17 August 2018

BusinessNZ chief Kirk Hope is exactly right in saying Government policy must maximise economic growth and generate jobs that lead to higher incomes and make Kiwis better off, National’s finance spokesperson Amy Adams says.

“The Government has downplayed the significance of slumping business confidence, but as BusinessNZ observes, there is now ‘indisputable evidence’ falling confidence is impacting actual activity.

“It is naïve for the Government to say companies are profitable enough to cope with policies that are slowing the economy and driving up costs. In the real world, employers must juggle priorities and make difficult decisions that affect workers and investment.

“The Producer Price Index figures today show firms’ input costs are rising faster than they can raise prices. Faced with a squeeze, businesses have to raise their own prices, hire fewer workers or cut investment.

The impact on business activity can be seen in the performance of services index (PSI) for July which showed employment shrank for the first time since early 2013 - yet more evidence that jobs growth is stalling. The PMI manufacturing index showed production contracted, which Bank of New Zealand called ‘the most disturbing finding.’

“Business needs the certainty of sensible, consistent economic policies that encourage them to grow. They have to manage risk and right now one of their biggest risks is the lack of policy certainty from the Beehive.

“National wants New Zealand to be a place where everyone has the opportunity to get ahead. Gains tend to be hard won and easily lost.

“I welcome BusinessNZ’s balanced assessment of the challenges we face. These aren’t issues for petty political point-scoring. New Zealand is a small, open economy and policy must be optimised to ensure that we, as a nation, can thrive and grow.

“National believes that a growing economy means more jobs, higher incomes and more revenue to pay for things the country needs. Without it the argument just becomes how we split our current ‘pie’ amongst ever growing demands. We have to grow the pie.”

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