John Armstrong: Ardern's baby leave gives her time to give serious thought to Labour's 'cannot be bothered' attitude to business sector

Jacinda Ardern may have left the building in body for the next five weeks or so. But in mind she will still be operating very much on Wellington time. Her stint on maternity leave gives her a unique opportunity to do something denied to other prime ministers.

Baby willing, her time-out is an opportunity to conduct a relatively relaxed stock-take of what her Government is doing right and what it is doing wrong.

Source: 1 NEWS

With regard to the latter, one of the things that is in dire need of some serious thought is Labour's relationship with business in all its guises and sizes.

When mild-mannered representatives of the business community such as the Auckland Chamber of Commerce's Michael Barnett are warning that business confidence is in "free fall" in the country’s largest metropolis and the engine-room of the economy, it is wise to start listening to what he and other economic soothsayers have to say about what might be causing this crisis.

The PM eventually said it was "pretty special" holding baby Neve Te Aroha Ardern Gayford for the first time. Source: 1 NEWS

It could be a matter of survival — Labour's survival in government to be more precise.

Labour instead gives every impression that it cannot be bothered. It rather seems to be rubbing its hands in anticipation of some kind of sequel to the Winter of Discontent which saw Labour and the business community lock horns in truly ugly fashion back in 2000.

Ms Ardern and Deputy PM Winston Peters shared a joke, looking relaxed ahead of the important discussions. Source: 1 NEWS

That episode is often painted as a blot on the record of Helen Clark’s government of the time.

As Michael Cullen, her ever trusty Finance minister, made very clear with his "we won, you lost, eat that" jibe at National, Labour was the victor.

That stoush, which centred on Labour’s commitment to repeal the much-hated, anti-trade union Employment Contracts Act and replace it with something more worker-friendly, ultimately proved to be cost-free for Labour.

Once replacement legislation had been passed by Parliament, the sting went out of the storm. It culminated in Clark leading Labour to an easy victory in the subsequent general election two years later.

The Finance Minister responds to a gloomy business confidence survey. Source: Q+A

A similar Cullen-like scoffing can be discerned in Labour’s reaction to the current pessimism that is the prevailing theme of survey after survey of business opinion.

Labour has seized on research which shows the perverse nature of such measures of the economic mood.

That analysis found business confidence was pessimistic at the very time the economy was undergoing strong growth. Yet when the mood was optimistic, the economy grew at a slower rate.

That misses the point, however. Those surveys of business opinion are a vehicle by which to send a message to the governing party. The message is that commercial enterprises both big and small are reluctant to hire more staff or to re-invest profits or borrowing order to lift production.

Labour ignores that message at its peril.

The current crop of Cabinet ministers are still at that stage, however, of the electoral cycle which has them believing they are infallible; that if they really tried, they could walk on water.

Under the leadership of first Andrew Little and then Ardern, Labour has also undergone a marked shift to the left. Those voicing the views of business are few and far between in the Labour caucus.

It is also the case that the Government’s honeymoon is long over. Ardern’s troops have become battle-hardened. With a number of contentious policies covering work-place relations in the pipeline, now is the time to remain staunch rather than being seen to be caving in to employers hell-bent on blocking reform.

That is even more necessary for a Government walking a fiscal tight-rope on the highly sensitive matter of the scale of the pay rise that should be granted to the country’s nurses.

In political terms, the bleating of business figures is of Lilliputian significance compared to ending up on the wrong side of public opinion should public hospitals end up being crippled by rolling strikes.

One ingredient is missing from the Beehive’s battle-plan — discipline.

A major factor exacerbating the frustration of those in the world of business is that it is hard to get a grip on the current three-party governing arrangement and the direction in which it is likely to head when confronted with a problem.

In part, that is because this government cannot get a grip on itself.

This week the Government emphatically denied any intention to allow foreigners possessing the required skills to work in New Zealand in order to speed up the construction of new homes under the KiwiBuild programme.

The following day the Government announced just such a policy.

Business hates inconsistency. It hates uncertainty.

Grant Robertson, the Finance Minister, has conceded there is a problem of perception and the Government needed to lift its game when it came to communicating with business.

So, it would seem this is the Winter of Disconnect, rather than another Winter of Discontent.

It could conceivably end up being something much more serious, however. There is a danger that the regular doses of economic pessimism spiral into a self-fulfilling prophecy.

Given the robust good health of the domestic economy, however, it would require a lot of talking by a lot of corporate figures to induce an economic downturn.

Labour needs to remove its blinkers, however.

The argument surrounding the drop in business confidence is not taking place in a vacuum.

When it comes to public opinion as to which political party can best be trusted with the task of managing the economy, Labour starts from a long way behind while National starts from some way ahead.

That is a cold hard fact of political life in New Zealand. You need look no further than the findings of recent 1 NEWS-Colmar Brunton polls for strong evidence that voters do not hold the country’s two major parties in equal regard when it comes to economic competence.

There was a dramatic shift in the public mood in polls conducted prior to last September's general election and ones taken in the immediate aftermath of the formation of the three-party arrangement now ruling the nation.

The number of respondents who thought the economy would be in a better state during the next 12 months than at present dropped from 55 per cent to 36 per cent.

Even more telling was the finding that those who thought the economy would be in a worse state during the same period of time soared from 10 per cent to 36 per cent of those surveyed.

The only thing that changed during the weeks between the two polls were taken was the colour and composition of the government.

Labour has long endeavoured to remove the stigma of questionable economic competence which has attached itself to the party.

If anything, that party’s disregard for the voice of business will only stitch that stigma even deeper into the country’s political fabric.

Jacinda Ardern's Government is now in full stride, despite a slump in business confidence. Source: 1 NEWS