“We’re committed to doing our part in training and investing in our employees in these areas, and in creating pathways for entry level talent and in some cases for internships,” she says.

“But these are long and medium-term solutions, and we have some significant recruitment challenges in the immediate term.”

MinterEllisonRuddWatts chair Sarah Sinclair, says “current preferred candidates for roles remain offshore.”

Similar challenges were shared by others in the tech sector.

“Twenty per cent of open roles are currently unstaffed,” says the CEO of a major IT firm.

But this issue isn’t restricted to any particular sector.

Tim Myers, chief executive of farm machinery firm Norwood says there is a desperate shortage of skilled technicians and mechanics.

“One, there aren’t enough, and two, they’re being incentivised to move to Australia with more competitive wages and more affordable housing”.

Federated Farmers CEO Terry Copeland shares a similar story.

“Many of our members are reliant on skilled migrant labour and seasonal workers on farms, vineyards, orchards and processing facilities,” he says.

“Around 7000 full-time roles are currently vacant and not being filled by New Zealanders.”

Almost all CEO respondents — a considerable 94 per cent — say New Zealand should be doing more in the short term to bring in skilled migrants to ensure firms can support economic growth.

An independent director says there is an immediate and very serious labour market shortage that will see New Zealand lose jobs overseas and its relevance as an employment option. “Developing our own skills needs to be done — but it will take time.

“The opportunity/threat is here right now.

“Companies will not wait for the government and many are now setting up hubs overseas so that they can continue to execute their strategy.”

The CEO of an agribusiness firm says the widespread business impacts that the lack of workers is having on the industry requires urgent attention.

“If we are going to become less reliant on migrant workers, it will take time — years.

“Just pulling the pin as has been the case is poor judgement, commercially naïve and certainly not representing a just transition.”

Employing more Kiwis is not the answer,” underscores OfficeMax NZ managing director Kevin Obern.

“We have skilled people desperate to move here, there has never been a better time to access those skills.”

Adds EMA’s Brett O’Riley: “The current approach is inhumane, ignores wellbeing and wellness for those involves, and does not represent New Zealand’s values of manaakitanga.”

New Zealand’s scores for Year 5 students (9-year-olds) also fell in both subjects since the last time the test was conducted in 2014/15.

Similarly, last year’s OECD’s Programme for International Student Assessment (PISA) tests, which tests reading, maths and science, saw New Zealand’s 15-year-olds recorded their lowest scores ever. Of the 79 participating countries in PISA, New Zealand was 11th equal for reading, 12th for science, and 27th for maths.

“Literacy and numeracy are at an all-time low, the system is letting down far too many young people and their families,” says EMA chief executive Brett O’Riley.

We have some outstanding educational achievement results in some parts of our education system, but weaker results in other parts which represent a big lost opportunity both for our people and our country,” says Beca CEO Greg Lowe. “No New Zealander should be left behind in the journey to better skills.”

“It feels like standards continue to slip and that mediocre is now okay,” says a food producer. “A drift to the lowest common denominator.”

From an investment firm boss: “A big worry — with an annual deterioration in standards and achievements wrapped in a cloak of wokeism and irrelevance.”

Federated Farmers CEO Terry Copeland says our fall in international rankings is down to a “combination of low literacy and numeracy skills, and less common sense due to reliance on computers”.

But another respondent, from the education sector, comments: “Working closely with education, I think the attainment metrics aren’t everything. We have a system that teaches great critical thinking and inquiry-based learning which help foster innovation.”

One director says the education system is failing too many and not supporting enough young New Zealanders into stimulating vocational opportunities; however they note the solution requires “the whole community — especially businesses — to become much more engaged in the educational process”.

Time to consider a Swiss model?

Building on this sentiment, respondents were asked whether there is a role for business to play in the education of equipping young New Zealanders for the future workforce — such as Switzerland’s Vocational Education Training (VET) system — where they are seconded to firms while still at school to learn vocational and life skills. A significant 73 per cent responded yes. Just 6 per cent say no, and 21 per cent are unsure.

“Business has a large role to play in teaching young New Zealanders about what they do and why,” adds Mainfreight’s Don Braid.

“The education system must support this through the examination process — pass rates alongside apprenticeships and other vocational training.”

Beca’s Greg Lowe acknowledges business already plays a big part in the training and development of its workforce, which is an area of significant investment for most businesses in NZ. “Models like Australia where secondary students complete formal workplace secondments do help students to with potential career choices.”

