherescalated questionsabouttheparty’sstability andcredibility.
Amongthedepartureswasacandidatewholikenedthevaccine mandatestoNaziconcentration camps,astatementwidelycriticised foritsinstabilityandhistoricalinaccuracy.Anothermadeclaimsthat linkedvaccinestodrownings.And anothercalledformerPrimeMinister JacindaArdern“Jabcinda“.
Actpolicies
Respondentswereaskedtoscore someofAct’skeypoliciesthatwere availableatthetimetheMoodofthe Boardroomsurveywentintothe field.
Thehighestscorewasattributed toaproposaltoestablishpublicpri-
vatepartnershipsforroadinfrastructureconstruction—anaverage scoreof4.17/5where1equals“very poor”and5equals“verygood”..
ManyofAct’shighest-ratedpoliciesrelatetoeducation.
Itsproposalformandatorydaily nationaleducationattendance reportingwithatrafficlightsystem forabsencesscored3.97/5,reflecting significantsupportfromCEOs.
Similarly,establishinga$250 millionperyearteachingexcellence rewardfundreceivedascoreof 3.87/5.Reinstatingpartnership schoolsreceived3.73/5.
“Actisdefyingthedefinitionof insanitybypositioningformuch neededstructuralreforms,”saysPrecinctPropertieschairCraigStobo.
OneofAct’smorecontroversial proposalsistointroduceanklebraceletsforyouthoffenderssothatthey canbeelectronicallymonitored.
Thisreceivedascoreof3.69/5, however,13percentofrespondents signalledtheyareunsureaboutthe policy,indicatingalevelofreservationregardingitseffectiveness.
“Anklebraceletsdon’twork,”says SkellerupHoldingsCEODavidMair.
WhileAct’spoliciesweregenerally positivelyreceived,thereare
lingeringconcernsamongbusiness leadersregardingthepaceanddepth ofthechangesproposed.
Strikingtherightbalancebetween advocatingforchangeandeffectively implementingitremainsasignificant considerationforthem.
CEOsstressedtheimportanceof strategicalignmentandacomprehensiveapproach,suggestingthat certainprojectswillrequirecollaborationwithotherreformstobe trulyeffective.
Despitetheoverallsupportfor Seymour,reservationspersistwith Act,especiallyconcerningitsposition onissueslikeclimatechangeandgun control,thelatterofwhichisviewed asbeing“outofstepandmisguided” byonerespondent.
Thebossofanassetmanagement firmsuggeststhereisagapinthe politicalmarketforapartythat believesineconomicrationalism, climatechangeandsocialliberalism, butsays“unfortunately,Actseem determinedtoplayinadifferent space.”
AbankingCEOconcurs.
“Iamnotconfidentthathe (Seymour)wouldactinthebestinterestofAotearoaversushisparty andbackers.”
RecentpollingindicatesthatNew ZealandFirsthaslikelyhitthe5per centpartyvotethresholdrequiredto secureareturntoParliament.
ThiswouldbringWinstonPeters andShaneJonesbackintoParliamentandpotentiallyintoCabinet.
“Sotherodeoisbackintown…will itbeasideshoworthemainevent?,” asksPrecinctPropertieschairCraig Stobo,referencingNZFirst’sviralad wherePetersemphasisestheneed forexperiencegovernanceandquips thatthis“isnotourfirstrodeo”.
Peters’experiencewasbegrudginglyrecognisedbyaprominent Auckland-basedchiefexecutive.
“It’satoughandsurprisingcallto wantWinstonbackinthemix,and Iamremindedofthatsayingabout ‘foolingmeonce’andsoon.
“ButaNational-Actgovernment willbeveryshortonexperienceand talentandwillalsobeverysocially progressive.
“Thismightpleasesomesections ofthemedia,andmakeforaneasier life,butitwouldbequitegoodtohave someadultsintheroomwhounderstandtheydon’thavetobescared
oftheyoungmetropolitanjournalists andareallowedtotakeadifferent pathwhenmanyoftheirvotersmight preferit.”
WithNZFirst’spoliciespotentially inthemixinupcomingcoalition negotiations,CEOswereaskedtorate
someoftheparty’skeypolicies. ThehighestratedwasitscommitmenttofullyfundStJohnAmbulance,ensurePlunket,RescueHelicoptersandSurfLifesavingNZare well-fundedandprovidefundingto MikeKing’sGumbootFridaycharity.
Thisreceivedaratingof3.32/5ona scalewhere1equals“verypoor”and 5equals“verygood”.
ConnectingMarsdenPointand Northporttothenorthernmaintrunk raillineisalsobroadlysupportedby business,receivingascoreof3.07/5.
Therewasreasonablesupportfor awaste-to-energyplantinNorthland toreplaceDomeValleytip,which scored2.67/5.MovingPortsofAucklandoperationstoNorthportand establishingadrydockandnaval baseintheareascored2.40/5.
However,thesepoliciesevoked concernsfromsomeregardingtheir regionalfocusthatwouldfavour somepartsofNewZealand.
NZFirsthasbeenactivelycampaigningonMa¯ori-relatedissues.Ithas pledgedtointroducelegislationin Parliament’sfirstsittingweektomake EnglishanofficiallanguageofNew Zealand,alongwithMa¯oriandsign language.Currently,EnglishisconsideredadefactolanguageofNew Zealand.Thisreceivedascoreof 2.49/5fromrespondents.
NZFirstalsowantstochangeall “wokevirtue-signallingnames”of governmentdepartmentsbackto Englishandwithdrawfromthe UnitedNationsDeclarationonthe RightsofIndigenousPeople.These policieshavelesssupportfrombusinessleaders,scoring2.36/5and2.00/5 respectively.
Co-governanceandracialdivisionhavebeenhighlighted asissuesinthe2023 Herald CEOsSurvey.
Halfofsurveyrespondentssaid theLabourGovernment’scogovernanceframeworkshouldhave beenappropriatelydiscussedbefore implementation.Fortypercentagree itis“aheadofpublicopinion”and41 percentbelieveitshouldbe“reviewedbythenextgovernment”.
Just13percentbelieveco-governanceis“rightforthetimes”anda furtherfurther7percentsayit“does notgofarenough”.
Labourisinfavourofco-governanceandhasimplementeditin areassuchasnaturalresourcesand thedeliveryofpublicservicessuch asTeAkaWhaiOra(MaoriHealth Authority)whichwascriticisedinan independentreportasshowingno over-archingplanforactivities, timeframes,accountabilityorperformance.
“TheapproachthatMaorishould getanequalsayineverythingand thatseparatestructuresarerequired todeliverservicessuchaswithhealth arebothwrongandcreatinghuge inefficiencies,”saidaninvestment banker.Aformerbankeraddedthat alldecisionsshouldbebasedonneed “notraceorethnicity”.
NewZealandInitiativechairman RogerPartridgesaidco-governanceis asuitablepolicysolutionforfinding 21stcenturysolutionstoTreaty claimsoverpropertyrights(like NationalParks,theMaungainAuckland,etc).“However,itisnotsuitable forthegovernanceoftheprovision ofcorepublicservices—orofthe nationgenerally.
“Extendingco-governancetothe
latterisinconsistentwithliberaldemocracyandtheprincipleenshrinedin theUniversalDeclarationofHuman Rightsthateveryoneisentitledtoall thesamerightsandfreedomsregardlessofrace,colour,sex,language,or otherfactors.”
Butotherswhosupportco-governancetookadifferentapproach:“We areonlyintroublebecauseofalack ofpropercommunicationandconsultationonitleadingtomisunderstanding,misinformationand fear,”saidanadvertisingchief.“We needproperdialogueandcommunicationandconsultationaboutthis veryimportantarea.”
AnenergybosssaidtheArdern Governmentbotchedtheopportunity:“KeepingHePuaPuaconfidential, castthedie.IfeelforMaoriwhohave nowmissedthemomentintime.But itwillcomeagaininthefuture.”
FranO’Sullivan
TheoutgoingLabourGovernmenthas beenmarkeddownbychiefexecutives foritsinabilitytoexecuteonsomekey policiesduringitspastthreeyearsin office.
Chiefexecutivesrespondingtothe Herald CEOs’Election2023Surveyrated thegovernment’sperformanceonpolicy executionat1.5/5—thelowestratingof somekeyinitiatives—onascalewhere 1equals“notimpressive”and5equals “veryimpressive”.
ChrisHipkinsrecognisedthisweaknesswhenhedroppedorpostponed variousinitiativesinhis“policybonfire” shortlyafterbecomingprimeminister.
Ironically,foraGovernmentwhich swepttopoweronthebackofitsinitial managementoftheCovid-19pandemic, faithinitsapproachdeclinedoverthe 2020-2023term.In2020,CEOsputthe Labour-NewZealandFirstCoalition’s managementofNewZealand’sresponse tothepandemicat3.95/5.Inthe2023 surveythishasdroppedto2.64/5.
Theexecutivechairofanadvisoryfirm saidtheCovidlockdownswereextended forfartoolongandappearedatoddswith initialpublicstatementswhichweremore appropriate.
“Sadlyitwasnottransparentas promised.EmergencypowersandPR wereusedtomaskactivitiesand intentions,”saidaprivateequityboss.
Ahotelieradded,abalancedapproachistherightwayforward, ensuringthatMa¯oriareadequately respectedasthe“originalsonsofthe soil.”
“TheystartedoffOK.Butthenfound theycouldnotexecutethedeliveryof verymuchatall.Dreadfulwasteful spending”—companychair.
TheLabourGovernmentreceivedits highestmarksfromCEOforits performancesincethe2020electionfor cementinginternationaltrade agreementsat3.24/5.
FormerPrimeMinisterDameJacinda ArdernledtrademissionsintoAustralia, Japan,SingaporeandtheUnitedStates —onceNewZealandreopenedtothe worldafterCovidrestrictionswerelifted —andHipkinsfollowedthroughthisyear withChina.
Freetradedealshavebeencemented withEuropeandtheUK.NewZealandhas signeduptotheRegionalComprehesive EconomicPartnership.TheChinaFTAhas beenupgradedandNewZealandisin negotiationstojoinanIndo-Pacific economicinitiativeledbytheUS.
Amongcomments:Onregional development—“Icannotlookpastthe tardycycloneresponse.Theaffected provincesarestillontheirknees”(agri exporter).
Onbusinessconsultation—“The Governmenthasbeenwoefulat genuinelyengagingtheprivatesectorto assistintimesofcrisis.ThePM’sBusiness AdvisoryCouncilwasafarceinspiteof theverytalentedbusinesspeople deployingenormousamountsoftime andenergy”(listedcompanychair).
Some20percentbelievedcogovernanceis“wronganddivisive”, Amongcomments:“Dangerously aheadofthecountry.Significantand worryingrisktotrustandsocialco-
Otherratings
Maintainingstrong internationalrelationships: 3.24/5
ManagementoftheCovid19pandemic: 2.64/5
Addressingclimatechange: 2.50/5
RegionalDevelopment: 2.02/5
Addressingtransport constraints: 1.79/5
Addressingthehousing shortage: 1.70/5
Addressingthe infrastructuredeficit: 1.70/5
Policyplanningand consultationwithbusiness: 1.59/5
Immigration: 1.56/5
hesion”(Agribusinessdirector);“Too politicised,lackingdefinition,overweightwithideologyandnarrative” (exporthead);“polarising”(education boss).
