Tim McCready

New Zealand First leader Winston Peters may not be universally admired by the C-suite, but chief executives rate him a shrewd politician.

“Winston is undoubtedly in my view a supreme politician!” said Joanna Perry, professional director and chairwoman of the IFRS Advisory Board. A legal firm boss added, “Peters plays the political game very astutely. But he is the ultimate opportunist on the political front.”

Peters, 72, has previously held the roles of Deputy Prime Minister in Jim Bolger’s National Government (sacked by Jenny Shipley) and Foreign Minister in Helen Clark’s Labour Government.

NZ First currently has 12 MPs, and following the election expects to have former Labour MP Shane Jones join the ranks, listed comfortably at eighth on the list.

NZ First has released some favourable policies for business – including cutting corporate tax rates to 25 per cent – but his negative stance on the TPP, foreign investment and immigration, along with his growing shopping list of bottom lines, has damaged his reputation with business leaders.

Chief executive respondents to the Herald’s CEO Survey rated Peters’ political performance as leader at 2.76/5 on a scale where 1= not impressive and 5= very impressive. But it is the NZ First leader’s ability to exert leverage under the MMP political system which makes him a key player at the September 23 election.

It is possible Peters will not be the sole potential kingmaker or queenmaker when coalition negotiations begin after the votes come in. Or at least not with the same levels of bargaining power the NZ First leader might have had eight weeks ago, before Labour began its poll climb.

Before Labour’s leadership change, NZ First was considered the only path to power for either National or Labour. But in light of the “Ardern Effect”, there is some evidence that disillusionment with the status quo is spilling over to Labour, with recent polls showing they now have more than one path to form a government.

CEO respondents identified the young vote – and young females in particular – as those who might be drawn to vote for Labour this time, favouring a removal of a stale Government in favour of a fresh one.

When asked who NZ First should form a coalition with, most CEOs (69 per cent) opted for National. Just 4 per cent said Labour. What is notable is that a considerable number said the decision should be up to the voter – and not a case of the tail wagging the dog.

“The party who secures the largest portion of the vote from the electorate as that is the party most New Zealanders want to see form government,” said Beca’s Greg Lowe. Others thought NZ First should just support the largest party on confidence and supply rather than trying to “blackmail policy concessions that result in much being watered down”.

There was growing support for both major parties to reject NZ First as a coalition partner and instead form a grand coalition – between Labour and National – as has been seen in Germany, or for both parties to simply go back to the polls instead of making a deal with Peters. “Maybe National and Labour should form a grand coalition to get some long-term things right,” recommended an automotive CEO.

Both National and Labour have ruled out giving the prime ministership to Peters. Unsurprisingly, 94 per cent of chief executives were also strongly opposed to the major parties conceding the prime ministership on an interim basis to achieve power.

Most thought the party with the largest share of the vote should be in control, and that minor parties should not have this level of influence.

Some of the responses were on the nose: “Heck no,” “FFS”, and “Winston doesn’t have the work ethic to be Prime Minister even for a couple of weeks.”

In this year’s Mood of the Boardroom, a majority of chief executives expected the disillusionment with traditional politicians would spill over and affect the results of the upcoming election.

Brexit. Jeremy Corbyn. Donald Trump.

Recent outcomes of elections and referendums around the globe have been anything but predictable and can be largely attributed to disillusionment and rejection of immigration, globalisation, and a loss of national identities.

But many also believe disillusionment with the status quo can be explained by the curse that comes with ruling for three terms:

“We are already seeing it – sensationalism and strong communicators are winning votes,” adds a media industry CEO.

“There will be some fatigue with another National government term but not the disillusionment with political institutions that we have seen in the US and Britain,” reckoned Rob Cameron, founder of Cameron Partners.

“We are in a very different position to the US and UK,” says a professional director. “Our economy is strong and we have choices as long as we make them wisely.”

Others think the disillusionment runs deeper. An executive in the wine industry: “People are sick of smug, self-indulgent, middle-aged white men. At least I am.”

Tim McCready

Chief executives have strongly marked down Greens leader James Shaw’s leadership abilities in the wake of the Metiria Turei scandal which claimed the career of his former co-leader.

Whereas last year, CEOs ranked Shaw second in their performance rankings for Opposition MPs, this year he has slumped to ninth place just behind fellow Green MP Julie-Anne Genter.

