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Where Did Business Go?

Written By: - Date published: 8:56 am, May 22nd, 2021 - 34 comments
Categories: budget 2021, business, david seymour, Economy - Tags:

Back in the day when we had useful Opposition, business leadership could be relied upon to think as if they had interests in common as business. This budget, their ability to think let alone lead has deserted them.

Baldly stated from Michael Barnett the Auckland Business Chamber of Commerce, “Compassion won. Business got nothing.”

He further commented that “… it is disappointing that the Budget gave no relief to tourism …”. Except that the government’s budget has supplied over $200 million to support, recover and re-set the tourism sector of the economy.

Mr Barnett also said that “If we are to increase prosperity it must be for all and be measured in increased productivity not just the size of our mortgages.” Mr Barnett’s egregiously lazy complaints over 2 decades of a sinecured tenure show only that he fails to understand that the basic elements of higher productivity are in the control of business, not government. This government is doing what it ought and that is: lifting the minimum and low wage floor. This is the guy that purports to represent business for one third of our economy.

One might also have expected that our apparent leader of the opposition David Seymour would as leader of Act be able to understand the specific role that this government sees itself fulfilling within the economy. Instead, he said “Since COVID19, we’ve watched as fruit rotted on the ground because there weren’t the workers to pick it.”

There’s really no need for this government to point out that the border shutdown is being effectively used to crush minimum wage and unprocessed agricultural exporters and exports in favour of higher wage and higher value exports. The fruit will rot until agribusiness learns to pay far higher wages with accommodation provided, or buy the robotic harvesters, or they will go out of business. They may not like it, but with an unemployment rate heading for 4% they are going to figure it out.

The most important part of our export economy, agriculture, had its main lobby the Federated Farmers claim that the reason the Minister of Finance was able to spend so much in the budget was because farmers were so resilient, competitive and fleet-footed that “farmers themselves had bankrolled the budget’s big spending”. Yup, that was the sum total of the contribution of the largest part of our export economy: to be such a dumbass that he didn’t understand the purpose of public debt in a public budget.

What used to be the most vociferous and most penetrating brains trust of the big end of town, the Business Roundtable in its NZ initiative guise, was simply not at home in 2021 when it was time to comment on the public sector response to the largest single economic crisis we have faced since the wool crash.

The only note they put out that mentioned the budget was a few lines on public sector productivity. None of which really matters to the salary average of most of New Zealand. Private sector productivity in New Zealand – the stuff that really drags New Zealand down in the medium term – got not a mention. Zip.

It’s getting pretty weird when even the bastion of property ownership and interests the Real Estate Institute of New Zealand could say nothing but good of this budget, noting for example $100 millin for healthy homes and $38 million to upgrade residential tenancy bond transactions.

Low paid workers and welfare beneficiaries were well represented in the mainstream media budget commentary by all the unions and welfare groups, and their commentary was reliable as well as overwhelmingly positive.

But business leadership showed themselves unable to think.

For those of working age, we have about 630,000 on welfare out of about four million employed: this budget simply didn’t speak to those on a decent wage or salary already. Which is fair enough this time around. But business leadership are currently unable to articulate that they are simply not going to get rich if they keep paying near minimum wages, and won’t be able to take on the more interesting bids or international market niches if they don’t attract qualified people who demand high salaries.

Ordinarily it would be the job of the party reliably representing business to set out what business needs to make us all richer, but that’s just not what National are capable of any more.

Business leadership had nothing to say on:

  • the $44 million set aside for small business digital training, or
  • the $153 million for reinstating training initiatives, or the positive effect of $30b expenditure of private sector wage subsidy scheme, or
  • what business might do with $300 million of GreenInvestment Fund, or
  • any commentary on the $57.3 billion on infrastructure that keeps about 8 tier 1 companies employing over 5,000 people and about 2,000 smaller companies in construction with more business ongoing than has ever occurred in this country.

Those who represented the higher paid worker, those who represented business owners, and those who represented our largest exporters, appeared to have nothing to say, no capacity to lead, and have left the public sphere open to the continued dominance of Labour’s ideas and Labour’s outcome framework.

With business so unable to engage they may as well have left the field of discourse entirely, we are left all the poorer.