‘StartedoffOK:couldnotexecute’
dairycompanyboss
● NewZealandisoneofthefewcountriesintheworldwithout aCGT.Itistime,andYesitwillaffectyouandme,” Erica Crawford,LoveblockWines
● NZneedssomeformofwealthtax,”energysectorchair.
● “Thegovernmenthasanumberofinitiativesunderwayto effectivelyimplementacapitalgainstax.Thisshouldn’tbedone undertheradarandshouldbeapubliclyannouncedintention orpolicy,” privateequityboss
GREENPARTY
● $10Ktaxfreethreshold(personal) 2.3/5
● Capitalgainstaxonrealisedreal(notnominal)gainbasis 1.65/5
● Corporatetaxratetoincreaseto33% 1.33/5
● 1.5%taxonassetsheldintrusts(tobolsterwealthtax) 1.14/5
● Wealthtaxat2.5%over$4million(couples),$2msingles 1.13/5
● Upto45%onincomeover$180k(personal) 1.13/5
Whattheyaresaying
● “Demonstrateacapabilitytospendappropriatelyandthen I’lldecideifyouShouldhavemoreviataxtake,” foodand beveragedirector
● “IfIwantedsocialismIwouldliveinVenezuela,” logistics CEO
● “UltimatelyNewZealandwillneedsomeformofrealisedand realcapitalgainstax.Awealthtaxisjustdumb,” investment banker
● Wealthtaxisagoodidea,butsettoohigh,” energysector chair
● “WealthtaxandtrusttaxandCGTtargetsthesamegroup ofindividuals.Toomuch,” wineexporter
TEPA ¯ TIMA ¯ ORI
● $30ktaxfreethreshold(personal) 1.69/5
● Foreigncompaniestaxat2%(NZrevenuenottaxedinNZ) 1.55/5
● Vacanthousetaxat33%onanyunrealisedcapitalgainon vacanthomes 1.39/5
● Nonpersonaltaxratestoalignto33% 1.29/5
● Landbankingtaxat33%onanyunrealisedcapitalgain 1.29/5
● GSTremovedonallfooditems 1.29/5
● Upto48%taxonincomesover$300k(personal) 1.08/5
● Wealthtaxfrom2%upto8%onwealthover$2m 1.04/5 Whattheyaresaying
“Trynottoremoveanyincentivefordoingwell”— foodand beverageboss
“Godhelpus—it’slikeTePa¯tiMaorithinktheeconomyisjust somemachinethatwillprovideendlessfundingorredistribution andbetotallyunimpactedbysuchlunaticpolicies.Ifthisisthe contributionwecanexpectfromco-governancethenweshould allbeveryconcerned”— investmentbanker
“I’mnotconvincedthat anyhaveagoodpolicy mix.Weseea triangulationofLabour andNationalpolicies beingofinteresttous, butwemainlysuffer frombenignneglect.”
ProfessorDawnFreshwater,ViceChancellorUniversityofAuckland. “Ihaven’tseenanyof thepartiespresenta cohesiveviewofhow NewZealandcan makethemostofits competitive advantagesina decarbonisingworld.”
Infrastructureboss.
“DavidSeymouris committedtogetting spendingunder controleliminating wastefulexpenditure.” Chairmaninvestmentfirm.
3.58
● Allowunder-30stouseKiwiSavertopayforrentalbonds 2.52 Whattheyaresaying
● “Idon’tsupportforeignbuyersbuyingpropertywithout significanthurdles,” industrialcompanyboss
● ‘Nopolicytobefoundoncorporate/businesstaxlevels.A reductioninbusinesstaxtoencouragemoreinvestment.
● Particularlytoattractmoreoffshoreinvestment opportunities,” DonBraid,Mainfreight
● “Userpaysforimmigrationwillhaveasignificantimpacton internationaleducation,ourfourthlargestexportsectorwhich isalreadyoperatingundersignificantdisadvantages,” tertiary sectorchief
ACT
● Repealing(most)ofLabour’spropertyrelatedtaxes 2.79/5
● Twotaxratesystem:17.5%and28%(personal) 2.43/5
● ETSrevenuegiventohouseholds 2.25/5
Whattheyaresaying
● “Flattaxratesareadreamthatwillneverflyinreality,” logisticsboss
● “Simplifythetaxsystemforbothbusinessandindividuals. Itisfartoocomplicated,fartoomanyloopholesandbyincreasing thecomplexitysototheincreaseinbureaucracymanagingthe taxtake,” DonBraid,Mainfreight
NEWZEALANDFIRST
● Adjustincometaxbracketstoinflation 2.98/5
● Providetaxincentivestopromoteaddedvalue 2.38/5
● RemoveGSTfrombasicfoodsincludingfreshfood,vegetables, meat,dairyandfish 1.36/5
Whattheyaresaying
● “Don’tscrewwithGSToneverything—itistoohardto administer,” logisticsboss
Partypolicieswereratedona1-5scalewhere1=“verypoor”and 5=“verygood”.HeraldMoodoftheBoardroom2023ElectionSurvey.
Fonterra’srecord$1.6billion profitforthe2023financial yeargoessomewaytoobscuretheissuesthegiant dairyco-operativefacedastheChineseeconomyslowedearlierthisyear.
The170percentliftinnetprofit wasdrivenbystrongmarginsonthe co-op’scheeseandproteinportfolios.
CEOMilesHurrellsayswhileithas beenastrongyearforFonterra,the businesshasnotbeenimmunetothe effectsoftheeconomicslowdownin China.HeremainsbullishonChina. Immediatelyafterannouncingthe resulthesaid:“OurmediumtolongtermpositiononChinahasn’t changed.It’samarketthatwe’llcontinuetobefocusedon.”
Despitethefinancialsuccess,the co-op’sdairyfarmersshareholders remainconcernedaboutthelower forecastfarmgatemilkpricepayout ofbetween$6.00to$7.50per kilogramofmilksolidsforthe 2023/24season.
Therearesignsofanupturn.The mostrecentGlobalDairyTrade auctionsawrisingpriceswithanhydrousmilkfatup5.3percentand butterup3.8percent.Skimmilk powderandwholemilkpowder pricesalsoclimbedby5.4percent and4.6percentrespectively.
Toputitintoperspective.
BeforeCovid,theco-op’sChina businessenjoyeddoubledigit growth:“Thatwassignificantgrowth forus;significantgrowthforthedairy
industry;andsignificantgrowthfor theagriculturalsectorasawhole,” saysHurrell.
Therewerenewpressuresas Chinawentthroughaseriesofsevere lockdowns.FromFonterra’sperspective,demandchangedquitesignificantlyinthesecondhalfof2022.
ExplainsHurrell:“Thatplayedto ouradvantage.Asout-of-homeconsumptionreduced,wecouldmove ourproductsintootherchannels.
“Werodethatwave.Thestrength ofourbusinessandtheflexibilitywe hadwashelpful.
“Then,aswecameoutof2022into 2023andthelockdownended,we sawdemandpickup.Therewasa reboundinourFoodservicebusiness. Wesawpent-updemand.”
Duringthisperiod,China’sown milkproductiongrewatarapidpace. Whiledemandwasrisingthishad littleimpactonFonterrawhichwas abletomaintainitsimportlevels. WhenChinawentintolockdown therewasadomesticsurplus,which wasdriedintomilkpowderwhichis nowbeingfedbackintothemarket displacingproductthatwouldotherwisehavecomefrombusinesseslike Fonterra.
Thislowerdemandisthemain reasonbehindtherevisedmilkprice forecastsforthecomingseason.
Theco-opexpectsdemandtopick upinearly2024.Hurrellsays:“Weare startingtoseeconsumerspurchasing day-to-dayproducts,whichisgood foranindustrylikeourswhereit’s seenasadailyconsumable”.
Despitetheoverhangofsurplus milkonthemarket.Fonterra’sother productscontinuetodowellinChina.
Theco-op’sFoodservicebusiness showedincreaseddemandand fetchedhigherpricesafterthe lockdownendedleadingto Fonterra’sGreaterChinaoperation reportingaprofitincreaseof$11 milliontoatotalof$284million.
HurrellsaysFonterra’sout-ofhomeandconsumerbusinesshave becomeverystronginthelast12 months.“Wedon’tseethatslowing down.”
Anothergrowthareaisthesports, healthyageingandactivelivingmarket.“Itwasaverysmallpartofthe
Chinesemarket,butweseethatgrowingsignificantlyasthepopulation ages”.
Fonterrahasalsohadsuccess targetingthesportsandhealthylifestylesectorintheUS.“We’veseen goodgrowthinthelastcoupleof years.Wedon’tseethatslowing down,butweneedtokeepwatching thatmarketbecauseitisanimportant playforus”.
AnotheraspectofChina’schangingdemographicswillimpactdemandinthecomingdecade.The nation’smiddleclassissettorisefrom 400milliontonearly800million overthenexttenyears.Hurrellsays thiswillmeantherewillbeaplace forimportedmilkproductsdespite thegrowthindomesticmilkproduction.
FonterrahasstreamlineditsChina organisationinrecentyears.Itno longeroperatesfarmsthere.Today thefocusisontheconsumerfood serviceandingredientsbusinesses. Thebusinessissimpler.
Inrecentmonthsithasexpanded itsreach.Whilethereisstillplentyof growthtocomefromthelargecities onChina’sEasternseaboard,Fonterra ismovingintomoreofthetierfour andfivecities.
Therehasbeenatrendofpeople movingfromthelargercitiestothe smalleronesandwhentheygoback theytaketheirtasteforFonterra’s productswiththem.
Hurrellsaysitisstillearlydays,but
therearepositivesignsfromthis.
UnderthetermsofNewZealand’s freetradeagreementwithChina,the lastofthetariffsaffectingthemilk industrywillbeliftedattheendof thisyear.
Thatcurrentlysitsat10percent.
There’spotentialforFonterrato moveintootherAsianmarketsby formingjointventuresorother partnershipswithChina’sowndairy giants:MengniuandYili,whichowns Westland.Hurrellsaysinthenear termanypartnershipswillfocuson China.
AwayfromChina,Fonterraismakingsignificantheadway:“WeareseeingtheMiddleEastandAfrica performingverywell.SoutheastAsia continuestoperformwellandthe restofNorthAsia,inparticularJapan andKorea,arealsoperformingwell.”
Hurrellseessomecloudsonthe horizon.Theglobaleconomicoutlookispoor.Manyofthedestinations forFonterra’sproducthavehadfiscal stimulusprogrammesastheeconomiescomeoutofCovid.It’snotclear whatwillhappentodemandasthese programmeswinddown.
Fonterraisonaprogrammeto removecostsfromthebusiness,it couldsaveasmuchasabilliondollars by2030.
Hurrellislookingattrimmingcosts acrosstheboard,theannualtotal costsinthebusinessareintheregion of$9billionto$10b.Partofthatwill includeclosinginefficientplants.
Wearestartingto seeconsumers purchasingday-todayproducts, whichisgoodforan industrylikeours whereit’sseenasa dailyconsumable.
MilesHurrell
China’seconomicslowdown dominatesthemoodof manyagribusinessboardroomsthisyear.TheChinese economyslowedintheaftermathof theCovid-19pandemicandweakeningexportdemand.
Agribusinessexportersconsistentlymarkedtheslowdownasa “significantconcern”inthisyear’s Herald CEOs’survey.
ChinaisNewZealand’slargest tradepartnerandthetopdestination forourfoodexports.Lastyear,Kiwi farmersandotherproducers exportedmorethanNZ$20.4billion worthofgoodsrangingacrossdairy (milkpowder,butterandcheese), meatproducts,woodproductsand preparationsofcerealsflourand starch.
