The second winter of discontent is upon us

Duncan Bridgeman writes at NBR about the chill of the second winter of discontent that has descended upon the government: Quote:

Last week was a pivotal moment in the relationship between the newish government and the business community.

Until recently businesses had been feeling uncertain about the future, wary of certain policies and uneasy about the complexities of the agreements between Labour, New Zealand First and the Greens.

Business confidence was understandably subdued, tempered at first by the construction sector and then exporters and other large employers.

Finance Minister Grant Robertson?s first budget was fiscally conservative enough to hit pause on the negative sentiment.

Then last week the business world received confirmation of what the oil and gas sector already knew ? the Coalition government can?t be trusted.

Any lingering hope that the government may actually work with business and soften the blows of reform was shattered.

And business confidence dived again. End quote.??

The government have no idea what they have done. The oil and gas decision sent a signal to every business owner and investor in New Zealand and offshore. The message was that the government didn’t care how valuable a business, sector or investment was to New Zealand: if it suited them to get some positive PR for the princess who is currently the prime minister, then that business, sector or investment would be chucked under the metaphorical bus. Quote:

The drastic move to ban oil and gas exploration with no consultation has given other sectors an enormous fright.

Whether the business community saw it coming or not doesn?t matter. What matters is they were clearly excluded despite Prime Minister Jacinda Ardern saying otherwise.

The document dump under the Official Information Act last week showed the government banned future oil and gas exploration with underwhelming, last-minute analysis from officials. There was also no cabinet paper on the issue, despite the significant ramifications, including lost jobs, lost opportunities and a complete undermining of overseas investment in New Zealand. End quote.

My international sources tell me that even if the government reversed their decision it won’t matter because the signals sent have been received. New Zealand, under this government, is not worth investing in. Quote:

In April Ms Ardern denied the government had failed to consult adequately with the industry, saying Minister Megan Woods had met oil industry representatives.

But the documents released last week show no evidence of consultation, save for discussions between Ministry of Business officials and industry participants the day before the announcement. End quote.

No advice, no cabinet process, no consultation, no research and no idea. Quote:

When asked about the government having a business confidence problem on TVNZ?s Q&A Ms Ardern initially tried to deny it, ?It didn?t fall. It just hasn’t increased,? before admitting it is an issue.

?That’s why we’re going out and working alongside business for some of the things that we’ve floated that we want to do. We’re not making arbitrary decisions. We’re working together.

?But it is something that Labour governments successively have struggled with.?

At least that last bit is true. End quote.

They’ve struggled because they actually have no idea how business operates. They are student politicians, academics or union bosses. Of course they have no idea how business works. Their warped minds construct theories of conspiracies that simply don’t exist, and they make policy based on those theories. Little wonder they get such a tepid, if not hostile, response from business. Quote:

Parallels can be drawn with the Labour-Alliance Coalition government in early 2000.

It came in with more taxes, increases in minimum wage, tighter restrictions on employment and other business practices, and in general a bigger role in managing the economy.

It took some time before business accepted the Helen Clark regime and Sir Michael Cullen?s fiscal management.

The fact is Labour has a real phobia when it comes to considering the interests of those who risk financial capital in New Zealand.

This is compounded because, while Labour has a long-term vision, it does not appear to have a business plan to implement it.

And few in the Coalition cabinet appear to have sufficient economic literacy to successfully lead the country through the good times, let alone an economic downturn. End quote.

There is nothing this government can do now. They’ve sent the signals and they’ve been heard. There will be no further large-scale investment in New Zealand industry while this government remain in power. The knock-on effects will become enormous, especially as oil and gas prices rise.