Prime Minister Jacinda Ardern pushes back on flagging business confidence

Prime Minister Jacinda Ardern, with Trade Minister David Parker at a press conference yesterday, says other markers show the economy is doing fine. Photo / Mark Mitchell

Prime Minister Jacinda Ardern is pushing back against suggestions there is a crisis of confidence in business in New Zealand, saying one survey does not reflect the true picture.

Last week's ANZ Business Outlook showed business confidence at its lowest point in a decade.

"I've seen that there is a perception around certainty, change and what's going on in our international environment, Ardern said today.

"As Prime Minister I need to look not just at a survey of 500 or so businesses. What I'm interested in is employee confidence, I'm interested in consumer confidence, wages, unemployment, GDP growth, ANZ job ads, all of those things are up, all of those markers are solid," Ardern told Newstalk ZB's Mike Hosking.

Business activity was a better reflection of what was happening in the economy, Ardern said, citing the ANZ survey which she said showed the majority of respondents thought their own activity would stay the same or improve.

Ardern said the Government was working on improving economic growth, which in the last quarter was 0.2 per cent.

"Look at what the basis of our growth was prior. It was housing speculation and migration, we cannot rely on that. We're also seeing reflected in our business confidence surveys the fear about what's happening internationally. That may be beyond our control but we can do things to make sure we have more resilience in our economy," she said.

"With change comes uncertainty and I acknowledge that, but the alternative is the status quo and I'm not satisfied with that either."

The Treasury yesterday advised that weaker confidence highlighted the risk that growth over the coming year may be lower than the 3 per cent forecast in the Budget.

"Although we think growth held up in the June quarter weaker confidence, in conjunction with other data, highlight the risk that growth over the coming fiscal year may be weaker than forecast in the Budget," it said.

Talking up the Government's economic policy this week will be Finance Minister Grant Robertson, who will deliver a speech in Auckland on Wednesday outlining the Government's agenda to move away from the past settings.

Speaking yesterday following her first Cabinet meeting since returning from parental leave, Ardern said the Government was not tempted to relax its Budget Responsibility Rules targeting net Crown debt at 20 per cent of gross domestic product to boost growth.

"The business community would say that their confidence in us is based on our ability to balance the books and deliver a strong economic agenda and delivery a surplus and low debt," she said.

KPMG's latest CEO Outlook Survey Report yesterday showed New Zealand chief executives seem more upbeat than respondents in other recent business surveys showing sentiment souring as firms fret over the new Coalition Government.

KPMG NZ chief executive Godfrey Boyce said the survey pointed to a "slight softening" in confidence but he didn't view this "as a faltering of confidence – but more of a realistic re-balancing".

Given that New Zealand has come through a period of robust growth, "a little tempering of confidence is both realistic and expected", he said.

He did note, however, bedding in a new government with new policies "inevitably brings a level of uncertainty".

- With BusinessDesk