Beijing’sofficialgoalwasfor annualgrowthtohit5.5percentthis year.That’snolongerlikely.The economycameclosetocontracting duringtheJunequarter.ButaReuters pollof76analystsbasedinand outsideChinaearlierinthemonth predictedthetheeconomywould stillgrowat5percentthisyear.
ThereislessdemandbothinternallyandexternallyforChina’soutput whiletradetensionwithnationssuch astheUnitedStatesisalsohindering growth.
NewZealandagribusinessCEOs disagreeonhowlongChina’smarket willstayweak.Viewsrangefrom monthstoyears,buteveryonethe Herald spoketoisoptimisticaboutthe mediumandlongterm.
Manyproducersarestillworking throughtheeffectsofCyclone Gabrielleandtheextremeweather earlierthisyear.Theimpactvaries fromsectortothesector.
Climatechangeremainsamajor concernfortheagribusinesssector withallbutoneleaderrankingthe challengeatnineor10onascale where10is“extremelyconcerned”. Twowordsthatsurfacedagain andagainduringourinterviewswith agribusinessbosseswere“uncertainty”and“bipartisan”.
Oftentheywereusedinthesame context.Thesector’sleadersagree thatbothmainpoliticalpartiesneed toreachabipartisanagreementon
issuessuchasclimatepolicyinorder toreducetheuncertaintysurroundingregulationsandallowbusiness ownerstobetterplantheirresponses.
Viewsaresplitonimmigration. Mostrespondentsfromtheagribusinesssectoridentifyimmigrationas anareaofconcern,yetaminorityare significantlylessworried.
TheconsensusisthatNewZealand’simmigrationpolicysettingsare aboutright,butanumberofindustry leadersmentionedthereisworkto doonstreamliningtheprocesses.
SirmaKarapeeva,CEO,Meat IndustryAssociation
MeatIndustryAssociationCEOSirma Karapeevasaysmanyintheindustry expectedChinatoresumeitsstrong economicpathwhenthegovernmentremovedzero-Covidpolicies.
Thefeelingwasthatconsumers wouldgoshoppingandspendafter aperiodofinactivity.“Thatdidn’t happentotheexpectedlevel.Consumershavebeencautious,”shesays.
KarapeevasaystheHeWakaEke Noaprimarysectorclimateaction planpartnershipwiththeoutgoing governmenthadleftabadtastein somepeople’smouths.
Lookingforwardshesays:“Weare askingforanynewgovernmentto takeamuchmorealignedviewofthe valuethatthesectorbringstothe NewZealandeconomy.Wewant decisionstobemadewithaclearer viewoftheimpactonthesectorand thereforeonthewidereconomy.
Leadersareseekingbipartisansupporton policiesaffectingthesectorinan uncertainglobalandclimateenvironment fantasticbenefits.So whycan’twedo thisaroundclimate changeregulation oraroundthe scienceand innovationsystem?
“We’dlikethegovernmenttoacknowledgethatweareverylarge employers,predominantlyintheruralareas;thatweexportbillionsof dollarsworthofproductaroundthe world;andwewantthemtotakea muchmoresystemicandbipartisan approachtothefundamentalsettings neededforthiscountrytothrive.”
Karapeevaarguesthree-yearpoliticalcyclesarenothelpful.“Weknow
itispossibletohaveabipartisan approachthatwillendure.Wesee thatinthesupportwegetinthetrade spacewherebothmainpartiesagree. Thathasputusinareallygood positiontonegotiatefreetrade agreementsandthegreatnetwork thatwe’vecurrentlygot,”sheadds.
“Thebipartisanapproachtotradehas deliveredfantasticbenefits.Sowhy can’twedothisaroundclimate changeregulationoraroundthe scienceandinnovationsystem?”
Karapeevaechoesotherswhen shesayssheisalsolookingforgreater clarityonimmigration.Thereare opportunitiestousethelabourshortages,whicharerightacrosstheprimarysectoraswellasotherindustries, asapointofleveragewhenbuilding relationshipswithothercountries.
“Wedidanalysisthatshowed
MeatIndustry Association(MIA) CEOSirma Karapeevaleda technical delegationtoChina thismonth.Scenes fromtheChina MeatAssociation 'Meatand Technology' exhibitionin Chongqingwhich theMIAvisited.
labourshortagesduringtheCovid pandemicmeantwewereleaving somethinglike$600millionworthof exportrevenueonthetable,because productcouldn’tbefullyprocessed. Alotofproductwassentdownthe wastechuteforrendering.”
DavidChin,CEO,Livestock ImprovementCorporation LivestockImprovementCorporation CEODavidChinwantsanincoming governmentto“continuesupporting thedairysectortoremainthemost efficientproducersintheworld”. Hesaysthesectorgetsgreatsupportnow,butinnovationisonlygoing tobecomemoreimportantifweare toremaincompetitiveasanation.
TheLivestockImprovement
Corporationisinvestinginwhatit calls“adaptationstrategies”toprepareforweathereventsandahotter climate.Chinsaysthismeansusing geneticstodevelopcowsthatare moreheattolerant.
“We’vedonesomegreatcollaborationwiththegovernmentviatheNew ZealandAgriculturalGreenhouseGas ResearchCentretodeveloplow methanecows,”hesays.“Strategically,weneedtodevelopacowthat’s betteradaptedtotheenvironment.”
Chinsayssupportisneededon multiplelevels.“Weneedsupportfor researchanddevelopment,whether thatbethroughAgResearchorPlant andFood.
“That’swheretheinnovationis goingtocomefrom.It’sgoingtobe veryapplicabletoNewZealand.So I’llbelookingforanincominggovernmenttocontinueanddouble downonthoseprogrammes.”
HesaysNewZealandhasdonea goodjobcementingtradeagreements.“We’vebeenwellservicedby ourtradenegotiators.Iwanttosee theincominggovernmentcarryon supportingthembecausethemore high-qualitytradeagreementswe have,themoreoptionsforourprimarysectortoexporttodifferent marketsandonfavourableterms.”
Lookingatthewideragricultural sector,Chinwantsthenextgovernmenttofocusonpoliciesthatare practicalandimplementable. “Farmersdoalotofadministration inordertostayfarming.Weneedto keepthebalancerightofbeing innovative,pragmaticproducersof reallygoodfoodanddoingitin efficientway.”
Risingcostsremainaconcernfor LICmembers,alongwithrising
interestratesanduncertaintyabout theregulatoryenvironment.
“Ifyou’reuncertainaboutwhat yourfutureis,you’rehesitantto invest.Themorecertaintywecanget aroundtheenvironmentalregulations,thebetterfarmerscanplan”.
StephenGuerin,CEO,PGG Wrightson
PGGWrightsonchiefexecutive StephenGuerinsaystherealityis NewZealandneedsasuccessful Chinatobuyourfoodto“havea positiveimpactonoureconomic prosperity”.
“Year-on-yearsheepmeatprices arebackcloseto24percent,”Guerin observes.“Whateverbusinessyou’re running,thatsortoffallissignificant.
“Atthosepriceswecanseethere isn’tgoingtobeareboundatleast untilthistimenextyear”.
GuerinsaystheuntappedmarketplacefromNewZealand’sperspectiveisIndia.“We’vebeenslowthere. Dairyisalwaysgoingtobeachallengebecauseofprotectionismbut thereareotheropportunitiesforour agricultureandhorticulture.Weneed tofocusonthoseopportunities.”
PGGWrightsondidn’tfeelthefull impactofCycloneGabriellewhenit hitearlierthisyear.Butitwasdevastatingforcustomers.Guerinsaysitwill haveanimpactonthecurrentyear.
Hehasanuancedtakeonclimate issues:“Wecansometimestakean insularviewofclimatechangefrom anagriculturalsectorperspective,but asacountrywehavecommitments.
“Whatdoesthatlooklikefrom outsideNewZealandinourinternationalmarkets?We’vegottosell productsinthosemarketplaces.”
CraigEllison,actingCEOand executivedirector,Sanford
Sanfordturnedinasolidfirsthalf performanceonthebackofastrong fullyearresultfor2022.
Thebusinesshasyettoreturnto pre-Covidlevelsofprofitability,but itappearstobeontrackwiththe abilitytoincreaseprices.Thesquid seasonhasbeenpooracrossthe sectorbutthat’sbeenmatchedby gainsatthehighendofthemarket includingproductslikescampi.
SanfordactingCEOCraigEllison saystheexchangerateisinrunning inthecompany’sfavour.Reiningin costsremainsachallenge.Butthere ishelpcomingfromlowerfreightbills andfuelcosts.
Fornow,theChinaslowdownis notimpactingSanford:“We’restill gettinggoodpricingandstrongdemandforarangeofproducts.
“We’veinvestedheavilyinour customersandourproductquality. I’mhappywithhowourteamandour productsareperforminginthemarketplace.Weneedtobewellplaced andtodothatwetalkmultipletimes everydaywithourcustomersin China.”
NavigatingtheChineseeconomy intothefutureremainsaconcern.
“Igivecredittosomeofthework ForeignAffairsMinisterNanaia Mahutaandherteamhavedone ensuringthatwehavegoodmarket accesswhileremainingaquestioning friendofChinainthegeo-political sense,”Ellisonadds.
“I’mhearingthiselsewhereinthe market.”
SimonLimmer,CEO,SilverFern Farms
Lastyearsawrecordreturnsforthe farmerssupplyingSilverFernFarms.
ChiefexecutiveSimonLimmer saysrevenueshit$3.3billionandnet profitwas$189million.
“Thelastfouryearshavebeen good.DespitetheCoviddisruption therewasarelativelystrongmarket,” hesays.“Wewerequitedependent ontheChineseandUSmarkets.Ifone wasdown,theotherwasupandwe hadanabilitytomovebetween markets”.
ThischangedinOctober2022 whenChinacameoutofalockdown.
Buttherecoverywasatnowhere neartheexpectedpace.ChinaremainsrelativelyflatwhiletheUSis alsoundereconomicpressure.
Meanwhiletherehasbeenmore productfromSouthAmericaand Australiaenteringglobalmarkets.
IntherecentpastChinahas remainedpositivedespiteanypolicy changeinthecountry.
Limmersaysthistimeitfeelsdifferent.“We’restillwaitingtoseeany greenshootsstarttoemerge”.
Hesaysthisyear’sextreme weathereventshurtthebusiness withpoweroutagesandflooding takingplantsoutofactionforweeks. “Theimpactonourfarmerswasnot thesameashorticulture.Ourfarms areonhillcountrysotheymayhave seendamagetofencesandstructures.Thebiggerdamagewasonhow farmersfeelabouttheworld,how theyseetheirfuture.
“Ofcourse,wearealwaysimpactedbyeventsandpressures.”
ConsumersentimentsarechangingandLimmerseesanopportunity forgettingaheadofthatbecoming morerelevanttoconsumerneeds.
HesaysNewZealandhasanadvantagewithafarmingsystemthat ismoreintunewithtrends.Buthe sayswemayhavebeenguiltyof undersellingthisinthepast.
LastyearWestlandMilkenjoyedrecordsalesatitstageda$120million profitturnaround.
ChiefexcutiveRichardWyethsays thebusinessisontrackforasimilar strongresultthisyear.
Zesprichairman BruceCameron turnedhishandto live-streamingto boostsalesonthe PrimeMinister's tradedelegationto China.Around40 percentofZespri's fruitinChinais deliveredthrough e-commerce.
