Finance Minister Robertson says Labour will work with business over confidence concerns
Finance Minister Grant Robertson says weaker business confidence in recent surveys reflect perceptions of the new Labour-led government, but he and other ministers will still be seeking to allay concerns.
At the finance and expenditure select committee today, Robertson fielded a number of questions from National's finance spokesman Steven Joyce, who said there was a "disturbing lack of business confidence" according to recent surveys, at odds with the country's current economic health.
Robertson said the downturn was not unusual, but rather "the result of a change of government and some perception issues in relation to that", and that there is a stronger relationship between firms' own activity confidence and gross domestic product growth than there is between general economic confidence and GDP expansion.
The New Zealand Institute of Economic Research's quarterly survey of business opinion for December showed a seasonally adjusted net 11 percent of firms expect economic conditions to deteriorate in the first half of this year, turning negative for the first time since September 2015, and falling from a positive reading of 5 percent in the prior period.
Firms' own trading confidence saw a net 10 percent experiencing increased activity in the December quarter, from a net 13 percent in the previous quarter, and a net 18 percent anticipating more demand in the first three months of 2018, from a net 27 percent. NZIER noted in that release that their previous surveys have shown business confidence tends to fall after Labour takes office, in contrast to a lift in confidence when National takes office.
Similarly, in the ANZ Business Outlook for December, a net 38 percent of businesses were pessimistic about the year ahead, versus 39 percent in the prior survey, when confidence dropped to an eight-year low following the election. However, a net 16 percent of companies saw their own activity expanding in the December survey, compared to 6.5 percent in November. The historical average is 28.
"That doesn't mean we don't have a job to do, as a government, to make sure we get alongside the business community, that we work with them to help implement our programme, to make sure they are able to operate," Robertson said. "We'll work hard with the business community to lift their overall confidence and deal with perception issues."
Joyce said Labour's policies, such as changes to industrial relations law, are what is worrying business owners, and asked Robertson whether he was telling his colleagues to moderate their positions because of that. Robertson said he was not.
"We have a range of social partners in the economy — businesses, workers, NGOs, all sorts of people. We need to work with all of them to make sure we have an economy which grows prosperity and shares it fairly," Robertson said.
"There is a host of things we can do, working with small businesses, to be able to make their interactions with government more efficient and ensure they've got the support to invest and grow their businesses."