Power supplies, labour laws top 2005 wishlist

What does a business community - branded by Finance Minister Michael Cullen as outdated ideologues this year - want in 2005?

Lower taxes, less government and privatisation of state business?

Well, yes. But ask them to pick one thing for the coming year and the list is a bit more basic.

They want the lights to go on when they flick the switch and no traffic jams halting the movement of goods and services in the country's biggest city.

It could be a wishlist from a developing nation, not an economy rated AA plus by Standard & Poor's.

Brownouts, or shutdowns because there was not enough electricity to meet demand, was the biggest issue Peter Springford, Carter Holt Harvey's chief executive, raised.

He chose that because it might be more obtainable than asking for a rolling back of labour laws from a Labour Party-led Government.

Springford said the nation's electricity supply problem had not gone away because of a wet winter.

He wanted a comprehensive strategic review of future energy requirements and solutions.

Carter Holt owns four pulp and paper mills and its sawmills account for a quarter of that industry's output.

The company is also considering building a sawmill, which would be the biggest in the country.

"Energy is important from an investment perspective and also for the overall development of the country," Springford said.

The Government's view was that reducing demand was the solution.

"That's crap because we have never been able to save power."

One place where demand is not going away is at Fonterra's factories. Twenty-nine of its plants have gas-fired power supplies and New Zealand's biggest gas field, Maui, is running down faster than expected. It is a legitimate problem that needs a fix.

Changes to the employee relations and holidays law were also high on Springford's and many other business people's wishlist.

Under the Holidays Act, employers had to pay staff, including salaried workers, time-and-a-half for work on a public holiday and a lieu day.

It also imposed higher sick leave provisions, increased minimum wages and imposed higher penalties on employers.

Reforms to the employee relations law force employers into multi-employer collective agreements.

Springford said multi-site collectives went against any drive for improving relations with employees and gaining productivity.

The Holidays Act was a debacle, being difficult to manage and costly.

Geoff Vazey, chief executive at Ports of Auckland, wants Auckland's regional councils to work better together.

Local body issues were also on the mind of Don Nicolson, a national board member of Federated Farmers of New Zealand.

He said local government should be funded on use of council services, replacing the anachronistic system that set rates mainly on how much a property was worth. The system hurt farmers, he said.

"I know for a fact that farmers want fewer compliance costs. These are increasingly eroding the profitability of New Zealand's number one export earner. Free us from the shackles of an over-regulated economy."

Catherine Savage, managing director of AMP Capital Investors New Zealand, wants policy to increase the savings rate.

A recent trip to Europe reinforced the belief that New Zealand was well known for its natural beauty but "we've got to make sure that our economy reflects that".
She said AMP could help by investing in infrastructure and helping to bring companies to sharemarket listings.

She hoped AMP's property arm would launch more retail projects such as the Botany Town Centre, which the company developed and owns.

Property aside, any business of any size that makes things in New Zealand has to export because the domestic market is so small.

This has been the forestry industry's great dilemma.

The high dollar hurt exporters badly this year and it has been high for so long now that there are concerns about the ability to use financial instruments to blunt its effect in future.

"The cover is running out and that is a problem," said Bob Walters of Export New Zealand.

But because business believes in the free financial markets, it accepts the high currency.

Walters said exporters did not complain about the currency because they could not offer a solution to it.

The high currency was a particular problem for the fishing industry.

Many of its companies did not have a natural offset like a manufacturer that imported components.

Wayne Coffey, of the Timber Industry Federation, said New Zealand could not sustain such a high exchange rate and it would correct - eventually.

His biggest issue was getting the Government to listen to business people at the coal face.

"This industry makes lucid comments about how to fix things but it falls on deaf ears."

Instead, a lot of taxpayers' money went on handouts to ventures that were not going to work, leaving established, successful manufacturers in the wood sector wondering: "Do you want us or not?"