DespiteitbeingChinese-owned, WestlandMilkhaslessexposureto thatcountry’smarketthanmany otherNewZealand-basedprimary producers.Itaccountsforjustaround aquarterofsales.
Wyethsaysthesuccesscomes downto,“havingastrongfocuson understandingthecompetitiveset thatweworkin.
“Becauseofthecompany’slocationandgeography,weneedtobe cleverandhaveagoodcultureof execution.Whichmeansthepeople sideofthebusinessisimportant.”
WestlandMilkhasasignificant immigrantworkforceinspecialist technicalroles,particularlyinengineeringandautomation.
Wyethsaystheimmigrationpolicy settingsareaboutright,butthespeed ofprocessingnewimmigrantshas beenachallenge.Hewantstoseethe applicationsprocessedinatimely manner.Thejobfortheincoming governmentistoimproveproductivityinthatarea.
Hewouldalsoliketoseemore clarityfromgovernment.
“Thehardestthingintheregulatoryspaceistheuncertaintyaround what’scoming.Thatappliestoany incominggovernment.
“Peoplestrugglewithuncertainty. Oncethereiscleardirectionoftravel, peoplecanreactandrespondtothat. Whenit’sambiguous,itcreatesnoise andit’sdifficulttodealwith.
“BipartisansupportonNewZealand’sbigissuesisimportant.The three-yeartermmakesitdifficultfor that,butwe’restagnatinginareas becausewedon’thavebipartisan supportonkeyinitiatives,whether it’sregulatorychangeorinfrastructure.”
Whenitcomestoinfrastructure, electricityisaparticularconcernfor WestlandMilk.“Fromaclimate changeperspective,we’regoingto havetoexitcoalinthenearfuture, butwedon’thavetheelectricity infrastructuretobeabletotake powerfromtheEastCoasttotheWest Coasttodriveanelectricboiler,for example.
“Wewillbelookingforgovernmentsupportaroundeithergetting electricitytothecoastorcreating energyontheWestCoasttosupport thelikesofourindustry,thehospitals andeverythingelse”.
Thehardestthinginthe regulatoryspaceisthe uncertaintyaroundwhat’s coming.Thatappliestoany incominggovernment.People strugglewithuncertainty.
RichardWyeth,CEOWestlandMilkProducts
TheimmigrationofpeopleNewZealandneedswouldbespurredifNationaliselectedandaxestheforeign buyerban,Barfoot&ThompsonmanagingdirectorPeterThompsonsays.
Beingabletobuyahousehere wouldeasethepathwayformany becausetheproposaltoallow foreignerstobeabletobuy$2m+ propertiesifNationaliselectednext monthwouldallowthemtopurchase whentheyre-settle,insteadofrenting.
EuropeansandAmericanswould bekeenaswellasChinese,hethinks.
“WhatNationalisproposingisvery sensibleandwillhelpimmigrationof peoplewhoarebusinessleaders, bringingmoreknowledgeintothe country,morestart-upbusinesses.
“Highly-qualifieddoctorsand surgeons,forexample,arepeoplewe needandtheywanttobuywhenthey movehere.Theydon’twanttobe renting.”
CanadaandAustraliaalloweda regimesimilartowhatNational proposed,taxingpeoplewhobought housesinthecountryiftheywere notcitizens.“I’vebeenoverseasrecently;alotofpeoplearewantingto buyinNewZealand,buttheycan’t.”
Heexpectsmanytransactionsin thatcategory.Theagencysold29 Aucklandpropertiesover$2min August.Allowingforeignerstobuy wouldnotdamagethefirsthome buyermarket,hesaid.
Onfirsthomebuyersbeing chargedhighinterestrates,Thompsonsaidhehadlongwarnedthat mortgagerateswouldrise;buyers shouldhavetakenthatintoaccount whentheydecidedwheretobuyand howmuchtospend,hesaid.
“Peoplegotafalsesenseofsecurity whenratesweresomuchlower.
“Firsthomebuyersmustpurchase
Highly-qualifieddoctorsandsurgeons arepeopleweneedandtheywantto buywhentheymovehere.Theydon’t wanttoberenting.
inareaswheretheycanrealistically affordlower-pricedhomes,notnecessarilywheretheywanttobe,andbuy inalessersuburbwheretheycanpay offtheirmortgage,regardlessofinterestrates.
“Interestratesarenowmorereflectiveofwhattheyhavebeenafew yearsago,notinrecentyears.”
OnNationalpromisingtomakelife easierforlandlords,heexpectsinterestdeductibilitytobeallowedagain andhewantsthat.
“We’reseeinginvestorsgetoutof therentalmarketandit’sleadingto ashortageofrentalsinAuckland.
PeterThompson’stop
● Increaseproductivityinallsectors ofourbusiness
● Giveourcustomersabetter experience
● Supportourpeoplewithbetter systems
Conversationsaboutthefutureworkforcehavebeen runninghotlately,particularlyfollowingthereleaseof OpenAI’sChatGPT.Recently,bothIBMandBritish telecommunicationsgiantBTGroupcitedautomation anddigitisationwhenannouncingjobcuts.
Automationistransformingalmostallindustries. Farmersareharnessingthepowerofautomationto optimiseeveryaspectoftheiroperations,fromherd managementtomilkproduction.
ArecentGoldmanSachsstudypredictsthat generativeAItoolscouldsee300millionfull-timejobs lostordiminishedworldwide,leadingtosignificant disruptioninthejobmarket.
BusinessleaderswereaskedwhetherGovernment shouldchangethetaxsettingstoaccelerateinvestment inautomationtoliftproductivity.
Theyoverwhelminglyrespondedyes,with68per centofrespondentssayingitshould,underscoringthe potentialseeninautomationtosignificantlyboost productivitywithinvarioussectors.
That’sputtingrentsup.Inthelast month,theaveragerentwentup $20/weekinAugustacrosstheaverageofalltheagency’srentals.
“It’ssimplythesupplycrunch.If we’vegotmoresupply,thenhopefullyrentsremainalittlemorestable.”
Majorinvestorsareaffectedbynot beingallowedtodeductmortgage interest,butnottothesameextent asthe“MaandPa”investorswhoare agood50percentofBarfoots’rent rollwithonetotwoproperties.
“Theirlifetimesavingshadgone intothoseplaces,”heexplains.The agencymanagesjustover21,000 properties.
“ButunderLabour,investorsare havingtopayallthecostsyetreturns arenowherenearwhattheyhad been.“That’smeaningmanyare decidingtosell,”hesaid.
WhateverNationalplanned,landlordsneedtobetransparentabout theirexpenses,hesaid.
“Technologycandeliversignificantefficiency, productivity,andsustainabilitybenefits,and incentivisinguptakeacrossalllevelsoftheeconomy willbringsubstantialbenefitstoNewZealand,”says SparkCEO,JolieHodson.
Aneducationbosssays“weneedtoensurethere ismoreinvestmentinR&Dtosupportlocallyledand developedAIandautomationexpertise,orthiswill becomeaprocessofoffshoringanddependencyon foreignproviders(withmanyassociatedrisksofboth costandmissedopportunity).”
Just15percentadvocatedagainstalternatingtax settings.
SamStubbs,founderandCEOofSimplicity,notes thatthecruxofthematterliesinpolicyalignmentrather thansimplyadjustingtaxsettingsanddeductibility. Furthermore,afinanceexecutivesaysthenecessary incentivesforpromotingautomationalreadyexist withinthecurrentframework.
Thisperspectiveisbackedupbyaprofessional director,whosaysthatbusinessesshouldalreadybe activelypursuingautomation,withcurrenteconomic factorslikeinflationservingasadditionaldrivingforces.
—TimMcCreadyClimatechangeisonlongera vaguetheoreticalfuture problem.SofarthisyearNew ZealandhasseenCyclone Gabrielle,adamagingatmospheric riverandaseriesofextremeweather eventsthatcouldbeharbingersofa newnormal. Theimpactonbusinesshasbeen significantandhastornupthe rulebookwhenitcomestoplanning forandmanagingrisk.
Insuranceisallaboutmanaging risk.Asclimatechangedevelops mostexpertsbelieveinsurerswill movetoincreasepremiumsand,in cases,abandonprovidingcover altogether.NewZealand’sbusiness leadersexpressedtheirconcerns abouthowthisisalreadyplayingout inthe2023MoodoftheBoardroom survey.
Whenaskedtorateaseriesof climate-relatedrisks,respondentsput thecostofinsuranceatthetopofthe list.Onascaleofonetofive,where fiverepresentsextremeriskandone isminorrisk,respondentsratedthe costofinsuranceatanaverageof3.6. Thisiscloselyfollowedbytheavailabilityofinsurancewhichisratedat 3.4onthesamescale.
KiwirailchiefexecutivePeter Reidyhaswitnessedthechanging insurancemarketfirsthand.Hesays: “Railinfrastructureissignificantlyimpactedbywaterrun-offfromroads andphysicalstructures.Theinsurancemarketisbecomingrestricted anduncompetitive”.
Whilethepainofinsurancecost andavailabilityiswidespread,itisnot sharedevenlyacrosstheentireeconomy.Businessesintheutilities,energyandextractionareamongthe sectorswhosaytheyfacethehighest riskofincreasedinsurancecostswith retailandconsumerdurablesfollowingclosebehind.
Professionalservices,advertising, marketing,media,automotiveand manufacturingfacelessrisk.
Theinsuranceindustryplacesthe highestriskontheavailabilityof insurance.Thesectorratesitasan extremeriskwithascoreoffive.
Whichofthefollowingchoicesmost accuratelyrepresentstheactionsyour companyiscontemplatingtosafeguard againstpotentialeconomicchallengesand instabilityoverthenext12months?
Intheupcoming12months,whichofthe followinginvestments,ifany,isyour companyplanningtoundertake?
Healthcareandpharmaarenotfar behindwitharatingof4.5.Atthe otherendofthescale,respondents intheadvertising,media,marketing sector,wheretherearefewphysical assets,seetheavailabilityofinsuranceasaminorrisk,aratingofone.
Risksassociatedwiththepossibilityofshiftingbusinessoperations fromlowlyingareasaresectordependent.Acrossallsectorsbusiness leadersratethisat2.5,lessthan halfwaybetweenminorriskatone andextremeriskatfive.Yetthosein government,healthcareandpharmaceuticalsseehigherlevelsofrisk, whileleadersintheairlinesandaerospacesectorsseelittlerisk.
AprimarysectorCEOsaysthe nationneedstofocusonadaptation asapriority.EricaCrawfordof LoveblockVintnersspellsoutthe challengeforhersectorwhen.She says:“Changingweatherpatternswill forcethewineindustrytore-evaluate whereitgrowsgrapes,andwhatit growsinspecificareas.Italsoaffects diseasemanagementandinfrastructureplanning.Wehavebeen feelingitseffectsparticularlyinthe past10years.”
SparkCEOJolieHodsonleadsa businessdisruptedbythecyclone. Shesays:“Theinterdependenceof digitalinfrastructureonotherforms ofinfrastructure—namelypowerand roading—wasbroughtintothespotlightduringCycloneGabrielle.
“Thisnecessitatesacross-sector andwholeofeconomydisasterresponseapproachandinvestments intoinfrastructureresilience.Ifwe wantinfrastructurethatismoreresilientthiswillneedbettercollaborationandco-investmentacrossthe privateandpublicsectors.”
