Focus on substance — that is the clear message to National from respondents to this year’s Mood of the Boardroom survey.
National leader Simon Bridges announced a June shadow Cabinet reshuffle following the news that MPs Amy Adams and Alastair Scott would retire from politics at the 2020 election.
The biggest winner in the reshuffle was Paul Goldsmith. He picked up the heavyweight finance spokesperson and infrastructure spokesperson roles and jumped from seventh to third in the party’s parliamentary rankings.
Chris Bishop was also a winner, picking up Goldsmith’s former roles in transport and regional development. He moved from being ranked 35th to 16th, overtaking several of his colleagues and clinching a spot in National’s shadow cabinet.
New Zealand’s top CEOs and directors seem to agree with the reshuffle, with a banking boss commenting: “Paul Goldsmith and Chris Bishop have great potential”.
But when asked what more Bridges needs to do to present a vigorous alternative to the Government at the 2020 election, it was substance — rather than individuals — that received attention from respondents.
Many suggested National needs to identify and focus on key policy areas, rather than trying to do everything.
“Be smarter and more strategic in what it criticises the Government on,” says a public sector boss. “Focus on things that matter to Kiwis — not on personal politics that only capture the attention of the press gallery.”
Respondents also suggested that National spend more time focusing on how they would perform better than the Government, rather than negativity and time spent explaining what the Government is doing wrong.
“Cut out the negative comments, lead from the front,” said Ovato managing director Simon Ellis.
Mainfreight boss Don Braid was direct: “The negative nit-picking in opposition has been pathetic; shut up and develop credible policy.”
But other respondents say National should continue to highlight the strength and credibility of its team, compared to those on the Government benches.
“All that National has to do is point out Labour’s incompetence at running the Government and the country,” said a policy boss.
“It makes the contrast to National’s experienced and qualified front bench even stronger.”
Cooper and Company chief executive Matthew Cockram said: “National should reach out to those who have been so cruelly misled by Labour’s rhetoric and execution ineptitude. Show that just throwing money at issues does not solve them.”
But CEOs also want National to adopt new policies that can demonstrate how the party has moved on from the Key government.
“The world has moved on and going back to that is insufficient to become Government and the wrong thing for New Zealand.”
Adds an independent director: “It still feels like a return to more traditional National policies. I think they need to better read the mood of society and set out some new ideas that demonstrate a real change from the past on issues like climate, infrastructure and taxation policies.”
Mark Franklin, managing director of Stevenson Group said: “They must stop acting like they are entitled to be there and start rolling their sleeves up.”
The need for National to consider the long-term — including creating a prosperous New Zealand for all New Zealanders, being realistic about sustainability and equality challenges and addressing New Zealand’s under-performance in productivity — was also a message from respondents:
“National needs to provide a long-term vision for New Zealand as a country, in order to work its way up the OECD rankings rather than declining,” says MinterEllisonRuddWatts partner Lloyd Kavanagh.
Said the chief executive of an investment firm: “In order to win, National has to own middle New Zealand — and right now they don’t. They are not progressive enough to capture hearts and minds of the real big-picture long-run issues for the future.”
“Stay centrist and loud on how to address system changes for long term change,” advised a tourism boss.
National also needed to find a coalition partner. “They will be hard-pressed to get an outright win,” advises an executive in the education sector.
Reiterated Barfoot & Thompson’s Peter Thompson:
“They aren’t going to win it alone so need to work closely with an alternative party to go into partnership with them before the election — so the public know before they vote.”
Though most respondents say National’s strength is that it has a credible cohort of talented performers, a few recommended National look to bring in new talent from the outside.
“…but definitely not Luxon!” pleaded an investment bank head.
A ‘credible alternative’
Two-thirds of business leaders — 66 per cent — say that National’s proposed policies are providing a credible alternative to the policies from the coalition government. Just 8 per cent say they do not; 26 per cent are unsure.
“National is insignificantly different to make a great difference to New Zealand,” says Mercury CEO Fraser Whineray. “Can we have a long-term vision and discussion about our place in the world?”
“Better than the Coalition? Certainly. But not good enough to lift our lousy productivity growth rate,” cautions ICBC chair Don Brash.
Last month, National launched its economic policy discussion document. Among commitments, Leader Simon Bridges said National would not introduce any new taxes in its first term, would reinstate the social investment approach, and would reintroduce targets in health, education and law and order.
The top three rated policies were:
Allowing Kiwisaver contributions to continue beyond the age of 65 for seniors who remain in the workforce (8.12/10)
Requiring all government agencies to pay their contractors on time and within 30 days (7.99/10)
Requiring Treasury to have greater focus on identifying wasteful spending (7.96/10)
The two lowest-rated proposed policies were:
Returning the brightline test to two years and remove ring fencing of losses (5.29/10)
Repealing the regional fuel tax in Auckland (5.12/10)
Deloitte CEO Thomas Pippos says Government policy is about deliberate choices that balance financial and non-financial outcomes.
Pippos says a challenge with the proposed economic policies that National released is that they look to appeal to the conservative wing of those that support National — which they “already have in the bag”.
“Key social issues around housing, poverty and inequality are not being overtly addressed,” he says.
“Similarly, there is no positive response to environmental issues. Putting to the side the challenges of MMP and the lack of coalition partners, National would be more successful if it transformed to being more progressive and appealing to the majority of voters who occupy the centre of NZ politics.”
