Businesses sick of waiting at altar for Government

Public-private partnerships have been much-touted butslow to materialise, say sceptical business interests.

The Government and businesses need to speed up the courtship phase and finalise their nuptials if their partnership model is to bear fruit.

Despite a plethora of charm offensives, talkfests, steering groups and confidential forums in the past two years, chief executives believe there is little evidence to show the concept is working.

Nearly 90 per cent of the 55 chief executives who responded to the Herald's survey said the politically promoted model did not exist.

Several senior business figures claimed that the Government had "tame favourites" who had the limelight and inside running.

Even those who automatically go on the invitation list when the Government wants to do business are showing signs of disenchantment.

But fewer than a third of survey respondents were prepared to talk on the record.

Deutsche Bank's Scott Perkins, who is on the "A list", said the Government should be encouraged to liaise with business, as the state sector was not generally very experienced with business.

"However, the normal rules of probity do apply. This reduced the scope for special interests.

"The Government should also in its political dealings demonstrate that there is no scope for political special interests and the merits of rigorous, well-informed, factually based policy analysis should drive policymaking."

Perkins cited LEK's immigration initiative and Boston Consulting's foreign direct investment study as examples of the partnership model that produced world-class analysis.

He has a point. LEK's recommendations for talent visas and other mechanisms to attract world-class immigrants are being implemented. But a large lump of the FDI report's main planks have been ignored.

Ports of Auckland's Geoff Vazey said the model was working "considering it only really started about two years ago".

But chief executives' overall impression was that if it is working - which they fundamentally do not believe to be the case - it is in select areas only.

Michael Winter, from burgeoning IT company The Atlantis Group, was blunt.

"It's all talk and no action whatsoever. There has been much interference and manipulation from the Government recently."

Another saw the process as a "soft engagement model aimed at short-term management of business issues out in the public domain".

"The Government has a limited appetite for confronting restructuring issues based on 'Why do we need to? Our position is secure without a credible opposition'."

Business leaders were conscious that they stood to become a target for political point-scorers if the partnership model is not clearly defined.

National leader Bill English's recent charge that some business leaders' coziness with the Government is at the expense of the wider commercial community's interests has clearly pricked a nerve.

"Bill English's point to the Institute of Directors was reasonably valid," said Deloitte chairman John Hagen. "But you do have to get on with these people.

"If you are trying to negotiate something, calling them a 'bloody idiot' or telling them they are 'absolutely mad' just before isn't a very good idea. That's what the Rugby Union did and look at what happened to the World Cup."

Northern Employers and Manufacturers Association chief executive Alasdair Thompson agreed.

"But I am highly peeved he implied our organisation was under the Government's thumb. I don't know any organisation apart from Roundtable which has been more forceful in opposition."

Hagen said business still must fight for the policies it believed in.

"But it is difficult. There are not many people who are prepared to take a position that the Government does not like because they think 'Somewhere down the road I'll get kicked by the Government'."

Thompson added: "I don't think the relationship between business and the Government is crash-hot at all.

"We have seen a number of organisations such as the Business Council for Sustainable Development and various business leaders who have tried to have an amicable working relationship with the Government in order to influence certain directions - I think many of them are somewhat disappointed that their supportiveness for the Government has been used for it to claim endorsement from the wider business community."

Business Roundtable executive director Roger Kerr warned that the Industry New Zealand style of picking winners (or rewarding losers as Act NZ claims) took the focus off neutral policy settings and policies that were hurting business, such as the explosion of industrial and employment legislation.

Business New Zealand's Simon Carlaw took part in the recent Government-Large Business confidential forum, but his organisation's 20-point recipe for growth has been largely ignored. "Too many anti-business aspects to legislation are being passed or proposed," said Hagen.

A head of a large manufacturing concern stressed that the Government must take a stronger strategic stance on the policies that matter: investment incentives and tax rates.

The Treasury is aware of the issue. It cautioned the Government this year that a growth and innovation policy, which encourages specialisation in a few parts of the economy rather than having a spread-out economy, carries risks.

There is not a lot of empirical evidence to link this with improved economic performance, the Treasury said.

"A targeting approach can infect the general business climate with greater uncertainty about which sectors are, or will be, in favour or not with the Government.

"It can divert firms from growing their businesses to lobbying for assistance."

Alstom's Geoff Hunt said simply that policies leading to growth would automatically provide the best environment for business.

Beca's Gavin Cormack said he had yet to perceive an effective partnership across the areas covered by his own international consulting business.

"The advantages some are receiving will undoubtedly be at the expense of others.'

Chief executives were concerned that efforts to establish public-private partnerships (PPP) to invest in infrastructure projects, along the Australian lines, were being frustrated.

Former Television New Zealand chairman Ross Armstrong's gaffe in offering "first-mover advantage" to potential investors was seen as a setback.

The lack of real progress on roading was typically described as "woeful", but the Government needed to look wider than transport.

Minter Ellison special counsel Lex Henry said the solution was to widen the engagement.

The chief executives' sentiments should tell the Government that it needs to make discussions more transparent and broaden the engagement if the model is to work.

Both sides tried to form a working relationship after a disastrous fallout in 2000 over industrial legislation.

But the overall impression seems to be - as one respondent summed up - "of two silos with very little crossover".

"Until there is a shared and agreed vision between the two, this will continue."

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