Leadersarelessconcernedabout theneedtodecommissionhigh emissionsoperationsorplants. Thatscored2.3onascaleofone, minorrisk,tofive,extremerisk.
NewZealandbusinesseshave beenproactivewhenitcomesto addressingclimaterisks.Morethan eightinten(83percent)have implementedemissionreduction initiativesandafurther11percent plantodosointhenextyear.
Meanwhile70percenthaveintroducednewclimatefriendlyproducts orprocesseswith11percentplanning todosooverthenext12months.
FreightwayschairMarkCairns sayshisbusinessescarbonemissions arelargelytransportrelated.
“Wehavemadeprogressreplacing one737-400aircraftwitha737-800 aircraftwhichisaround20percent morefuelefficient.
“Unfortunately,wecannotmove toelectricvansuntilsuitablemodels (electricvanscurrentlyhaveapoor rangeofaround130km)andcharging infrastructureareavailableinNZ.
“Thelatteriscurrentlywoefully inadequate.”
FranzMascarenhas,managing directoratCordisAucklandsayshis businesshasaseriesofsustainability initiativeswithEarthcheck,theinternationaltourismbenchmarkingcompanyandarecurrentlyintheorganisation’s“Masters”category.
Sixin10respondentssaytheir businessesdevelopedadata-driven, enterprise-levelstrategyforreducing emissionsandmitigatingclimate risks.Aquarter(24percent)are planningsuchastrategy.
Fewer(44percent)businesses haveinitiativestoprotectphysical assets,whileanother25percenthave aninitiativeinthepipeline.
BlairTurnbull,CEOTower Insurance.
It’sclearoneofthebiggest challengeswecollectivelyfaceis thethreatofclimatechange.
Carbonreductionisvitalfor managingclimateimpactsinthe future,butwe’vegottothink broaderthanthis.We’vegotto createclimateresilienceforNew Zealand.
Thisyear’scycloneandfloods wereaflashpointforpeople.
ButIdon’tthinkmostbusinesses havewrappedtheirheadsaround whatthisactuallymeans—thecost ofdoingbusinessisgoingto increaseformostofus,andour customers’needsaregoingto change.We’regoingtohaveto innovatehowwedobusinessand whatweoffer.
Forusthatmeansinnovating insuranceproducts,aswellas improvingaccessibilitythrough digitalinvestments.We’re currentlyunderwaywithtrialling parametricinsuranceinthePacific andarelookingathowwecan reshapewhatweofferNew Zealandcustomers.
Fromaninfrastructureperspective,havingclimateresilienceis aboutbetterplanning—weneed tostopbuildinginstupidplaces. Weneedtofocusonmitigatingthe impactsofclimatechangewith newandbetterinfrastructurethat protectsbothpropertyandlivesfor thelongterm.Weneedspongy cities,notmoreconcrete.
Intheaftermathofthefloods andcyclonewereceivedfiveyears’ worthofclaimsintwoweeks.From avolumeperspectiveitwassimply unprecedented,butmanyarealso highlycomplexclaims.
Thiswasamomentoftruthfor insurers.
Obviouslynoteverythingwent perfectlyduetothescaleoftwo consecutiveevents,butthefact we’renowmostofthewaythrough completingclaimsisatestamentto whattheTowerteamhasachieved.
Thesereportsarepremier,business-to-businesspublicationsprovidingcriticalsector insightsalongsiderobustinformedcontentandcommentaryaboutissuesthatmatterto NZbusinesses.ThereportscanvastheviewsofCabinetMinisters,businessleaders,and businessorganisationchiefs.
Thissitsalongsideexpertcommentaryfromrespectedthought-leadersthroughinterviews andin-deptharticleswrittenbytheHeraldBusinessReportsteam.
ThereportsaredistributedwithintheHeraldandtheeditorial contentiscarriedonlineat nzherald.co.nz/business.
With its promise of higher wages, lower prices and more opportunities to advance careers, Australia has long looked attractive to New Zealand workers looking to get ahead Earlier this year Australia changed its immigration rules tilting the playing field even further in its favour
Even before the rule changes the net loss of workers to Australia was at the highest level in a decade Stats
NZ data for 2022 shows there was a net migration loss of 13,400 people
A total of 33,863 people left New Zealand for Australia while 20,431 moved in the opposite direction
Under the new rules New Zealanders in Australia have a fast route to the benefits of permanent residency That gives them access to social security and the National Disability Insurance Scheme It also means any children born in Australia to Kiwi parents now have an automatic right of citizenship
The most recent figures from the Australian Bureau of Statistics are from May when the average weekly wage in Australia was AU$1838 (NZ$1985) Stats New Zealand s average weekly wage in March was NZ$1506 That’s almost a third higher
In certain sectors where specialist skills are in demand worldwide the pay gap is even more pronounced Senior nurses who move across the Tasman are able to double their income while reducing their hours Australia s rule changes are causing consternation right across New Zealand boardrooms
In the words of professional director Craig Stobo, there is a giant sucking sound from Sydney
Across the Ditch
Stats NZ data for 2022 shows there was a net migration loss of
13,400 people. A total of
33,863 people left New Zealand for Australia while
20,431 moved in the opposite direction.
The pay gap
The most recent figures from the Australian Bureau of Statistics are from May when the average weekly wage in Australia was A$1838 or
Stats New Zealand’s average weekly wage in March was
We asked business leaders to rate their level of concern about losing critical skilled personnel overseas on a scale from one to five. Almost half,
45.7% rate the problem at five, “very concerned”.
40%
per cent rated the issue four, “concerned”.
<1% per cent of respondents are not at all concerned.
We asked business leaders to rate their level of concern about losing critical skilled personnel to Australia and elsewhere overseas on a scale from one to five Almost half (45 7 per cent) rate the problem at five, “very concerned” Another 40 per cent rated the issue at four: “concerned” Less than 1 per cent of respondents say they are not at all concerned Thomas Pippos chair of Deloitte says: “We live in a world where talent and capital are highly mobile We need to compete for it by recognising the importance of delivering market returns to both forms of capital
The head of a large legal practice summed up the mood of other commenters neatly, saying: This is an ongoing and constant concern and has been for years” A communications business leader warns: “We need to be very aware of this Senior talent will quickly move offshore if New Zealand doesn’t turn around ”
For an independent director the problem has wider implications “The salary gap with Australia has become profoundly serious We can t lose our productive talent to Aussie and expect to be able to continue to support our growing number of vulnerable people in NZ in the same way
Jarden managing director Silvana Schenone voices another fear: “A real concern is that many young students are looking at moving to Australia for their university studies resulting in a leak of talent at an earlier stage than before ”
Several respondents link the problem directly to election politics with one saying the exodus: Will increase materially if Labour wins the election , while a transport sector CEO says the flood will become a tidal wave if there is a Labour, Greens, Maori Party coalition
Bill Bennett
While climate change dominates thinking in the boardrooms, it is by no means the only challenge facing business leaders.
Many are concerned about inflation on their own companies even with the consumer price index (CPI) easing down to 6 per cent.
On a scale of 1-5 where 1 equals “negligible exposure” and 5 equals “highly exposed” our respondents ranked inflation at 3.8/5.
Closely related is macroeconomic volatility which scores 3.7/5 on the same scale.
Cybercrime is rarely out of the news and attacks have been increasing in the past year both in terms of frequency and the amount of economic damage they cause. New Zealand’s business leaders rate this at 3.55/5 on a scale where one means they have negligible exposure and five means they are highly exposed.
Clearly there is still work to do in this area.
Dame Therese Walsh, who sits on the boards of Air NZ and ASB, says cybercrime risks, alongside climate risks, continue to increase even in the face of significant investment and focus.
Geopolitical conflict scores 3.1/5, which means business leaders see the nation’s export heavy economy as partially exposed to risks.
While social inequity sits lower on the list of exposure risks, with a score of 2.8/5 (close to the halfway point between one, minor risk and five,
extreme risk) it still represents a problem for leaders. David Carter from Beca says: “Addressing climate and social inequity are critical to delivering a more sustainable future for our nation”.
Paul Newfield from Morrison and Co picks up on the wider sentiment. He says: “We’ve aimed to build a
David Carter, Beca
portfolio that is resilient to inflation and will benefit from the drive to decarbonise the world.
“But that doesn’t make us immune to the macroeconomic, geopolitical and social disruptions.”
Given the recent Covid pandemic, New Zealand businesses feel they have more of a handle on health risks.
Just 3 per cent of respondents say their organisations are highly exposed while the average on a scale running from one, negligible exposure, to five, highly exposed comes in at 2.6/5.
When asked to name other risks, the CEO of a large food producer listed the availability and affordability of raw materials while an education sector leader identified “increased closures and disruption to core business and operations”.
Addressing climate and social inequity are critical to delivering a more sustainable future for our nation
Thepoliticiansbattlingitout tobeNewZealand’snext financeministergottheir practicerunsinearlyatthis month’sBusinessNZelectionconference.
Therehavebeenplentyofheadto-headdebatessince-andmoreto come-includingattoday’sMoodof theBoardroombreakfast.
FinanceMinisterGrantRobertson threwdowntheopeningsalvo,emphasisinghowLabourhadsupported NewZealandersandNewZealand businessduringchallengingtimes whilefosteringeconomicgrowth. “Wenowneedtoinvestinourfuture —ourinfrastructure,ourpeople,our externalrelationshipsandtrade deals.”
HeacknowledgedthattheGovernmenthadborrowedsignificantlyto getNewZealandthroughCovid,but notedthat“virtuallyallpoliticalpartiesweresayingthat’swhatwe neededtodo”.
“Thereareacoupleofprofessors ofhindsighteconomicsinParliament, whokeepcomingbacktimeandtime againsayinghowmuchofourspend weshouldn’thavespent.”
National’sFinanceSpokesperson NicolaWillisargueditistimefora governmentthatchampionsgrowth, jobcreation,entrepreneurship,innovationandallowsindividualstoretainmoreofwhattheyearn.
“Iamcarryingonintheproud traditionofapartythatkeepsthe booksinorder,thatspendswith discipline,andthatunderstandsthat everydollaroftaxpaidbyNew Zealandersshouldbetreatedwith respect,”shesaid.
WhenActleaderDavidSeymour tooktothemicrophone,hewasted notimeinchallengingthestatusquo, dismissingthepriorspeakers’ narratives.
HeassertedthatNewZealand’s deep-seatedissueshavebeenbuildingoverdecadesandrequiresubstantivechange,notjust“showup nextweek,businessasusualbutwear abluetiethistime”.
TheGreenParty’sFinanceSpokesperson,JulieAnneGenter,keptthe climatefrontandcentre.SheemphasisedthattheGreenshavebeen“consistentlycallingforclimatechangefor 20years,andallthepolicieswehave implementedingovernmenthave beensensible,”rattlingthroughthe homeinsulationprogramme,Zero CarbonActandcleancardiscount.
Seymourplayfullypointedout thatActhasquiteanumberofsupporters.“Ihavetosaywearemostly
TheDeloitteandChapmanTripp ElectionConferencehostedby BusinessNZearlierthismonth broughttogetherpartyleadersand keyspokespeoplefromacross Parliament.
TheresultsofaBusinessNZ Electionsurvey(seeB36-37)— describedas“sobering”byDeloitte chiefexecutiveMikeHorne— resonatedwithbusinessattendees whowereconcernedaboutglobal economicuncertainties, geopoliticalinstability,alingering desireforchange,andconcerns aboutthenation’sfinancial outlook.
goingforthelivingvoters,butnot exclusively.”
