Mood of the Boardroom

Attended the annual Herald’s Mood of the Boardroom breakfast yesterday. A big crowd gather to hear the results of the survey by Fran O’Sullivan, plus speeches and Q&A with the Finance Minister and normally the Opposition Spokesperson. For some reason David Cunliffe couldn’t attend this year, which was a pity.

Around 350 CEOs took part in the survey. Now before anyone states the obvious, no of course they are not a representative sample of New Zealanders. But as a group they manage a greater share of the economy than the Government does, and their view on business conditions determines whether or not billions of dollars of investments and purchases occur. So I regard it as a very good group to get views from.

Some of the findings were:

• 79% support there being a Regulatory Responsibility Act
• 70% support mining on the conservation estate, so long as conservation values are retained or restored
• 62% are focused on reducing energy costs
• 60% support foreshore & seabed reform
• 76% want ACC opened up to competition
• 58% want the NZ company tax rate to be below Australia’s
• 57% support partial listings of some SOEs on the NZX

I found it interesting that partial sales of SOES had the least support, even though still a majority.

The budget was rated 3.63/5 (think 73%) as a solid foundation for future growth, 3.8 (76%) as business friendly and 3.92 (78%) as making the taxt system fairer.

The eight top ranked Ministers were:

• John Key 4.58
• Steve Joyce 4.50
• Chris Finlayson 4.47
• Tony Ryall 4.09
• Simon Power 4.08
• Judith Collins 4.08
• bill English 4.06
• Jonathan Coleman 4.03

Individual Labour spokesperson were not ranked but 98% of CEOs said Labour’s leadership has yet to begin carving out a credible alternative to the Government.

The top ten domestic issues of concern (out of 10) were:

1. Labour productivity 7.2
2. Regulation 6.9
3. Skills and labour shortages 6.9
4. Level of govt spending 6.9
5. Adequacy of infrastructure 6.8
6. NZ dollar level 6.7
7. Wage increases 6.4
8. ETS 6.2
9. Level of NZ Govt borrowing 6.1
10. Access to capital 5.9

The top ten international issues affecting confidence are:

1. Instability in capital markets 8.5
2. Protracted global recession 8.4
3. Level of borrowing by govts 8.0
4. Strength of US recovery 7.7
5. Exchange rate volatility 7.7
6. US dollar value 7.2
7. Competition for global talent 6.5
8. Protectionism 6.3
9. Commodity prices 6.2
10. Global inflation 6.2

They also ranked the two leading candidate for Mayor on several attributes on a 1 to 5 scale

• Leadership skills – Banks 3.47 v Brown 3.06
• Puts interest of Auckland over political alignment – Banks 3.33 v Brown 2.74
• Vision and strategy – Banks 3.33 v Brown 2.99
• Management – Banks 3.27 v Brown 2.63
• Experience – Banks 4.11 v brown 2.84
• Judgement – Banks 3.26 v Brown 2.51
• Trustworthiness – Banks 3.37 v Brown 2.86
• Ability to form support within Council – Banks 2.98 v Brown 3.15
• Economic management – Banks 3.65 v Brown 2.56
• Courage – Banks 4.30 v Brown 3.46

But 50% of CEOs want a new candidate to also enter the race.

Also 85% of CEOs support compulsory superannuation, as in Australia.

And ratings of various aspects of the budget:

• Closing loopholes for Working for Families 4.73
• Increase in GST 4.44
• Personal tax cuts 4.24
• Corporate tax rate cut 4.21
• Aligning top personal and trust rates 4.09
• Change tax treatment for LACQ’s 4.06
• Axe depreciation for residential housing 4.01
• Cuts to savings vehicle tax rates 3.95
• Reduction in thin cap threshold from 75% to 60% 3.63
• Ace depreciation on commercial buildings 3.17
• Axe 20% depreciation loading on new assets 3.16