Several of the respondents say the release of the economic policy discussion paper was a step in the right direction, but suggested National is not doing enough to move the needle.
“Some of their ideas are incredibly sensible but I don’t see a strategic plan in place yet,” adds a government relations firm head.
“There are some good ideas, but it’s all tinkering,” says Whineray. “The centralised dynamics are different to the rest of the world and effective oversight of expenditure absolutely beats the perception of scale economies.”
Don Brash added: “Some of what National proposes is a pale shadow of what it should be. For example, starting to raise the age of eligibility to 67 from 2037. Australia will get to 67 by 2023!”
Others suggest that National is struggling to resonate with the electorate, and put this down to a lack of ability to clearly communicate their policies. “They are still pretty unimpressive when it comes to developing and communicating their policies… maybe it’s still a secret?” questions Mark Franklin, managing director of Stevenson Group.
The proposed “regulations bonfire” – which has been compared to the Donald Trump playbook – promises to “repeal 100 regulations in our first six months in government and eliminate two old regulations for every new one we introduce.” It scored 6.25/10 and received the most commentary from respondents.
“A ‘regulations bonfire’ sounds good, but National’s own record in this area over nine years was very poor,” says a banker.
Michael Lorimer, Auckland managing director for Grant Samuel said: “This policy illustrates Bridges’ naivety.”
https://www.timmccready.nz/wp-content/uploads/2019/09/MOTB2019-National-spread.jpg9921365tim.mccreadyhttps://www.timmccready.nz/wp-content/uploads/2020/03/TimMcCready_banner.pngtim.mccready2019-09-24 21:04:362019-09-24 21:15:17Mood of the Boardroom: Get smart and focus on the substance (NZ Herald)
Finance spokesman advised to get a coherent set of policies writes Tim McCready
Business leaders gave National rising star Paul Goldsmith their third highest ranking among the party’s top 10, but when it comes to the right qualities to deliver as finance spokesman many think it is too early to tell.
In the 2019 Mood of the Boardroom survey, respondents were asked to rate Goldsmith.
He scored 3.14/5, the third-highest score for National’s top 10 ranked MPs — behind housing spokesperson Judith Collins (3.51/5) and education spokesperson Nikki Kaye (3.31/5).
When asked whether he had the right qualities to deliver as finance spokesperson, 43 per cent responded yes, 12 per cent said no.
“Paul has a detailed knowledge of tax issues — he has literally written the book on the history of tax in New Zealand. He has a reasonable knowledge of economics, is extremely bright and is a fast learner,” responded former National Leader and Reserve Bank Governor Don Brash. “He also understands the seriousness of the economic problem facing the country: the extremely poor rate of productivity growth.”
“He’s bright enough, but quirky,” said a government relations director.
SkyCity Entertainment Group chair Rob Campbell suggested Goldsmith needs to “get away from just saying what he thinks business wants to hear”.
Another suggested Goldsmith needed to “get some charisma”.
With just three months as finance spokesman it is not surprising 45 per cent of survey respondents are still unsure if Goldsmith has what it takes to deliver as finance spokesperson.
Goldsmith was appointed in a June reshuffle after former National Cabinet Minister Amy Adams announced she would retire from Parliament in 2020.
“We haven’t seen enough either way,” says an investment firm’s chief executive.
“It is still early days, but I believe he has the right qualities from his early changes and comments,” says Barfoot & Thompson director Peter Thompson. “Today’s Mood of the Boardroom debate will be his first real test.”
While he has still to raise his profile as a shadow finance minister, Goldsmith is a prolific author. He wrote a book on the definitive history of taxation in New Zealand (We Won, You lost, Eat That) and the history of Fletcher Building. He is also a biographer, covering the pantheon of New Zealand business leaders including John Banks, Don Brash, Sir William Gallagher, Alan Gibbs and the Myers family.
In Gibbs’ biography, Goldsmith wrote that at one-point Gibbs asked him: “Paul, when are you going to stop living vicariously, writing about other people’s lives and get up and do something yourself?” After his maiden speech in Parliament, Goldsmith said Gibbs laughed down the phone at him: “I meant get up and do something genuinely useful; not go into politics!”
Goldsmith got his first taste for politics when he moved from a role with the Waitangi Tribunal to join John Banks’ office as a press secretary. When Banks was thrown out of Cabinet he was taken on by National Environment Minister Simon Upton. After National’s 1999 defeat he worked in Helen Clark’s Labour Government as a staffer for former Cabinet Minister Phil Goff.
He entered Parliament as a National list MP in 2011 and went on to hold the Commerce, Science and Innovation and Tertiary Education portfolios in the last National Government.
After the 2017 election, Goldsmith aligned himself closely with National leader Simon Bridges.
As economic and regional development spokesperson, he raised his profile through blistering attacks on Shane Jones’ administration of the Provincial Growth Fund.
In an open-ended question on what Goldsmith’s key priority should be, many CEOs highlighted productivity and infrastructure.
“He needs to devise a coherent set of policies which would plausibly deliver a meaningful improvement in New Zealand’s rate of productivity growth,” says one respondent.
Said an energy boss: “Joining the narrative together on economic, environment, trade, social, infrastructure into a compelling, long-term and understandable (street-level) vision.”
“Creating a framework for stability and investment that does not constrain growth,” responded an automotive boss.
