Waters signs off with blast on economy

Ralph Waters says this country is mired in false luxuries it cannot afford. Picture / Greg Bowker

Outgoing Fletcher Building chief executive Ralph Waters has fired a parting salvo at New Zealand's economic and political direction, saying the country is complacent and oblivious to a range of problems.

He used his farewell to launch an assault on the Government, saying it was weak and incapable of pushing through major changes to benefit New Zealanders.

His list of criticisms included a soaring national debt burden, anti-business policies, a Government afraid of taking tough decisions, an uncertain electricity supply and too few successful companies expanding overseas.

Waters, who came here in 2001, is credited with transforming Fletcher Building from being a loss-making under-performer into the country's second-largest listed company.

"Looking at the broader picture, I think New Zealand will have some hard decisions ahead, but the political system here is not conducive to making important decisions, should they be unpopular," he told business leaders in Auckland on Tuesday night.

The record $14.54 billion current account deficit should have shocked people out of their complacency, but that had not happened. "Strong economic activity that is consumption-driven is also a bit misleading as to how we are really travelling. The current account deficit is a reminder but, in the main, the country seems oblivious to the large structural imbalances," he said.

Not enough companies were investing overseas. "We need more Fonterras and Fisher & Paykels exporting and we need more Fletcher Buildings investing successfully overseas," he said.

Dependence on primary products should act as a harsh reminder of economic realities.

"The country must always remember that, if the business is not processing New Zealand resources like grass or timber, then there are not many compelling reasons to be based here. Building one's plants closer to export markets makes much more sense.

"Yet as a country we do all we can to discourage major manufacturing investment here, with the lack of certainty of power, its uncompetitive pricing relative to external options and the success vested interests have in making meaningful new investments very difficult, if not near impossible.

"These are false luxuries that the country cannot afford."

Waters is returning to Australia, but he will be back here frequently as he is a director of four major companies: Fletcher Building, F&P Appliances, Fonterra and Westpac NZ.

>> Is Ralph Waters right? Email your opinion to the Business Herald