National says the blame for yet another drop in business confidence figures can be placed squarely at the feet of the Government – but the Finance Minister appears undeterred

National says the blame for yet another drop in business confidence figures can be placed squarely at the feet of the Government – but the Finance Minister appears undeterred

National says the blame for plummeting business confidence belongs solely with the Government, but the Finance Minister continues to blame the “inbuilt bias” of business towards a Labour-led government.

The latest business confidence numbers from ANZ reveal firms’ optimism levels are now the lowest since the height of the Global Financial Crisis. This is worrying some economists, with Bagrie Economics chief economist Cameron Bagrie - formerly ANZ's chief economist - saying the figures show an economy at “stall speed.”

Under the headline "in a funk," ANZ says; "Headline business confidence and firms’ views of their own activity continued to fall in July, reaching their lowest levels since May 2008 and May 2009 respectively. Activity sub-indicators were weak across the board, retail is the least confident sector."

The data shows a net 45% of business are expecting general business conditions to deteriorate in the year ahead.

Businesses’ perceptions of their own prospects – which has a closer link to Gross Domestic Product growth than the headline confidence figures – are now at the lowest levels since May of 2009.

“This Government is having the same effect on business confidence as a global financial crisis did a decade ago,” National Party leader Simon Bridges says.

He says the drop in the confidence levels is the Government’s responsibility – “there is no other credible explanation for what is happening.”

He blames poor policies, such as industrial law changes, and a lack of leadership for the drop in confidence levels.  

Bridges says most of the banks have privately made clear to him that there is no other credible explanation for the receding levels, other than Government’s actions.

Finance Minister Grant Robertson says ANZ’s numbers “aren’t unexpected, given the trend we have seen.”

But he says the fundamentals of the economy are sound.

“We still have relatively low unemployment, we still have a surplus and we have debt tracking down.”

Robertson says the Government will continue working with the business community on the issues which are concerning them.

He “completely rejects” Bridges’ assertion the drop in confidence levels is all the Government’s fault, saying business confidence always falls under a Labour-led Government – “there is an inbuilt bias.”

‘Forget business confidence…’

Bagrie is most concerned about the businesses’ own activity measure in the survey.

Just 4% of businesses are now expecting an improvement in their own prospects.

“Forget about the business confidence figures,” he says. “It’s the fact firms own activity expectations, employment and investment intentions are near zero that is the concern.”

He says this figure seldom gets down this low.

“The economy is a long way short of the 3% plus [growth] projected by Treasury. The Government now has a fiscal hole from two sides; more spending demands and a weaker economy, which means less tax revenue.”

But Robertson remains confident that, over the forecast period, the economy will grow at around that 3% figure. 

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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Good luck extracting more tax from a declining economy .

Its a classic case of Unintended Consequences !

See what happens when you stumble out of a Cabinet meeting at 3.30 pm and unilaterally announce the banning of an entire industry (oil and gas exploration ) without any warning or even a hint of consultation .

It shatters business confidence ........... the rest of sit and think WTF next ?

If they can machine-gun a good laying Goose just on a whim , without any forethought, what will they do to the rest of the Productive Sector ?


Next was Auntie Eugenie announcing no more mining on conservation land. Taranaki was softened up with some cash for walking tracks. The West Coast is being handed some lolly for possible expansion of the Tranz Alpine rail. No surprise that business confidence is falling.


They just don't understand that productive people want to earn a living, not be dependent overgrown teenagers.

Apologies for the interjection Boatman. but some commentators may not have managed to get to the 'QE's ten anniversary page today' where I posted this earlier. Possibly because it didn't have 'housing or new Zealand business confidence in the title.. But I would consider it just as relevant here, so please forgive me the duplication, I do generally try to keep things fresh - unlike many!

'The super cycle suggests that after several minor recessions are generally interspaced every lifetime with a big one, which is either very deep or very long. No one believes it can happen again, because often the previous generation to experience the last 'biggie' have all died. But, they have been prevalent throughout history and require a major re-set of the over-exuberance (major deflation) to re-set. Sadly they often also have ended up in War, which has sped up creative destruction and provided a levelling of things to induce the next demand and growth cycle.

Exuberance of late 1700's was mercantilism.
Exuberance of mid 1800's was steam, power and locomotion
Exuberance of 1920's was mechanisation and automobiles
Exuberance that we have been trying to avoid the effect of since the 2000's is information technology and the internet revolution, but where valuations are still wildly above the returns to capital - and this is the case with many of the massively valued stocks are seeing today. The link below highlights the likelihood of a big correction to take place still, QE, in my opinion has merely postponed its arrival, but the super cycle cannot be denied it pound of flesh payment. The 'Great Recession' was hardly that but the media is very dramatic these days with its labelling of events.

If you want to go back further you will get to Tulips in the 1630's... Generally every 70-80 years there is a biggie. The question is did we really have it already? Was that it?

And for the specuvestors....... I know New Zealand is diffrunt.'

Honestly , I dont think houses are over-priced that they are suddenly going to fall .

Here's why

1) We have a known 50,000 home backlog
2) The cost of subdividing and servicing a section is $250 to $300k EXCLUDING THE LAND COST
3) Expect to pay $500,000 for a section in a decent area
3) The cost per m2 to build a home is circa $3,000 , so a 150m2 home will cost $450,000 to erect

Hey presto that new build in Hobsonville point is dead on at $1,200,000 .

So the price of a secondhand houses is build bouyed by the costs of construction of new houses .

Its not going to change anytime soon

If the money is not there to buy them they will fall all right. We might even hear you screaming for more immigrants and foreigners to pay you what you think your house is worth.