Other advice for Goldsmith included the need for him to “get really clear on how all parts of society can win under a National government”, and to “have clarity regarding National party policies and being able to articulate them clearly.”
https://www.timmccready.nz/wp-content/uploads/2019/09/MOTB-Goldsmith.jpg864977tim.mccreadyhttps://www.timmccready.nz/wp-content/uploads/2020/03/TimMcCready_banner.pngtim.mccready2019-09-24 20:58:302019-09-24 21:15:26Mood of the Boardroom: Goldsmith a fast learner (NZ Herald)
Incumbent Auckland mayor Phil Goff has failed to fire with New Zealand business leaders who want him to focus and step up the pace if he gets another term in next month’s local government elections.
CEOs and directors responding to the Mood of the Boardroom survey were asked to rate incumbent Goff on a scale where 1 = not very well at all and 10 = exceptionally well. He received a fairly average grade of 4.88/10.
But despite this low score, when asked who has the best attributes to be Auckland’s mayor between Goff and mayoral hopeful John Tamihere, 73 per cent picked Goff.
Throughout the campaign, Tamihere has made a name for himself — suggesting a two-level harbour bridge crossing, an 0800 JACINDA phone number to report homelessness, and selling off the council-owned Watercare in order to fund infrastructure projects.
Goff, meanwhile, has argued he is a steady pair of hands with the experience needed in order to bring better public transport and cleaner water to Auckland.
Survey respondents tend to agree with this, commenting that Goff is more “practical and experienced”, and has the best knowledge of the issues that are important to Auckland.
Beca CEO Greg Lowe says Goff is more capable than John Tamihere, and understands the challenges of running Auckland better.
But he advises that: “Phil could be more aspirational though on where Auckland is heading, to develop a compelling vision we can all buy into.”
Lowe says a vision would help clarify city priorities and provide a clearer platform for discussion with central government.
One of the country’s leading bankers says: “Phil Goff may be a bit of a geek, but you know he’ll be diligent and across the detail”.
Barfoot & Thompson’s chief executive Peter Thompson says though Goff has the best attributes for mayor, it’s a close call.
“He knows the issues the city is facing and if elected he needs to act and fix,” he says.
“We need to see where our petrol tax is going to and we need to see timelines for the infrastructure — not just saying these are issues and then form committees to look into.”
A government relations boss reckons “Goff is dangerously autocratic, but he’s bright — whereas JT is fun but mad”.
But there were also a sizeable number who commented “neither” when asked to choose between the two leading mayoral candidates.
“Not sure I feel great about either — where is the focus on running a great city as a business and its effectiveness?”, questioned Foodstuff’s Chris Quin.
“Disappointed neither candidate is a woman,” said an internet retail boss.
“The test is of commercial acumen and governance ability,” said independent director Dame Alison Paterson.
Just 11 per cent of respondents chose former Labour Cabinet Minister John Tamihere as the mayoral candidate with the best attributes to become mayor of New Zealand’s biggest city.
“It has come down for me to anyone but Goff,” says one prominent chairperson who preferred the challenger over the incumbent.
But despite not necessarily choosing Tamihere as their preferred candidate, some CEOs say he is raising important issues and offering visionary thought.
A leading banker says he will vote Tamihere because he is “looking for a mayor who will shake the hell out of the huge bureaucracy which Auckland Council and its CCOs (council-controlled organisations) have become”.
Another respondent says Tamihere has made some “valuable contributions on CCO transparency, the port move, stopping light rail to the airport and utilising existing heavy rail connections”.
Says Barfoot and Thompson’s Peter Thompson: “If Tamihere gets the facts and shows strong reasoning, he will go close in the election. At least he is addressing the issues.”
Mark Franklin, managing director of Stevenson Group says he likes some of the things Tamihere talks about, but “he loses me when he makes stuff up and makes promises that he can’t afford”. Franklin suggests though Tamihere is getting some cut-through, he would be more credible with costed policy.
“I think that JT thinks the Trumpian method might carry him through,” he says.
Auckland Business Chamber’s chief executive Michael Barnett says Tamihere began with a focus on the basics, but has since chosen to try to be a visionary. “The problems Auckland faces are here and now, and his change will cost him any chance of winning,” he says.
This was the sentiment from many when asked whether Tamihere’s campaign promises — such as a rates freeze and replacing the harbour bridge with a double decker megastructure — offer a credible alternative to Goff.
Only 9 per cent of respondents say they do, 77 per cent say no, and 14 per cent are unsure. Many worry that some of his ideas are “all talk, incompatible objectives” and lack the detail needed to be realistic.
“I don’t think anyone anybody takes Tamihere’s Auckland bridge proposal seriously,” says one professional director.
A leader in NZ wine exports opines: “A rates freeze will mean Auckland will spend another decade not improving infrastructure. Choosing Christine Fletcher to ‘shake things up’ with him is a joke.”
A professional director pleads to the electorate: “John Tamihere would be like voting for Donald Trump — please don’t!”
Says another: It’s dreamland and God help Auckland if he becomes mayor.”
https://www.timmccready.nz/wp-content/uploads/2019/09/MOTB-Mayoralty.jpg992650tim.mccreadyhttps://www.timmccready.nz/wp-content/uploads/2020/03/TimMcCready_banner.pngtim.mccready2019-09-24 20:54:092019-09-24 21:15:39Mood of the Boardroom: Goff or Tamihere – CEOs pick their preferred Auckland mayor (NZ Herald)
Business chiefs say Peters and his party have had a moderating effect on Labour, writes Tim McCready
Business leaders say Winston is in tune with the view of a wide cross section of New Zealand and understands what the electorate can accept and what it will not.
