Business Confidence in Freefall

Batten down the hatches, Oilers. Things are going to get ugly. We have the perfect storm descending on us. The global economy has some serious issues, Australia is going into recession and we have a bunch of clowns without a single economics paper between them running the country. The only reason their tax-and-spend approach has not hit the economy hard so far is because they are so incompetent that they have not yet figured out how to get most of their massive spending policies off the ground. Think of Kiwibuild as a good example. It is a disaster. It is also not alone.

The Government’s greatest fear (well I assume it’s their greatest fear, and if it isn’t it should be) is unfolding before their eyes.
Business confidence is now at a decade-long low. Confidence is not new in a measure of this Government, it’s been down since they arrived.
Initially it was dismissed as business not liking Labour governments. Committees were formed, speeches were made, promises were inferred, time was asked for. It’s amounted to nothing.

Of course it has amounted to nothing. When a government decides, completely out of the blue, to blindside a major industry for no better reason than the prime minister wants to do some virtue signalling before she heads off to Europe, you are in trouble and it is only a matter of time before things really start to turn septic. That time is now.

The latest statistics out this week show confidence is at a 10-year low.
Making it worse is the overall figure, and this was the political argument made by Prime Minister Jacinda Ardern about Labour governments, the overall figure used to be different to the personal figure.
In other words you might be a bit negative, but in your personal circumstances you expected to see things generally tick along, if not improve.
That number has now turned ugly, a net four per cent now expect their own circumstances to go backwards. Manufacturing, as a sector, wants to jump off a cliff. The services sector, as we have seen, is slowing alarmingly. That’s punters not shopping.

We have just had another fuel price hike, and these increases affect everything. Inflation is still low, house prices are falling and, if you are in business, rising wages and the risk of increased union action represents a serious threat. Interest rates are through the floor and this is not a good thing for an economy. Much as we all hate high rates of inflation, really low inflation can be a sign of a very bad state of affairs. And here we are.

The tax take is up $2.5 billion – but is that because of the economy, or the fact Treasury couldn’t forecast what day it is tomorrow, far less a business return.

Like turning around an ocean liner, the flow on effects from the good economic management of the previous government are still there, although they must be running out by now. The tax take will start to fall away fairly soon. Then, as unemployment rises, the tax take will plummet… right at the time that the government is looking to introduce new taxes, such as land tax (read my lips…) to pay for the supposed effects of climate change. Yep. Why else did you think that Jacinda wants the government to declare a climate change emergency?

Who voted for these clowns? Oh, that’s right. No one did.

I think we have fundamental issues now that are going to see growth continue to slow. We have 0.6 per cent last quarter. If it drops below that, it’ll eventually flush through to give us annual growth below two per cent, what we have now at barely over two per cent is bad enough.
If this lot head to election year with decade-low confidence, a slowing economy, a dropping tax take, a surplus all but spent then you watch the National Party prospects, Simon Bridges or no Bridges, spring to life.

When people start really paying attention and the vote counts, history shows they don’t vote for economic wreckers.

A Newspaper.

This crowd were always economic wreckers, but they rode the waves of the previous government’s success for a while. That particular juggernaut will have gone off the road by the next election and voters will be able to see the true idiocy and total incompetence of this dreadful government.

I fervently hope that Mike is right. I also fervently hope that National has some small parties to work with in parliament next time around.