Cry for Government leadership

By JIM EAGLES business editor

Auckland businesses want stronger Government leadership after the terrorist attack on the United States.

A survey carried out by the Auckland Chamber of Commerce, in conjunction with the Business Herald, found business expectations have fallen sharply over the past month.

Chamber chief executive Michael Barnett said the survey showed that "the impact of this has been huge and obviously underestimated by the Government".

Its results were reinforced by anecdotal evidence that many businesses had put plans on hold.

"Travel plans have been stopped, employment halted and investment decisions canned."

He said the most startling finding was the widespread call for stronger leadership from the Government.

"I am overwhelmed at the number of responses that urged the Prime Minister to address the nation directly and to acknowledge the uncertainty and despair that is affecting many New Zealanders.

"The impression I get is that while businesses do feel the economic outlook has changed for the worse, they also feel it doesn't have to be that way and are looking for a lead from the top on how to fight back."

The survey, sent out to members on Monday, produced 400 responses within five hours, with hundreds more pouring in later.

A large number carried unsolicited pleas for a more active Government approach to the crisis.

"This is a real wake-up call to our Government," Mr Barnett said.

The survey found that about half the businesses involved expected to be affected by the terrorist attack.

Of those who responded, 57 per cent were expecting a negative effect on their operations, and 43 per cent expected no impact.

Sixty-seven per cent said they were less confident, 26 per cent indicated no change and 6 per cent said they felt more confident.

A similar response came when the decision makers were asked about their expectations for their businesses during the next six months.

When the same question was asked a month ago, the rounded figures showed 63 per cent expected things to improve, 29 per cent thought they would remain the same and only 7 per cent expected they would deteriorate.

But by this week the number expecting an improvement had fallen to 27 per cent, 42 per cent thought they would remain the same and those expecting a deterioration had jumped to 31 per cent.

On a more positive note, nearly half thought their businesses would benefit from the unexpected rate cut announced by Reserve Bank Governor Dr Don Brash.

But, in what emerged as the key issue, business gave a lukewarm response to the Government's handling of the crisis. Only 2 per cent thought the Government's handling of the issue was very good and 20 per cent rated it as very bad.

Exactly 50 per cent thought the Government's performance was neither good nor bad, 20 per cent rated it as good and 4 per cent as bad.

Asked if there was any one thing that could be done to boost the economy and business conditions, the responses had three main themes:

* For the Government to show more leadership.

A huge number of respondents wanted the Prime Minister, in particular, to "provide motivation and encourage a resumption of normal business" and to demonstrate "a clear vision for the future".

* For urgent action to sort out the position of Air New Zealand.

Although Air NZ was not mentioned in the questionnaire, a high number of returns urged the Government to "clear up the Air NZ fiasco", "be decisive with regard to Air NZ and its shareholders", "provide a quick solution to Air NZ's problems."

* For the Government to cut taxes and create a more favourable business environment.

The largest number of suggestions was for a cut in company taxes, but several respondents urged the Government to go ahead with its suggestion that capital works might be brought forward, and a significant number wanted measures to create a more positive business climate.