When business leaders were asked to rate Winston Peters on his ability to influence the major coalition partner (Labour) in government to achieve policy outcomes on a scale where 1 = not impressive and 5 = very impressive, they gave him an impressive score of 3.59/5.
A major wine exporter jokes that “in reality, Winston runs the country!”
Furthermore, most respondents — some 64 per cent — say that Winston Peters and his party have had a moderating effect on Labour within the Coalition that is producing better outcomes for business and farming communities. Only 13 per cent say he hasn’t, and 22 per cent are unsure.
“It seems that sometimes Winston is the voice of reason and experience at the Cabinet table,” says one chairperson.
Foodstuffs North Island’s Chris Quin adds: “NZ First are engaged, seem to be pragmatic and focused on producing better outcomes.”
In some ways this is now seen as a strength. At the Red Meat Sector Conference this year, one speaker urged attendees to vote for NZ First for the moderating effect the party brings — joking that we have moved from first-past-the-post to a third-past-the-post electoral system.
When Prime Minister Jacinda Ardern was unable to get the support of NZ First and was forced to reject the Tax Working Group’s recommendation to adopt a capital gains tax (CGT), Peters brushed off questions about whether NZ First held too much power:
“Politics and coalitions are difficult to operate. This has been a most successful coalition in an unexpected way.
“It’s not a matter of being happy or who won or who lost. What really matters is: have we got the right policy — all of us — that has the support of what I believe is the mass majority of New Zealanders?”
A lobbyist agrees, saying Peters’ cunning and ability to understand negotiating gives him a huge advantage — “he also understands middle NZ better than the Greens or Labour”.
Peters also has a big role to play as our foremost diplomat and has driven a punishing schedule in recent month with visits to Washington DC to meet Vice-President Mike Pence, to Turkey to meet President Recep Tayyip Erdoğan in the wake of the Christchurch massacre, and on multiple trips to the Pacific.
But it is in the domestic arena where CEOs have chipped in.
Respondents also noted the labour law changes and climate change as areas where NZ First is having a notable influence.
Banker Don Brash says the business community owes the partial retention of the 90-day trial period for smaller businesses to NZ First, “and the farming community may well owe NZ First for moderation in the Zero Carbon Bill”.
“Yes — and keep it up Winston,” says independent director Cathy Quinn. “We do need to see that the climate change legislation allows business and farming to adapt in a sensible time frame.
“I’m not saying we shouldn’t reduce emissions in NZ or play our part — I very much believe we should. But we shouldn’t expect business (including farming) to reduce emissions before there are variable pathways to do so. That is unreasonable, unfair and bad for our economy. For example, if we want farmers to cut emissions, we need to look at allowing the use of genetically modified grasses and the like which would facilitate this.”
Quips another respondent: “It is a bit of a worry when we all say: thank God for Winston!”
But not everyone was a fan of NZ First moderation. Fulton Hogan managing director Cos Bruyn agrees with the moderating effect, but is “unsure if it is producing better outcomes”.
Explains a public sector boss: “I scored Winston as being impressive in his ability to influence because he exercises a veto right over a lot of strategy — however I am not saying that is good.”
https://www.timmccready.nz/wp-content/uploads/2019/09/MOTB2019-Peters.jpg1057969tim.mccreadyhttps://www.timmccready.nz/wp-content/uploads/2020/03/TimMcCready_banner.pngtim.mccready2019-09-24 20:50:192019-09-24 21:15:49Mood of the Boardroom: Winston Peters viewed as ‘the voice of reason’ (NZ Herald)
Act Leader David Seymour’s infamous appearance on reality television show Dancing with the Stars has continued to dog him: “Less dance twerking more policy tweaking please,” says Craig Stobo, LGFA chair.
Adds an investment chief: “Hopeless. He should return to Dancing with the Stars.”
When survey respondents were asked to rate Seymour’s performance in holding the Coalition Government to account on a scale from 1 = not impressive to 5 = very impressive, he received a score of 2.31/5.
The Act party relaunched earlier this year, unveiling a new logo and a focus on freedom.
It announced a freedom to earn, and a freedom of education policy to go alongside its freedom of speech pledge.
Seymour is hoping to boost Act back into the 6 to 8 per cent territory it occupied between 1996 (6.1 per cent) and 2002 (7.1 per cent).
“Seymour is a lone voice and the media representation of him is as a shrill,” says Cooper and Company’s chief Matthew Cockram. “It is a shame really, as he is smart and articulate with good instincts and a heart that wants the best for New Zealand.”
Independent director Cathy Quinn says Seymour is impressive but needs more MPs to be able to achieve more. “I admire his positivity nonetheless,” she says.
A transport chief suggested: “he’s actually better than I expected for a one-man band.”
“By all accounts a nice guy albeit somewhat quirky — while stiff on the dancefloor — largely invisible in this term,” says Deloitte’s Thomas Pippos.
One of Seymour’s most public achievements this year has been the progress made on his voluntary euthanasia private members bill, which would allow terminally ill adults to request assisted dying. The End of Life Choice Bill is due to return to the House tomorrow for a fourth debate. Following the mosque attacks, he labelled the gun buyback scheme a waste of time, noting that the “people who are prepared to line up in the full public glare and hand in their firearms at below-market rates are not the people we should be worried about”.