FYI I only own one single residential dwelling , its paid for and I intend keeping it for the next 20 years


Then if that is truly the case, you're in good shape and all you need to do is earn a few more dollars over the next 20 years and not falsely rely the family house being your pension for retirement in the regions, that sadly is what a lot of fools have been duped into believing their house is, a pension... and they have squandered the riches on boats, coffee and nice cars.......that lot are about to get a very rude awakening and a major paradigm shift.



National, Bagrie (ex ANZ) and ANZ.. but it's nothing to do with any of them though!

Does anyone else worry about how loud a voice the people who created the mess still have? Yesterday it was 'Uncle' John (current ANZ) at the pulpit. Do any one of them take any responsibility for their previous negligence?

Now I may be particularly cynical but the amount of bleating going on and 'blame' throwing by these parties is actually making me question what state things really have got to already.


Will Labour ever be responsible for anything that happens to the economy, or will you always blame the last govt?

Can you blame National for the Coalition's:
-increasing income tax
-increasing petrol tax
-wasting 5-6billion on tertiary student bribe and NZF pork fund.
-Pissing off major trading partners (insulting Trump, Aussie (various gaffs, ongoing), Europe (over Russia), China (recent rebuke from them)
-Spending another billion on Embassies
-Subsidies for good looking horses
-Killing oil and gas industry
-Signalling severely regressive industrial relations policy still to come but seriously damaging to business
-Productivity sapping strikes all over the place
-Ham fisted kiwibuild and billion trees fiascos that destroy confidence in govt competence.

All of which hurt the economy.

Nah come on, I heard from a credible source that Labour are going to plant some wilding pine and cut funding to initiatives set out to eradicate these species.

1 billion trees here we come!

Hi Foyle

Look at the banks and their bedfellows if you want to blame anyone. The writing was on the wall long before this coalition came in to power, if you were clever enough to have seen it. I have always been a tory but I do blame them for the imbalances in the economy that are now coming home to roost.

The current situation is a consequence of previous excesses and the day that Uncle John - a man who was so in love with the prestige of power and title - was prepared to hand that thrown to Bill, was the day you should have spotted that all was not right at the mill.

Most of what you fluff on about above is rubbish or was already going to happen before the Coalition came into power. The one thing I will agree with you on is that the sacrifice of the Oil industry was a mistake that shouldn't have happened. Some of what you've written is actually untrue so you should change it.

@Nic Johnson you are simply wrong in your assertions .

The previuos Government did not spend up large , they let us keep more of our hard - earned $ by reducing taxes , AND got to produce a budget surplus .

Absolutely amazing effort , score 10/10 for excellent administration and good governance

So sorry mate you are 100% wrong .

The banks have extended credit to buy houses , but price of second-hand houses is simply a function of the costs to build new houses .

Cant blame John Key for house prices or credit extension , he had nothing to do with it whatsoever .

Quite simply no one holds a gun to your head forcing you to borrow money


You're about to wake up to a major paradigm shift, even uncle John realises it's coming and he was the architect of the folly...

Folly means 'lack of good sense; foolishness.' (thought I'd help you out on the translation),

Good luck with the change in the credit cycle/availability....


Well perversely I hope you are right because I have 3 adult children who really need to own their own homes, and my wife and I are prepared to stump up with $600 k in cash to help them each with a 1/3 rd deposit on the magic new home , compliments the NZ Taxpayer

I either want house prices to collapse , or I really need them to win the Kiwibuild lottery .

As to whether John Key was the architect or engineered this paradigm shift to which you refer , is debatable but I suspect you are giving him far too much credit for his ability , or what any one individual could ever do .

The credit cycle was not engineered onshore , the world has been awash with money and the QE money washed up here ( or some did ) .

'self regulated removal'


Apologies, I neglected your human side.... Your three kids will all be much better off, as will you be in terms of exposure after the crash has made things a lot more sensible for good number of kiwi's...the process will be painful (like pulling teeth without drugs) but it will be worth while.


Sorry Nic , exposure to what ?

- increasing income tax Incorrect, outright falsehood.
- increasing petrol tax same as last government (six times) and known to be required for National's transport plans (was almost certainly happening whoever won)
- wasting 5-6 billions on tertiary student bribe and NZF pork fund Investing in education gives a much better return than the over 60% of social welfare handed our regardless of need. NZF regional investment - would have a stimulatory effect on the local economies, not a slowing effect.
- Pissing off major trading partners NZers may value a bit more spine than recent kowtowing, up to and including bribing a foreign businessman.
- Spending another billion on embassies Was probably in the works whoever won. Be realistic.
- Subsidies for good looking horses Fair enough. Like the previous government, this one may be to generous in subsidies to farmers, eh.
- Killing oil and gas industry It's still there, ya booby.
- Signalling severely regressive blah blah blah Er...yeah...okay. Maybe just ensuring NZ doesn't go full-USA. Too much Leighton for you, from the sounds of it.
- Ham-fisted blah blah Kiwibuild will actually be stimulatory, in a flat environment as Key described being caused by global issues including a potential credit slowdown.

I mean...there's propaganda then there's reasonable consideration of reality. If you want to be reasonable you need at least to be realistic about the stimulatory effect of things such as Kiwibuild.

John Key's comparatively sane comments provide a much better reflection of the fact the economy was built on high immigration, cheap credit via QE etc. and that globally, things are changing.

Now we are passed the cycle peak, its anticipated Wednesdays employment report will reflect this. Hard to see a speculandlords future lined with capital gains and endless rent increases when falling business activity expectations likely translates into hiring intentions heading south, unemployment likely heading north.


