The big news from Jacinda Ardern’s Westpac speech on business confidence this morning to is Ardern announces Prime Minister’s Business Advisory Council, but there are other things of interest in her speech.
Working together to build a new economy
In fact it wasn’t too long ago that I stood amongst you and spoke about our economic agenda.
I also spoke about the issue of business confidence. I called it the elephant in the room. Well I am here this morning to tell you that I have changed my mind.
Not on our economic agenda – I remain more convinced than ever that it is required, but on the issue of business confidence.
It is not the elephant in the room, it’s a flashing great neon sign with giant lights and fireworks going off behind it. We are all talking about it, and there is nothing wrong with that.
That is why this speech was the first thing I announced the day I returned to work.
Because we have an economic agenda which responds to so many of the issues that have been raised time and time again, and because if there are concerns, or issues, both within our control and outside of our control – then lets tackle them head on, and lets do that together.
The business confidence paradox
When you line up business confidence with key economic performance measures over the last two governments there appears to be an inverse relationship between business confidence and the actual performance of the economy.
For instance, average business confidence scores under the Clark/Cullen Government were much lower than the Key/English Government, despite Clark and Cullen delivering higher average growth, lower unemployment, lower debt, larger surpluses and stronger wage growth than their successors.
We appear to have inherited a similar conundrum, we’ve run a strong surplus, have the best net international investment position ever recorded, stable and low interest rates forecast for some time which ought to spur investment and the lowest unemployment rate in a decade.
That then begs the question, if it’s not the overall economic indicators that is driving these figures, then what is? I have discussed this question with both business leaders and representatives, colleagues and officials. The answers I have had back are almost as diverse as the groups I have asked.
Certainty
As I travel around the country, the issue of certainty is an underlying theme. Whether you are a social service, a health organisation, or a business, knowing what a new government has planned is critical to your eco system. I utterly understand that. In fact, I have considerable empathy for that desire too.
As a politician with quite a diverse government and the scrutiny of a three yearly very public performance appraisal, I will take certainty when I can get it.
From a business perspective, I understand the desire for certainty in order to make decisions big and small, ranging from the risk of taking on an extra hire through to multi-million dollar investment decisions, and you need to understand that the climate you operate in today will be broadly the same tomorrow.
But certainty shouldn’t be confused for stasis and complacency, which are the enemy of progress, and for that matter the enemy of innovation.
The reality is that our economy faces a number of challenges, global in their nature, that by working together we must confront to protect our long term prosperity.
Skills shortages, lack of investment in the productive economy, a shallow national pool of capital, an infrastructure deficit, low productivity, building sustainable business practices in the wake of environmental degradation, and the challenges of what can broadly be called the future of work.
The jarring way in which we came out from under the cloak of protectionism in the early 80s saw over a hundred thousand workers lose their jobs and the genesis of many of the social challenges we are now working to fix decades later. This must not be repeated.
And for that, we need a plan.
It is time to retool our economy to make it work within the limits of our environment, shape it to deliver on the hopes and aspirations of all our people, and for our economic purpose to be bigger than just profit.
From reform of the Reserve Bank where we are including maximum sustainable employment as an objective, to getting active in the housing market, building modern transport infrastructure and setting ambitious emission reduction targets – we are renovating the existing legislative and policy architecture to bring it up to the new code our economy needs.
Government decision making
We are an MMP government at its best and our structure ensures that on every decision a range of views are heard. The outcome reflects the breadth of input and leads to better decisions.
Hardly a model for fast and unexpected change – in fact all change is negotiated, but a model that I believe serves us well.
Business Partnership Agenda
Today we are launching a publication that outlines this agenda and brings together the strands of this Government’s economic strategy.
Our overall objective is to build a productive, sustainable and inclusive economy.
On each score we have some way to go. When it comes to productivity, the OECD has said we are “well below leading OECD countries, restraining living standards and well-being”.
We need to transition from growth dominated by population increase and housing speculation, to build an economy, that as I said, is genuinely productive, sustainable and inclusive.
That’s the why. Now what about the how. For that, I want to share with you the top lines of our economic strategy so everyone is clear about our key priorities that you can engage with us, but also so you can hold us to account against some key measurables.
First we want to grow and share more fairly New Zealand’s prosperity.
That means the gap between the highest and lowest income and wealth deciles reduces, real per capita income increases; the value and diversity of our exports grows and home ownership increases.
Second we want to support thriving and sustainable regions that benefit from an equitable share of sustainable economic growth. We want to see key regions show improvement in employment and income distribution figures and the number of businesses in key regions growing.