But some worry this shifts too much responsibility on to business.

“Businesses are already taking on much of the training directly — but there is always potential to expand this,” said a professional director.

A respondent in the education sector says they have seen this model work really well in Israel as well, “but I’m not sure we have enough talent or large organisations to support it here, particularly in our regions.”

And a food producer cautions: “This shifts the burden to already overburdened firms.”

Of the regions, Waikato saw the biggest jump in prices over the quarter, with its average property value up 6.1 per cent from $821,000 to $871,000.

Auckland and Wellington regions remain the most expensive for property, with quarterly growth of around 4.5 per cent pushing their average property value to $1.395m and $1.037m respectively.

“What is so offensive in the current situation is that most of the huge increases in wealth are not the result of hard work, or of inventing something new, or of building a business, but just the result of buying lots of land with borrowed money and waiting,” says ICBC (NZ) chair Don Brash.

Another banker observes that an increase in share values is certainly contributing to that growing wealth inequality,” but the main contributor is the utterly inexcusable escalation in house prices, or more accurately, residential land prices.”

“This needs to be addressed or there will be anarchy in the next 20 years,” says a professional director.

Respondents were also asked what the Government’s role in wealth inequality should be. This question resulted in many suggestions from business leaders — with housing and education a major focus area.

“Freeing up residential land in a meaningful way would quite quickly reduce the wealth of those who have borrowed heavily to invest in residential real estate, while vastly helping those who currently don’t own a home,” suggests a banker. “If this were done, there would be no need for a ‘heightened safety net’.”

Capital gains taxes?

“New Zealanders are rewarded for investing in housing and driving up prices due to under supply vs demand,” says a media boss. “The Government needs to tax capital gains and remove the incentive to invest in housing.”

While this year’s Herald survey did not directly address capital gains taxes, many echoed the call by the media boss. “Get on with some form of capital gains tax… it is simply wrong to get taxed on the likes of shares and not investment properties,” says a food manufacturer.

From another director: “We have to fight this growing wealth divide with a capital gains tax — or whatever it needs to be called politically — or we will see the divisiveness emerge in New Zealand that is already prevalent in many other nations around the world.”

Others suggest that education must remain a key focus of the Government to help close the gap.

“Education for those in poverty to help them come up the curve — the hand up not the hand out,” says one director.

A similar sentiment from a food producer: “Bring the bottom towards the middle, don’t drag the top down.”

“Ensuring excellent and broad opportunities for education and work (which may be coupled with living wage/ sustainable wage system),” says Schenone. “This gives everyone the opportunity and incentive to earn a decent living and see the effect of effort and reward as a truth available to them.”

Another independent director says training more students for STEM (science, technology, engineering and mathematics) capabilities will “get more of our people into higher paid and more relevant roles”.

But others suggest responding to wealth inequality is not the role of the government at all — and some say intervention is aggravating the problem: “Government interference seems to keep making the situation worse,” says Devon Funds Management chair Paul Glass.

“I think that relatively speaking there is less inequality now than there has been in the past 200 years,” says a director. “Welfare is important, but not to the detriment of signalling the importance of being employed.”

Prior to entering politics she was a commercial lawyer serving as Auckland District Law Society president and as a Housing New Zealand director.

Some say she is in an unenviable position with a tough job. “She has been handed a hospital pass and is trying her best,” says independent director Carol Campbell. “But she has no support from her party.”

Says another chair: “Being leader of the Opposition is a bloody tough job — particularly when the media is aggressively hostile.”

Others suggest Collins’ lack of strong leadership and negativity is giving the Government an easy ride.

“Hopeless,” says Devon Funds Management principal Paul Glass. “Labour’s best asset.”

“I am yet to see Judith do anything other than complain,” says a leading entrepreneur. “I’d much rather see her lead her opposition by offering smart solutions.”

“Always bitter and negative. Rarely constructive,” says an IT boss.

“She has lost the confidence of her caucus, which has made National unelectable. There needs to be a change,” says Datacom chair Tony Carter.

National is still languishing in the polls. The most recent polls by 1 News-Colmar Brunton, Newshub-Reid Research and Roy Morgan put National at 26, 28.7 and 25 per cent, respectively.

Under Collins’ leadership, the National Party launched its campaign to “demand the debate”. The party says: “New Zealanders are being left out of important decisions as Labour continues to make policy announcements that were never campaigned on and will have a significant impact on New Zealanders”.

