Michael Cullen blames media for much business pessimism

By IAN LLEWELLYN

Finance Minister Michael Cullen has lashed out at business journalists saying they encourage the business community to show ill will to the Government.

In notes for a speech at a function launching the New Zealand Herald's "Mood of the Boardroom" survey, Dr Cullen said the survey showed a continuing pattern of business pessimism.

"One of the most constant and puzzling features of surveys of business has been the disparity between the perceptions business leaders have of the economy at large and their own intentions with regard to hiring and investment," Dr Cullen said.

Business leaders were either "curiously ill-informed" or had a pessimistic mood bearing no relation to the realities of the economy.

"I lay a good portion of the blame at the door of some business journalists who cannot seem to bring themselves to acknowledge that, on balance, the Labour-led Government has presided over and contributed to a period of very positive economic growth (in spite of a difficult international situation)."

New Zealand's growth rate was higher than most other countries in the developed world, unemployment was down and the Government maintained a tight rein on spending, Dr Cullen said.

While the dollar was suffering due to "irrational exuberance" he saw little "rational analysis" from the business community to balance it.

Business seemed determined to fight with the Government.

"We cannot afford to take a confrontational approach," Dr Cullen said.

"Those who still think in terms of a clash between grand Victorian forces of capital and labour need to be reminded that Victoria has been dead for more than 100 years."

Dr Cullen said there were constant calls for less tax and less regulation of the labour force.

Those who called for the same headline tax rate as Australia should also be asked whether they wanted all the add on taxes and burdens that system had.

"The same goes for labour market regulation where our current reforms place us toward the flexible end of the OECD... That is not to say we should not engage on the detail of the present (Employment Relations Amendment) bill. But business leaders and some commentators need to remind themselves of how poor their predictions were in 2000."

Speech notes from National Leader Don Brash who was due to speak on the same stage as Dr Cullen painted a very different picture of the same economy.

Growth rates were too low because the Government was stifling the economy, Dr Brash said.

Dr Brash also had a slightly different message on National's tax policy for a business audience.

Recently Dr Brash said those paying the 39 per cent top tax rate would have to be patient without specifics.

Today he said cuts in the top rate would be "implemented during our first term of government" and said this would require financial discipline not spending cuts.

Dr Brash outlined his plans for less regulation and a free trade deal with the United States.

National was also doing work on removing Treaty of Waitangi clauses from legislation.

Dr Brash also said that Treasury had warned that unresolved treaty debates could have "quite large" negative impacts on economic growth.

The Government had been too slow to sort out the foreshore and seabed debate and economic and social fallout had grown as the Government dithered.

- NZPA