Business advisory council members will be key to its success

Tuesday, 28 August 2018

PM Jacinda Ardern announces a new business advisory group at a business breakfast in Auckland.

OPINION: This morning, the prime minister openly acknowledged the growing disconnect between business and government, and announced the creation of a Business Advisory Council to build a closer relationship.

Over recent months, business leaders have become increasingly concerned, with some comparing the current climate to the winter of discontent experienced by Helen Clark's government in 2000.

Business leaders are worried by rapid changes in policy direction in certain areas, while decisions are delayed and outsourced to numerous working groups in others; by the anti-business rhetoric coming from some ministers; and by the hijacking of the government's attention by labour unrest in the public sector, the likes of which have not been seen for 20 years.

Declining confidence is a response to increased uncertainty in the business environment, and it couldn't come at a worse time.

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Air New Zealand chief executive Christopher Luxon will lead the council.

While economic indicators are still positive, we are nearing the end of a long cycle of growth, and many are speculating that global growth will soon begin to slow. To be resilient, New Zealand's business and political leaders need to be on the same page.

Appointing Air New Zealand chief executive Christopher Luxon, arguably New Zealand's leading chief executive, to head the council is a positive signal that the government is listening.

Prime Minister Jacinda Ardern needs to keep business leaders on side.

But, the move may be greeted with scepticism by those already critical of the numerous working groups set up by the government. Key to the success of the council will be who is appointed and how influential their advice is on policy-setting.

The composition of the council will be important and will tell us more about its purpose and direction – and ultimately whether it will help foster economic growth and employment.

A good balance between big and small business is vital. Hopefully entrepreneurs, innovators and start-ups operating in the IT and the STEM fields will be well-represented on the council. These are the businesses that New Zealand urgently needs to encourage in order to diversify our economy away from low-value-added commodities and tourism. On the other hand, if the council is dominated by large, established corporates, then the council may be seen as just another channel for lobbying and corporate welfare.

Professor Rod McNaughton is deputy dean of the University of Auckland Business School. Ryan Greenaway-McGrevy is a senior economics lecturer.