It is a stunning turnabout for the MP last year’s Mood of the Boardroom had billed as part of a “dream team for the future” along with first-ranked Opposition MP Jacinda Ardern.

“James disappointingly has been damaged by the Metiria issue and undone all the good work securing new urban Green voters. He lacked decisiveness on an issue that was black and white,” says a transport CEO.

A professional director agrees: “I would have rated James a five six weeks ago, but his handling of the Turei affair was appalling and the Greens are damaged almost to the point of extinction as a result.”

Chief executives believe Shaw should have called time on Turei after her admission she had intentionally misled authorities about her living costs while on the DPB.

Her admission of benefit fraud initially spiked the Greens poll ratings. But outrage grew after further revelations that Turei had registered at her former partner’s address in a prior election in order to vote for a friend.

The fallout continued when Kennedy Graham and David Clendon – two of the Greens’ most long-serving and respected MPs – quit in protest, saying they could no longer support the leadership. The killer blow came when a Newshub-Reid Research poll revealed a slump in support for the Greens – down 4.7 points to 8.3 per cent. Turei finally admitted defeat and stood down leaving Shaw as the party’s sole leader.

“It has become a joke,” says a banker. “The Greens were clearly out to steal votes from Labour with their announcement of a no-questions-asked welfare policy, and Labour have clearly done their best to steal those votes back again, helped by Ms Turei’s extraordinary performance.”

Chief executives had to this point considered Shaw an asset to the Green Party. He has an impressive background, with a pre-politics career in management consulting, working offshore with multinationals to develop their sustainable business practices.

Stick to the environment
CEOs believe the Greens should now “stick to their knitting” and refocus on environmental policies instead of standing by while Labour and National grab terrritory.

A banking boss says: “If James Shaw can make the Greens a truly environmental party – rather than a party of social justice activists and protests – that will be good.

“It will push Labour and National to up their game around New Zealand’s pressing environmental issues.”

“The Greens need to provide the necessary environmental platform and stand strongly on that platform,” says a wine industry boss. “Sadly, they have neglected the environmental aspect for a Labour agenda.”

Labour’s eleventh-hour leadership change to Ardern has seen her reclaim the progressive agenda as her party hoovers up the soft Green vote.

An automotive sector boss said the leadership spill had demonstrated they are not sure themselves whether they are environmentalists, left-wingers or a Third Way party.

“Talk to James and you might think the latter, but I’m no longer sure and Jacinda might be better without them.”

Scrap the MoU with Labour
Some 78 per cent of CEOs now think that the memorandum of understanding (MoU) that Labour and the Greens forged in May 2016 should be scrapped.

Others think it had its merits when the Opposition needed to project an alternative option to a popular National-led government.

“The context in which it was signed is more part of the past than the present given where Labour in particular was in the polls,” says Deloitte CEO Thomas Pippos. “In terms of today, I would have thought the Greens would be better placed out of it and more focused on Green issues in and around the centre; as they could naturally, under an MMP environment, be within successive Governments for extended periods of time.”

During Three’s recent The Nation debate, Shaw was asked why the Green Party did not transcend left and right as it said it would when it was set up.

Shaw explained: “We felt it was only fair to voters who want to know which way their vote is going to count that we would say we’re with the parties of change.

“If you want a progressive, Labour-led government, the Green Party has to be at the heart of that government because they won’t be able to govern without us.”

But many CEOs disagree, saying that a blue-green government is one they could get behind.

“Greens should work with National to form a government” says Onno Mulder, City Care Group CEO.

Mainfreight group managing director Don Braid offers the Green Party and Shaw sage advice: “Get on and believe in yourselves rather than worrying about who you might need at your side, or not!”

Tell me: Who are you?
“Raise your profile” is the overwhelming message from CEOs when asked about Opposition MPs.

While most were rated an average of between two and three (out of a possible five), an alarming proportion of “Unsure” votes were given as well.

MPs such as Labour’s Chris Hipkins and Dr David Clark and NZ First’s Tracey Martin all received “Unsure” responses from over 40 per cent of respondents, for example.

Martin was ranked lowest overall of 20 Opposition MPs rated by respondents, with an average rating of just 1.57.

This translated into uncertainty and pessimism about a potential alternative government.

“What do these people actually do?” asked the director of a law firm. “One hears nothing of them until election year.”

“There is a lot about a Labour government that is unknown – and thus risky,” said Rob Cameron, founding partner of investment banking firm Cameron Partners.