34 comments on “Where Did Business Go? ”

  1. Patricia Bremner 1

    Ad, their sense of entitlement is very evident. They are in business to make money, and behave like lemmings who are failing to adjust to the World situation.

    They have underestimated this Government and they believed their own spin about the Ministers not performing.

    Adjusting to the new reality will be difficult for some who still think Jacinda Ardern "will be gone by Christmas" and "She's only good in a crisis".

    Our PM is only 40 shows great judgement and the ability to cut through hyperbole. She is genuine and follows the science not outmoded beliefs.

    Many have been critics of the "Reports", but they are a basis for evaluation future planning and improvements

    Each budget has been an onion skin building on what went before, learning adjusting and actioning. Not perfect but the tenor and direction is people centric, so yes business people who are money centric feel threatened.

    This Government is working towards making citizens more secure and business people should be pleased, as secure people spend.
    Best news yet was the intent to develop NZ systems. Wow and WOW!!

  2. John G 2

    I was quite surprised to hear Kirk Hope speak yesterday on National Radio. He was pretty complimentary of the budget I thought. Didn't expect that !

    • Pat 2.1

      Not surprising really….SMEs have just been provided with an additional 3 billion revenue over the next few years…well, at least whats left over after the landlords and banks take their cut.

      • Phillip ure 2.1.1

        What broke the mould with hope was his saying the welfare increases should have been higher…

        He used that economics 101 reason for his stance…namely that those increases for the poor churn straight back into the economy…so are good for business..(richardson/bolgers' cuts to welfare brought on a retail recession..'cos that money was yanked out of retailers' tills..)

        And for all their talk of wanting to revive/build the economy…ardern/robertson seem yet to grasp that econ 101 fact…and that puzzles me..as they are not unintelligent people..
        Why didn’t they need the calls for a $100 fillip to basic benefits…?
        the straws are all pointing in the right direction..(c.f. hope and other rightwingers calling for more for the poor..)
        It must be ideological…which makes a sick joke of the kind/caring mantra..doesn’t it..?

        • Pat 2.1.1.1

          Because although they wish to (need to ) replace the lost revenue from tourism/education/migrants they dont wish to fuel inflation (despite the rhetoric) hence the PS wage freeze that wasnt….without that support the ponzi collapses on their watch and that is to be avoided at all costs but it can also be collapsed by increased interest rates….it is a balancing act extraordinaire, and one they are likely to fail at…..but they are not alone in that as it is a near impossible task that will require a million things to occur just right, most of them outside their control.

          I'd suggest theyd argue it meets the caring mantra in that the alternative would be worse.

          Its not ideological (imo) rather it is a delay and hope strategy because the solutions take time and vision and they have neither.

          • Patricia Bremner 2.1.1.1.1

            That is sweeping and harsh Pat. "Time and vision and they have neither".

            I disagree with that premise. They do have a vision of more new housing of varying kinds, and have home building ramping up until supplies are stretched due to covid impacts. They want better incomes for the lower paid, and better conditions of work.

            Time is always a constraint, especially when doing large infrastructure projects such as the future transport tunnel. Getting such projects underway takes vision planning and a good deal of thick skin!!

            Each budget layers more funding to keep sectors afloat working or stimulated to meet the plans arising from the many reports.

            I don't see this latest budget as perfect, but having lived through Polio virus epidemics the wool crash the oil crash the share market dive in1987 the high interest rates the GFC not to mention terror attacks earthquakes and eruptions, I marvel that our little coracle is still afloat during the covid pandemic.

            Why are we still afloat? We have good Leadership. The pandemic is not over.

            • Pat 2.1.1.1.1.1

              You are welcome to disagree Patricia but I note rather than present the vision you claim the government have you offer excuses for its lack….they had 9 years in opposition to develop the vision (and method) and have to date wasted a further 4 years in office accumulating reports to develop that destination and even now are pushing out by further years more investigation…..and all the while the act fails to align with the rhetoric.

              When you are time constrained the worst thing you can do is waste that little you have….and this Gov appear masters of deferral.

              • Patricia Bremner

                Tell me Pat What did you think of the Key years?

                I feel it is a false dichotomy to say "plans should have been made during 9 years in opposition" different people different times. Labour had the same problems National has now. In fighting poor leadership and poor direction. Andrew Little pulled the party together and his unifying work and promotion of some current MPs laid the ground work for planning to begin. He often said "Talk to the needs of the people, not the needs of Politicians'

                Well somehow I don't see National planning 10 years ahead at the moment, do you?

