Prime Minister Jacinda Ardern sets up a Business Advisory Council chaired by Air NZ CEO Chris Luxon in the Government's latest attempt to woo the business community

Prime Minister Jacinda Ardern sets up a Business Advisory Council chaired by Air NZ CEO Chris Luxon in the Government's latest attempt to woo the business community
Jacinda Ardern by Jacky Carpenter.

Updated by Jenée Tibshraeny

Prime Minister Jacinda Ardern has enlisted one of New Zealand’s biggest companies to try to help restore the confidence of Kiwi businesses.

In a major speech to business leaders in Auckland on Tuesday morning, Ardern announced the formation of a Business Advisory Council.

Its chairman will be Air New Zealand CEO Christopher Luxon. Its membership is yet to be determined; Ardern envisaging it having 10 to 15 members. 

Ardern said the Council would provide “high-level free and frank advice to the Prime Minister on key economic issues". It would "create a vehicle to harness expertise from the private sector to inform the development of the Government’s economic policies".

Speaking to media after the breakfast, Ardern denied the group was just another "talk fest".

“To date, the way that we’ve taken on board the views of the business sector has been ad-hoc. I want to put more structure around it...

"We engage in meetings with the business community… But like we have with the local government forums, I’ve seen benefit in actually formalising those arrangements, co-designing some of the areas where we might work together, and having that formal structure.

"[It] works well for local government, I think it’ll work well for business.”

An issue of certainty

The formation of the Council follows a string of bad business confidence surveys; the most recent revealing firms' optimism about the economy is at the lowest point since the Global Financial Crisis.  

When speaking to the business community previously, Ardern labelled falling business confidence as “the elephant in the room.”

But today she said: “It is not the elephant in the room, it’s a flashing great neon sign with giant lights and fireworks going off behind it. We are all talking about it, and there is nothing wrong with that.”

She previously spoke of “the business confidence paradox” - the fact that despite economic growth being strong under Labour Governments, business confidence has been weaker than under National-led Governments.

Today Ardern moved away from that rhetoric.

“The overall sense I have is that it would be wrong to oversimplify this survey and just call it out as being about party politics, just as it would be wrong to ignore it.”

She said the main issue businesses have is not with confidence, but with certainty. 

“We do need to provide certainty. We also want to provide an opportunity for us to work collaboratively with the business community. Whether or not that changes business confidence numbers is yet to be seen.”

Just another working group

National Leader Simon Bridges is not convinced, slamming the Council as just another working group that won’t fix the problem.

“This is a Government that believes it can talk its way out of anything – but instead of trying to shout over the conveyor belt of weak economic indicators they should be taking concrete steps to change their anti-growth policies," he said.

The Government has previously made other moves to work with the business community.

In a pre-Budget speech, Ardern launched the Tripartite Future Work Forum which brings together Government, business and unions to help “future proof the economy.”

And last month, the Minister of Small Business Stuart Nash unveiled a Small Business Council which will help the Government develop a strategy to “drive improvement and innovation in the small business sector.”

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36 Comments

11
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Yes, another working group a Business Advisory Council.
Why is it needed?
Because this government has absolutely no idea about business whatsoever!
They are hopeless and if you can not see this by now you are deluded!

Can't see that any further comments will express it better. For my business, the PM and her gang of incompetents are the 'elephant in the room'.

then maybe you are in the wrong business (sector) unless its repo? in which case Im sure having National tank the economy is a god send.

10
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I dunno, I am 42% up in sales so far this FY. Things are fine thanks.

Edit : I really dont care who the government is, I just get on with it. The rules may change slightly, the currency may fluctuate, I just sell stuff.

I will disagree with you here, usually when a Labour Govn is in power businesses do better as more money is spent. However yes this is a waste of time as most businesses are SME's but we get a chair who runs one of the biggest yet again. This will achieve zero as they at most will push for regulations etc that benefit them and not the small guy.

regards

Well said Steven, Air NZ have a vested interest in protecting their monopoly and a track record of predatory business practices. An SME representation would better serve to provide that representation.

