Has business confidence really slumped?


With her return from maternity Prime Minister Jacinda Ardern has been getting back down to business at a brisk rate. And with concerns about both the New Zealand economy and the global economy growing, Ms Ardern is out to tackle what media commentators are describing as the elephant in the room: the allegedly slumping business confidence.

I am not altogether sure that business confidence really has slumped as a direct result of the Labour-led policies being announced, or whether it is a result of an overall poor international economy. Yes it would seem that Labour likes to announce working groups and other panels to give the appearance of being busy, but realitistically in under a year with most of those panels still not due to report back, I find it difficult to believe Labour alone can be to blame for the slump in confidence.

On the other hand we have a bunch of slowly worsening crises around the world that are making investors jittery. They range from the increasingly irrational behaviour of United States President Donald Trump to ongoing concerns that another major fiscal crisis is in the offing; from Brexit deadlines looming with neither British Labour or British Conservatives seemingly having a clue what they are supposed to be doing to ever climbing petroleum prices. All of this also says nothing about reviving concerns over Euro-bound economies and concerns about the geopolitics of Russia and China.

That is certainly not to say I think that the New Zealand economy is doing okay. The New Zealand Dollar has dropped substantially. In late 2015 it was arounnd U.S.$0.88c and there were people guessing that it might crack U.S.$0.90c, which is territory that just a decade ago was unthinkable. The announcement about oil and gas being phased out was appallingly handled by Ms Ardern, without even her Minister of Energy and Resources, Dr Megan Woods knowing.

But there are major things happening:

  1. $28 billion was set aside for Auckland transport issues
  2. A major review of education is underway – submission opportunities close on Friday
  3. Substantial announcements made around single use plastics – with promises of stewardship programmes to follow
  4. Tackling major pay issues that the previous Government neglected with teachers and nurses is now happening
  5. A forestry service to manage our forests is being established

I admit that opportunities where the Government could be making substantial announcements exist:

  1. People want action against the epidemic of armed hold ups going on up and down the country – I do too, and not just because the service station that is entrusted with the servicing of my parents vehicles was attacked on Friday
  2. Alternative energy sources, such as biofuel, tidal power and solar panels need
  3. I am not advocating for R.M.A. reform on a large scale, but the enforcement provisions need to be revisited in the wake of the difficulty Environment Canterbury is having with the wayward Chinese bottling company

Let us also remember that Labour have not even been in office one year yet. National had 9 years in office and failed to do a huge number of things I thought that a conservative Government might have done. Whilst there is plenty of time for Labour to fall short of what socialists believe should be the agenda for New Zealand, I believe the party and its coalition partners would have to be performing substantially worse than they are in the polls to be a one term wonder.

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