A banker commended his passion, noting that at times he seems to be the only voice of reason within Parliament: “He was able to shame the Government into retaining the essential features of charter schools and has embarrassed it on its largely ineffectual gun buy-back programme.”
https://www.timmccready.nz/wp-content/uploads/2019/09/MOTB2019-Seymour.jpg443964tim.mccreadyhttps://www.timmccready.nz/wp-content/uploads/2020/03/TimMcCready_banner.pngtim.mccready2019-09-24 20:48:442019-09-24 21:15:57Mood of the Boardroom: Seymour needs to sharpen up his Act (NZ Herald)
Business leaders and controversial Cabinet Minister Shane Jones haven’t gone so far as to smoke a peace pipe.
But this year’s Herald CEOs survey shows the sting has gone out of business criticism with just a few personally derogative comments on Jones compared to 2018 when he was slagged off for “pathetic populist posturing” and “short-sighted political point scoring” after the string of personal attacks he mounted against leading business people.
Respondents were asked to rate Jones on his performance as Regional Economic Development and Infrastructure Minister over the past year.
On a scale where 1 = not impressive and 5 = very impressive he received a score of 2.43/5.
Jones has toned down the bombast so his personality does not eclipse his policies.
This came after a word from Prime Minister Jacinda Arden, who Jones told the Herald had said to him “no news is good news”.
His championing of the new Infrastructure Commission has raised his reputation with that sector.
But his jawboning has also got results. Air New Zealand, where he called for top brass to go after the airline axed some provincial routes, this year hosted Jones on an inaugural direct flight from Auckland to Invercargill.
Jones, who refers to himself as the “provincial champion”, has attracted criticism over the Provincial Growth fund which sits within his portfoilo responsibilities.
“It has delivered for Mr Jones and NZ First,” suggests independent director Craig Stobo. A professional director suggests it is a “NZ First get re-elected fund”.
The Provincial Growth Fund has been allocated three billion dollars over three years to invest in regional economic development.
Investments include upgrades to infrastructure, such as the announcement earlier this month that the Auckland to Whangārei rail line will be upgraded to the tune of $94.8 million, getting freight trains back up and running by next September.
Some say it has already delivered on what it set out to do.
“In some aspects it has, particularly in attracting investment into the smaller regions,” says a professional services chief.
“Solely based on the recent allocation to rail infrastructure improvement between the North and Auckland,” adds a top exporter.”
Business leaders were asked to choose as many of the following that apply in terms of the Provincial Growth Fund (PGF). They say the fund is:
In need of financial monitoring to ensure appropriate investments (61 per cent)
A political slush fund (60 per cent)
Getting much needed economic focus on regional New Zealand (24 per cent)
Delivering infrastructure investment that will boost regional links and infrastructure (11 per cent)
When asked how confident they were that the fund would help to address New Zealand’s infrastructure challenges, 2 per cent are very confident and 22 per cent are quite confident. The overwhelming majority — 76 per cent — say they are not confident it will help.
“It’s a solution in search of a problem which, when it finds a problem that does need solving, discovers it’s not the right solution,” says a real estate chief executive. “It’s also — let’s be fair — not the Government’s PGF, but NZ First’s, and it would exist whoever Winston Peters had chosen as his coalition partner.”
“The idea is a good one but these things take a while to feed through, so we’ll only be able to judge its success in a few more years,” suggests a top banking boss.
Beca’s chief Greg Lowe suggests the existence of the PGF is encouraging a significant increase in ideas to improve regional growth. But he says “a more integrated regional plan, bringing a collection of initiatives together within a region that can support each other, might give more effective outcomes”.
Questions about the way in which the PGF operates were frequently raised by respondents. “Investing in the provinces is a great idea — this model for doing so is a joke … ,” says one investment boss. “It has potential in places, but is also open to be used to finance projects that never stacked up in the past,” says another.
https://www.timmccready.nz/wp-content/uploads/2019/09/MOTB2019-PGF.jpg763966tim.mccreadyhttps://www.timmccready.nz/wp-content/uploads/2020/03/TimMcCready_banner.pngtim.mccready2019-09-24 20:45:462019-09-24 21:16:07Mood of the Boardroom: ‘Solution in search of a problem’ (NZ Herald)
The New Zealand Initiative’s recently released report — #localismNZ, Bringing power to the people — argues the case for localism in New Zealand. It calls for a radical shift of political and fiscal power from central government to communities.
The Mood of the Boardroom asked New Zealand’s leading CEOs and directors whether central government should give more decision-making responsibility to city and district councils; 67 per cent of respondents agree, 20 per cent disagree, and 13 per cent are unsure.
Beca’s CEO Greg Lowe says that local authorities are facing increasing infrastructure challenges but in many cases they do not have the funding mechanisms to pay for all the improvements needed.
“Better regional investment plans would help the conversation between central and local government about how these needs can be funded and implemented,” he says.
Port of Tauranga chief Mark Cairns agrees with the suggestion, assuming that “taxes or rates raised in a region are hypothecated to that region”.
Says an energy boss: “decentralisation isn’t about existing councils having more power, it is about distributing that power on relevant topics to even smaller democratic units.”
A software boss agrees, suggesting that “decisions are always better made when the decision maker is closer to the community”.
Simon Ellis, managing director at Ovato NZ, is unsure, and says it depends in what areas the decision-making is in. “In most instances in New Zealand we should have the same rules across the country — central government cannot absolve its responsibilities to NZ Inc,” he says, giving water quality, water safety and fluoridation as examples.
In New Zealand, council revenue is largely separated from economic performance.
