The winter of discontent is upon us

The government has tried very hard not to repeat the winter of discontent that beset Helen Clark’s government in the first year. The hallmarks are similar. As in 2000, oil prices are rising, and the government has exacerbated that by piling tax increases on top.

Now business confidence has plummeted, just as in 2000. The NZ Herald reports: Quote:

The spiking price of fuel, slow progress on housing and infrastructure and the threat of rising labour costs has sent business confidence in the country’s biggest city into “free fall”, says Auckland Chamber of Commerce boss Michael Barnett.

The chamber last week surveyed 800 businesses and found nearly half (44 per cent) believed the economy will deteriorate over the rest of this year.

Only 15 per cent thought the economy would improve during that time.

Compare that to June last year, when a third of businesses surveyed thought the economy would improve while only eight per cent believed things would get worse. End quote.

Unsurprising when you consider that the signals that Labour have sent business are all bad. They’ve unilaterally destroyed an entire industry, signalled union friendly industrial policies and prevaricated and shown a lack of planning by forming 122 working groups and inquiries.?Quote:

The chamber said that skill shortages were getting more pronounced for small-and-medium businesses, which made up 97 per cent of the chamber’s survey

But uncertainty over the direction the Government is taking the economy was the main reason behind the slump in business confidence, Barnett said.

Businesses, according to Barnett, were upset with the Government over what they perceived as slow progress on infrastructure and housing.

“There appears to be no speed of action and no decisions, just working groups,” he said.

The 11.5c fuel tax – which Auckland Council last week approved – and increasing cost of labour was also biting.

The minimum wage rose 75c to $16.50 per hour on April 1 and the Government has said?it is committed to hiking it to $20 by 2021.

“The biggest threat to a small and medium business is the threat of a price of labour hike, a spike in the cost of labour. And they [businesses] are told the minimum wage is going up, they told the living wage is going to be in there by 2020 and they’re told that if they don’t think they can manage it they shouldn’t be business,” Barnett said.?End quote.

Labour don’t care. Their minister said that if businesses couldn’t operate with an increased minimum wage then they shouldn’t be in business. His wish is likely to come true: businesses will either automate away their workers or close and make them redundant. Either way the workers will have no work.

Labour are dreaming if they think that increased fuel taxes will affect only Auckland. They won’t be constrained by silly politicians dreaming up arbitrary boundaries. If something is manufactured in Auckland or passes through the port in Auckland and needs to be transported elsewhere, then it is going to cost more. Prices are going to rise.

Perhaps the biggest damage done is the decision to destroy a whole industry, based on nothing more than seeking positive PR for the prime minister on her tour of Europe. That signalled to business that the government really doesn’t care, and that if you annoy them or they think they can get some positive headlines in the short term then they will happily shank your business, no matter the damage to the economy.