Some of the issues National has called out as part of this campaign include the Government’s 2019 He Puapua report, the Government’s “feebate” policy, gangs and crime, and homelessness. But the survey has seen business leaders express serious concern over the issues Collins is focused on. “Her instincts are all wrong,” says an investment banker.

“She seems disconnected to most New Zealanders,” says Federated Farmers CEO Terry Copeland.

A company director: “I’d love to see her focusing on the issues that will really matter for New Zealanders and especially the next generation of New Zealanders, so that she and National have some renewed relevance.”

NATIONAL NEEDS TO HOLD GOVERNMENT TO ACCOUNT

National needs a refresh and to concentrate on the issues that matter. That’s the clear message from New Zealand’s business leaders in this year’s Mood of the Boardroom survey.

When asked whether the party has sufficiently renewed its personnel at both party and political levels as well as policies since the election, an overwhelming majority — some 90 per cent — say no. Just 2 per cent say yes, while 8 per cent are unsure.

The election saw 23 MPs lose their seats. At the party’s annual conference held in August, National party president Peter Goodfellow was under pressure since the disastrous election result — particularly due to his involvement in several troubling candidate selections. But despite a challenge from former speaker David Carter, Goodfellow was re-elected to the position and Carter resigned from the board, despite only joining last year.

“Goodfellow should have stepped down and commenced renewal from the top down,” says a media executive.

A lot of experience has left since the election which is unfortunate — some had to go, but the volume of talent leaving was concerning,” says Federated Farmers chief executive Terry Copeland. “On the flipside, they haven’t replaced the party president which is perhaps stopping change and regeneration which is desperately needed.”

MinterEllisonRuddWatts partner and SkyCity Entertainment director Silvana Schenone says “they desperately need to show new leadership.”

“It is still very much in a rebuild mode,” says Deloitte chair Thomas Pippos.

But a professional director says that is not to say the potential isn’t there — “but it’s certainly not publicly visible at the moment, with a couple of exceptions.”

Focus on the issues that matter

Business leaders were asked to comment on where National should be making more inroads in its role as the prime Opposition party.

This prompted several chief executives to respond with just a single word: “Everywhere!”, and one banker to joke: “This is a trick question. It’s not the Opposition, Act is!”

Many of the criticisms lobbed at the party are due to its failure to focus on the issues that matter to the electorate. Several CEOs expressed concern that side issues like the painting of Winston Churchill in Parliament seemed to receive more attention than the economy and holding the government to account on key priorities — namely poverty, health, housing, education, infrastructure, crime, and the country’s route out of the pandemic; although MP Chris Bishop’s work in this area was acknowledged.

Dentons Kensington Swan chair Hayden Wilson says the reality for National is that they are at the point the Labour party was at in 2013/2014:
“They had a really tough election, they had some quite significant divisions within their caucus, and that led to a complete lack of message discipline.”

He points to the debate around whether or not the country should be called Aotearoa.

“I do not think they are focusing on the things that New Zealanders are worried about, or the things that New Zealanders don’t presently vote for them worry about,” he says. “That does a disservice to the people in the National party caucus who are doing sterling work on the issues that matter.”

“What New Zealanders want to see in an Opposition is someone that they would be comfortable running the country. That means having ideas about things that matter.

“We haven’t seen that from the Opposition since the election.”

A professional director shares a similar view: “National has not focused its airtime on the issues that matter most to the business community. Coming out with clear policy on issues where the Government is falling short would help, also calling for more Government accountability.”

“They have lost touch with the emerging voting base,” says Norwood CEO Tim Myers.

“National used to stand for intelligent conversation and fiscal responsibility,” suggests a technology entrepreneur. “All I hear now are cheap shots and complaints, I have no idea what they even stand for anymore.”

Says a property executive: “The immigration policy was an excellent one, released without fanfare or PR support… and was almost immediately lost in the noise around the Aotearoa referendum.”

Others suggest national needs to focus on credible, workable alternative policy — not just discussion documents filled with questions and “demanding the debate”.

“They need to outline what they would do, how and why,” says the head of an investment firm. “At present it comes across as quibbling and bleating.”

Says the head of a bank: “Detailed alternative policy agenda which reflects the things that matter outside the beltway. Having a view is more important than criticising.”

The party needs to focus on its values and what it stands for — connecting with New Zealanders on issues that matter and not the ones that don’t,” says BusinessNZ CEO Kirk Hope. “Stay off Twitter!”