  3. Descendant Of Smith 3

    I dunno when John Key got them all together they came up with that bastion of intellectual thought – a cycleway. They were devoid of ideas then and are devoid of ideas now.

    Many have got rich by extracting capital out of their businesses through low wages and high executive salaries and accessing the enormous spending power of baby boomers who had no student loans to repay, inherited more wealth than any other generation, who had paid off their mortgages, kids had left home, two incomes and much lower taxes than previous generations.

    COVID has only accelerated what was going to happen as the baby boomer population declined. If you couldn't make money while the baby boomers were spending……..

    As for the rotting fruit I suspect much wasn't picked because they had no ships to put them on to export. They, the industry, seem very quiet about any change in the last twelve months about lost markets / supply chain / transport issues. Much better to blame lazy NZer's and the lack of overseas workers rather than a high dependency on export growth, expansion and lack of pandemic planning.

    It has been quite interesting overall to see how few businesses had planning or contingency for a possible pandemic even though this possibility, and indeed formal planning, has been talked about for at least the last 10 years.

    • greywarshark 3.1

      The shipping point has resonance. I remember information about some lines considering not coming here at all, or as much, and this before Covid. As we, out of desire for efficiency, chose not to let our own shipping line sink, which went beyond NZ shores, we were tied into the overseas lines as per free markets and neolib notions. We would keep our airline but shipping, our mainstay for heavy and mass sea transport was of lesser importance. After all the future was in services and tech wasn't it, not production.

      There are some great new designs being built, we should be onto a couple of them from overseas builders and (not China at the start anyway), with room to sail to Pacific Islands and help their and our trade with them, also carry a few passengers similar to the old idea of 'banana boats', and soon they would be an integral part of inter-PIsland interaction.

  4. AB 4

    Maybe they got comfortable and lazy during the Key years, which like all National governments had the sole purpose of removing political/democratic threats to business profitability. Or more likely they were always mediocre – while the effective handling of Covid crisis by collective solidarity and understanding one's obligations to others, plus large-scale government intervention, has taken the wind out of their ideological sails.

  5. GreenBus 5

    Most Business in NZ large and small (especially the small) have used the trickle down
    theory as a means of suppressing wages and using the minimum wage rate as a benchmark. They have had it all there own way for decades, using cheap immigrant labour to fill there slave jobs. This has gone on so long they cannot change. Well guess what NZ Initiative, you are unable to speak and shocked by a huge kick in the balls by this Labour Govt. The FPA will crush your wage slave membership given a couple of years to rebuild the unions and you know it.

  6. Nice post Ad.

    One of the main roles of government is to create a fair and functioning society within which business can operate, whether privately or publicly owned.

    By addressing poverty and increasing the minimum wage (plus all of the advantages given to business listed in Ad's post) that is exactly what this government is doing.

    More money to address climate change is needed though.

  7. Jackel 7

    Well I guess these days it's bad for business to appear greedy and stingy or to throw your toys out of the cot like Hosking, much better for business to appear open and generous.

    • Phillip ure 7.1

      I wouldn't be quite so cynical..

      I have been surprised at the number of rightwingers calling for benefit increases..

      the optimist in me sees this as a focus brought on by covid..that we are all in this together..

      and that low-wage/frontline workers…and the beneficiaries..

      deserve more financial-dignity..

      'you may say that I'm a dreamer..

      but I'm not the only one'..

      next step..a u.b.i…

      spread the dignity..

      • Jackel 7.1.1

        Fair comment, I wasn't intending to come across as cynical. And yes, people still have to have the means to consume and businesses still have to have consumers in this age of advanced technology and robotics permanently taking away jobs. A UBI is an answer to this problem.

        • Phillip ure 7.1.1.1

          and if course with the loss of tourism..it makes even more economic sense to prime the business pumps..by doling out money to those who will spend it straight away..

          i mean..if not now..when..?

          these are not the times for even more incrementalism..and that delayed gratification nanny-labour is so wedded to..half of the pittance now and half next year…f.f.s…!

