What the Prime Minister Should Have Said to Business

Jacinda Ardern Did Not Say Enough at a Recent Business Breakfast.

[After introductory remarks] This morning I want to address the fact that surveys of business opinion suggest that business confidence is not high. This seems to contradict the reports in the same surveys that firms are expecting higher sales, taking on more workers and planning to invest to increase their capacity; that, is they are confident about the prospects for their businesses.

Admittedly, throughout the world business confidence is weakening because of the dangers of a major trade war. My government is concerned about this danger too and we are preparing contingency plans for it, as well as working with our trading partners to minimise its risk and impact.

But we also recognise that you are uncertain about a new government. A year ago you expected a continuation of the previous government. The people of New Zealand decided otherwise. One appreciates that this casts some uncertainty on business which prefers political stability and are not sure what the new government means to them.

This morning I want to assure you that my government – the Labour-led Government – sees business as having an integral role in the progress of New Zealand and the pursuit of the wellbeing of the people of Aotearoa/New Zealand.

That a Labour-led Government sees this integral role should be no surprise to those familiar with the traditions from which Labour comes. Its foundation is more in Methodism than Marxism, from progressive dissent based on liberal values than from turbulent revolutionaries – except that progressive dissent results in social transformations which in the long run amount to revolutions.

For more than 150 years, social democrats have recognised that a healthy private sector is vital for a healthy society. That does not mean that business is the only thing which matters. Our tradition is pragmatic. Business – or indeed any particular way of doing things – need not always be the best way of pursuing social objectives. But often a business approach will be; it will always be a key part of pursuing the nation’s wellbeing.

I am disappointed that this is not obvious to you. One of the first things my government did when it came to office was to commit New Zealand to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. I remind, if not business, then the rest of New Zealand that nations do not export – it is businesses which export. Our aim was to offer further opportunities for them because that is good for New Zealand. We continue to pursue other trade agreements for that reason and we have a domestic program explaining why the open economy is so important to New Zealand.

Of course, there are New Zealanders less committed to the open economy. We took their concerns into consideration and recognised there were ways we could improve the deal compared to that being offered when we came into office – and we did.

In the same way, when we were improving New Zealanders’ access to housing, developers argued that there were ways we could modify the changes to improve their opportunities to build apartments. We listened and made changes.

That is but one of numerous examples of our listening to business. Another is that there has been a strong public demand to eliminate disposable plastic bags – I hardly need detail their dreadful impact on the environment. We could have banned them by fiat but, no, we have worked with the retail industry to phase them out.

Or consider our plans for the transport network. We’ve had to make tough decisions. It has been especially hard because our predecessor did not. We are building more of the network than in the recent past. There has had to be prioritisation and some local favourites came below the cutoff. As we roll the program out, they will be reconsidered.

There has been grumbling that our comprehensive program included public transport and road safety. Public transport is good for business because getting passengers off the road frees up space for trucking – you cannot ship construction steel in a bus. As for safety, we do not want our people to die on roads, any more than business wants its workers to die on worksites.

So the evidence is that my government takes business concerns into consideration when it is responding to public demands. You can be confident we will continue to do so.

But this is not a promise that we will always do exactly what business wants. The people of New Zealand did not elect another government which would be passive and permissive towards business. They want a New Zealand which business cannot provide by itself – a safe New Zealand, a sustainable New Zealand, an egalitarian New Zealand, a socially cohesive New Zealand, a culturally vibrant New Zealand. But if business cannot deliver these outcomes alone, we cannot deliver them without business making its contribution.

To be frank though, one source of your unease is my party’s name. Again history will help us put that in context. The labour movement evolved when working people and their dependents were marginalised by the existing political system. The party developed to move working people into the centre of the political stage. That role of supporting the marginalised continues to this day; there are far too many examples to list but I am especially proud of the Labour Party’s leading role in doing this for women, for Maori, for Pasifika. No other political party has anything like our record on behalf of them and of many others of the marginalised. We shall continue to enhance our proud record. You know I am especially concerned about child poverty.

Business is particularly uneasy about the union movement because it limits its managerial discretion. It limits mine too, but I welcome that because unions are conduits which express the concerns of their members, Unfortunately, the headlines are about industrial conflict but, as you know, the day-to-day interactions are more constructive and more common.

Businesses often have to make tradeoffs and sometimes those tradeoffs will favour their workers at the expense of other stakeholders. Same for the government. In particular we judge that the previous one was too neglectful of workers’ interests. Rebalancing is the purpose of the Employment Relations Amendment Bill.

So we are changing the law back towards where it served New Zealanders well in the past. This has caused some discomfort to some employers and we have listened carefully to your submissions. It is evident that for the vast majority of employers – the good ones – the change in law will make little difference. It is already sets out what your routine practice.

But there are rogue employers who use the current law to mistreat workers. That is going to stop. The rogues do the rest of business no good, especially when their misbehaviour appears as headlines. Unfortunately too many people conclude all businesses are like the rogues; it ruins all your reputations.

Our policy of seeking good work relations is not only because that boosts productivity and wellbeing but because it improves the image of business in the community. The government would like to see continuing improvements in the dialogue between business and workers’ representatives. If we can help, do ask.

I have said that the government carefully listens to you as it does to other parts of the community. I shall shortly announce the establishment of a business advisory council to improve access to government decision-making, especially at the early stage in policy making. But that is not enough. Ministers will continue to listen to business. Sometimes, especially for small businesses, it will be sensible to approach first a member of caucus, perhaps your local one, perhaps one with specific expertise.

But do not expect business will always get what business wants. This is a government which will make decisions in the interests of all New Zealanders not just in the interests of the noisiest or richest lobby group, whoever they may be.

Like all business leaders, a prime minister sometimes makes less than optimal decisions. When that happens in business, the outcome is buried in the firm’s bottom (profit) line. Egregious mistakes may end up on business pages and occasionally even breakout in the general news. All the prime minister’s decisions are subject to scrutiny and criticism in the media and blogosphere. Even when it is the best possible decision there is grandstanding, almost invariably without full knowledge of the facts behind the decision or recognition of the difficult tradeoffs that had to be made.

It is not easy running the biggest operation in the country and the job is even more frequently misunderstood than the job of business is. Curiously, the prime minster’s remuneration is substantially lower than that for the leaders of the biggest businesses in the country. I am not complaining. The government has just decided not to give itself a pay rise recommended by an independent committee.

The reason I am not complaining is because I do not do the job for the money. I do it because I believe that I and my team can contribute to making a better New Zealand; I hope everyone else in this room has a similar ambition. That is why this Labour-led Government deserves your full confidence.