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!”

 

“There seems to be little control over where this is targeted, or oversight on its effectiveness,” says Federated Farmers chief executive Terry Copeland. Professional director Craig Stobo shares similar concerns, asking: “Do we really have good, measured information on the status of this spending?”

Another director suggests there should be a complete recase of the numbers to reflect the actual reality, since “the fund was set when Treasury’s projections for the economy were significantly different than what has unfolded”.

More than $4.5b was given out to various recipients in the 2021 Budget announcement: $3.8b was given to the Housing Acceleration Fund, designed to increase the supply of houses by accelerating the pace and scale of construction to ease the struggle of first-home buyers to enter the market.

Immigration received $173m to enable the continuation of core immigration services that have been impacted by Covid-19.

Other projects awarded funding include on-board cameras on commercial fishing boats, and a $500m towards an extension of the school lunches programme — which was a project of particular concern to CEOs.

“Far too many stories of wasted food, an initiative that I believe was a backward step to socialism’s need to have populations reliant on government,” says a serial entrepreneur. “There are better ways to address this that don’t load the taxpayer with a UK operation devised during WWII for vastly different reasons.”

Says a logistics boss: “It is wasteful — there is no such thing as a free lunch”.

But others are less concerned. “Yes, I do think it is being used more widely, but I don’t think at this stage that I have a concern about its use.”

This view was supported by some 20 per cent of survey respondents who said they are not concerned; 17 per cent say they are unsure.

Covid Fund replenished

Three weeks ago, Finance Minister Grant Robertson announced that the impact of a stronger economy — reflected in the Government’s books, with lower deficits and debt position than had been predicted — has given sufficient fiscal headroom to top up the fund.

“Ministers have decided to use the greater fiscal headroom to top up the Covid-19 Response and Recovery Fund (CRRF) by an extra $7b,” Robertson said.

That is on top of $3b that remains unspent.

“We have already boosted support to business in this lockdown and the extra funding will be targeted at further economic support as well as building resilience in our health system, supporting the vaccination rollout and border and MIQ provision,” said Robertson.

“We are in a strong economic position to protect lives and livelihoods and plan for the gradual and careful opening up of New Zealand to the rest of the world to secure the recovery.

“Our focus remains on keeping New Zealanders safe, accelerating the recovery and dealing with long-standing issues such as climate change, housing and child wellbeing, despite the uncertainty and volatility globally around the ongoing impact of Covid-19.”

Covid Recovery Fund

In 2020, the Government allocated a total of $62b to support the Covid recovery through an initial $12.1b support package in March and the $50b Covid-19 response and recovery fund unveiled in May.
This funding was to pay for pandemic-related expenditure, including the wage subsidy scheme to help employers recover from the effects of Covid-19.

The fund also gave a $1.6b to boost apprenticeships and industry training, $1.1 billion to get New Zealanders into jobs focused on restoring the environment, and $3.3b for infrastructure, on top of the $12b infrastructure package announced earlier in 2020.

Says New Zealand Initiative chair Roger Partridge, “For the New Zealand economy there are risks in both directions — of business confidence being harmed by a Covid strategy that raises the prospect of never-ending lockdowns.

“If this risk does not eventuate, then we will see a continuation of asset, wage and consumer price inflation, which also presents a long-term threat to business confidence, growth and jobs.”

Global economy optimism has rebounded even further. Last year’s survey respondents scored it at 1.16/5, at a time when many of our major trading partners were being ravaged by the pandemic. This year it scored 3.15/5, showing that despite the Covid-19 numbers remaining significantly high around the world, the international vaccine rollout has clearly helped buoy confidence.

A banker says: “It is easy to be more optimistic than this time last year with vaccines in sight, but that doesn’t mean there are some massive structural concerns around how we make the most of the more buoyant economy we find ourselves in.”

Beca’s CEO Greg Lowe says: “Locally and globally, the pandemic economic impacts are more manageable than we feared, but ongoing disruptions (supply chains, recruitment, lockdowns) mean uncertainty around investment and potential delays to projects and plans.”

As is typical for this survey, executives rated optimism in their own industry the highest of the three optimism scores — 3.20/5, compared to 1.90/5 in last year’s survey.

But delving a little deeper into industry optimism scores shows that these vary considerably.

Industries that scored particularly high include insurance, airlines and aerospace, technology, finance, and entertainment.

