Business matters

Farmers ought to be reasonably happy.

Prices for almost every product except strong wool, are at least reasonable and some are much better.

But farmer confidence is in the doldrums fuelled by anti-farmer sentiment and policies from the government.

The wider business community isn’t very happy either and that mood wasn’t improved by the Prime Minister’s pre-budget speech to Business NZ.

Liam Dann said she played heart strings not purse strings:

. . . But while the event was crowded there was still space for an elephant in the room.

Ardern made a point of acknowledging the “elephant in the room” in her first post-election speech to a business crowd.

That elephant was the business confidence surveys, she said in February 2018. . . 

And so today the gloomy pachyderm sat quietly in the corner, as the PM addressed undeniably important issues such as homelessness and family violence. . .

No-one argues about the importance of these issues but the government doesn’t appear to understand that the money to deal with them comes from businesses.

Where the economy, and the current slow down in GDP growth was addressed, the blame was pointed squarely off-shore.

“The tariff war between the US and China has flared up again,” she said. “The US economy is also showing signs of slowing. And uncertainty in Europe due in large part to Brexit is ongoing adding further to the global economic headwinds we face.”

These things are true but, if the strong export returns and record stock market levels are to be believed, they are yet to have had a significant impact on the local economy.

The slowdown this winter is domestically led and business confidence seems to be a big driver. . . 

As a warm up for the well being Budget next week the PM hinted at a broad and bold vision for a fairer and more inclusive country.

It may resonate well with the wider public and certainly will with Labour’s base.

But while this was a speech for Business NZ it wasn’t really a speech for business.

Rebecca Stevenson said expectations were low and lack of detail disappointed:

“Nothing for business” and “disappointing” were common refrains around the room as the PM wrapped-up her holistic vision for next week’s first wellbeing budget.

While sure, it was nice she came (along with Finance Minister Grant Robertson and Consumer Affairs Minister Kris Faafoi), some of the attendees were still left underwhelmed, even though expectations were low. . . 

Warren Green, chief executive officer of Active Roofing, summed up the sentiment.

“It was a bit disappointing,” he said.

“It was more like a Labour Party ideological fairytale. But she’s a great orator.”

Active Roofing has about 40 employees. It used to have a strong apprentice scheme. It doesn’t anymore, Green said. The Government’s choice to do away with the 90-day trial law put paid to that, he said. 

That can’t be laid at the door of ill winds from abroad. It’s government policy which makes it much more risky to take on a new employee.

The company had only let one person go under the law, but without it, and with the changes coming down the line to industry training, it’s just too big of a risk now. So they’re not doing it anymore.

“We’re hugely disappointed with the new training model,” Green said, “the existing model works.”

He was pretty typical of employers in his view on his workers. It’s not an adversarial relationship. The company recently helped one of its staff get dental work. “We’re like a bank for some people,” he mused. . . 

Government policy appears aimed at saving workers from really bad employers and in doing so is making business much harder for good employers.

There is goodwill for this Government, despite a feeling they are disjointed and not always clear on what they are trying to do, and how the changes they make will play out (see the new break law and issues with bus drivers), but with some sectors it is wearing thin. 

There is real concern about a lack of progress on infrastructure projects, concern about the training changes coming, and concern that the Government doesn’t really understand business.

Ardern can hit the key talking points a business audience wants to hear with aplomb; economic headwinds, trade war, more trade agreements, helping more Kiwis into work. There is no question she is polished, astute and an excellent Labour politician.

But when you can barely bring yourself to mention the b word, that goodwill will only go so far.

Businesses need certainty and confidence to take the risks to grow.

The government doesn’t understand that, even though it’s being reflected in a slowing economy.

Warm words don’t change the cold fact that business matters. If business isn’t happy the economy stutters and economic wellbeing is the foundation on which social wellbeing is built.

One Response to Business matters

  1. adamsmith1922 says:

    Reblogged this on The Inquiring Mind and commented:
    Some excellent points

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