C'mon Retired Poppy, this bunch of losers are 100% responsible for the collapse in Business Confidence .

How can you expect to BAN an entire industry such as oil and gas exploration without even a hint of consultation , and not expect the productive sector to worry about these fools masquarading as a Government ?

Its called consequences .

Boatman, low confidence aside, why are businesses activity expectations falling?



That's easy, businesses have just realised that 1/3 of the country don't have any cash (they are just mortgaged up to the eyeballs), another 1/3 don't have any money because they are paying high rents (and are up to their eyeballs in personal loans). The final third are too old and tight-fisted to leave the house and spend any money... but they really should start picking up the slack now if they want their investment properties to still have tenants with jobs to pay the rent.

In olde English this paradox is referred to as a 'buggers muddle!'

Nic, damn! - I was waiting to see how Boatman might explain this embarrassing phenomenon ;-)

Sorry RP. My apologies.

Nic, for the struggling myopic speculandlord, voting for another party that delivers 10% pa gains is the only solution. No matter the social cost.

I'm watching for Bridges to commit to winding back Kiwibuild, ring fencing, Brightline extension, fee free tertiary and the increase in minimum wage, if elected in 2020. It would seem these policies won favour with the public more so than Nationals tax cuts.

Speculandlords belief a recovery is in store in 2021 is a simplistic one. Its based on the belief that National will claim victory in 2020 and once again deliver yesteryear gains on a platter. I think gathering global risks combined with stretched local fundamentals debases any credibility this prediction might have.

Yes indeed RP.. But it has always been the way that some brains are just easier to wash than others. Smaller surface areas make the washing much quicker.....

Apart form the economic strife around the world, which I am buggered if I can figure out how Jacinda and Winnie did that, you are probably just about right on the button.

"Businesses have just realised" all this?

What information about household wealth, rent levels and spending habits is available to business now that was not previously available?


Irony alert.
Boatman is on another hypocritical rant.

Boatman - vehement advocate of reducing immigration and house prices.

Two core components of business confidence:
- Access to labor (business confidence drops when their costs go up).
- Consumer confidence (typically drops significantly when you put the brakes on house price inflation).

You do realise that he won't understand any of that.

- Access to labor (business confidence drops when their costs go up).

Importing cheap labor has deflationary implications, don't you think?

- Consumer confidence (typically drops significantly when you put the brakes on house price inflation).

Right. Hence the argument for not blowing property bubbles in the first place.

Importing cheap labor has deflationary implications, don't you think?
Why comment?
Of course it does. That's the point. A reduction in the supply channel has inflationary implications. Businesses don't like costs.
This is a stated goal of the coalition and Boatman - my point.

Right. Hence the argument for not blowing property bubbles in the first place.
Pointless comment.

Lower incomes means lower disposable income to be spent in the consumer economy, which negatively impacts business performance and revenue. Double-edged sword.

Property bubbles are very detrimental to consumer spending and the wider economy.

Extremely relevant point.

Lower incomes means lower disposable income to be spent in the consumer economy

Nope. Lower incomes due to increased supply doesn't at all necessarily mean less aggregate spending with non net neutral migration.
A region facing a positive supply shock of labor (wage adjustment downwards) is also, by implication, also facing an increase in aggregate demand.

Conversely a negative supply shock will raise wages and by implication reduce aggregate demand for goods.

The wage effect is much more pertinent. Hence why in regional adjustment models, we see predominantly recoveries being driven by firm relocation and not labor relocation.

Nope. Lower incomes due to increased supply doesn't at all necessarily mean less aggregate spending with non net neutral migration.

What does that mean? There is no effect on consumer spending in the event of wage deflation? Any illustrations that support this belief?

A region facing a positive supply shock of labor (wage adjustment downwards) is also, by implication, also facing an increase in aggregate demand.

Irrelevant if consumer spending is the key driver of the economy.

Conversely a negative supply shock will raise wages and by implication reduce aggregate demand for goods.

Possibly, but the example of strong wage growth in cities such as Perth showed increased consumer spending. Since the end of the mining boom, income growth and consumer spending has suffered.

The wage effect is much more pertinent. Hence why in regional adjustment models, we see predominantly recoveries being driven by firm relocation and not labor relocation.

If that means manufacturing firms relocating to Vietnam, I get your point.

Nope. Lower incomes due to increased supply doesn't at all necessarily mean less aggregate spending with non net neutral migration.

What does that mean? There is no effect on consumer spending in the event of wage deflation? Any illustrations that support this belief?

A region facing a positive supply shock of labor (wage adjustment downwards) is also, by implication, also facing an increase in aggregate demand.

Irrelevant if consumer spending is the key driver of the economy.

Conversely a negative supply shock will raise wages and by implication reduce aggregate demand for goods.

Possibly, but the example of strong wage growth in cities such as Perth was accompanied by increased consumer spending. Since the end of the mining boom, income growth and consumer spending has suffered.

The wage effect is much more pertinent. Hence why in regional adjustment models, we see predominantly recoveries being driven by firm relocation and not labor relocation.

If that means manufacturing firms relocating to Vietnam, I get your point.

There is no effect on consumer spending in the event of wage deflation?
Not necessarily when aggregate demand is increasing. Surely we see that in our current productivity figures - substantial growth in GDP but stagnant normalised productivity...
i.e. people aren't getting richer, but we are increasing output...

Irrelevant if consumer spending is the key driver of the economy.
Not at all irrelevant. (aggregate) Consumer spending is a function of wages, marginal propensity to consume and demand.
Causality flows from wages, not spending. Although, the two could be endogenous in the long term, I guess.

