Getting down to business

 

Stuff had an article on Sunday by Tracy Watkins that tries at least to get to the bottom of the problem with the government and business. Essentially, it suggests that

Jacinda Ardern must pause radical reforms or risk economic consequences of falling business confidence.

Well, duh. Quote:

National leader Simon Bridges says the Government needs to extend an olive branch to business by pausing radical reforms – or suffer the economic consequences of falling business confidence.

The first step would be admitting it “stuffed up” on its ban on oil and gas exploration and go back to the drawing board, Bridges said.

The Government announced last month there would be no further offshore oil or gas exploration permits granted. End quote.

Good one Simon, although this should be obvious to anyone not living under a rock, and possibly a few that do. Business hates uncertainty, and no one really saw the ban on oil and gas exploration coming, because it was not discussed with any of the 123 government-appointed working groups, it just came out of thin air.

Let’s face it. If you have millions or billions invested in a business in a country where the government can pull a stunt like that, you will probably look to go elsewhere. Especially when the government’s own advisers told them not to do it. Quote:

But the Government’s own officials warned such a move would increase risks around security of supply, increase costs to consumers, decrease economic activity in Taranaki and reduce Crown revenues from future royalties.

Bridges said the Government’s lack of consultation on the oil and gas decision, and its work place reforms – potentially the biggest shake up in industrial relations in decades – were all taking their toll on business confidence. End quote.

That’s the next thing that business has to deal with. The workplace reforms are obviously going to be a case of back to the future, with strengthened union powers and much less power to the employer. Remember him? He’s the poor sod who pays the wages while people don’t turn up to work. Quote:

An Auckland Chamber of Commerce Survey shows business confidence in “freefall”, with nearly half believing the economy will deteriorate over the rest of this year. Only 15 per cent expected an improvement, compared to 12 months ago when a third of businesses thought the economy was going to get better, and 8 per cent believed it would get worse.

Bridges said no one should under estimate the “corrosive” effect of falling business confidence on the economy and the Government. End quote.

Rust never sleeps. If business confidence goes, the economy is damaged. And yes, that is where we are heading right now. In fact, I would go as far as to say we are already there. Quote:

“It is bloody serous. If they don’t turn it around it’s kind of like nothing else matters,” Bridges said.

“If it stays where it is in a year’s time people will really notice it…it will affect their pay round, their jobs, and the costs they’re facing at the supermarket.” End quote.

Yes, Simon, quite right, but even if business is totally peachy with the government in a year’s time, people will really notice a few things. Like how everything has gone up in price because of the fuel hikes and then the regional fuel taxes, which will have kicked in by then. That will apply even if the government does a U-turn and says they will abandon their workplace reforms and will allow the oil and gas industry to produce as much as they like for as long as they like. Which, of course, won’t happen. Quote:

Speaking to TVNZ’s Q+A programme, Prime Minister Jacinda Ardern disputed that business confidence was falling, and said it “just hasn’t increased”.

Ardern said the reality of the economy was that New Zealand was still predicted to have strong growth, at 3 per cent of GDP, on average.

But she acknowledged that the Government needed to work on the perceptions of business. End quote.

Maybe you are starting to realise that business needs more than fairy dust. It needs to work together with governments, not against them. It needs to operate without the dread that, at any time, a rogue government can just pull the rug from under them, costing millions in lost investment. Quote:

“Of course, we’ve got to do everything we can to change that. I agree. That’s why we’re undertaking things like our R&D tax credit, to try and stimulate that investment. That’s why we are looking at things like incentives for people to invest in small business. End quote.

R & D credits are not worth the swathes of paper you have to go through to apply for them. Believe me, I know. And R & D credits only apply to a small sector of business. And ‘looking at things like incentives for people to invest in small business’ is just cheap talk. What about big business, like oil and gas, that you just destroyed? Quote:

“That’s why we’re going out and working alongside business for some of the things that we’ve floated that we want to do. We’re not making arbitrary decisions. We’re working together. But it is something that Labour governments successively have struggled with. End quote.

This Labour government is considerably worse than most. I feel that the decision to end oil and gas exploration was an ‘arbitrary decision’. So once again, when the going gets tough, she just lies.

But wait until you hear this. Quote:

“For me, I take it as a matter of pride. I want to demonstrate that I cannot achieve what I want to achieve as prime minister if we do not have strong business confidence and growth.” End quote.

What is it they say about pride coming before a fall? Sorry Jacinda, but your fairy dust won’t help you this time.


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Accountant. Boring. Loves tax. Needs to get out more. Loves the environment, but hates the Greens. Has been called a dinosaur. Wears it with pride.

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