Infrastructure and power generation are key concerns

Doug Heffernan

Looking beyond short-term cyclical factors there are concerns in the boardroom about more structural factors such as infrastructure, longer-term energy supplies and an increasing tendency of the Government to want to pick winners.

"We go through a cycle and you can't do anything about that," Rob Cameron of merchant bankers Cameron Partners said. "But if you are worried about economic growth three or five years out, the concerns we are hearing from our clients relate to infrastructure - whether it's transport, energy or water - and how they react with property rights, network operator rights and with the Government's policy ambitions over the management of the environment."

The question was how the Government set a policy environment that gave certainty for people making major investment decisions. "Or is the Government going to do it all?"

Doug Heffernan, chief executive of the State-owned electricity generator and retailer Mighty River Power, worries not only about the state of the national grid but, longer-term, where the energy to keep the turbines turning will come from.

"In the electricity space up until a decade ago we had almost a century of fuel surplus. While things are still pretty good until the middle of the next decade - largely through renewables such as geothermal and wind, but also e3p [Genesis's gas-fired plant at Huntly] - the big challenge I see is further fuel for electricity beyond then," Dr Heffernan said.

Neil Paviour-Smith, managing director of sharebrokers Forsyth Barr, said: "Issues around personal tax, incentives to work and welfarism gnaw away at business, as do compliance costs and getting through the quagmire of regulation over development that is inhibiting infrastructure development."

He is wary of returning to policies like tax credits for export market development and the Government picking winners.

" There are New Zealand companies which have demonstrated they can compete on a world stage. And we need to be realistic that there may be industries which are just not competitive for reasons of scale, distance or whatever."