Editorial: Verdict of business emphatic

Today, as usual in the lead up to a general election, the Herald publishes a survey of political opinion at the highest levels of business. We do so not because we imagine corporate leaders are the best judges of the national interest but because their judgments of the country's performance and its prospects will influence investment in the economy and their position at the head of companies large and small gives them perspectives that are useful to hear.

It is striking, for example, that their greatest economic concern - a skills shortage - has featured little in the election campaign so far. Company executives have been complaining for several years about the difficulty of finding capable staff. Part of the problem might be that pay rates in this country have been slipping by comparison to those in Britain, North America and even Australia, all English-speaking countries where our trained young people are readily employable.

But the shortage might also have much to do with the nature of modern training. While the present Government has revived apprenticeships to a limited degree, and promises to extend them by 5000 places if elected, the thrust of modern training for even technical occupations has become highly academic and institutionalised. It produces graduates well versed in social and ethical thinking in their intended field but with too little preparation in the practical tools of the trade. How often are engineers and others heard to complain that the graduates applying to enter the profession have to be taught what to do?

The other parties' responses are not encouraging. National has yet to announce a policy but it appears to be thinking no further than liberalised employment law and removing a funding cap. Minor parties' proposals range from New Zealand First's pay subsidy to the Greens' plan to encourage women, Maori and Pacific Islanders into industries where they presently number less than their proportion of the population.

For all that, the company leaders overwhelmingly prefer National's policies for business to Labour's. The size of their verdict (nearly 90 per cent for National) is a surprise considering that Labour has presided over six years of quite remarkable uninterrupted growth. The prosperity has been built on the economic reform of the previous 15 years but any government that presides over such a sustained expansion is doing something right. Labour has judiciously increased spending, largely putting it into state service payrolls but also into infrastructural improvements. And it has done so while running big Budget surpluses.

For business leaders, as for many other voters, Labour's good economic record seems to have been overshadowed now by National's offer of tax cuts. The prospect of a significant financial transfer from the public sector to personal incomes clearly is seen as a stimulant for business as well as a personal benefit for those surveyed. There seems little concern that National's tax package involves small increases in public debt and cuts to public expenditure.

The survey has been conducted in a period of declining economic confidence. Just under 72 per cent said they were less optimistic than a year ago for conditions in their industry. If they are right, tax cuts could be a timely stimulus. If they are wrong, the cuts could be inflationary and force a monetary contraction. By and large business leaders are ready to take the chance. It is worth noting.