Third we want to deliver responsible governance with a broader measure of success. The Finance Minister is already working on the Government’s measures of success to ensure they better reflect New Zealanders’ lives.
Next year we will be the first country in the world to deliver a Wellbeing Budget. This process is underway and will see an overhaul of how the Budget is written and the objectives that it sets.
Finally this Government is committed to transitioning to a clean, green carbon neutral New Zealand. We plan to put New Zealand on a clear path to a net-zero emission future and a healthy environment.
My message to you all is this – now is the time to be involved and help shape this work for a better economy.
Industrial relations and immigration settings
In amongst this new agenda is also the work that we are undertaking on industrial relations and immigration settings – two areas that do come up from time to time.
I understand the tension that addressing these issues can bring. The reality of making payroll, investing back into the business for future growth and keeping the lights on.
The underlying fundamentals of our industrial laws are working well, but we do need to address some of the imbalances that have been generated over recent years.
A lot of waffle on this.
Then Ardern announces Prime Minister’s Business Advisory Council.
Conclusion
I am confident that by working together we can overcome the challenges facing our economy and society.
We will not be an idle Government, and I won’t be an idle Prime Minister.
We are promoting change because without change our businesses and our economy are at risk. But change does not need to breed uncertainty, not when instead it can breed opportunity.
I have confidence that our relationship will thrive, that our agenda will successfully tackle the challenges we face, and that our shared achievements for the country will leave a lasting legacy future generations will thank us for.
Now let’s get on with it.
Apart from announcing the Business Advisory Council there doesn’t seem to be much new here, it is largely a promotion of the Government agenda – she used the work agenda 12 times – and trying to promote confidence in the changes they want to make to “successfully tackle the challenges we face”.
I don’t know what business people will take from her speech. There doesn’t seem to be much in specifics.
PDB
/ August 28, 2018Ardern: “We appear to have inherited a similar conundrum, we’ve run a strong surplus, have the best net international investment position ever recorded, stable and low interest rates forecast for some time which ought to spur investment and the lowest unemployment rate in a decade.”
Not quite right – they have inherited a strong economy from the previous govt, the very same economy they now want to replace with a ‘new economy’ which appears to be based on feel good waffle, vague promises and uncertainty.
adamsmith1922
/ August 28, 2018typical Ardern waffle, all mouth no trousers
Blazer
/ August 28, 2018bit like you ,yesterday ‘claptrap’,today another simpleton statement…
you are all hat and…no cattle ..Adam.
adamsmith1922
/ August 28, 2018Looking at the thread Blazer, it is quite clear that you are just an obnoxious partisan troll lacking any intellectual substance.
Blazer
/ August 28, 2018do you think you are making stunningly intellectual observations you poor deluded droogue.
adamsmith1922
/ August 28, 2018Clearly,you are not capable of debate,as your default position is abuse.
Blazer
/ August 28, 2018look this word up in a dictionary…you seem capable of writing MORE THAN one sentence…IRONY…
‘ you are just an obnoxious partisan troll lacking any intellectual substance.’
Blazer
/ August 28, 2018Well I can confidently predict,despite rumours to the contrary..Westpac will retain its lucrative Govt …contract… 😉 Bol.
Grumpy
/ August 28, 2018Unfortunately for Jacinda (Capitalism doesn’t work) Ardern, business perception is formed from her actions, not gibberish. As leader of a COL where the mad hard left greens control policy, her attempt to talk up confidence is far too little and far too late.
Blazer
/ August 28, 2018wouldn’t bother with business confidence if I were her.
She can’t win…they expect to be the organ grinder of Govt policy and corporate welfare and do not like any Govt, other than their compliant National ..cronies.
PDB
/ August 28, 2018Ardern’s govt – Taking New Zealand back to the 1970’s quick smart!
Blazer
/ August 28, 2018a fitting video..NZ united in a triumphant international event.
PDB
/ August 28, 2018The country united that this govt has…no idea.
Grumpy
/ August 28, 2018Comment from one of the usually more rational editors at “The Standard” explains exactly why Ardern’s COL will never get the confidence of business.
“That leaves us one option with regards putting an end to global warming – destroy, collapse or otherwise neutralise the root cause of the warming – capitalism and its structures of governance.”
Corky
/ August 28, 2018So they sit on the branch of capitalism…take a saw and start cutting the branch off near the trunk. Great idea until they crash land on the hard ground of reality. Thing is, they are so thick they would probably blame the crash on the Chinese and the poor quality of their saws.
Blazer
/ August 28, 2018I think you may find ‘saw losers’ are to…blame instead.
