The Government can't keep ignoring business anymore. It can't keep pretending it isn't to blame for our economic downturn.
That's what this government likes to do. Whenever anyone asks, Finance Minister Grant Robertson blames the global economy.
He is right. Sort of. The whole world's losing steam. And we'restill doing well compared to most. But global headwinds aren't the only reason our growth has close to halved, from 4.1 per cent to 2.1 per cent in three years.
Two information releases this week put that theory firmly to bed.
The first was the Official Cash Rate decision. On Wednesday, the Reserve Bank laid part of the blame firmly at the feet of the Government. It said low business confidence is "impacting investment decisions", and that businesses feel gloomy partly because of "policy uncertainty".
The second sucker punch to the Government's not-me defence was the Herald's Mood of the Boardroom. It was brutal. It tore shreds off the Government. Businesses say they're frustrated by government policy, government delivery of its policy and - just to back up the Reserve Bank - uncertainty over government policy.
The top four concerns? Congestion in Auckland, infrastructure constraints, skills and labour and policy uncertainty. All four are problems created or exacerbated by this government. How does the international environment rank on the list of worries? Sixth.
The top two concerns - Auckland congestion and infrastructure constraints - are a biggie. 86 per cent of businesses said they wanted more roads. The Government knows this. It just ignores it. The Prime Minister's own Business Advisory Council told her she needed to build more roads because New Zealand's infrastructure is at a "crisis point". They told her which roads they wanted. She sent out Transport Minister Phil Twyford to say no. That is an astounding response to business' number one worry.
The Govt can't keep ignoring business anymore. Photo / Getty Images
The third biggest concern - skills and labour - is also a problem made worse by this government. Immigration Minister Iain Lees-Galloway shut down a bunch of overseas offices of Immigration New Zealand. He wanted to bring those jobs back to New Zealand. Problem was, hiring here took too long. And the existing staff could only work so fast. So, visa applications built up. A backlog grew. And suddenly businesses were waiting months to get staff into the country when they needed those staff immediately.
The fourth biggest concern is uncertainty about government policy. Are we getting industry-wide Fair Pay Agreements? If so, when? Will it be in time for one or two agreements to be triggered before the next election, like the PM promised?
The Government is naive if it thinks bogyman laws like this don't influence business decisions. Take the capital gains tax scare, for example. I know a business owner who says he sold his business thinking a CGT was on its way. That's how government policy affects lives.
On the bright side, the Government seems to quietly accepted that its stuffing things up. It's making a few small tweaks that indicate a corner might have been turned. It's introduced a new streamlined visa, it's thrown business a bone with a couple of tax tweaks, it's taking the side of SMEs in the fight against "unconscionable" business behaviour.
That's great. But it's not enough. A little tax rebate doesn't nearly outweigh two hours a day stuck in traffic or work that can't be finished because an overseas employee can't get into the country. Or, even worse, the sense that the Government is ignoring you.
Right now, the best thing the Government can do is fess up that it accepts there's a problem. It could admit it's not just the global economy, there's a bunch of stuff happening at home that's not working, and, good news, it's going to help.
That would go a long way to lifting business confidence.