10
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Why are they even bothering to pander to these disingenuous crybabies? The tantrums and bleating have eff-all to do with actual business and everything to do with sore loser sour grapes. Just ignore them, and if they want to stop whining and put on their Big Boy Business Pants at any stage, there's nothing stopping them.

Exactly. Accept that the majority of business people don't respect or accept the Government and get on with the agenda. Taxinda can't jawbone her way past this, just accept it for what it is.

I assume she wants to be more than a one-term government.

Absolutely, it's not as if this lot have other options outside politics.

This “working group” just reinforces that JA and GR really have no idea how business works. She is effectively distancing herself, and putting a third party in place. More BS. At some point JA will need to take heed of the economic data, rather than bury her head in the sand. From what I am seeing most reports are fundamentally negative. Quite the reversal from 12 months ago.

and this externally driven negative outlook and recession was coming anyway, (even accelerated by Trump), so which ever political party is in power simply doesnt matter to the event, just how bad it will be.

Or people like you could accept that global growth is up against the ceiling and that we are watching it start to falter.

And you could agree that doing more of what we are doing - given that it's already the problem - is a stupid idea.

Then if you have future-useful skills (and the majority of current skills probably aren't) start spreading them around.

pdk. The issues facing nz right this minute are mostly domestic. They are the result of a government trying to ram through policy, without due consideration. Nor do they allow business the time to plan and absorb. The end result is nothing happens.

The competitive edge that nz had, is eroding by the day.

Only yesterday I spoke to a client who is contemplating pulling out of nz and relocating offshore. Frankly I don't blame him.

What economic data? They're getting rid of departure cards which were a quick way of forecasting immigration trends. Now we'll have to rely on outdated statistics that confirm what we already know.

https://sciblogs.co.nz/the-dismal-science/2018/08/27/tossing-away-valuab...

They're hiding the data. These kind of statistics are what I'd expect from the National Party, China or Swed-istan.

Speaking of burying one's head in the sand, how is it you missed what people were saying about the outlook over the last couple of years? E.g. https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=118...

How'd you miss all that discussion?

Many commentators have been highlighting the perils of sort-of growth based on QE, pulling foreign money into housing, and running immigration at twice the OECD norm as a short-term sugar rush.

Surely rick you can see this for what it is - a sideshow. You have bought it hook, line and sinker.

Regarding transitioning the economy which is another subject matter, and discussion, I like most kiwis worry about high debt levels, especially in the housing sector. However there are ways to transition without blowing the economy apart. If JA et al had some experience they would pause and let business adjust. We have policy overload.

Taxinda is naïve enough to think that businesses will buy the "transition into a productive and high wage utopian economy" BS that she successfully sold to her voters in 2017.
Worse, the government's actions absolutely contradict their pre-election stance on all things business.

What about some alternative surveys? "Millennial confidence" or maybe "Permanent motel and automobile residents confidence". I wonder how such surveys would have fared during National's reign of mediocrity.

And you left out this quote from Ardern by the way:
"For instance, average business confidence scores under the Clark/Cullen Government were much lower than the Key/English Government, despite Clark and Cullen delivering higher average growth, lower unemployment, lower debt, larger surpluses and stronger wage growth than their successors,"

11
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Let's count Fings Wot Scare Elephants:

  1. IR legislation with collective bargaining, unions back in the mix, and the rise of contemporary Con Devitts to lead 'em.
  2. The TWG, headed by none other than 'Rick Pricks' Cullen, coming to a Deep Pocket near You...
  3. The Zero Carbon chatter, with the O&G fiasco as proof that yes, Virginia, the Gubmint can shutter entire industries on a whim.
    One-two, one-two and Through and Through, the Vorpal Sword went Snicker-Snack.
    They left it Dead, and with its Head, they came Galumphing Back.
  4. The continual mis-steps in relations with Australia, starting fairly much on Day 1 with the idealistic, unrealistic urge from our esteemed PM to 'open the gates'. Oz is only a major export destination....
  5. A splurge on social spend which essentially ensures that Votes stay Bought, but which removes the opportunity to use that same spend on productive, innovative and other buzzword-du-jour purposes which could have had long-term posidives.
  6. The raising of wage expectations right across the spectrum, which while it started in the public sector, will inevitably upset relativities everywhere including in the private sector, and raise the labour expense lines of most businesses. Perhaps it won't end up in a classic wage-price spiral but there's a lot of water to go under That bridge. More labour expense against fixed or declining sales = less profit = less tax revenue, but with a 6-18 month lag....
  7. The demonisation of entire industries on the basis of sound bites: dairy, plastics, fishing, horticulture. All have reason to worry about their future when dramatic, selective news items highlight the Latest Outrage, and the Gubmint jumps on the bandwagon and mulls over Yet Mo' Regulation. And given the economic position of these - large exporters, internal economic multiples in the teens - hunkering down and zipping wallets means sudden death to some suppliers, contractors, employees, and so the ripples spread outwards.

And, Oh Frabjous Day, Calloo, Callay - we now have Working Group #166 to - er - Work on all of this.

10
up

Well written. The COL means more tax, more regulation, and the nightly news filled with inane virtue signalling and social justice warrior announcements. If that's your cup of hemlock, drink deep.

Yes, Jacinda's teeth in the cartoon aren't quite right, are they, the incisors should perhaps be a tad longer. Beneath the smiles and good sound bites some daft ideas lurk.

Goodness me, the harping on from votaries who forget that working group numbers have been very much the same for Labour as they were for National, and that Key had his pet Jobs Summit.

One can only assume that these commenters also believed such things showed National had no clue what they were doing either. Surely.

Surely, they're consistent and not just whiny?

I'm a business owner and I'm just so excited about the minimum wage going up to $20 especially as I am having difficulty finding skilled staff, paying unskilled retards $20 has me brimming with optimism in the brave new world. Capitalism has failed long live the ever and everywhere successful socialism!!!!

Totally. I am so excited about gambling with my company's finances and reputation when hiring a new person, now that the 90-day trial period is off the table and we are stuck to deal with whoever we recruit under labour laws from the 70s.

Surely, you could do a better job of recruiting the right candidate..

What kind of business, skudiv, and where? I'm sure there will be lots of folks in here who know good, skilled people that are looking for permanent, full time employment.

My guess: a Property Maintenance business in Auckland.

With the attitude he has demonstrated to employees?.. Not likely.

With an attitude like that, I'm not surprised you ran your business into the ground. Don't let you own door hit you on the way out.

A fairly funny comment, but your first sentence stuck out to me.

If you are having difficulty finding skilled staff, shouldn't you offer more money? I mean isn't that what the market is all about?

Laughing as the night JK was voted in, I asked a Senior member of the party "So, what is the plan?" to which I received a belly laugh and "There isn't one". We now know there was and it certainly wasn't in the interests of the existing population.

Comparing the period in the boom leading up to the GFC with the busy after seems somewhat disenginious to me. Shouldn’t she be comparing the relative performance of NZ to the rest of the world during the terms of the previous 2 governments instead?

Let's hope that the business council has a big dose of SME representation, and won't just be a vehicle for the big end of town to put their hands out for some Joyce-style crony capitalism.

Regardless of what happens, you can bet the whining noise on here will only increase. Facts don't matter too much - e.g. the whines re working groups when the parties are basically the same in that regard.

"Mr Luxon this is your largest shareholder here. Listen I was wondering if you can you do me a favour? All the hard working kiwis are leaving to Australia. It's like they don't like my fuel taxes or something. We need to get rid of those departure cards so I can sweep this under the rug for 17 months. No statistics no worries. It worked for Key it works for me.
Maybe we need to look at a jet fuel tax so your planes stay on the ground. You think Rolls Royce are problematic?
Also Grant was saying something about using AirNZ bonds to take on debt in a fiscally responsible way. Can you get in touch with him about that. I don't really understand what he meants as I don't do economics but yeah nah let's do this. Sorry I have to go Chris little Neve-Te-Aroha-Ardern-Gayford is trying to feed on Gayford's moobs again."

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