          • Jackel 7.1.1.1.1

            Of course np with fiscal expansion to grow the economy and probably the quickest way to get it into the system is to give it to those least likely to hold onto it. The problem for Labour has been that when they have tried to get big, bold and positive there simply hasn't been the uptake or the buyin so they are reduced to incrementalism. This is the basic problem people can only generate so much demand in a world awash with products. As for all this buying up of houses, it very much has the feel to it of just before the 2008 GFC.

            • Descendant Of Smith 7.1.1.1.1.1

              Or 87 when the wealthy encouraged the "mum and dad" investors into the share market so they could sell off high and buy back again later low.

              • Jackel

                Difference is who's going to bail them out this time? Central Banks, nope sorry got nothing. Governments, nope sorry got nothing. So if not them then who?

  8. Tricledrown 8

    Most of the money in the budget will end up being spent in businesses unlike tricledown tax cuts which never reach the lower end money spent on the bottom goes up all the way.

    The billions will keep the economy buoyant.

    [deleted spurious “k” from user name]

    • Incognito 8.1

      Mod note for you.

    • Descendant Of Smith 8.2

      Well they sort of reach the lower end via increased savings at the upper end turning into excess capital turned into buying houses turned into competing against each other driving house prices up to higher rents for the lower end. QED.

  9. tc 9

    Kirk hope initially whined about business being left out displaying the entitlement we've become used to.

    IMO he's been told about optics and reminded of a few little things like wage subsidies and large exec packages for the likes of CEO of Fulton Hogan etc etc

    • Graeme 9.1

      He's just doing his job, which is representing his members' views. His change in focus reflects a similar change by a lot of business people. They are seeing Labour as a net positive for their business, and are doing very well. Hence the CEO packages which are performance related.

      We're members of the Retailer's Assn. and have seen a similar change in attitude of the Association towards the Government. It's gone from a quite blinkered, National or National stance to a constructive relationship with the current Labour Government. Actually doing something about interchange fees has done a lot, National wouldn't go there, but every retailer knows that they haven't got a business if their customers haven't got any money. Hence the quite muted response to rises in minimum wage, and now praise for raising benefit levels. Ruthenasia not only fucked over beneficiaries, it decimated small town and suburban retail.

  10. “Compassion won. Business got nothing.”

    Business has been extorting the country and its serfs for thirty + years and pocketing the dividends.

    Michael it is time that the trickle became a torrent from the bottom up defying gravity and neo liberal theft.

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    BeehiveBy beehive.govt.nz
    1 week ago
  • New beef genetics programme to deliver cows with smaller environmental hoof-print
    The Government is backing a genetics programme to lower the beef sector’s greenhouse gas emissions by delivering cows with a smaller environmental hoof-print, Agriculture Minister Damien O’Connor announced today. Informing New Zealand Beef is a seven-year partnership with Beef + Lamb New Zealand that is expected to result in more ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Appointments to the New Zealand Qualifications Authority
    Education Minister Chris Hipkins today announced new appointments to the board of the New Zealand Qualifications Authority (NZQA). Former Associate Minister of Education, Hon Tracey Martin, has been appointed as the new Chair for NZQA, replacing the outgoing Acting and Deputy Chair Professor Neil Quigley after an 11-year tenure on ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Govt supports residential house building by allowing manufacture of building supplies
    The Government has agreed to allow some building product manufacturing to take place in Auckland during Covid lockdown to support continued residential construction activity across New Zealand. “There are supply chain issues that arise from Alert Level 4 as building products that are manufactured domestically are mostly manufactured in Auckland. ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Government invests in scientific research to boost economy, address climate change and enhance wellb...
    Research, Science and Innovation Minister Hon Dr Megan Woods has today announced the recipients of this year’s Endeavour Fund to help tackle the big issues that New Zealanders care about, like boosting economic performance, climate change, transport infrastructure and wellbeing. In total, 69 new scientific research projects were awarded over ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Transport to drive economic recovery
    The Government is investing a record amount in transport services and infrastructure to get New Zealand moving, reduce emissions and support the economic recovery, Transport Minister Michael Wood announced today. The 2021-24 National Land Transport Programme (NLTP) was released today which outlines the planned investments Waka Kotahi NZ Transport Agency ...
    BeehiveBy beehive.govt.nz
    2 weeks ago