Clark's friends in high places

By JIM EAGLES business editor

The country's top business leaders are not too bothered by the prospect of another Labour-led Government.

Some even hope that in a second term, Prime Minister Helen Clark might feel able to be more growth-friendly than in the first term.

But business would be appalled if Labour ended up in coalition with the Greens.

This month's Business Herald survey of senior business leaders shows that - on a scale of 0 to 10, with 5 being neutral - a Labour election win rates a mildly positive 5.2.



The prospect of Labour having to go into coalition with the business-unfriendly Greens rates a strongly negative 2.2.

The preference in top business circles would be for a National government, a prospect which rated 6.4, or a National-Act coalition, even better at 6.6.

That is presumably because business leaders believe Labour has been somewhat anti-business and anti-growth in its first three years.

The business leaders survey rates the impact of Government policies on the business environment as 4.4, down from 4.6 the previous month.

Asked to identify the biggest constraint to economic growth, about a quarter named taxes, another quarter the size of the state sector (which is almost the same thing) and another quarter compliance costs.

A number of respondents said interest rates and the exchange rate were problems, and some were highly critical of the Reserve Bank.

But overall, the bank's impact on business was rated as a moderately positive 5.4, up from 5.1 the month before.

The business leaders had a positive view of the business environment, rating it at 6.25, down from 6.4 a month before.

They were also reasonably positive about the environment in the next 12 months, rating it at 5.7, up from 5.3 last month.

And most were optimistic about the prospects of their own businesses, rating their likelihood of them expanding over the next year a remarkable 7.6.

But, with Labour apparently heading to victory, the business leaders are crossing their fingers that having broken the bogey of winning a second term, Clark will put more resources behind the rhetoric about economic growth.

Asked what should be the priority of the new government, a third of those surveyed said economic growth. Others referred to leadership and economic leadership.

One executive said the incoming government should acknowledge that "the social agenda relies totally on economic growth for it to be sustainably affordable".

Another said it was essential for the Labour-led government to "continue to be business-friendly".



The same message was delivered in Business Herald interviews with the chief executives of four of the country's major companies - Craig Norgate at Fonterra, Theresa Gattung at Telecom, Chris Liddell at Carter Holt Harvey and Greg Muir at The Warehouse.

All believe it is essential the country go on a crusade for higher growth.

Norgate says few people realise how far New Zealand's per capita income has fallen behind Australia's in the past 10 years.



"Unless we change faster we are going to fall further behind.

"A few years down the track, we will have a crisis when people wake up and realise that we can't afford the sort of services that other nations have."

Muir is worried that New Zealand, like the All Blacks, seems to have lost its competitive edge.

"I don't think there's any reason we can't get it back but we need to be a lot more focused and determined and aspirational and outward looking."

Liddell believes the country will have to change the way it does most things if New Zealanders want to preserve their quality of life.

The Labour-Alliance Government took some steps in the right direction, he said, "but we need to do it faster, smarter and with more resources".

Gattung said business opinion was divided between those who feared Labour would return to its socialist roots and those who hoped it would put some weight behind a growth strategy.

Describing herself as in the cautiously optimistic camp, she said: "After the election, the Government will have the opportunity, it has the intellectual wherewithal and I think it has the bottle. I hope I am right."

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