Local government is the core funder of transport and water services for new development, yet its revenue is derived from property rates — which are a cost allocation method linked to council costs, and not to the success of the economy or land prices.
Conversely, central government is the direct benefactor of growth: receiving increased GST, income tax and corporate tax when the economy grows.
New Zealand is unusual in that it is among the most centralised countries in the world. Local government is responsible for almost half (46 per cent) of public spending in OECD countries on average, whereas in New Zealand, central government controls 88 per cent of public expenditure. Business interest in localism was fired up when NZ Initiative executive director Oliver Hartwich organised a group of his think tank members to go to Switzerland — which is the poster-child for localism — on a study mission in 2017.
Vector chair Dame Alison Paterson disagrees in the idea for New Zealand — at least “until there has been an assessment of the capability of local body politicians to assume this responsibility”.
This lack of confidence that local government in New Zealand has the capability and capacity for localism to work here was frequently raised by respondents.
A prominent chairperson suggests localism in New Zealand could work “only if they are capable of carrying out the additional responsibilities”, but says he has seen nothing that gives him the confidence that they can.
The CEO of a large retail chain takes a similar stance, suggesting “councils across New Zealand are exceptionally good at incompetence — I am not in favour of increasing any of their responsibilities”.
A lobbyist head offers a more candid take: “Hell no. They are often completely loony and I wouldn’t trust most of them to run a pub raffle.”
The NZ Initiative has published a string of reports on localism, including examining the myths, facts and challenges about local government; advocating for a Local Manifesto to restore local government accountability and giving a global perspective on localism.
https://www.timmccready.nz/wp-content/uploads/2019/09/MOTB2019-localism.jpg740979tim.mccreadyhttps://www.timmccready.nz/wp-content/uploads/2020/03/TimMcCready_banner.pngtim.mccready2019-09-24 20:43:332019-09-24 21:16:16Mood of the Boardroom: A radical community initiative (NZ Herald)
The Prime Minister’s Business Advisory Council was on the money when it warned Prime Minister Jacinda Ardern New Zealand is at an “infrastructure crisis point”.
Some 86 per cent of CEOs and directors responding to this year’s Mood of the Boardroom survey agree: Just 7 per cent disagree, 7 per cent are unsure.
Roads, ports, hospitals and mass transport systems frequently appeared among comments from respondents as areas that need urgent attention.
Beca chief executive Greg Lowe says New Zealand’s current infrastructure — on many fronts — is struggling to meet current demand and is falling further behind in regions that are growing. “We need to be catching up on the infrastructure backlog, not letting it get bigger,” he says.
A dairy industry chief executive makes the case that infrastructure is an enabler for a thriving and productive economy that impacts on everything — from people’s mindsets, productivity and life balance, through to the flow of goods and services. “Make it easy to be productive and get things done.”
Waste Management’s managing director Tom Nickels suggests “if we do not address our inadequate infrastructure, we risk becoming a nice place to visit providing you don’t mind second rate amenities.”
A transport chief executive says the infrastructure challenges are more acute in some regions over others, “however the country is years behind and must not only catch up — but get in front of the curve”.
The significance of infrastructure as a concern to our top business leaders can be demonstrated from a question respondents were asked about business confidence.
Asked how concerned they are about the impact of infrastructure constraints on business confidence (on a scale of 1 to 10 where 1 = no concern and 10 = extremely concerned), they scored it 7.39/10. This was the second highest constraint among those polled, the constraint of highest concern was congestion in Auckland — also linked to infrastructure — which scored 7.60/10.
The head of a major education institution reckons “crisis” is the new buzz word. “A bit overdone in places,” he says. “Not sure it is a crisis — but it is certainly challenged,” says an energy boss. Local Government Funding Agency chair Craig Stobo suggests “New Zealand’s infrastructure is a big bucket… I’m not sure that all of it is in crisis.”
The Government recently appointed Alan Bollard to chair a newly launched Infrastructure Commission.
The Independent Commission will have two broad functions — strategy and planning, and procurement and delivery support:
It will provide expert advice, planning and strategy, and support the delivery of major infrastructure projects across the country.
It will also be a one-stop shop for investors, including publishing a pipeline of infrastructure projects.
As an autonomous Crown Entity with an independent board, the commission will have the credibility and influence required to effect real change. Ministers will retain final decision making rights, as is appropriate.
Some 7 per cent of respondents were very confident that the Bollard-led commission would help address New Zealand’s infrastructure challenges.
Some 58 per cent were quite confident. But 35 per cent had no confidence the commission would make an impact.
Bollard is a former Governor of the Reserve Bank and Secretary of Treasury. The five other members of the board are: Infrastructure New Zealand’s former chief executive Stephen Selwood, MinterEllisonRuddWatts chairwoman Sarah Sinclair, Watercare Services chief executive Raveen Jaduram, former banker and independent director Sue Tindal and Simpson Grierson special counsel David Cochrane.
The Government has shifted transport infrastructure focus from roading to public transport and rail, including the recent announcement of funding for the construction of a Hamilton-to-Auckland passenger rail service. Though when asked to rate the coalition government on its performance in addressing transport constraints on a scale where 1 = not impressive and 5 = very impressive, respondents gave a grade of just 1.57/5.
Many of those responding to the survey specifically mentioned roading improvements as essential to the country. A quarter of those surveyed that suggested building more roads to reduce congestion should be a “top three” priority for the Auckland mayoralty.