HeincludedKateSheppard,the founderofthewomen’ssuffrage movement,onhislistofhistoric figuresthatwouldhavebeenAct voters,alongsideNelsonMandela andchiefsthatweresignatoriestothe TreatyofWaitangi:
“IhavereadsomeofKateSheppard’squotesandshebelievedin universalhumanrights.Sheopposed racialdiscrimination;Isuspectthat shewouldbevotingforustoday.”
Helefttheaudienceinstitchesand Genterwithherheadinherhands.
Peters’scathingreviewofthe statusquo ThetwocontendersforPrimeMinisterstucktotheirpredictablestump speeches.
NationalleaderChristopherLuxon saidthatNewZealandisafantastic countrywith“endlesspotential”but onethatisheadinginthewrong direction.
“Ifwearereallyhonestwithourselves,wearenotrealisingthepotentialwehave,we’renotsolvingthe problemswe’vegot,andwecertainly arenotmaximisingtheopportunities infrontofus.
“Whatweneednowisaturnaround.AndI’vedonealotofturnaroundjobsinmylife.Therealityis youhavetodotwothings:facethe brutalrealitywhetheryoulikeitor not,andthenactuallyhavehope— notjustinsomekumbayasense—but hopebecauseyouhaveaplanthat youcanactuallygetyourselfintoa differentplace,andIthinkthatis whatweneedinNewZealand.”
Heitemisedfivethingshewould focusontoturnNewZealandaround —butnotablyomittedanymention oftheword“climate”.
WhenitwasPrimeMinisterChris Hipkins’turn,hemaintainedthatNew Zealand’sdebtwasstilllowrelative toothernations,andthatCyclone Gabriellehadhadasignificantrolein slowingdowneconomicrecovery.
Hipkinsreiteratedthesignificance ofpersistingwithLabour’ssocial agenda.
“Aneconomydraggeddownby povertyandexposedtotheravages ofextremeweatherisbadforbusiness,”hesaid.
“Oureconomicfundamentalsare ingoodshape.”
Butofalltheleaderaddresses,it wasNewZealandFirst’sWinston
Peterswhosparkedthemostdiscussionafterwards.
Theshorttimethathespenton businesswasfocusedontheuncertainglobaloutlook,particularlywith China,andhowitcouldimpactNew Zealand.
“TheChineseeconomyisindeep trouble,andwefacecircumstances almostidenticalorworsethan1997, when,asyouknow,theThaibahtfell outofbedandsodidtherestofthe currenciesaroundAsia.
“AsTreasureratthetimewehad arealbigproblemtryingtokeepour economygoingwithmarketsdroppingoffeverywhere.So,itpaysto havesomethinglikeexperience— andcertainlyineconomieslikethis.”
Heunderscoredtheneedtoincentivisewealthcreation.“Ourwayback istoexport,export,export.Andtoadd valuetoeverythingwepossiblycan beforeweexport,notafter.”
ThemajorityofPeters’speechwas dedicatedtooutlininghisstanceon awidearrayofNewZealandFirst’s keyissuesandcritiquingotherpoliticalparties.
HetookjabsatformerPrimeMinisterDameJennyShipleyandher troubleswithMainzeal,Hipkinsand hisfreedentalpolicyandcommitmenttodelivertunnelsunderthe Waitemata¯Harbour,Nationalandits delaysandcostblowoutsbuilding roadinginfrastructureandtheforeign buyertax.“Thesepromisesbeing madeonthiscampaignjustwillnot happen.They’renotgoingtohappen becausetheyhaven’tgotthemoney,” Petersclaimed.
Healsounderlinedhisopposition toco-governance,theincreaseduse ofMa¯orilanguage,andthesubstitutionof“Aotearoa”for“NewZealand”.
“Wehaveawholelotofthings beingchanged,likeourhealthsystem,oureducationsystemandwe’ve gotanewname—WakaKotahi—who isnotconcernedaboutpotholesbut moreconcernedaboutthesignsthat youwanttoreadifyou’retryingto getpastthepothole.”
GreenPartyco-leaderJamesShaw wasonstageimmediatelyfollowing Peters.
“Tenakoutoukatoa…Peopleof Aotearoa,”hesaid,receivingarobust roundofapplausefromthebusiness audience.“Iwasstrugglingtothink ofatitleformyspeech,andI’ve decidedtogowith:‘Andnowfor somethingcompletelydifferent’.”
Businessesarefeelingunder thepumpandneedabreak fromincreasinggovernment regulation,saysEMAchief executive,BrettO’Riley.
“Theyarenotgettingalotof support,andarebeingloadedupwith extracomplexity,”hesays.“We’ve neverhadsomanybusinessessaying ‘whyamIbotheringtotakerisksand bringingincapital’.There’snotalot ofincentivestodothat.”
O’Rileysaystherehavebeen signalsaroundwealthtaxes.“EntrepreneursIhavespokentorespond ‘doestheGovernmentforgetthatwe aretheonesthattakerisks?
“Ifweworkhardandbecome successful,wedon’tmindcontributinginotherways.TheGovernment wantstotaxusandmakeithardfor ustooperate.Yettheywillspend taxpayermoneyinawaywewould neverdoinourbusiness’.”
O’Rileysaysthegovernment(after theelection)mustmakeiteasierfor companiestodobusiness.ThecurrentGovernmenthascloggedup businesseswithregulation,highcosts andmadeithardertohirepeople.
“Thefairpaymentagreements undernegotiationarequiteunwieldy
Thegovernmentshould concentrateonpolicymakingandletus concentrateonservices delivery.
andhavecreatedconfusion;wehave beenwaitingfouryearsforthepassingoftheHolidaysAct;andreintroducing90-daytrialsacrosstheboard
givesyoungpeopleachancetowork.
“Thecomplexityaddscoststobusinesses,andtheyarehavingtoget legaladvicejusttoparticipateinthe process.”
O’Rileysaysthepublicandprivate sectorshavedecoupledinthepace ofoperatingandthereneedstobe significantpublicsectorreform.
“Governmentshouldalsocollaborateonpolicy-making—fartoomany policiesareshapedinavacuum.Take theimmigrationpolicy.SinceI’ve
beenatEMA[fiveyears]we’vebeen workingwiththedepartmentonthe accreditedemployerscheme.We don’twanttoseeimmigrantworkers exploited.Wecanhelptriageemployersandimmigrantapplications butwearetoldthatisaregulatory processandwecan’tbeinvolved.”
O’RileysaysEMAhasbeenworkingonamodeltopartnerwithImmigrationNZ.“Wehaveourownlegal teamwiththecapabilityandresourcestoworkalongsidethem.Butthere needstobeapoliticalwill,andwe werestartingtogettherewithMinisterMichaelWoodbeforeheresigned.”
O’Rileyispushingformoreforeign directinvestment.
“Weneedasignificantinvestment
increase,otherthangovernment,to reducetheinfrastructuredeficit.We havegonefromoneofthemost attractiveplacesintheworldfor investmenttotheopposite.
“WeneedtostreamlinetheOverseasInvestmentOffice(OIO).
“Withtheworkwearedoingin China,weknowthereisinterestin investinginNewZealand’sproductivecapacitytosupplyfood.
“Ifwedon’twantforeignersbuying land,thenwecanmatchinvestors withlandowners—iwihaveland availableforcultivation.”
O’Rileysaystheinvestormigrant schemeneedstobefit-for-purpose— thetermsdon’talignwiththeChina bankingrules.
“Ifyouwantpeopletoinvestin infrastructure,youhavetomakesure there’sinfrastructurefundsavailable toputmoneyinto.Investormigrants willinvestwhereveryouwantthem to,providedthereisareturn,whether it’sports,airportsorotherinfrastructure.”
“Wejustneedtobeclearwhat investmentandoutcomesweare lookingfor,andmakesuretheOIO hasveryclearrulesandiswellresourcedtodealwithissues.
“TheAustralianshavedonethis successfullyandwearewellbehind.”
Businesschiefshavesenta strongmessagetothe LabourGovernmentconcerningtheescalatingcosts associatedwithconductingbusiness.
Whenaskedwhethergovernment actionsoverthepastthreeyearshave elevatedthecostofdoingbusiness, aresounding93percentof respondentstotheDeloitteandChapmanTrippelectionsurvey,conductedbyBusinessNZ,said“yes”.Just5 percentofrespondentssaid“no”, while3percentwere“unsure”.
DatafromStatisticsNZshowsthat profitmarginsforbusinessesare lowerthanpre-Covidlevels.Price increasesforthenon-financialsector oftheeconomyshowthat75percent ofinflationinthethreeyearsto2022 hascomefromtheincreaseinthe costofinputs(goodsandservices) andtheremainderisevenlysplit betweenwagesandprofits.
Takingacloserlookatthisinthe survey’sfindings,anotable64per centofrespondentssaythattheirtax compliancecostshaveincreased overthelastthreeyears.Just1per centsaythatcostshavereduced, while36percentsaythatcostshave remainedthesame.
ThreeWaters
Earlierthisyear,theGovernment unveileditsshakeupoftheThree Watersreforms.
Afterconsiderablepushbackfrom councils,itabandoneditsoriginal planstoestablishfourmegawater entities,andinsteadhasproposed creating10waterentitiesunderthe umbrella,AffordableWaterReform. Itsaysthisnewstructurestrikesthe rightbalancebetweenensuringcost savingsinthedeliveryofwaterinfrastructure,whilealsoensuringthatthe waterentitiesarestronglygrounded intheirlocalcommunities.
Laboursaysthatthecostoffixing thecountry’sbrokenwaterinfrastructureisestimatedat$185billion overthenext30years,andthatlocal councilscannotaffordthisontheir own.Theysuggestthathouseholds insomeareascouldseeratesriseup to$9730peryearby2054ifnothing isdone.
Businesschiefswereasked whethertheybelieveregion-focused deliveryofThreeWatersservicesby newpublicsectorentitiesthatare separatefromterritoriallocalauthoritieswillbringaboutthetypesof economicgainsthattheGovernment hasoutlined.
Theyarenotconvinced,with80 percentofrespondentssayingit won’t.Only8percentsaiditwill deliversubstantiveeconomicgains, while12percentwereunsure.
Otherpoliticalpartieswereasked whethertheysupportthecurrent ThreeWaters(AffordableWater)proposal.Theirresponsesare:
● Act:No.
● Green:Wearepleasedthatthe Governmenthasincreasedthenumberofwaterentitiestoensureacloser connectionwithcommunitiesthey serve.Butwestillhavesignificant concernsthatthecurrentproposals don’tdoenoughtoguaranteepublic ownershipandprotectnature.The failuretoseparatestormwatermanagementisanothermissedopportunity.
● Labour:Yes.Thecostoffixing ourbrokenwaterinfrastructureis estimatedat$185boverthenext30 years.Localcouncilscannotafford thisontheirown,andhouseholdsin
someareascouldseeratesriseupto $9,730peryearby2054ifwedo nothing.
● TePa¯tiMa¯ori:No,becauseMa¯oriownershiprightsandentitlements haveyettobedetermined.
● National:No.Labour’spolicyis justThreeWatersunderanewname, withthesameassetconfiscation, brokengovernanceandbureaucratic centralisation.Wewillrepeal
tionreplacingtheResourceManagementActwillsatisfactorilysupport economicdevelopmentwhilealso protectingandrestoringtheenvironment,only7percentofrespondents said“yes”.Themajority—some59 percent—responded“no”,while34 percentare“unsure”.