Corky
/ August 28, 2018What ‘saw losers?’
Blazer
/ August 28, 2018typo…sore losers…ie National lost.
Alan Wilkinson
/ August 28, 2018Drivel. Whst on esrth does working with the govt mean? Waiting for a handout? Lapping up pontificating talkfests? Trying to stop idiot policies being promoted and implemented?
Normal businesses just want the freedom to get on with serving their customers without being stymied by regulations and bureaucrsts. The last thing they want to do is work with them.
Blazer
/ August 28, 2018so what legislation has had a direct effect on business confidence?
Alan Wilkinson
/ August 28, 2018All the working groups set up to fiddle with taxation, employment, environment, welfare, education, housing, trade and immigration. No doubt a few others too.
Blazer
/ August 28, 2018like Nationals 75 working groups…consensus and informed discussion is a cornerstone of…democracy.
High Flying Duck
/ August 28, 2018National’s 75 have been well and truly eclipsed by the 156 and climbing in year 1 from this lot.
Blazer
/ August 28, 2018so we can expect Labours working groups to achieve roughly twice as much as Nationals working groups…then.
David
/ August 28, 2018Its easy to solve her problem, abolish the tax working group its just not needed, abolish the industrial relations committee its not needed and admit the track NZ is on is similar to how Helen left it so there will only be legislative changes where needed.
Then tell Winston his foreign affairs slush fund is being reduced by 70%, tell Jones his re election fund is reduced by 70% and spend that money on your cherished policies you were elected on…oh and dont expand the free tertiary education bribe any further.
David
/ August 28, 2018Its ironic that Christopher Luxon is chairing this thing not long after Shane Jones told him to keep his nose out of politics. Makes Jones look as stupid as he did at the oil and gas announcement the pontificating circus clown.
Pete George
/ August 28, 2018I’ve posted a reminder on this: https://yournz.org/2018/08/28/shane-jones-versus-christopher-luxon/
david in aus
/ August 28, 2018What is Adhern’s strength is her appearance of agreeableness without being seen as a pushover. We see this again and again. There is a segment of the population who sees themselves as compassionate and well meaning, Adhern with her persona appeals to that type of person.
However, what is also important to people is COMPETENCE. You can get away with ‘working groups’, ‘committees’ having ‘conversations’ for only so long. This government is in a fortunate position of having no real ‘crises’ to speak of. Note, that ‘poverty’ etc. are political devices and not a crisis; as the bible said: the poor will always be with us.
If this government does not get it act together, the narrative will change from: what a nice lady, I am glad she represents us (the visage), to, what a bunch of incompetent fools.
Pink David
/ August 28, 2018Her main tool is the projection of empathy. The significant problem with this is empathy is a terrible tool for making policy.
Pink David
/ August 28, 2018Meaningless fluff.
Pink David
/ August 28, 2018Where fluff is defined as;
“Fluff is a form of gibberish masquerading as strategic concepts or arguments. It uses ‘Sunday’ words (words that are inflated and unnecessarily abstruse) and apparently esoteric concepts to create the illusion of high-level thinking.”
Kitty Catkin
/ August 28, 2018Fluff is it. It’s meaningless. It’s an embarrassment. It sounds like a school speech from a 6th former (the style, I mean, not the content)
It’s the sort of speech that people forget the minute it’s over.
David
/ August 28, 2018I think Ardern is going to be disappointed, again, that another announcement of yet another committee is going to see a further fall in confidence. It does starkly expose her complete immersion in government and no private sector experience, in government you have meetings, put together committees, produce nice reports and slow walk your way to making very small changes which is 90% focused on the politics and in business you make decisions and get on with things.
She needs to actually throw business a bone, something tangible, something that addresses their clearly articulated concerns. It would be as simple as abolishing her Bolger led industrial relations inquiry and winding Cullens group up, nothing radical from these things will be implemented they are pointless.
Blazer
/ August 28, 2018she should tell business to grow up and stand on their own 2 feet,and stop looking for Govt handouts,subsidies and the like.
Get on with it you whinging National acolytes.
David
/ August 28, 2018They dont want anything but to be left alone so they can get on with business, she knows nothing of the commercial world why doesnt she just confine herself to poverty or trans issues or some such thing.
Why does she think she and Robertson are qualified to change the capitalist system.
Blazer
/ August 28, 2018so if all they want is to be left alone…why are they on about confidence then…are they pessimists?
David
/ August 28, 2018Because she wont leave them alone Blazer, because she thinks she can change the economy into some sort of fairy dust and unicorn utopia and anyone with more than an ounce of real world experience thinks someone who has literally no experience in anything, achieved nothing in 9 years except being the only Labour politician than can communicate and has a winning smile can change the world.