Waste Management’s Nickels says congestion in Auckland remains a major constraint on productivity and quality of life in general.
“The movement of goods and services have become extremely challenging. Our drivers’ unproductive time is increasing and it is becoming more difficult to meet customers’ needs in a timely way,” he says.
“We must invest in roading infrastructure to free up traffic over the next decade or two in support of the forecast growth of greater Auckland. For the longer term we also need to invest in our rail system.”
On rail, an agribusiness boss disagrees: “Where railway works best is between large population centres, over huge distances with straight lines and limited hills to climb, carrying consistent cargo on a large gauge and with a modern rolling stock — New Zealand has none of these.”
He suggests the answer has to be getting the roads right: “Imagine the benefit of a two-lane highway from one end of the country to the other. The new two lanes could be built where the railway lines currently are. We need to stop half-doing both.”
The boss of a lobbying firm says that “with Twyford in charge and no money spent on roads anymore, no one is surprised that we’re at a crisis point”.
The Business Advisory Council’s damning indictment of New Zealand’s infrastructure regime says there is “no overarching vision or leadership in New Zealand for infrastructure development”.
“This means there is no nation-building narrative upon which to build a strategic direction,” it says — although it acknowledges the problem at hand was not created by the current government but is instead intergenerational.
Barfoot & Thompson’s Peter Thompson agrees, adding that many of the existing issues have been around under prior governments before. “It is a matter establishing what are the essential ones and to actually get on and rectify such,” he says. “Costs of fixing won’t come down, so the longer they are put off the more the costs will go up”.
Says the managing director of a large investment firm: “It was at a crisis a decade ago and National did bugger all”.
Some 55 per cent of CEOs felt rail investment in NZ could be bolstered through an in increased share of the National Land Transport Fund (petrol excise tax and road user charges). But 30 per cent felt this mechanism had no role to play in rail investment.
A similar number (55 per cent) felt rail investment could be stepped up through the public purse: an increased share of funding from general taxes to fund health and environmental benefits of rail; 35 per cent were opposed.
There was two-thirds support however for bolstering investment through commercial, industrial and residential land development adjacent to rail.
https://www.timmccready.nz/wp-content/uploads/2019/09/MOTB2019-Infrastucture-commission.jpg993643tim.mccreadyhttps://www.timmccready.nz/wp-content/uploads/2020/03/TimMcCready_banner.pngtim.mccready2019-09-24 20:41:162019-09-24 21:16:24Mood of the Boardroom: The road to improvement (NZ Herald)
Last week, mayoral hopeful John Tamihere announced his first transport policy: promising to turn the existing Auckland Harbour Bridge into a two-level bridge with 10 lanes for cars on a lower level, and four rail tracks, walkways and cycleways above.
He says the superstructure could be completed within six years using the existing piers, swapping out the existing bridge with “minimal disruption to traffic”.
“My team have looked at overseas structures and costs and it is very doable,” he says. His policy document references the Milton-Madison bridge which connects Milton, Kentucky and Madison, Indiana — towns with populations of around 500 and 55,000, respectively.
Tamihere had not costed the proposal at the time of the announcement — but suggested he expects the New Zealand Transport Agency to pay for it.
Minutes after the announcement, Mayor Phil Goff shot back on twitter, claiming the bridge would cost over $10b to build and suggesting Tamihere either “intends to bankrupt the city, burden ratepayers with massive extra rates or he is making it up because he knows he is never going to deliver it.”
Goff continued: “Widening the motorway at either end to match the new lanes would see massive demolition of buildings and destruction of homes and neighbourhoods. This will cost further billions of dollars that Auckland doesn’t have and the Government won’t pay for.”
“This is total fantasy stuff and fundamentally dishonest to promise.”
Infrastructure experts and the public have largely ridiculed the idea, with some drawing parallels to President Trump’s border wall, which he insisted Mexico would pay for.
The comparison has been made before, to which Tamihere said: “it’s a very poor simile for me. I’m not a billionaire, I’m not a big white guy, my wife sold my golf clubs a long time ago… While I’m forthright, I like to be as respectful as I can be… To use a lazy simile like that on me, you’d have to actually express some specificity about that and give some evidence.”
But Tamihere risks turning his candidacy into satire. His pledge to launch a freephone hotline for the public to dob in beggars was an obvious jab at central government:
“Under my mayoralty, you will be able to ring 0800 JACINDA and a person all loving and caring that knows everything about your wellbeing will answer the phone and they will be able to dispatch a social worker,” he said.
He dug in further, saying social workers should change their work hours to work three shifts because the profession needs to “wake up to the fact that social work is a 24/7 job”.
The Social Workers Association chief executive Lucy Sandford-Reed labelled the quip provocative and poorly thought out. Once again, Goff took the opportunity to fire back at Tamihere on twitter:
“John Tamihere’s plan to set up 0800 JACINDA to report homeless people is a political stunt that demeans the seriousness of the issue. While Tamihere might be happy to criminalise homelessness, I believe we should be providing support to our most vulnerable.”
We know that local elections can be notoriously dull. Auckland’s turnout for 2016 was only 38 per cent.
As the election draws closer, candidates will continue the publicity stunts and attack lines in an attempt to get cut-through and secure a vote.
During the first head-to-head debate of the campaign last month, Tamihere announced his intention to sell 49 per cent of the council-owned Watercare, suggesting proceeds from the water company could be used to deliver cash to fund the city’s hefty infrastructure requirements. He said there was already a bid from ACC, claiming “Phil knows it, the public needs to know it.”
