CEOs urge action on energy

By FRAN O'SULLIVAN, assistant editor

New Zealand's top chief executives have warned that a looming energy crunch could hinder prospects for investment and economic growth.

The Mood of the Boardroom survey, published in today's Herald, reveals they want the Government to avert a future crisis.

The Herald survey, in association with Business New Zealand, canvassed 300 chiefs of major companies through to the heads of small to medium enterprises.

The country's rapidly diminishing gas fields and the potential for another electricity crisis are concerns for companies at all levels.

Fonterra chief executive Andrew Ferrier said the major issue facing his company is not regulation, but energy. "We have 29 plants in New Zealand that run on natural gas. If we had to convert those to coal over the next 10 years we would spend a huge amount of capital for no real benefit for our farmers whatsoever."

Fletcher Building chief executive Ralph Waters said the "one-in-50" -year scenario that governments had used to explain away recent electricity crises "was a myth". And Carter Holt Harvey chairman John Maasland warned that energy shortages might affect investment.

Among major surprises is the huge support from top chief executives and company chairpersons for a "single market" with Australia, being promoted by Finance Minister Michael Cullen. Support for Dr Cullen's proposals for joint competition and securities frameworks and accounting standards topped the 80 per cent mark. There was also considerable support (60 per cent) for controversial proposals not yet on the transtasman agenda such as a common currency and combined stock exchange.

But nearly 80 per cent were opposed to full political union.

There was strong support for Government initiatives to forge free trade agreements, the recent land transport funding package, and skills and tertiary training initiatives.

But 90 per cent of respondents said the Employment Relations bill introduced by former Labour Minister Margaret Wilson just before Christmas would adversely affect productivity and growth.

Herald investigations have disclosed that Prime Minister Helen Clark has indicated to some of the country's top CEOs she may be prepared to temper the legislation after the select committee reports back to Parliament.

And the strong kiwi dollar is a particular worry for SMEs, who want a cut in the corporate tax rate.