Possibly, but the example of strong wage growth in cities such as Perth was accompanied by increased consumer spending. Since the end of the mining boom, income growth and consumer spending has suffered.
That's an employment demand shock. The driver of the wage growth was scarcity in labour.
Consumer spending then followed. This is the direction of causality mentioned above.

You're trolling. Aggregate demand is not consumer spending (which accounts for 60% of GDP). Consumption is driven by income and wealth (or perceived wealth). Japan is a perfect example where a property bubble drove strong consumer spending, then when it crashed, was followed by wage deflation and less consumer spending impacting the price level. All this despite massive private sector investment and govt spending.

I'm trolling because you don't agree?

You can disagree with me. But that doesn't change the fact that consumer spending doesn't drive the economy. Investment and productivity do.
Even in Econ 101 students are taught that consumer spending is the effect and not the cause..

That's correct nymad. You are a troll coz you disagree with the DGMs and not a fan of Taxinda and the COLs. OMG all these acronyms I learned from this site LOL ^^

You can disagree with me. But that doesn't change the fact that consumer spending doesn't drive the economy. Investment and productivity do.

Nonsense. Consumer spending is the key driver of the NZ economy, not investment or productivity. Rodney Dickens explained it quite well on

Rodney Dickens still doesn't understand the difference between correlation and causation.
A foolish trap that just claimed another victim, evidently.

Riddle me this.
Say we have a completely new town. A widget producer sets up shop.
How are wages set in this town?
I'll give you a hint - it's not by consumer spending (there is none). However, this employment demand shock results in upward pressure in wages. This attracts a labour response which then consumes based on a given propensity and the equilibrium wage rate.

That is the direction of causality. From wages to consumption.
If you don't believe this, write to the editor of every journal that has published papers using the standard model of regional adjustment for the last 25 years and proclaim you revolutionary new discovery.

OK got it. The NZ economy isn't or has not been driven by consumer spending, despite what people may say. Capital investment is the key and cheap labor is the way to achieve that. So what's the solution? Increase immigration as much as possible at the lowest possible cost?

If they say the magic bullet is consumer spending, they are oversimplifying the problem - something Rodney Dickens is very good at in order to make his arguments make sense.

The answer depends on what the question is now that we are on such a tangent from the original proposition..

Riddle me this.

Imagine a new town. The people help each other make widgets and only make as many as they need at any one time. They also help each other to provide for everyone's needs. They consume everything they make. There are no wages. How did they get to consumption without wages?


Boy you talk some bulldust. Try reading beyond mike hosking. This is global. And it's been staring us all in the face for many have tried to educate.

And some are still silly enough to be bullish on NZ property. Go figure??


Agree, agree, agree, agree and agree. Gravity is kicking in. Winston called it, Sir JK has called it, other Banking CEO's have called it, and the DGMs on this site have been calling it for a while.

Debt and immigration rocket blasters were shut off last year. The ponzi plane has maintained some of its glide slope via momentum, nut now its time to get back into the atmosphere where lift is generated on reality, not pink fluffy space aliens selling debt and laundering tee shirts. Specuvestor debt junkies its time to buckle up, grab you puke bag, and start scoffing your Pepto-Bismol stash.

It started somewhere around the time China tightened up on capital flight, anyone prepared to guess why they might have done that.

Pocketaces I'll have a go with a few scenarios.

1. the Chinese were aware of an impending debt crisis of their own because of excessive debt in their own economy/business, housing and infrastructure and needed to stem the tide of outflow to stop major economic contraction / implosion / revolution. In fact even GDP growth at 2-4 % for them would be equivalent of a contraction in the economy given debt levels.

2. The inflation of asset bubbles in world cities was initially a deliberate Chinese government plan to make the West feel confident enough to continue to buy their many low grade and worthless products ie. wealth effect abroad so that they could keep the fires of industry burning at home

3. More sinister this one. The capital outflows from 2009 are all part of a deliberate Chinese government plan to invade the West with cheap capital, inflate housing at the margin by bidding up debt levels in the West. When the inevitable bust occurs (after they remove themselves from the margin) the Chinese government will be available to hoover up the massively discounted businesses and assets that Western governments can no longer afford. Invasion by economics along with a few million people exported to take pressure off the resources in the Mainland..

4. China has no control whatsoever and the smart money just decided to leave as it did from Greece, Russia, Cyprus, Ireland (magnifying credit issues at home) - This was just on a bigger scale though so had more impact woirldwide. NB I saw this happen in UK property when Greece was in a pickle and the amount of money that flooded into London property for a few months was quite incredible. Greece then got close to collapsing. China probably has more control over what its citizens do than the Greeks do... Prison, disappearance, execution - which is also another reason that people are still trying to leave if they can.

Would pay to be very aware of 3.

or just close your eyes as tight as you possibly can and hope (with crossed fingers too) that someone else will be able to buy your house for enough money that you can pay off the car and boat...clear the mortgage, still be able to downsize, afford a smaller place and be able to feed yourself for 20 years of retirement... woah.. that's a big ask of this debt pile,


1. The ban on exploration doesn’t kick in for a couple of decades.
2. By the time it does, the increasingly drastic manifestations of climate change would hve triggered action without this particular ban.
3. It was a total waste of time and effort, but in the real world, it shouldn’t matter.
4. It would be easily reversible by a future administration.

Not at all RP.
Winnie covered his basis by telling the masses that it would not be the fault of the coalition in the coming years as to a downturn. So because he said it, we can't possibly pin anything to his Teflon Tongue and the Nursery down the hall from his office......Perhaps its global economics mixed in with the inexperienced clowns trying to run the local show!

