There’s been a lot of comment on business confidence, which hit a seven-year low last month.
While it’s easy to dismiss confidence as just sentiment, fact is it does have an impact on economic growth through the investment and employment decisions businesses make.
We can debate the various drivers of the numbers, but the biggest factor in my opinion is uncertainty; businesses need certainty to invest. Right now, they don’t have that certainty.
Whether it is around immigration changes and the impact this has on finding skilled workers, proposed changes to employment legislation, or the changing nature of overseas investment and ownership rules impacting our reputation as an investment destination, the signals from policy-makers are unclear.
Coupled with the decision around the oil and gas sector and we begin to see a picture that results in lack of confidence. There is a real risk to the pipeline of projects coming to market across many sectors, including commercial and residential building and the much-needed infrastructure investment to support our growing population and tourism numbers.
This takes a toll on businesses which require stability and certainty. While businesses understand the need for change and are incredibly resilient and adaptable, sound policy that enables and supports business growth, is essential.
Everyone supports the Government’s goal of developing a nimble, productive, high-growth economy. But we need a clearly defined strategy and sound policy to create the certainty and stability to enable the innovation, growth and investment we need to create a stronger New Zealand.