Thelegislationishotlycontested. Whenpoliticalpartieswereaskedby BusinessNZwhethertheysupportthe changestotheResourceManagementAct,theyresponded:
● Act:Acthasreleasedapolicy toreplacetheRMAwhichputspropertyrightsandlocaldecision-making atthecentre.
climatechangeisimpactingtheir business.Thetopthreeresponsesto thisquestionwereitsimpactonthe costofinputstobusiness(59per cent),thecostofinsurance(53per cent)andthecostofproductsor services(48percent).
Infrastructure BusinessNZrespondentswereasked torankvarioustypesofNewZealand’sinfrastructureintermsof whichhasthemostpotentialtocontributetoNewZealand’sbusiness growth.
Transportinfrastructure(roads, railandports)wastheclearfrontrunner,receivingascoreof4.4/5.This outpacedotheroptions,withenergy infrastructure(electricityandgas)receivingascoreof3.9/5,telecommunicationsscoring3.8/5andwater scoring3.3/5.
Justoverhalfofrespondents—51 percent—agreewithanincreasein userchargestohelpfundinfrastructurebuild.Some30percent disagree.
Thesurveyresultsunderscorethe escalatingapprehensionamongbusinessesregardingfutureenergycosts, with75percentofrespondentsacknowledgingthisasaconcern.Just 21percentsaythecostofenergyisn’t ofconcerntothem.
Labour’sthreewatersandreturn assetstolocalhands.
● NewZealandFirst:No.Itisa racistTrojanHorsemasqueradingas asolution.Andthefiscalsbehindit havealreadybethrownintoserious question.
ResourceManagementreforms Lastmonth,thegovernmentpassed itsResourceManagementActreplacement,ending30yearsofthe RMA.
Twoacts,theNaturalandBuilt EnvironmentsActandtheSpatial PlanningAct,makewayforanew planningregimewhichaimstocut downthenumberofplanscouncils arerequiredtoproduce.
EnvironmentMinisterDavid Parkerpraisedthesimplification offeredbythenewresourcemanagementsystem.
“Atthemoment,thereareover100 RMAplans,thosearecutdownto16 betterplansthatwillbestructuredin asimilarwayandthereforeareeasier tofollow,aremadefasterandresult inmorepermittedactivities,lower landprices,lowerconsentingcosts andbetterenvironmentaloutcomes,” Parkersaid.
Headdeditwill“savehomeowners,infrastructureproviders,alot ofmoney—hundredsofmillionsof dollarshavebeenhere”.
Whenaskedwhetherthelegisla-
● Green:Wesupportedthe NaturalandBuiltEnvironmentsBill andtheSpatialPlanningBilltothe SelectCommitteebutwillcontinueto pushforimprovementstoensure thatnatureandtheclimateareatthe heartofthesystem.
● Labour:Yes.Thenewresource managementsystemwillbetterprotecttheenvironmentwhilecutting redtape,loweringcostsandshorteningthetimeittakestoapprovenew homesandkeyinfrastructureprojects.Itisexpectedtocutcoststo usersby19percent.
The2023DeloitteandChapman Trippelectionsurvey,conducted byBusinessNZ,received876 responsesfromabroadrangeof businesssizes,regionsand industries. Notably,nearlyhalfofsurvey respondents(49percent),were fromtheagriculture,forestryand fishingindustries. Thesurveyalsocanvassedthe viewsofpoliticalpartiesfor insightsintopolicypositions relevanttobusiness.
● TePa¯tiMa¯ori:Yes.
● National:No.Wewillrepeal Labour’sRMAreplacementbillsby Christmas2023.
● NewZealandFirst:No.New ZealandFirstdoesnotsupportthe expansionofTreatyreferencesinthe newlegislationortheinclusionof spiritualbeliefsinwatermanagement.
Climatechange
Businesschiefswereasked:Doyou believeNewZealandneedstoincreaseitsinvestmentinadaptionto climatechange?
Overhalfofallrespondents—51 percent—believeNewZealandneeds toincreaseinvestmentinthisarea. Some30percentresponded“no”, whileafurther19percentare “unsure”.
Therewasconsensusfrompoliticalpartiesonthisfronttoo.When askedthesamequestion,allparties broadlyagreedthatmoreinvestment inadaptiontoclimatechangeis required:
● Act:Yes.Actbelievesclimate changespendingshouldbefocused onadaptationratherthanmitigation.
● Green:Wesupportedthe NaturalandBuiltEnvironmentsBill andtheSpatialPlanningBill,tothe SelectCommitteebutwillcontinueto pushforimprovementstoensure thatnatureandtheclimateareatthe heartofthesystem.
● Labour:Budget2023allocated $6bininitialfundingforaNational ResiliencePlanforinfrastructure.The GovernmentalsoreleasedNewZealand’sfirstEmissionsReductionPlan inMaylastyear.
● TePa¯tiMa¯ori:Yes.
● National:NewZealandwillneed toinvestmoreinfuture-proofedinfrastructuretoensurewecanmeetthe adaptationchallenge.Nationalwill workingoodfaithtomakesurethat costisappropriatelydistributed.
● NewZealandFirst:Yes.New ZealandFirstwasalreadydoingthis withtheallocationsfromtheProvincialGrowthFundtoadaptation initiatives.
Diggingintothisalittledeeper, businessleaderswerealsoaskedhow
BusinessNZaskedrespondents whethertheGovernmenthas effectivelymanagedtheallocationof infrastructurespending.
Only4percentofrespondents believethatthecurrentbalanceof investment,includingtheallocation betweensignificantprojectsand smallerinitiativesandthedistributionacrossregions,isappropriate.
Incontrast,asubstantial74per centexpressedstrongreservations, indicatingthattheyperceivetheGovernment’sapproachtoinfrastructure spendingasfallingshortofthemark. Afurther22percentrespondedthat theyareuncertain.
Politicalpartieswereasked whethertheysupportsupplying majorinfrastructureservicesthrough public-privatepartnerships:
● Act:Yes.
● Green:Majorinfrastructure servicesthatdeliveressentialpublic servicessuchasenergyandwater shouldexistforthepublicgood,not forprofit.TheGreenPartyprioritises Ma¯ori,communityandpublicownershipoverprivateprofit.
● Labour:Weareopentoalternativefundingandfinancingtools,such aspublic-privatepartnershipsand congestioncharginghoweverour currentpolicyprecludesPPPsin health,education,andcorrections.
● TePa¯tiMa¯ori:Yes.
● National:Yes.
● NewZealandFirst:NewZealand Firsthasbeenreluctanttosupport public-privatepartnershipsinthe past,whereKPIshavenotbeenmet, butwouldnotrulethemoutifthere wasaccountablepublicoversightbeforeandafterestablishment.
Skillsandhumancapital Educationisheatinguptobeamajor issueduringthecampaign,withdata showingachievementforstudentsis declining.Oftheroughly64,000 studentswholeftschoolin2022,only halfattainedNCEA3orabove.A quarterleftwithoutNCEA2,consideredtheminimumlevelneededto pursueworkorfurtherstudy,while 15percentfailedtoreachNCEA1.
BusinessNZrespondentswere askedwhethercompulsory
21%
ofrespondentssaycompulsory educationissettingupyoungpeople withtheskillstheyneedtosucceed inthefuture.
educationissettingupyoungpeople withtheskillstheyneedtosucceed inthefuture.Only21percentofthose surveyedresponded“yes”.Asignificant68percentsaid“no”,while afurther12percentwere“unsure”.
Inafollow-upquestion,business leaderswereaskedwhatskillsand humancapitalissuestheGovernmentshouldbefocusingon.
Thetopthreeresponseswere: attractingandretainingskilled migrants(40percent),increasingthe literacy,numeracyandbasicskillsof theworkforce(40percent)and takingamorecompanyandindustryorientedapproachtowardsdevelopingsolutionstoskillgapsandlabour marketconstraints(31percent).
Fairpay,employmentrelations
LegislationgoverningFairPay Agreementswasenactedlastyear, establishinglegallybindingagreementsthatoutlinetheminimumemploymenttermsapplicabletoallemployeeswithinagivenindustryor occupation.Theseencompassvariousaspects,includingstandardworkinghours,minimumwage,training, andleaveentitlements.Anticipation surroundingtheimpactofthese agreementsonvariousbusinesses andsectorsisatopicofsignificant concernforbusinessleaders.
Whenaskedabouttheimpactof theagreements,just9percentof
Fairpayagreements
39% ofrespondentssayFairPay Agreementswilladverselyaffect theirbusiness/sectorinthefuture.
respondentsforeseeapositiveeffect ontheirbusinessesorsectors.In contrast,39percentanticipateadverseconsequencesasaresultof theseagreements.Afurther23per centremainuncertainaboutpotentialimplications,and29percent believefairpayagreementswillhave nodiscernibleeffectontheirbusinessesorsectors.
Politicalpartieswereaskedifthey supportfairpayagreements:
● Act:No.Theyallowatinypercentageofemployeestomake decisionsaffecting100percentinthe sectorandwillmakedoingbusiness significantlymoredifficult,regulated
Amajorityof respondents donotbelieve compulsory educationis settingup youngpeople withtheskills theyneed.
andexpensive,especiallyforSMEs.
● Green:Yes.FairPayAgreementswillensurethatmoreNew Zealandersarepaidfairlyforthe worktheydo.Theywillalsomake animportantcontributiontoclosing theethnicandgenderpaygaps.
● Labour:Yes.Theywillimprove employmentconditionsbyenabling employersandemployeestobargain collectivelyforindustryor occupation-wideminimumemploymentterms.
● TePa¯tiMa¯ori:WesupportFair PayAgreements,becausewebelieve inafairanddecentworkplace,and afairanddecentsociety.
● National:No.Nationalhascommittedtorepealingthelegislation withinourfirst100days.
FairPayAgreementsarenotabout fairpay.They’reaboutimposing mandatoryuniondealsthatforcea one-size-fitsallapproachonKiwi workplaces.
Surveyrespondentsweregiventheopportunitytocommentonthetopissuesandhowtheywouldresolvethem
JolieHodson Spark
● Theinflationaryenvironment andhighcostoflivingisachallenge forallNewZealandersand businessesalike.
● Wehavemadeprogresson climatechange,butwestillneedto switchthewayweapproachthe challengefromoneofsiloedsectorbasedplanstocross-sectorand whole-of-economystrategies.
● Ourinfrastructuredeficitsin housing,roading,andhealth services,whichiswidening inequalitiesandrequireslonger-term planningthatoutliveselection cycles.
MikeHearn Amcham
● Healthcare—allaspectsfrom hospitalsthroughtogreaterfunding forPharmac.Betteruseof governmentspendandborrowmore tobringuptoworldstandard.s
● Education—improvethequality ofeducationprovidedacrossall areasfrompreschooltoUniversity. Betteruseofgovernmentspendand borrowmoretobringuptoworld standards.
● Crime—makeNewZealandsafe again.Strongwarondrugs,gangs andramraids.
ThomasPippos
Deloitte
● Achievingfiscalequilibrium throughbothgrowingtheeconomy andaheightenedfocusonthe qualityofspending.
● Socialdivisivenessfuelled byself-interestandfringe
perspectives.
● Alackoffocusoninitiatives gravitatedtothebaseofMaslow’s hierarchyofneeds.
PeterReidy KiwiRail
● Racialtension.
● Economicrecovery.
● Corehealthandeducation servicestandardsanddelivery.