Bother. This isn’t ideal. Anyone want to see more pics of Neve?


Any coalition that has the Greens in it is bound to collapse. Their loopy ideas of saving the snails at full speed ahead and damn the torpedoes, will bring the whole rotting tower down.
But don't worry.
Aunty Helen is in the wings waiting to make her come back, hence her constant sniping about anything that gets her name in front of the media.


Good to know you are still terrified of a 68 year old woman 10 years after she left parliament.

Perhaps Helen with her wide connections could find a buyer for some fighter planes!

Maybe we could get them mended and offer flying lessons in them.

Hopefully not to some unsavoury middle eastern types!

Business confidence is certainly a self fulfilling prophecy as household deposits increase by around 1.5 billion over the last month and around 11 billion yr on yr..

It’s not all bad policy on the part of the government, I am afraid. Some policies are good for the public but disliked by businesses as they come with the promise of long-term sustainable growth over a quick profit. The Nats artificially inflated NZ businesses with disproportionate tax incentives for property investment and lowering wages through excessive competition among the workforce.

I am certain a number of businesses are unhappy with the government turning off the unsustainable inflow of low skilled workers. If the new policies only allow high-quality students to enter the country, subpar private institutions will have to shut shop and low-productive businesses will have to go back to paying the pre-record migration wages.
You won’t see students with strong academics studying at those apartment-turned-classrooms in Auckland or fruit-picking in Te Puke.


Damn. Wish the CoL hadn't blown all those billions on student bribes (with no increase in tertiary uptake) and NZF bribe fund and killing high-earning oil and gas industry. Then they would have a little more cash in hand to manage a downturn.

Every labour govt since the 1960's has left NZ in recession. But at least this time it is not the forgetful voters who are to blame, it is all on Winston.

Where did those billions of dollars go? Did they just disappear into an abyss?


Are you forgetting all the money WP just gave away in the last budget??

You know you would generally think people that visit and comment on this website would be well informed and switched on.

Of course if you somehow think that Labour was the cause of the GFC (Note the Global part of that), that is a big stretch from reality. When in fact they ran many years of surpluses and did well to prepare the country for the rainy day that was to come.

The reality about governments is that the economy is a long term game. Apart from the short term sweeteners a lot of their impacts (both good and bad) are often not felt until after they have left office. Its just a shame that governments on both sides often focus on the short term stuff, rather than what is best for the country in the long term.

Maybe the businesses with plummeting confidence should take a look at their customer / client bases. How much of their turnover has been based on customer / client debt?

What has the bubble been based on? Overdrafts? Business loans? Personal loans? Other loans? Interest free? Pay later? There's only so much debt people (sensible people) are willing to carry, and the banks are telling plenty of people they're at the limit .

Then, of course, there's been QE hosing money into global markets. And in New Zealand a cash pipeline running down from China. And, here too, the phenomena of apparently ever-rising residential house prices - a kind of housing helium.

If these conditions seem like sound market fundamentals to you, no wonder you're downcast. I suggest you shouldn't be in business.

Don't forget the part where a hell of a lot of New Zealand's businesses aren't real. They only exist to launder money and facilitate immigration scams. It's a vicious cycle screwing over the genuine businesses who can't complete with sham businesses who don't have to pay for labour, because they're being paid under the table for residency job offers, and who don't have to make a profit from customers, because only drug money needs to go through the till.

The markets must take this survey seriously. Following its publication, the exchange rate stayed exactly the same.

A survey provided by the main mortgage lender in country. Who wheeled out their talisman yesterday to talk down the economy and had it endorsed by a former employee with a name that people know probably better than the name of the new leader of the party who will somehow try and attach blame to a different party/government... Of course the markets haven't moved - this is a political move by old mates.... The markets will move when the foreign buyer ban goes through and that will be an evening to position yourself for as most of the fun will happen while kiwi's are asleep....

Robertson arrogantly dismisses the survey results as being simply reflective of bias despite being aware of their historically strong correlation to actual investment. The data he cites in support of his position that it is all a business community hissy fit, are lag indicators providing limited guidance on future trends. He is either being dishonest or more scarily doesn't understand the linkages and believes his own BS.

Housing was beginning to slow well before the election.
No doubt the current government's policies have had an effect on economic confidence. But is that such a massive problem given how unbalanced things had got in terms of workers' rights?
Economic confidence is important, but a government that is less obsessed with the economy and views the world more holistically is a good thing, in my books. Provided it doesn't go too far the other way.

when you grow the economy and bring unemployment as low as what National managed, you grow the tax revenue collected and you can spend more on education, health, welfare etc. Imported Food, Clothing, and Luxuries get cheaper relative to incomes and the poorest get relatively wealthier, their standard of living (on average) improves.

It is incredibly hard to make an economy work better, or improve anything in such a complex system as a country. If you lose sight of that and start bumbling around with hubristic ineptitude breaking a system that mostly works with poorly thought out ideologically rather than evidence based policy changes (every change will come with downsides in addition to whatever upsides it creates), then you are little better than a Bull in a China shop.

As for industrial relations: Labour market freedom is strongly correlated with increased prosperity for a country. Draconian labour laws make economies less competitive, kill growth and leave everyone poorer. They only people who benefit are a very few union members in monopoly service industries, and otherwise unemployed union bosses.


Strongly disagree.
Look at it from beyond your own privileged comfort zone. Not much fun working two jobs, 60 hours pw, at $16 per hour.
Ps you are right up to a point. There needs to be a balance between worker and employer rights.


This graph, derived from RBNZ data, explains it all. Spoiler alert! the decline in business activity was backed into the cake before Labour took office.

