Bold policy changes needed if incoming Prime Minister Chris Hipkins wants to lift record low business confidence - advocate

A business leader and advocate says incoming Prime Minister Chris Hipkins will need to make some policy changes if businesses want to feel like the Government has their back again.

Business confidence has plummeted, according to the NZ Institute of Economic Research (NZIER), with a net 73 percent of businesses expecting economic conditions to deteriorate over the coming month, in comparison to 42 percent recorded in the previous survey.

It's the worst result since the NZIER Quarterly Survey of Business Opinion (QSBO) began.

Iron Duke managing director and former BusinessNZ CEO Phil O'Reilly said the changing of leaders does have an impact on business confidence.

"Business confidence will have some objective stuff around it - have I got forward orders? What's my stock like? Am I able to hire staff? But then there's the subjective factors, how I think the economy's going, and it's there where the politicians really have an impact," O'Reilly told co-host Melissa Chan-Green on AM.

He said one of the reasons business confidence is currently so low is because they feel the Government doesn't have their back. However, with Hipkins coming into power it brings hope that things will change.

"Really, the rubber will hit the road when policies get announced. Will Chris Hipkins actually change some of the policies that are causing real concern for business?" O'Reilly said.

Phil O'Reilly said businesses feel like the Government doesn't have their back.
Phil O'Reilly said businesses feel like the Government doesn't have their back. Photo credit: AM

The main policies businesses are pleading to have changed are around immigration. O'Reilly said if an announcement is made around immigration there will be an immediate bump to business confidence.

Businesses have long been crying out for skilled workers as the country's unemployment rate hit 3.2 percent in 2022, the lowest it has been since 1986.

But Hipkins said on Monday he doesn't want to see New Zealand just rely on immigration to sort skills shortages when there are young people looking for jobs or who could be in training.

O'Reilly also said businesses are looking for changes to Fair Pay Agreements and for the Government to have more discipline over their spending. 

O'Reilly said if Hipkins doesn't change some of the policies businesses are gunning for it will see confidence tank.

Watch the full interview above.