Business confidence is no self-fulfilling prophecy

Business confidence is no self-fulfilling prophecy

Radio New Zealand
Auckland, August 28, 2018
Prime Minister Jacinda Ardern has announced a Business Advisory Council with Air New Zealand’s Chief Executive as its Chair.
Ms Ardern delivered a speech in Auckland aimed at directly addressing stubbornly low business confidence.
Rather than the elephant in the room, she said, it was a huge, flashing neon sign.
Building closer relationships
The role of the Prime Minister’s Advisory Council would be to build closer relationships between government and business and provide high-level free and frank advice on key economic issues.
“The Council will report to me on opportunities it sees and identify emerging challenges. It will bring new ideas to the table on how we can scale up New Zealand businesses and grow our export led wealth,” she said.
“I want to work closely with, and be advised by, senior business leaders who take a helicopter view of our economy, who are long term strategic thinkers who have the time and energy to lead key aspects of our economic agenda,” she added.
The Council will be chaired by Air New Zealand Chief Executive Christopher Luxon. He and Ms Ardern will determine the full makeup of the council and its initial work programme in the coming weeks, Ms Ardern said.
Westpac New Zealand chief executive David McLean told the audience to “get over the election result” and get on with business.
Uncertainty concerning
Mr McLean said uncertainty and concerns about consultation were contributing to low confidence, but business was running the risk of talking itself into funk and it was time to move on.
He said that by signing the Trans-Pacific free trade deal (CPTPP) as one of its first acts in office the government showed its commitment to trade.
Ms Ardern told Morning Report earlier today the message coming through from business was that they wanted as much certainty as possible.
An ANZ Bank survey last month revealed business confidence at a 10-year low.
The dollar has fallen nearly 2 percent this year, at one stage touching a two-and-a-half year low, largely because of a stronger US dollar and the prospect of interest rates in New Zealand staying low for longer.
Strong indicators
“Our economic indicators are solid. In fact, we have had bank economists come out and say conditions are great for business to invest. But what we need to ensure is the business confidence doesn’t become a self-fulfilling prophecy, and that’s why it is really important we address what messages we are being sent by the business community.
“The Governor of the Reserve Bank of New Zealand has given real investment certainty now. We have low unemployment, we’re running surpluses, we have relatively low debt levels,” Ms Ardern said.
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Photo Caption:
Prime Minister Jacinda Ardern announcing the formation of a New Business Council this morning.
(RNZ Picture by Dan Cook)

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