By late 2017 New Zealand had suffered the greatest decline in loan acceleration since the GFC. According to conventional economic theory this would have no impact on the macro economy, however according to modern monetary theory this would have a profound effect on the macro economy.

You can interpret the loan acceleration graph as follows – pick a point on the graph, if the number is negative it means that loan “growth” in that month of that year is less that in was the same month the previous year. This is nice because it’s seasonally adjusted just by virtue of the yearly granularity.

As you can see, housing loan acceleration is still in negative territory and that looks like it won’t change until about December 2018. The really interesting thing is that domestic housing loan acceleration looks like a strong leading indicator for business loan acceleration. Perhaps you could interpret that we have a housing driven economy. Look at what happened during the GFC. You could also infer that the real collapse in business lending hasn’t even happened yet, but it will if the past is anything to go by.

Interesting. Not really sure why a decline in loan acceleration would have no impact under conventional theory.

"macro economy"

In the case that you assume lending is a function of savings (or existing capital), the effect is neutral in the simplistic macro sense.

that's according to conventional economic theory. The spending power of the lender is reduced, and the spending power of the borrower is increased by the same amount. That's not the case if loans are created out of nothing. According to MMT aggregate demand in the macro economy equals "income" broadly speaking plus the change in debt. Steve Keen goes on about this all the time.

Exactly. But Key lovers won't understand a rational argument like that.

Well done.

This is a [expletive removed- Ed] disaster of epic proportions.

Totally self-inflicted by a short sighted, inexperienced government.

Should not have happened.


fat pat. Business community sentiment not pure bias then, after all. Robbo can't have been reading the same tea leaves as you.

He’s not reading the same tea leaves. I think GR is a conventional economist so to him lending is just a distribution from lender to borrower, and would have not impact on the economy.

Oh boy, bring back John Key & Bill English

Translation - "I believe another Global Financial Crisis is coming and the Coalition is solely to blame"

Chong Kee openly admitted the other day that the economy was an immigration/housing bubble driven ponzi under his leadership.


Business historically does not like a Labour led Government which I understand but that does not necessarily translate into a drop in GDP. The problem this time around is the business sector is really spooked by the proposed industrial laws that would take us back several decades. The oil and Gas future exploration ban has rattled everyone from both sides of the business and political sides. It displayed I believe the lack of understanding of how that would effect almost every part of the economy and contribute to NZ having to import oil and gas in the future and showed how much the ideology of the Greens is having influence over Government policy.NZF/WP also bulldozing his agenda of giveaways etc. We are in trouble and likely to go into recession but the effect on society of unemployment and job insecurity surely even the DGM's wouldn't be happy with that ! The lower social-economic part of society that Labour represents always get hit the hardest.

COLs are causing the business confidence to plummet no question about that. Bring back Sir John and BE!

Incorrect, if anything its a symptom of the over indebtedness of many wishful thinking individuals stuck at parties predictable end. Businesses would flourish if said individuals could still spend. Hello? It's now hangover time.

Over-indebtedness my foot !

While some have spent up large , many Kiwis have actually been paying down debt.

Ask David Chaston to run the numbers , the level of indebtedness is actually remarkably lower compared to the rest of the OECD

Correct DGZ

LOL thanks Yvil ^^

Its ok , we're just getting used to a govt that is actually doing things, after 9 years of turning a blind eye, and greasy talk.

They may not be perfect but they are better than the Party Of Oafs


"Doing Things". Jesus wept. Is there anything, anything at all that they have done or plan to do that will be positive for NZ's economy?

The Greens show every sign of wanting to somehow transport us to some fantasised arcadian social justice marxist utopia but with no clue as to how to pay for any of it. They daily illustrate their profound ignorance of human nature, history, economics, business, competition and science. They are an albatross around the coalition's neck.

NZF care about nothing but getting Winston 'Big Baubles' Bonaparte's ego stroked and splashing cash to buy themselves an electorate seat.

Labour just seem to be floundering due to lack of real world experience amongst their caucus with most of their Ministers doing a terrible job, Practically all of their ministers would have been demoted by now if they had been in any other NZ government of the last 40 years. Aspirations don't keep an economy going, and they are driven too much by nice sounding but practically flawed ideology rather than the focused hard-nosed pragmatism needed to keep the economy going with all it's internationally uncompetitive disadvantages. They desperately need to start focusing primarily on keeping the economy buoyant ahead of all their expensive and distracting social policy hobbyhorses.

If successfully executed Kiwibuild could be very good for the economy, as it will flatten out the volatility of the house building industry.

@Fritz , how so ?

The cost of building a house is what it is , and thats not about to come down anytime soon , unless of course we reduce wages , and stop the cartel from over-charging for materials

Then of course we have all manner of other fees , levies and charges so we can pay huge salaries to a bloated Auckland city council

So we need to stop Auckland council charging $20,000 for a water meter connection that is imported for under $300

And $250,000 to subdivide a single section .

Things are so far out of control , its never going to right itself anytime soon .

Philip II of Macedon to Sparta:
"You are advised to submit without further delay, for if I bring my army into your land, I will destroy your farms, slay your people, and raze your city."
Sparta's response:

Kiwibuild will achieve nothing but sucking more money out of NZ taxpayers pockets to subsidise a few lottery winners, house build rates are already at 30-35k per year, which is enough to keep up with population growth. The real problem is massive regulatory costs imposed by local govt on new builds - now accounting for around 25% of cost of a new house and setting an unnecessarily high (800k+ in Auckland) lower limit on house prices, when it could be ~600k. Central or Local Govt could fix the problem by winding the clock back 30 years on that in just a few months if they chose to (they won't as they are addicted to the fees).