However, cause for cheer will be the performance of Labour’s core election team.

Leader Jacinda Ardern was well in front, with an impressive average rating of 3.81.

She was flanked – as in the election campaign – by deputy leader Kelvin Davis on 2.97 and finance spokesperson Grant Robertson on 2.96.

“The bench strength outside of any Government always suffers from a concern around whether they are ‘game fit’,” said Deloitte CEO Thomas Pippos. “The inexperience in this case exacerbated by the number that have never been in Government – or if in Government, in lesser roles and 9 years ago… but everyone starts somewhere.”

NZ First leader Winston Peters received a smattering of ratings across the spectrum – culminating in an average rating of 2.64. This was a slight drop on his rating from last year (2.90).

“Winston gets a midway mark for being Winston,” summarised one business leader.

“Really!” said one investment banker, when asked his opinions on Peters’s key election policies. “Is that all they have got?”

“Dog whistle – playing to the base,” said Matthew Cockram, CEO of Cooper and Company. “None of these things will add to New Zealand’s productivity or wealth.”

Tim McCready

When asked to consider the National-led Government on its performance in key areas since the 2014 election, CEOs rated the Budget surplus focus at 4.55/5 most highly, followed closely by economic growth at 4.21/5.

This is perhaps unsurprising given this year’s Budget showing the Government recording a stronger operating surplus than was forecast, and the recently released Pre-Election Fiscal Economic Update showing a robust economy growing at an average of around 3 per cent over the next four years.

“The country has benefited on many fronts from stable and skilled economic policy making,” says Beca Group chief executive Greg Lowe.

But survey respondents cautioned though National can be proud of the economic health of the country, there are significant social issues that need tackling.

“National’s steady as she goes approach needs to change up if they get another term,” says an agribusiness chairman. “They must be more aspirational in their approach to the big-ticket items including water, climate, homelessness and poverty.”

This tale of two very different report cards is obvious in the survey, with National’s performance tackling housing issues (2.43/5), environmental/water quality (2.50/5) and poverty and homelessness (2.43/5) among the five lowest scoring areas.

“There are plenty of gaps starting to appear,” says an automotive chief executive. “They have not addressed environment and housing that well as they don’t want to offend their constituency: farmers and home owners.”

New Zealand’s growing inequality gave National another poor score, with the wealth gap receiving 2.56/5.

Research released by Oxfam earlier this year showed the richest 1 per cent hold 20 per cent of the wealth in New Zealand, while 90 per cent of the population owns less than half of the nation’s wealth.

ICBC chairman Don Brash says many of these issues are interlinked, with housing the crux of the problem: “increasing wealth inequality, poverty and homelessness are all a direct result of the Government’s failure to deal with the unaffordability of housing.”

A legal boss gave National a ruthless assessment: “They have not listened on housing ideas; allowed continued Chinese money launderers a free pass via housing access; missed opportunities to intervene in the market as Australia, Hong Kong and Singapore have done; messed up citizenship and residency revenue and allowed Auckland Council to continue to mess up the city.”

Poverty and homelessness was rated by CEOs as one of the Government’s poorest performing areas since the 2014 election, receiving a rating of 2.43/5. “New Zealand’s performance on a global scale has been impressive in comparison to most economies and National deserve credit for that,” says a director of two prominent companies. “But there are some notable underachievements, including the rise of homelessness — just walk along Queen St.”

When asked “should we be doing more to help the homeless population?” 85 per cent of CEOs said yes, 5 per cent no, and 10 per cent were unsure.

“Homelessness is simply not the New Zealand way. We fail ourselves as a society by condoning it in any form,” says Simplicity managing director Sam Stubbs.

Stubbs was not alone with this sentiment. “Everyone needs a home,” and “there is always more to be done in this space,” and “surely this problem is solvable” were comments peppered throughout this year’s survey responses.

But how to tackle poverty and homelessness was much harder for business leaders to agree upon.

“Give tax breaks to low and mid-income people and stop the merry go round of money,” says Erica Crawford, Loveblock Wine chief executive.

“Our people are struggling and kids struggling to learn. Too many homeless and hungry. Do something.”

The challenge now for National is to clarify what their vision for the future is – for both New Zealand and New Zealanders, explains Deloitte chief executive Thomas Pippos. “They need to capture the hearts, souls and minds of the voting public around it – not straightforward for anyone given the shallow decision-making criteria it seems the average voter adopts.”