MalcolmJohns GenesisEnergy
● LackofNationalDirection/Plan.
● WastefulGovernmentspending/ policies.
● Crime/Safety.
SteveJurkovich KiwiBank
● Lackofinvestmentincritical infrastructure.
● Healthandsocialservicesontheir knees.
● Crime.
AnneGaze CampusLinkFoundation
● Health—theprioritisingofMa¯ori. Returntoneeds-based,notracebased.
● Housing—Governmenttojointventurewithfirsthomeowners(via deposit).Thishastaxpayers supportingtheownershipofahome. ThemoreaspiringNewZealander willselltheirfirsthomeastheymove uptheladderandtheGovernment isreturnedtheirinvestmentper centage.Thoselessaspirationalwill stayintheirfirsthomeforthe balanceoftheirlivesandfallintothe socialsupportbracket.Thismodel wouldremovethehugecostofsocial
PortofTaurangaisNewZealand’slargest andmostefficientport,enablingessential accesstoglobalmarkets.
AstheonlyNewZealandportableto accommodatelargercontainervessels, PortofTaurangaprovidesnationally criticalinfrastructure.
housingandgiveNewZealandersa stakeintheirownhome,ratherthan renting,aswellasmitigatingthehuge costofmaintenancethegovernment spendsonrentals.
● RolltheManukauSecondary TertiarySchoolmodelthroughout NewZealand—whereYear9sare exposedtotrades,relevantsubjects andengagement.
SilvanaSchenone Jarden
● Infrastructure—maintenanceand resilience.Weshouldinvolveprivate capital(foreigndirectinvestment).If thename“PPP”(publicprivate partnership)isnotpolitically acceptable,callitstrategicalliances orsomethingelse.
● Talentshortage/migration.We needtaxandotherincentives(not disincentives)toincrease productivityandretaintalent. Consideralsoafocusoneducation improvementandincentives.
● Crime—safety.Weneedto empowertheauthoritiestotake actionandoffercompelling rehabilitationoptionsthatarenot justananklebraceletandbackinthe streets.
KevinObern OfficeMax
● Costofliving.Taxratethreshold changes.
● HealthandEducation.Complete reviewtomeetsocialneedandreset alongwithimprovedfundingmodel.
● Inefficientandbloatedcentral government.Needshigherlevelof accountabilityandproductivity.
MatthewCockram CooperandCompany
● Education.Thewholething—preschooltotertiaryandbeyond. Educationmustbevaluedandmade centraltoourbeliefandvalues system.
● Socialcohesion.Thisisallabout NewZealandersgettingbehinda commonvisionforthesuccessof ourcountry.Avisionthatmotivates, celebratessuccess,looksafterthe disadvantaged,butisaboutgrowth andprosperityforall—not redistribution.
● Fromherethereisalonglist— education,infrastructure,foreign directinvestment,publicsector effectiveness.Theyallneedtacking butrequireacentralorganising principleofagenerallyheldvision forthecountry.
MichaelLorimer
GrantSamuel
● Skilledstaff.CloseImmigrationNZ andstartagainwithanew departmentalignedwiththeprivate sector
● ReserveBank.Returntoasingle mandateofpricestability.
● MajoroverhauloftheMinistryof Education.
FranzMascarenhas
Cordis
● Basiccostoflivingandinflation. Resolvedbymoreprudent Governmentspending,increasing Privatesectorpartnershipswith Publiccompanies,improving productivityandboostingthe economytocounterexpenditure.
● Criminalactivityinthecountry.
Thereisanincreaseingang-related activityandalargeincreasein juvenileoffending.Thisisnotjustan issueaffectinglocalbusinessesbut essentiallydoesaffecttheimageof thecountrywhichisadisincentive forbothbusinessandtouristsalike tovisitorsettleinNewZealand.
● Tourismdoesnotseemtobe givenitsdueimportanceinour country.Thisisdespitetheindustry beingamajorforexearnerand contributingtotheGDPofthe countryandtheemployment opportunitiesitaffords.Fundingof Tourismrelatedactivityis decreasingyearonyear,despite inflationarycosts.Auckland strugglestoachieveafundingofless than$15mwhenMelbournealone spendstheamounttowinamajor eventorentertainmentact.
BryanThomson Harcourts
● Leadership.Weneedtocomeout ofthegeneralelectionwithpolitical leadershipthatispositive,inspiring andeffective.
● EconomicSuccess.Wemust ensuregovernmentspending amplifiesbusinesssuccess opportunities,andthroughthis inspiresprivateinvestmentin growth,anddrivesournext generationofleaderstogrowand developinNewZealand.
● SocialResponsibility.Wemust solvetheissueofourfailinghealth andeducationsystemsurgently. Provideaplatformthatprotectsand supportsthosewhocan’tdoso themselvesandonethatinspiresall toliftthemselvesup.
Dairyboss
● Education:Getkidsbackinschool. Nationalseemtohaveagoodplan. Weneedbipartisanalignmenton theseissues.
● Health:CarryonwiththeLabour panbutexecuteeffectively.
● Crime:Holdpeopleaccountable.
FoodIndustryCEO
● Reducingdisposableincome: FinanciallyconstrainedKiwis strugglingtomakeendsmeetandan everincreasingdivide.Whattodo? Replicate‘bestinclass’global learnings.
● Increasingcrimerates:Increase policenumbers,increase accountabilityandconsequences.
● Acrippledhealthcaresystemthat isunabletocope:Payourhealthcare workersmore.Createbetterworking conditions,buildmoremedical schools,reducebarrierstoentryfor internationallytrainedmedical workers.
Financialservicesdirector
● Lackoffocusofwealthcreation andGovernmentsettingstosupport businessdevelopmentand competitiveness:Government settingsneedtoprioritizesupporting ourgoodsandfinancialmarkets.For example,weneedtocompletethe capitalmarketsreformsstartedsome yearsago.
● Highinflation,lowgrowth,low productivity,highcostofliving:We mustaddressthewage/pricespiralby resettingexpectations.Treasury, ReserveBankandGovernmentneed toprovideleadershiponwhythis needstohappentogetbacktoalow inflationenvironmentthatismore supportiveofgrowth,productivity
andsustainablelivingstandards.
● Crimeandsocialdivisions: Reinvigorateasocialinvestment approachtoaddressingsocial challengestosecurevalueformoney investmentsandimprovedoutcomes.
Privateequityboss
● ThelevelofGovernmentdebtis unsustainableifwejustpaycurrent interestcosts,letalongrepaysome ofit.Ceaseborrowingattheserates.
● Theexodusofthe25-35agegroup brackettoAustralia.Weneedtomake housestheycanaffordandtakehome wagesandsalariestheycanliveon.
● Thenationneedstoregainsome prideandculture.Wearecurrently ashamedofourselvesandthatwasn’t thecaseundertheClarkLabouror KeyNationalGovernment.Re-market NewZealandasaplaceforeignersand NewZealandresidentswanttolive andinvestin.
Dairyboss
● Orderlyandeffectiveimmigration. Interrogateandimprovesettings, properlyaddressadjacent requirementssuchas accommodationandhousing.
● TargetGovernmentspending. Activefocusoneconomicaddactivity andimprovecapabilitieswithinthe publicservice(andstopinterdepartmentalwarfare).
● Haveagrownupconversationon theTreatyandrelatedissues.
Tourismboss
● Inequity.Solvedwithtargeted highertaxesandlowerGovernment spend.
● Complacency.SolvedwithgrowthorientedGovernment.
● Climatechange.Theonearea
Governmentshouldregulatemore. Justsignalchangewellaheadbut makeithappen.
Financedirector
● Populistleadershipofferingpolicy bribestovoterstoeaseshortterm issuesbutcreatesuperseriouslongtermharmtoourcountry.Weneed tostopwastefulspendingandcreate acohesiveplan.
● Fallingrelativeeducation standards.Startwithaddressing schoolattendance.
● Failingproductivity,fallingtax take.Wehavetosupportsmall businessestoflourishsotheycanpay moretax!
Constructioncompanyboss
● Wideningincome/lifedisparity. Increasetaxesandsupportmore targetededucationandhealth.
● Increasinglackofsocialcohesion. Investinbuildingtrustininstitutions.
● Lackofcompetentpoliticians. Investinprotectionandpromotionof thosewillingtotakeonpoliticalposts.
Educationboss
● Holdingtogetherapublicandcivic cultureinatimeofgreat informational,technological, economicandsocialturbulenceafter theglobalpandemic.Thisneedstobe addressedboththroughshared, ethicalbusinessandcommunity leadershipandanattentivenessto emergingthreatstoournational culture.
● Disengagementoftheyoungand marginalized,particularlyfrom educationbutalsofromthe workforceandsociety.Weneed qualityinvestmentinoureducation systemandimprovedhousingand
socialservicesforourmost vulnerablewhanau.
● Asthisyearhasshown,welivein arapidlychangingenvironment,and weneedtobedrivingtowards resilientandsustainablewaysof living.
Listedcompanychair
● AbsentachangeofGovernment, Ithinktherewillbeasignificanttalent exodus.
● Managingtheburgeoningdebt burden.
● Escalatingcrimeandlawandorder issues.
Professionalfirmboss
● RoleofWellington.Governmentis theretosettherules,collecttaxand getoutoftheway.Businesshasthe ideas,innovation,employment capability.Communitybased organisationsatthecoalfacearebest placedtodeliversocialservices.
● Lackofpersonalresponsibility. Moreopendiscussionofsocietal obligations.Notjustrights.
● Crime.Weneedtoughlovenotjust love.
Bankingboss
● Crime(physicalandcyber). Government-ledsupportwith appropriateagenciesgiven appropriateresources.
Auckland-basedCEO
● Alossofconfidenceor“mojo” whichisprobablymosteasily resolvedbygovernmentchange, albeitthiswon’tnecessarilyresultin amuchbettergovernment.
● Theneedforamoreattractive businesswhichrequiressubstantive andstructuralchangestoareassuch
astax,regulation,theOverseas InvestmentOfficeregimeandthe ResourceManagementAct.
● Theneedforsubstantivepublic sectoroverhaulandreformsranging frominfrastructure,health,education andpolicing.
MotorindustryCEO
● Dividednation.Wemustrecognize amulti-culturalfutureinNewZealand. Equitypoliciestosupportallcultures.
● Decarbonisation.Wemustshiftour focustoimpact,notsolutions.EVsare nottheHolyGrailtodecarbonization. Reducingthesizeofour4.5million agingcarparkwilldeliveragreater impactthanincentivizingexpensive EVs.Theproposalscrappagescheme orCleanCarupgradewasawinner.
● Education.OurMinisterdoesnot recognizeacrisiswithstudentsnot beingabletoread,write,ordobasic maths.ConsidertheIrisheducation modeltheNewZealandInitiative investigated.Itisasimpleplaybook filledwithgoldennuggetsforthis country.
Infrastructureadvisoryboss
● Uncertaintyintheinfrastructure pipeline.Weneedtotaketheshorttermpoliticsoutofdevelopingthe30 yearpipelinestrategyiewhatdoes AucklandandNewZealandlooklike by2050andthenworkoutexecution ofthatsomarketcanrespond.
● Climatechange.Weneedtohave asenseofurgencyonthis.Wecan’t keepkickingthecandownroad,need tobringinnaturepositiveanddrive throughprocurement.
● Auckland.Weneedtohaveavision forAucklandasaglobalcityandset aboutmakingthishappenwitha pipelineofworkto2050.