This just about sums up the situation perfectly. This incompetence doesn't bode well for NZ. My gut says take a punt on the NZD going down to 60 cents, and recoup some of the money Jackshinda is stealing from you.

I know you're upset but did you really have to come out with your own spin on the "Taxcinda" thing? I haven't morphed people's names into insults since i was at primary school.


For an article on business confidence it would be good to get more comments from the horses mouth rather than all these assumptions. From my experience over the last 20 years owning a small business employing around 20 staff labour governments are good and bad for business. The good is opportunity to benefit from govt spending which does noticeably stimulate sectors of the economy and its up to you to chase it.

The Bad? Sadly you have no say in this. The previous labour govt landed employers with an extra weeks annual leave, compulsory kiwisaver contributions and rapidly increasing salaries in the public sector to compete against. They were the main ones from my perspective, the list goes on. This time we already have up to one weeks leave for domestic violence (that'll fix it!), increases to the minimum wage way beyond rate of inflation which all staff want to have reflected in their salaries, 90 day trial period gone for most, arbitrary disruption of oil industry (whose next?) , another round of hugely increasing public service salaries (nurses so far more to follow), and so on. What I notice with minimum wage increases is that it demotivates staff. It compresses the pay structure and reduces the rewards of promotions. Amongst my staff its often the ones who dont take up opportunities to work longer hours (these are people with minimal family commitments ) who ask for pay increases and often dont even work their contracted 40 hours per week.

Productivity is it the answer? Not always in NZ due to scale, high compliance and OSH requirements, distance to markets, biosecurity restrictions (no GM advantages thanks Helen) very slow to impossible process to import new organisms (thanks to very inefficient and underfunded MPI), RMA , Environment court, Anti-farming lobby groups, Higher interest costs to business than housing (hello?), high land values due to local govt planing (lack of) etc etc.

Fact is business is tough and not for the faint-hearted to put their savings and future on the line. Hard enough without the goal posts being shifted and the playing field being tilted uphill when we get a govt not appearing to care about the business community and held to ransom by the green party.

So do you blame us for going into hibernation for a while? Delaying capital purchases, consolidating or rationalising rather than expanding, not replacing staff, these are common sense responses to the signals from central government at this time. During the GFC we laid off no staff (hired none either) and took a huge hit to our own income as owners. Id like to think we could get some money out of the business for personal enjoyment one day however that comes after meeting the weekly payroll. Family gets a bit tired of being told no. Thank God for capital gains - hang on what did you say!?@#

dazz, In 2013, the National Government increased the employer Kiwisaver contribution from 2 to 3% here;

Business leaders now support increasing employer Kiwisaver contributions from 3 to 4% here;

Current Government have rejected the idea here;

Great comment, dazz. Along with kane02, you have real skin in the game and your intentions are likely shared by lots of similarly placed others. Comments from non-business owners tend to lack that from-the-back-pocket relevance. Hibernating, hunkering down, devoting what spare cash does happen into real assets rather than investments which can be OBR'ed or vanish in a puff of stock market droppery, is not a bad strategy at the minute....

Aunty Helen strikes again:

See - I told you lot what she's up to a little earlier in this story.
It won't be long before being straight will be something to be ashamed of.

Do you have something against homosexual people?

Big Daddy...

Please re-read the article. Your comments are below.. Not very clever at all. Stupidity though belongs on STUFF.. we are trying to maintain some very strict standards here on .. IQ minimum level at present is 30. We plan to raise it to 40 by August.. I'm really really sorry but the threshold is tomorrow and you've just missed out.. Enjoy Stuff.

Warning for others... we're going to 50 IQ points by end of August and Ed has free reign on idiocy from September 1st.

'See - I told you lot what she's up to a little earlier in this story.
It won't be long before being straight will be something to be ashamed of.' (Big Daddy)


I was just reading Dazz's post waymad and agree entirely with the sentiment/analysis. I am in the same boat.

My business both directly and indirectly supports around 200 families around the country. In order to shore up we stockpile cash, and withdraw investment. This is the only real logical decision when faced with so much uncertainly.

There are very real repercussions down stream.

Similar decisions are being made by other company Directors up and down NZ. We will survive. Been there, done that. I can't say that for everyone.

Sadly this same scenario seems to repeat itself with each successive labour government. Until NZ inc implodes.


And just another kick in the guts for small employers by this Labour led government - 10 days employer paid leave for domestic violence , first country in the world to force it on employers - thank you comrade Jacinda...


Would have been really easy to have govt pay for it, a minor cost for them, but pretty huge cost and disruption for an employer with only one or two staff. Net effect is to discourage employers (particularly small ones) from hiring people they view as at risk.

Coalition again not thinking things through.

And just another kick in the guts for small employers by this Labour led government - 10 days employer paid leave for domestic violence , first country in the world to force it on employers - thank you comrade Jacinda...

'And just another kick in the guts for small employers by this Labour led government - 10 days employer paid leave for domestic violence , first country in the world to force it on employers - thank you comrade Jacinda..'.

sorry Artemis.... Who was it that probably got the first kick in the guts?


I had to check this was not an April Fools Prank .

10 days leave for domestic violence ?

They really dont want us to employ anyone do they ?

So what that call to work sound like ?


What sort of society do you want to employ people form? Medieval England? Do you think they'll take up arms for you?

@Nic Johnson , I will be very careful who I employ in light of this.

To have to pay wages for ordinary sick leave ( which is seen as an entitlement ) , plus 4 weeks paid annual leave and now this .

Does the Government think money grows on trees ?

In any event domestic violence is a Social scourge , why should we have to pay more then we already do for a problem not of our making ?


