Paul Goldsmith slams Govt for 'inconsistencies' leading to 10-year business confidence low

Business confidence has dropped in New Zealand to the lowest level in a decade, and National's new finance spokesperson Paul Goldsmith is pointing the finger at the Government.

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National’s new finance spokesperson talked to TVNZ1’s Breakfast about his concerns following the report. Source: Breakfast

Mr Goldsmith told TVNZ1's Breakfast today that New Zealand's "economy should be booming right now - the rest of the world wants our stuff, our commodity prices, our terms of trade are at historic high levels, so we should be doing really well. We had lots of money in the bank, big surpluses".

But the drop in business confidence is the lowest since the global financial crisis 10 years ago, which he says is a "poor reflection on the Government's approach that it's taken".

The latest NZIER Quarterly Survey of Business Opinion (QSBO), released yesterday, shows business confidence fell to its lowest level since March 2009, with a net 31 per cent of businesses expecting a deterioration in general economic conditions over the coming months.

There was also was a further decline in firms' own trading activity, with a net four per cent of businesses reporting reduced demand in the June quarter, and a net four per cent of businesses also expect demand to fall in the next quarter – the weakest level since June 2009. 

Mr Goldsmith called out Prime Minister Jacinda Ardern and Finance Minister Grant Robertson for "ducking and diving" the issues.

He admitted there was an element of international forces that played a role in the poor statistics, but added it was only a small part of the problem - that the real issues are what is happening domestically.

"They'll blame everybody, they'll certainly blame Donald Trump, the Iranians, the Chinese, anybody.

"The Government has brought inconsistently since it came in, anti-growth ideas, made it difficult for businesses to get ahead creating so much uncertainty," Mr Goldsmith said.

People "kept their hands in their pockets waiting to see what happens" - unsure about what would happen with things like the capital gains tax, he said.

"There's all this uncertainty that they've created, and then they've been very bad on the actual delivery of what they actually promised to do.

"The worry that people have at the moment is they just don't know what's going to happen next."

He mentioned the failed KiwiBuild venture and lack of transport improvements. "The combination of all that has meant that there's a very low level of confidence out there ... all those things make people confused and worried."

Mr Goldsmith said if he was in Government, he would be keeping taxes low, investing in good infrastructure, good skills training and enabling investment to come in.

"Firstly you've got to have a decent plan and acknowledge that New Zealand is a small country - we need to be competitive in order to stay afloat, and that means having a plan to improve the productivity of the country.

"I think that the arrival of a National Party that understands how business operates and how to engender confidence through having a predictable and stable policy setting would make all the difference."