Bolger and Cullen are literally 200 years old and they are going to chart the future !
Blazer
/ August 28, 2018how does this Capitalist system work David?
Pink David
/ August 28, 2018“she should tell business to grow up and stand on their own 2 feet,and stop looking for Govt handouts,subsidies and the like.”
That would be a great outcome.
PartisanZ
/ August 28, 2018@Blazer – “She should tell business to grow up and stand on their own 2 feet … and stop looking for Govt handouts, subsidies and the like.”
Yeah Blazer but where would the private trucking companies be without public roads …?
High Flying Duck
/ August 28, 2018Public roads are paid for using taxes on private individuals and businesses.
David
/ August 28, 2018Ever heard of road user charges, the land transport fund, the taxes and gst paid by trucking firms, what about the petrol tax.
Where do you imagine governments get their money from to spend on public goods PartisanZ.
Pink David
/ August 28, 2018“Yeah Blazer but where would the private trucking companies be without public roads …?”
You do realise that it is the public who benefit from trucking companies don’t you?
PartisanZ
/ August 28, 2018One pass of a truck and trailer unit equals one thousand passes of a car …
Does each truck pay one thousand times more than each car?
I’m told that from an engineering point of view one truck pass is considered equivalent to fifty thousand cars!
Our present-day [false] ‘economy’ is based a lot on privatizing the profits while socializing the costs and losses …
Rickmann
/ August 28, 2018” she knows nothing of the commercial world”. How many in the Labour caucus do ? From an earlier post on this forum, the Greens and Labour are full of staffers who were student politicians, like our Minister of Finance, but as Jimmy Carter once said, “I just wish some of them had had to meet a parole.” You know, the untidy nitty gritty of everyday commercial life.
Blazer
/ August 28, 2018why would you have to know about the commercial world?
Alan Wilkinson
/ August 28, 2018Pay roll
Blazer
/ August 28, 2018in a round about way you are right…the blackmail/bluff of corporations..if you don’t do X …it will cost…jobs!
sorethumb
/ August 28, 2018We cannot continue basing our economy on selling houses to each other and migration. It wasn’t delivering for NZrs
19:00
https://www.radionz.co.nz/audio/player?audio_id=2018660009
PartisanZ
/ August 28, 2018Straight from the mouth of TOP’s Geoff Simmons during last year’s election campaign …
Funny how many of TOPs policy ideas have gotten picked up one way or another …
sorethumb
/ August 28, 2018(Some) Economists have been saying that for years.
PartisanZ
/ August 28, 2018Yeah … I know … Morgan and Simmons …
sorethumb
/ August 29, 2018Greg Clydesdale
http://www.stuff.co.nz/national/463023/Economist-stands-by-underclass-comments
Savings Working Group 2011
Michael Reddell
Ian Harrison
Kerry McDonald
Ian Glass
Don Brash
Bernard Hickey
Rickmann
/ August 29, 2018“why would you have to know about the commercial world?”
Well, gee whiz Blazer, people in the commercial world, you know, commerce, industry and the primary sector who produce goods and provide services, have to be very aware of things such costs, delivery deadlines, law requirements etc., in a fluid, competitive environment. These are things which those who have never been in business are often blissfully unaware of, except perhaps on a theoretical level on paper or a computer screen. Having spent quite a lot of time in the NZ bureaucracy and the Ivory Tower getting multiple degrees and teaching in some of Japan’s leading universities I am mindful of just how isolated the inhabitants of such domains can be from the cut and thrust of everyday life and how ignorant they can be of the aforementioned vital considerations . Incidentally, I do have some experience of the practical side from having been an industrial engineer in NZ and a business consultant and small business owner in Japan, along with now driving taxis in NZ. Jus saying is all.
Blazer
/ August 29, 2018well Rickmann the wonderful thing about Govt, is that you have a plethora of resources and expertise on tap.
All those ministries that specialise in various sectors of importance.
Take MBIE as an example,aside from their permanent staff they have been spending over $1mil a week on consultants.
All the other state sector organisations have niche intel ,that is all available to Govt.
Not to mention all these targeted working groups and advisory boards,that can filter and formulate industry specific information.
So all in all the P.M and the cabinet even ,do not need to rely on personal sector experience to govern efficiently and effectively.
I could elaborate on some of the actual qualifications of various politicians from both sides of the house, but I’m sure you get my point.
George Burns…’the only people who know how to run the country are too busy cutting hair…and driving…cabs’!