But surely you don't really employ anyone do you? do you really? You can barely construct a sentence, so you must only employ cheap foreign labour that doesn't have English as their main language..... are you exploiting people below minimum wage?

No need to get personal , it weakens and takes the credibility out of your argument .

Our average salary in this practice is $80,000 p.a. , we have 12 staff half of whom are under 30 , and the average is pulled down by our receptionist who is on $50k .

And yes we are ALL Kiwi citizens


Based on your argument, I doubt you would consider employing females within the reproductive age range either, given the entitlements involved with pregnancy & maternity ????

Only the die hard CoLs supporters will deny that this Gov of inexperienced political newbies ( driven by activists, Unionists, and bitter opportunistic left extremists behind the scenes) are responsible for the downturn in business sentiments and confidence ...

Business has made it crystal clear in many occasions since October 2017 why they were unhappy.

the Gov failed to address these issues and kept repeating useless empty promises in every meeting with them using mouth pieces like GR and PT.

JA was aware of the " Big White Elephant" in the room early in the piece, and she clearly identified it , Yet she tried to use Auntie Helen's rough and tough tactics to shut business up and told them to Suck It ... it is what it is !!.

Well, I guess that didn't go down very well, and we have been going down the slippery slope since then.

The Elephant is coming of age and its strong growing limbs will eventually crush this CoLs ( and their clueless advisors) if they do not wake up and stop challenging its might. I do not wish this to sound as a threat, but a wakeup call for some Facts Of Life. .. Gov cannot work without Business support - Full Stop....

Business confidence is the barometer of how well the entire country will, or Not, perform in the following months.... It cannot be dealt with by bullying attitudes, childish seductions and smiles or ignorance.

GR and JA tried the small doses of morphine administration routine ( the one currently used to numb their mindless supporters ) .. obviously that didn't work and it's not going well at all - the result is clearly seen in the deteriorating confidence every month.

So the burning question is: We are at 10 years' low, where do we go from here? .. what's next? ... How low can we go ? ... and what happens when Business confidence deteriorates further next month ? ...

This CoLs does not seem to understand or get the message ... Maybe they think dictatorship is the way to go about achieving what they want and sooner or later business will come along! ... or let's make the most of it while we can !! ( something that we are seeing in the Unions behaviours)

Should this CoLs continue in this path, then they would have no one but themselves to blame for the humiliation of being thrown in NZ history rubbish bin --

They will only be remembered as the bunch of opportunistic fools who came under well known Political Brands ,mismanaged and misused the power handed to them by their voters and brought the country to its knees. Just like any failed sport's team, made of a bunch of stubborn losers!

The country will move on long after they're gone albeit losing good earned money and growing opportunities... And that is a Shame!

This CoLs forgets that Business stays and Politicians are the only ones who Come and Go. but when they Go in shame, they become damaged goods ... Ask Helen !!

Eco Bird I am printing out all your comments and stick them on my wall so that I can be energised on a daily basis reading them over and over again. You definitely sound convincing!!

@ anyone with half a brain, hence the over explanation in parts…

Does anyone remember where a fair chunk of tax (the country’s income) is created from?
Part of the willingness to abide by tax obligations (in other words respect the govt’s rule and have confidence in govt, social order even?) is the expectation that tax will be used for society sustaining or enhancing activities like:

An education system that actually educates its citizens that it is not ok to give the missus or hubby a bash for messing up the eggs.

A police force that can educate, deter, or prosecute offenders to a point that would reduce domestic violence.

An immigration education system that educates immigrants of New Zealand’s accepted domestic behaviour.

An alcohol policy that would heavily increase the cost of alcohol via tax from entities that take no responsibility for the negative outcomes of the consumption of the product they peddle such as wholesale outlets and supermarkets.
And for the benefit of any of you whom may be getting the DTs at the hint of this, lower the cost of alcohol in licensed premises like pubs and bars (controlled atmospheres), this may even create jobs, bar staff, security, entertainment? It may also lessen the effects and police burden of people pre-loading. It may also invigorate some of the happy party areas that have suffered in recent decades.

But no, let’s keep waffling on about poor productivity, and slug another anti productive cost with no benefit onto business. Business’s whom diligently pay their tax but are still left to “carry the can” for the failings of societies elected rulers / managers?

Oh, and what’s wrong with poor wee business? There is so much to be happy about, isn’t there? We promise that as the world economy slows down and things become tougher this will be the last time we will come to you to bail us out of the failings of successive government policy’s so cheer up!!

As someone with a considerable amount of capital committed to various private business ventures, I state from experience that business confidence surveys are treated as an important lead indicator and as such are a regular management discussion subject. Decisions on whether or not to commit more capital are often finely balanced and it sometimes takes little to tip votes into the nay basket. Robertson dismisses the results as irrelevant. He should sit around our board tables and listen to a bit of reality.

How does an economy stall anyway ??? Do we stop buying our bread and milk or something.

No we still want to buy bread and milk but the company we worked for went broke, the value of the house has dropped and I cant make repayments on the inflated mortgage that I got into cause everyone else was doing it at the time, and being from the building / property sector no one’s hiring and when I went to the dole office it was packed so my application is gunna take a bit longer than usual, so in fact the only thing I can afford is bread and milk.

you forgot "the sky is falling".
To be in that position you would to have had to taken your mortgage out before the equity restrictions came in , and not improved your position since. Which has little to do with the current govt..
I would suggest most peoples perception is that if property prices aren't rising, the economy is doing badly.
Unless you are speculating in property , lower property prices actually has very little effect. if your selling a property , your genrally buying another one , so it evens out.