Cathy Quinn’s Top Three Issues
Retreat to protectionism around the world: All we can do is to keep advocating for open trade and opening doors with others.

1. Trump commencing war with North Korea: Bill English openly warning US against it took moral courage. I think it is a position every Kiwi would agree with.
2. The divide between the haves and have nots: I would support a programme that provides housing for the homeless and support for children in deprived families. The challenge is getting the money spent where we want it to be. For example, on kids in deprived circumstances and not diverted off elsewhere. It is in no one’s interest to simply provide dollars without a degree of confidence that it ends up helping those who are most in need. Fundamentally, as a society I believe the majority want to see the vulnerable looked after appropriately. We find it abhorrent – for whatever reason – that kids have no home, damp homes, insufficient food, no shoes. That is not the NZ most of us want.

Tim McCready

Jacinda Ardern’s charisma, her ability to appeal to a younger generation, and her much sought after ‘cut-through’ that former leader Andrew Little just couldn’t seem to muster are some of her most admired attributes by chief executives.

“It is refreshing to have an Opposition leader with a more positive outlook on life, rather than one that is stuck in the past or in a negative loop,” said a transport head.

Says Mainfreight’s Don Braid: “There is clearly a level of enthusiasm, energy and commitment to what is lacking in New Zealand at the moment.

“An injection of youthful energy and vision is sorely needed.”

“Much is unknown, but perhaps that’s the best way to be going into an election when she has the ‘X’ factor,” says Simplicity’s Sam Stubbs.

Although CEOs respect Ardern’s courage – stepping into the Labour leadership role less than two months out from the election – most are worried she lacks experience and her unusually short job interview for Prime Minister won’t give the public the chance to see her tested for the top job. “An impressive start as leader of the Labour Party but untested under pressure in her national leadership,” observed Rob Cameron of Cameron Partners.

There is significant concern among chief executives that Ardern has failed to articulate the detail of some of her policies. In particular, tax policies including the expected capital gains tax and a failure to provide detail on whether the proposed levy on water use for farmers will be 1 cent or 2 (a difference of 100 per cent). Many consider this unacceptable for a party that has been nine years in opposition.

“We have not seen Jacinda Ardern in a leadership role for long but the initial signs appear impressive – not least in galvanising the Labour Opposition into campaigning hard to win the election and creating some self-belief,” says Forsyth Barr managing director Neil Paviour-Smith.

Adds EMA’s Kim Campbell: “It’s too early to tell how good an administrator she will be.

“We need to see more substance in policy development.

“She is a superb communicator with a very engaging social style. We have yet to see her perform under pressure.”

“I don’t know enough about her capabilities to be useful but give her 10/10 for courage taking over as leader with eight weeks to go to a general election,” says a banking boss. “But she has been very fluffy on tax policy and how we are going to pay for all the election promises.

“It feels like a tax hike for the 12 per cent of New Zealanders who already pay 75 per cent of tax in New Zealand.”

A law firm boss said in any event, she is likely to persuade many voters to ‘give her go’ without having to prove her credentials as potential Prime Minister.

“She is in the right place at the right time.”

Speaking publicly for the first time as leader, Ardern said: “We are about to run the campaign of our lives”. Recent polling shows this is the case with Labour – jumping from 24 per cent to 43 per cent in the latest 1 News Colmar Brunton poll; its highest polling in 12 years.

Port of Tauranga chief executive Mark Cairns says: “An intelligent politician with clearly a freshening of the Labour brand. Early days though to judge Jacinda on producing sound policies (economic as well as social) and her skills at political management.”

Adds Beca’s Greg Lowe: “Jacinda Ardern is putting on a polished performance but as she has no track record her ability to lead effectively, manage the economy and put forward policy that moves New Zealand forward is unproven.”

“I really don’t know and nor do most voters,” explained non-executive director Joanna Perry. “The trouble is a lot of people will forget that she is unproven and make assumptions (in their gut!) about these things.”

A legal boss summed up the general sentiment from CEOs: “Jacinda is a very likable person. She is politically very savvy.

“She seems to care greatly about issues many Kiwis care about – social injustice and our environment, for example.

“She is a game-changer in this election.

“However, she is very young, and while that appeals to many, for others in an uncertain world we may feel safer with the more experienced hands of Bill English.

“Some may not see him as exciting, but experienced.”