Wayne Brown is, by far, the best candidate to become Auckland’s next mayor in the eyes of business.

When asked in the Herald’s Mood of the Boardroom survey which of the top polling candidates of New Zealand’s commercial city has the best attributes to become an effective Mayor of Auckland, 51 per cent plumped for businessman Brown.

“I have been on a board chaired by Wayne Brown,” says one professional director. “He is the kind of no-nonsense person who would cut through many of Auckland’s problems assuming he has at least some support around the council table.”

Brown is regarded as a disruptive player who will get things done.

He is a former mayor of the Far North District Council, serving two terms before being tossed out at the 2013 local elections.

He has chaired Auckland DHB and led a suite of other large organisations with a turnover of more than $1 billion, been a director or chair of various Crown-owned companies and recently led the North Island Supply Chain review for the Labour-NZ First Coalition Government, which recommended shifting Auckland’s port to Northland. A top chairperson suggests he is a “cantankerous man” and will bully his way to ensure things get done — noting that “three years will be enough!”

When asked in the Herald’s Mood of the Boardroom survey about the Government buying back Kiwibank to keep it fully locally owned, only 22 per cent of CEOs agree that it was the right thing to do.

“Yes, I support the move,” says the head of a corporate advisory firm. “Although a state-owned enterprise/partial float scenario would have been good for capital markets and improved the bank’s ability to access capital for growth.”

While the head of a professional services firm disagreed with the premise of the question, noting that reporting has been misleading: “They have not bought it back – it was owned by the Crown, and is still owned by the Crown!”

Last month, the Government announced that it would acquire 100 per cent of Kiwibank’s parent company Kiwi Group Holdings (KGH) for $2.1 billion from state-owned shareholders, subject to regulatory approvals from the Reserve Bank.

KGH is 53 per cent owned by New Zealand Post, 25 per cent by the New Zealand Superannuation Fund, and 22 per cent by the Accident Compensation Corporation.

Finance Minister Grant Robertson said that an ongoing shareholding in Kiwibank did not fit NZ Post’s and ACC’s long-term strategic and investment plans.

NZ Super Fund had been interested in purchasing a majority shareholding in KGH, but it withdrew its interest as it did not align with the Government’s commitment to public and New Zealand ownership.

At the time of the announcement, Kiwibank chief executive Steve Jurkovich said the acquisition would enable Kiwibank to continue to deliver on its growth ambitions and have even more impact for its people, customers, and Aotearoa.

“We look forward to working constructively with the Government under our new ownership structure to deliver on our purpose: Kiwi making Kiwi better off,” he said.

When announcing the acquisition, Robertson stressed that the Government is fully committed to supporting the bank to be a genuine competitor in the banking industry, “ensuring the bank has access to capital to continue to grow on a commercially sustainable basis and offer a viable and competitive alternative for New Zealanders”.

But almost two-thirds of survey respondents – some 63 per cent – say they disagree with the move, with the remaining 15 per cent unsure.

Despite Robertson’s reassurance, many are wary that Kiwibank will struggle to get the capital it needs to be successful.

“Look at its cost-to-income ratio, it is a very poor investment that will require much more taxpayer support,” says a banking boss. “The Government won’t have the appetite to invest the capital needed to transform Kiwibank so that it can compete with the Aussie banks.”

From a tech chair: “The mixed ownership model has worked so well. Floating 49 per cent of Kiwibank and applying the discipline of the investment community while giving the bank increased capital would have been awesome.”

“The Government is paranoid about foreign ownership… or thinks that the public is,” says a chair in the banking sector.

Getting the Government’s books back into the black should be a higher priority, according to a clear majority of chief executives.

When asked about the Government’s plan to return to surplus and stabilise and reduce net core Crown debt, 58 per cent say this should be a higher priority for the Government.

Just over one third, 37 per cent, say the priority on returning to surplus and reducing net core Crown debt is about right. A further 5 per cent think it should be a lesser priority.

Many respondents to the Mood of the Boardroom survey expressed dismay at the current level of spending and want to see a more prudent approach.

“This should be done by stopping bad policy, silly centralisations that deliver no gains and wasteful spending,” said a top infrastructure boss.

Others concur: “Mainly through controlled and targeted spending, and living within our means,” said a utilities boss.

“Should be largely derived by reducing Government spending,” added a CEO in logistics.

“The issue is less about the need to reduce core Crown debt than to reduce fiscal stimulus, to take pressure off monetary policy,” said a banking chair.

There is a cohort of business leaders who are less concerned with the amount being spent, but rather over what it is being spent on.

“The TVNZ/RNZ merger seems a complete indulgence in the current environment,” said one CEO.

“No one can seem to articulate the problem they are trying to fix.”

Notes Precinct Property chair Craig Stobo: “We know that the problem lies with ministerial acuity and leadership when the Office of the Auditor-General criticises the methodology of tourism support during Covid, and the accountability of the proposed Three Waters reforms, and when Treasury advice on the $350 cost of living spray is ignored”.
Concern over the efficacy of spend CEOs also have heightened concerns about the efficacy of Government spending.

A significant 85 per cent of respondents say they are more concerned now than they have been previously in this regard.

“Government seems to be spending an astronomical amount of money to deliver an appallingly low level of outcome,” said a top logistics CEO.

From a design firm boss: “Huge amount of cash, huge amount of no KPIs.”

Mainfreight group managing director Don Braid: “The tax dollars being collected are being wasted on the funding of the bureaucracy and the consultants”.

Some 14 per cent of respondents say they have a similar level of concern over the efficacy of Government spending as they have had in the past. Just 1 per cent say their level of concern is reduced compared to previously.

Finance Minister Grant Robertson has said that from a fiscal perspective, the Covid emergency is now over.

“At a broad level, my focus will continue to be on making sure New Zealand maintains responsible debt levels, and ensuring our path back to surplus.”

Robertson has made it clear that upcoming “tough choices” will not include austerity cuts to spending.

But there is concern that the extent to which spending is reined in will be limited, given the imminent general election next year.

“I believe the fiscal policy will be expansionary in 2023… which will be a headwind for monetary policy,” says Stobo.

Mood of the Boardroom: Co-governance shouldn’t be a political football

The way that debate has played out is reflective of something that I am increasingly concerned about in New Zealand: a developing division in the political discourse that is artificially divided in a way similar to what we have seen play out recently overseas.

Top law firm boss Hayden Wilson says that co-governance, in a legal sense, is not a new concept, and while it is sensible to discuss appropriate governance models for the public sector, he is concerned about the way it is being latched on to as a rhetorical tool in political debate.

Ongoing water and health reforms have seen co-governance make headlines recently.

Local Government Minister Nanaia Mahuta says that co-governance is about the Crown meeting treaty obligations and maintaining relationships between councils and mana whenua.

But National Party leader Christopher Luxon believes New Zealanders don’t have a good idea of what it means, and suggests the Government needs to set out clear guidelines on what is and what is not included for constitutional issues such as co-governance.

Wilson, who chairs Dentons Kensington Swan and is a member of Dentons’ global board of directors, says New Zealand’s government exists as a result of a treaty partnership, and governance models that seek to reflect that relationship with Māori and provide for a more inclusive decision-making, can only be a good thing.

“Co-governance is a product of New Zealand’s unique place in the world and our unique arrangements,” he says, noting it offers a real opportunity for something that is different, more effective, and truly New Zealand.