Business doesn’t like guessing, it prefers stability

The New Zealand Herald editorial yesterday echoed the feeling I am picking up from business: Quote:

The sudden announcement on oil and gas exploration has not encouraged confidence.

The Prime Minister comes back to a country still waiting to get a measure of her Government. It will have been six months in office next week. It has taken a few definitive steps in the direction of setting the economy on a course of adapting to climate change, notably the decision last week to issue no new permits for offshore oil and gas exploration, but on much else it has been content to set up inquiries.

As a coalition that includes parties as divergent as NZ First and the Greens, inquiries probably appeal as a harmless delaying mechanism if nothing else. But when they concern sectors of the economy, they can delay or discourage investment as well.

Little has been heard about the inquiry into ports that NZ First secured in the coalition agreement, or the rail review or the inquiry into electricity supply for which a panel has just been set up. All these require ongoing investment by the companies owning them and their major customers. Chances are, their investment plans and schedules are on hold until they can see what is likely to happen, or not.

All business, on which continued economic growth and jobs depend, will be waiting to see how well this Government understands business and is prepared to listen to it. The sudden announcement on oil and gas exploration has not encouraged confidence on that score. While is could have been expected, especially after Jacinda Ardern went out of her way to receive a Greenpeace petition at Parliament a short time earlier, the industry feels it should have been given an opportunity to be heard.

The Green Party sounds suspicious of all industry “lobbying” and probably does not welcome it. But it is the way governments become aware of the practical implications of their proposals. Labour ministers thought the oil and gas decision would present no immediate risk to the industry and jobs until existing drilling permits expire in 30 years, but following the announcement, sector leaders have explained how the nature of the business means the impact will be felt much sooner.


The Government’s first Budget is just a month away and that will be the measure of the coalition’s real character. For that we can only wait. End quote.

The government are hamstrung at the moment and I know several key players are waiting until Jacinda goes on leave. There are real tensions behind the grinning grill of Jacinda Ardern. The oil and gas decision has cost some companies tens of millions of dollars. They aren’t going to take that lying down.

Business will be looking at the government and thinking to themselves, ‘Well, if they can do that to oil and gas what will they do to my business at the whim of a virtue-signalling prime minister whose sole experience of business is wrapping fish and chips?’

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