“The 2021 financial year was a huge year in markets, reflected in a record return for the NZ Super Fund,” says NZ Super Fund CEO Matt Whineray. “Driven by strong fiscal stimulus, aggressive monetary policy and the pandemic response, markets have rallied strongly since late March 2020. Markets are pricing in continued earnings growth and low interest rates, so it’s hard to see these moves being repeated this year, with continued uncertainty around the course of the pandemic and the spectre of inflation”.

At the other end of the scale, executives that gave the lowest scores are working in education, manufacturing, utilities, and construction.

“The pandemic has gone on much longer than I anticipated, and it still isn’t clear as to how it ends (if it ever does),” says a utilities executive, an industry that scored an average of 2.5/5 for optimism.

“We are in this quagmire in New Zealand of not being able to solve for a protracted and slow vaccination rollout compounded by inadequate tracing and testing speed and capability and the need to open the borders to enable tourism to restart — I am particularly depressed at the moment,” says a director in retail, a sector which scored an average of 3.38/5 for optimism.

The construction sector scored optimism for its industry 2.67/5. Says Fulton Hogan managing director Cos Bruyn: “The latest Covid lockdown in New Zealand and ongoing issues in Australia may constrain capital spend, dependant on ongoing duration of business disruptions. There is also the issue of international supply chain and shipping disruptions that will impact on our ability to spend to consider.”

Sanford CEO Peter Reidie says Covid has made a significant impact on Sanford’s revenue lines: “As a heavily export focused business, we were hit early by the impact of Covid-19 globally on food service and supply chains. We are now seeing different parts of our business begin to recover from that at different speeds.

“We need and expect to see further global recovery from Covid.”

The food and beverage sector scored optimism for its industry at 2.8/5.

The Warehouse Group chairman Joan Withers was less optimistic. “Probably because we are in this quagmire in NZ of not being able to solve for a protracted and slow vaccination rollout compounded by inadequate tracing and testing speed and capability and the need to open the borders to enable tourism to restart I am particularly depressed at the moment.”

Domestic concerns

The top five domestic issues of concern for executives are unsurprisingly Covid-related.

They are particularly concerned about skills and labour shortages, which they rated at 9.18/10 on a scale where 1 = no concern and 10 = extremely concerned.

Throughout the survey chief executives have raised many contributing reasons for the skills and labour shortage, including a huge increase in infrastructure and technology projects requiring significantly more staff than in the past, border restrictions preventing skilled immigrants entering the country, poaching of talent from international firms and recruiters, and salary costs being driven up by employees that are role-hopping between companies.

Susan Peterson, a director in the technology and digital sectors, says the New Zealand economy performed very well through Covid, largely due to the success of the Government’s elimination strategy and support provided, but is concerned that the rest of the world is now “kicking back into life” and New Zealand is being left behind:

“The border restrictions are having a real impact on NZ’s tech sector,” she says. “The jobs we are creating, and could locate here in NZ, are now being recruited in overseas hubs as we don’t have sufficient locally trained New Zealand talent and are not permitted to bring it in through the border. It is concerning to see the potential long term damage being done to New Zealand.”

Says Fulton Hogan managing director Cos Bruyn: “It is becoming an increasing challenge to hold staff, let alone grow staff numbers. Labour costs are rapidly escalating, the costs of which will need to be passed on.”

The next highest scoring domestic concerns are: the potential for community transmission of the Covid-19 delta variant (8.69/10), immigration restrictions (8.53/10), quality border protection against Covid (8.22/10) and transport and logistics costs (8.09/10).

“Supply chain issues and rising building costs is putting pressure on our costs which we are working hard to manage while also offering competitive pricing,” say Tower Insurance chief executive Blair Turnbull.

“If these inflationary trends continue the costs unfortunately will ultimately also flow through to higher premiums for customers.”

Local Government Funding Agency chair Craig Stobo says we are in the midst of a wartime economy: “Wage controls are in place, we cannot travel overseas and return easily, families are divided by cumbersome border restrictions.

“Migrant labour is not allowed to assist our food producers, businesses cannot find labour. Small businesses are closing, supply chains are disrupted, and materials are in short supply.

“Meanwhile, long-term structural issues of poverty, inequality and housing affordability have deteriorated significantly.”

Other more traditional issues that have a heightened level of concern among executives include the level and quality of government spending (7.95/10), the increase of cyber attacks (7.92/10), general uncertainty around direction of government policies (7.61/10) and infrastructure constraints (7.55/10).