Prime Minister doubles down on business confidence, says 'no grounds' for uncertainty

Tuesday, 7 August 2018

Prime Minister Jacinda Ardern has continued her 'push back' against low business confidence, playing down concerns around areas including labour law reforms.

The Prime Minister's in complete denial and is ignoring the issues surrounding low business confidence, says Simon Bridges.

The National Party leader lobbed these allegations in Jacinda Ardern's direction after the Government doubled down on its battle on the subject.

Ardern dismissed employers should be worried about the looming with changes to New Zealand employment laws - suggesting the concerns were centred on clauses relating to rest breaks, and was keen to listen to feedback.

Since Monday afternoon Ardern has played down the significance of surveys showing corporate confidence was at its lowest level since the global financial crisis, by pointing to indicators that showed the economy was performing strongly.

**READ MORE:

Simon Bridges says Prime Minister Jacinda Ardern needs a reality check about New Zealand's economy.

* Prime Minister's business confidence push back: 'I'm interested in the reality'

* Minister says campaign against labour law reform is 'deliberately misleading'

* Treasury urged Government to delay creating Jim Bolger-led working group**

A slump in business sentiment, a cooling housing market and trade war fears are seen as risks to the economy and the tax take.

But Bridges believed the real consequences of low business confidence left unchecked had already begun to set in.

Members of the BusinessNZ network including the Employers and Manufacturers Association and Business Central have run a vocal campaign against the Government's Employment Relations Amendment Bill, while on Sunday NZ First Minister Shane Jones said he believed employment law changes could be behind a lack of willingness by businesses to invest.

Speaking ahead of her weekly caucus meeting, Ardern said there was no cause for concern.

'I generally am interested in hearing that feedback from business - what is driving some of that sentiment. If it is things like bringing back rest and meal breaks then yes, I do want to hear about that,' Ardern said.

'But we've got to make sure that we're constantly striking that balance; creating the environment where our businesses thrive and at the same time, seeing workers wages coming up, because actually, that helps our economy too.'

Bridges said Ardern's arguments did not stand up. 'In terms of perception the Prime Minister's saying the numbers are all fine, it's all going to be good. Well that doesn't bear any scrutiny,' Bridges said.

'If you go through it, growth is falling and we've seen Treasury belatedly get to that point. We're seeing unemployment rise, we're seeing employment go backwards with about 10,000 new jobs a month to about 4000.

'We're seeing literally every sector you could name, whether it's retail, or it's manufacturing, whether it's construction, all of them now on the numbers are going backwards.'

Meanwhile, the world economy was growing by 4 per cent and Bridges said while headwinds were coming - America was 'booming', Australia had higher growth relative to New Zealand and business confidence there was at a 30-year high.

'Jacinda Ardern and Grant Robertson need to get out, they need to listen to businesses. And on the back of that, come up with a reset and real action that will turn this around.'

Finance Minister Grant Robertson said it paid not to get 'too fixated' on monthly economic indicators. That was after Treasury downgraded its forecasts on Monday.

'Clearly the view still is that over the forecast period, we should be averaging 3 per cent growth - that's a solid result. It may be that in this year - it already was forecast to be a little under 3 per cent - it may be that they revise that down a little.

'But I'm confident about our long-term plan for the transition of the economy,' Robertson said.

National finance spokeswoman Amy Adams said uncertainty over industrial law reform was having a real effect already, and until the Government recognised the economy was turning in the wrong direction, forecasts would continue to deteriorate.

' One per cent less GDP growth is about $800 million a year in revenue, and that doesn't even start to account for the impact on workers and wages.

'That's going to put real spending pressure on the Government - if GDP drops 1.5 per cent, that's well over $1 billion a year less money that Grant Robertson is going have to spend - he's already spent it,' Adams said.

John Milford, the chief executive of Business Central and the Wellington Chamber of Commerce, said he was not sure what Ardern was referring to in her comments on rest and meal breaks, which were not part of the 'fix the bill' campaign which he has been part of.

Instead, the employer groups had urged the Government to abandon clauses which would allow union officials to enter workplaces at any time, the requirement to be part of multi employer collective agreements, force the settlement of collective agreements and especially the plan to abolish 90-day trials for businesses with more than 20 employees.

Milford was adamant the trial periods gave employers the scope to consider employees which they would otherwise refuse to hire.

'That, we believe particularly strongly is needed to allow Kiwis a chance. It's not there to create new jobs, it's there potentially to give people the opportunity and we think taking that away will be detrimental.'

Workplace Relations Minister Iain Lees-Galloway has already begun pushing back against the business led campaign, which he has claimed is partly responsible for the fall in business confidence.

Lees-Galloway believed most of the claims in the campaign were factually inaccurate.