In some ways, the call for part-privatisation worked — it got significant exposure.
But Iain Lees-Galloway, the minister responsible for ACC, dismissed the claims. And in an unusual move, so did ACC:
“We do not normally comment on potential or actual investment opportunities; however, in this case, in relation to Watercare, we confirm that ACC has not received any investment proposal nor are we aware of any sales process.”
There is a place for imaginative thinking to help solve the infrastructure problems plaguing our biggest city. It’s just a shame they tend to be presented as hasty and ill-thought-out ideas, eight weeks out from an election.
https://www.timmccready.nz/wp-content/uploads/2019/08/bridge_TimMcCready.jpg7401041tim.mccreadyhttps://www.timmccready.nz/wp-content/uploads/2020/03/TimMcCready_banner.pngtim.mccready2019-08-21 09:30:532019-08-21 09:50:37Opinion: Build a bridge, make Wellington pay for it (NZ Herald)
NZ could be a connector of China and Latin America, but it’s not without its challenges, writes Tim McCready
Developments in air travel are making longer non-stop flights possible and commercially viable. Currently, the longest distance flight is Singapore Airline’s 15,300km between Newark New Jersey and Singapore — not quite reaching the distance to fly direct to South America from China.
The Herald’s aviation editor, Grant Bradley, says new aircraft technology could allow load restricted non-stop flights from Southeast Asia to South America — but those departing from China must still stop along the way.
“By stopping over in New Zealand (or Australia), airlines do get the opportunity to tap into more passenger and freight markets,” he says.
“But in saying that, Auckland Airport’s aim of being something of a mini-hub for Southeast Asia — South America flights could be some way off too; the demand isn’t there yet.
“And worryingly for Auckland, Latam airlines will overfly the city with some of its flights from Sydney to Santiago from the end of the year, instead of calling here.”
The Building the Southern Link conference, held in Auckland earlier this year, sought to leverage the opportunity, suggesting that New Zealand’s place in the world as a major and natural connection between China and South America is an idea whose time has come. It brought together more than 200 international experts and key stakeholders, to discuss the opportunity, and develop recommendations to move forward.
“New Zealand is either first cab off the rank, or the last,” former trade minister Tim Groser told attendees.
He says that for a small country, you must have the wherewithal to not wait for good company, but to get ahead of the queue and move swiftly. This is a central lesson if you survey the history of New Zealand’s relationship with China in particular. China attributes “five firsts” to New Zealand:
In 1997, New Zealand became the first country to agree to China’s accession to the WTO by concluding the bilateral negotiations component of that process.
New Zealand was the first country to recognise China as a market economy in 2004.
New Zealand was the first developed country to commence free trade agreement negotiations with China. In November 2004, New Zealand and China launched free trade agreement negotiations.
In April 2008, New Zealand became the first country to successfully conclude free trade agreement negotiations with China.
In November 2016, New Zealand and China jointly announced the launch of negotiations to upgrade its bilateral free trade agreement, a first for a developed country with China.
Groser says New Zealand has been an outlier in that respect. “Traditionally foreign ministries look for good company — political safety,” he says. “The tendency is to join queues, not to form them. If we’ve had some success, it’s because we’ve taken well calculated risks — because if we don’t, we end up at the back of the queue.”
Trade and Export Growth Minister David Parker says New Zealand’s geographic location — which was once considered a disadvantage — was now a development opportunity. He says the idea of the Southern Link is one that the Government is behind — it fits with their objective of diversifying our economic linkages further.
“What do we need this southern hub to do?
“At the simplest level, the hub should facilitate seamless and convenient exchange of goods and travel for people between the eastern and western sides of the Pacific Ocean,” he said.
“In this sense, New Zealand offers a clear alternative to crowded northern hemisphere airports.”
At the conference, Chinese Ambassador to New Zealand Wu Xi said: “The key features of the Belt and Road Initiative are connectivity, openness and inclusiveness. In many ways, it is like a modern version of the ancient Silk Road.”
She said it has created new energy and momentum for global economic growth, and a framework for ideas like the Southern Link to take shape.
Groser agreed — saying the Belt and Road Initiative, first described in 2013 by Chinese President Xi Jinping (and at that time known as One Belt One Road), is a “mother of a plan — you don’t get bigger vision than BRI”.
New Zealand is a small, sophisticated country — and well organised. The conclusion of working groups at the conference agreed that the potential exists to make the Southern Link a reality, but there are issues that will need to be addressed.
These include political complications, transit visas, air services, customs and biosecurity regulations, trade facilitation and border policies.
Many of these are a lot more complex than they might appear. Stephen Jacobi, executive director of the New Zealand China Council, told the conference that the Southern Link must be a partnership between government and business.
He says we need to convince government that the changes to public policy and regulation are worth making, “because the prize — in terms of increased trade, travel and tourism — is high”.
Groser wrapped up the conference by throwing down a challenge:
“A plan not backed by a vision is a nightmare. But a vision without a plan is hallucination,” he said.
“We have a big idea. I think it’s on the move — and I think we should seize the time.”
https://www.timmccready.nz/wp-content/uploads/2019/08/southernlink_TimMcCready.jpg786661tim.mccreadyhttps://www.timmccready.nz/wp-content/uploads/2020/03/TimMcCready_banner.pngtim.mccready2019-08-21 08:00:492019-08-21 09:50:21Infrastructure: Can Auckland be a major hub?