Low business confidence - Suck it up and do something

In these outpourings of low business confidence there's opportunity. Photo / 123RF

COMMENT: There's a lot of talk about business confidence – or lack of – and SMEs, one of the bedrocks of the economy, are joining the chorus.

So without fear or favour, or flashing red or blue coats, listen up to what SMEs have to say please Government. They are too big to ignore.

We're a nation of small and medium sized businesses. In fact,97 per cent or 487,602 enterprises, employing 29 per cent of the workforce or 600,000 employees and contributing 26 per cent of our GDP are SMEs - and they are not happy.

The latest Auckland Chamber of Commerce business confidence survey isn't showing the slightest upturn in confidence from the downbeat June trend and it's hardly surprising.

Business hates uncertainty. Business likes known knowns, not unknown knowns.

Uncertainty dashes confidence and that nervousness puts the blinkers on good decisions being made about investment, hiring, wages, productivity, managed risk taking and expansion and on it spirals down, fuelled by the pundits until we talk ourselves into believing recession is coming but miss the big external factor that really could plunge us into recession.

We're not in dire straits. There's money in the coffers and options to stimulate the economy domestically which will make people feel better anyway.

But, the big drivers of economic growth, housing and immigration, are right off the boil, and business is digesting the barrage of wage demands, price hikes, a surge in special purpose taxes, increases in compliance costs, policy decisions on everything from transforming into a low emissions economy to cutting off oil and gas exploration, not to mention a serious shortage and outflow of skilled workers in many sectors.

It's not good for Auckland, a powerhouse without the skilled labour to fuel its potential and still a very high-priced property market with a serous transport and infrastructure problem that scares newcomers away.

And that's the crux. Business, not just big business but also SMEs, want to know what Government is doing about the big stuff to get this region moving. What's happened to some of the infrastructure decisions that are so long overdue?

We're tired of the endless talk. We want decisions that will provide certainty to business to swing into action and build a prosperous future from driving up productivity rather than counting wealth from property.

The downstream positive impact of getting the big projects underway will take time to flow through, but if business knows what's happening there'll be momentum in investment, job creation, innovation, new resources and training and learning to build a resilient economy that shows New Zealand can compete in the world.

There's always going to be criticism of those who hold the purse strings and the Labour Government has got to realise it is not about pass or fail or a predisposition to diss their economic management. But, 12 months is a long time to keep business in limbo.

So, suck it up and see that in these outpourings of low business confidence there's opportunity. It's all in actually making a decision so we all know what we can do and how to get there.

- Michael Barnett is CEO of Auckland Chamber of Commerce.