Surveying the big survey of business leaders reveals something that should have been blindingly obvious.

It’s now 51 weeks, give or take, since New Zealand went to the polls and ended the Ardern era with a distinct lack of kindness. Despite Chris Luxon’s expressed intention, we still have a three year term, which means we’re one third of the way through the coalition’s assured time in office. The end of the sixth Labour government was driven by a broad and complex set of circumstances, but one sector that was mostly relieved was the mainstream business community, which saw it as bloated by ambition and broken by an inability to execute.

Luxon’s thesis was: Labour’s regime spent way too much time and money on things which don’t make the company country any more money – we’ll get back to the core, boring task of being the government. It’s the economy, stupid and all that.

In the leadup to the election, both National and Act performed strongly in opinion polls. But the most ringing endorsement of their potential as a government-in-waiting only became clear months after the election, when the final party donations were released. The two parties of business raised nearly $15m between them, just shy of double the combined total for Labour and the Greens. Put simply, they made a strong pitch to business, and they got the bag.  

Still, the approach drew a fairly tepid endorsement on election night. Despite having clearly signalled a desire for a two-party government involving National and Act, NZ First inserted itself into the coalition. A nationalist party pining for the certainties which New Zealand lost when Muldoon left office, working with two parties that want to be understood as the avatars of business – one of its pragmatic reality, the other of free market dynamism.

How it’s going

No one expected it to be easy. But if, a year on, you’d had to guess at which of the minor parties would be making it near-impossible for the government to focus on the economy due to a lingering, distracting culture war, few would have predicted the guilty party would be Act. It’s in a bizarre and unwelcome alliance with Hobson’s Pledge, digging deep into a divisive conversation about the treaty which increasingly resembles UFC or House of the Dragon – of consuming interest to fans, but which leaves the vast majority cold and alienated.

Most mystified of all is the business community. The most zealous and free market-orientated of business types have historically been Act’s unwavering base of support and source of donations. On that basis, they might be justified in wondering if they got what they paid for. While the party’s polling has held up well, the rumblings from that support base have been building.

The most visceral demonstration was Matthew Hooton’s extraordinary volley on The Working Group a month ago. Over four electrifying and swiftly-deleted minutes, he lit into Don Brash and Hobson’s Pledge, making accusations which launched a defamation claim, but which many on both the left and right found directionally accurate, even if he overran his mark. 

It’s a bleak illustration of where we’re at as a society that, no sooner had Hooton issued an apology, Hobson’s Pledge released a fundraising email which itself seemed to defame Hooton by suggesting he was disingenuous in his motives. Precisely the same grounds on which Brash had taken issue in the first place.

Boardroom’s current mood? Infuriated

If that was the micro, the macro arrived last Thursday with the latest instalment in the NZ Herald’s longrunning and highly scrutinised “mood of the boardroom” survey. It’s been an annual event for more than 20 years now, driven by Fran O’Sullivan, and provides a useful longitudinal snapshot of views of executives and directors on both a qualitative and quantitative basis.

The card was notable in that Luxon was ranked just sixth with a rating of 3.73/5, out-pointed by Erica Stanford, Simeon Brown, Nicola Willis and Chris Bishop. By comparison, the last National party PM rated in the survey was Bill English, who came out top with 4.13/5. The lukewarm response to Luxon is a surprise in some ways – when English was PM, Luxon was one of the most prominent people surveyed, as CEO of Air New Zealand. If any constituency could be expected to warm to him, it’s the boardroom. Instead we see a continuation of the lukewarm favourability and preferred PM polling which has defined his whole time as leader.

Still, Luxon’s disappointing rating had nothing on that of Act leader David Seymour. Despite his extraordinary efforts in reviving the party as a political force, and the near universal approval of his ministry of regulation, the Act leader languished in 12th, with a rating of 3.40/5, below his own deputy Brooke van Velden and Winston Peters. It’s a damning verdict for the leader of a party which lists as part of its purpose “reducing the role of government and increasing the role of free markets”, goals with which the boardroom could be expected to be profoundly aligned.

The reason for Seymour’s rating came through loud and clear in some savage commentary. “This divisive approach needs to end,” said one respondent, who believed he was “losing support from many of those who may have voted for him in his electorate”. A legal firm leader said “I worry they are not focusing on the biggest issues for New Zealand’s future prosperity by getting distracted by stuff that won’t shift the dial”.

Another business leader put it in even more stark terms. “If Seymour was really focused on long-term economic growth and productivity, that would be fine, but his obsession with divisive social issues that energise people on the fringes of the New Zealand political debate make him the wrong person to wear that badge.”

A year ago, the story was very different. “David Seymour has been the stand-out opposition MP this term,” said the head of an Auckland-based CEO organisation. He was rated a 4.01 for political management, and over 80% of those surveyed believed a National/Act coalition represented the best outcome for business.

In the intervening year, business leaders seem to have been blindsided by Seymour’s dogged pursuit of Act’s doomed treaty principles bill. The increasing alignment between Act and the controversial project that is Hobson’s Pledge, on race-based issues and particularly the focus on Māori, has created a strongly negative response from the business community. The sentiment suggests that in a country which is in a deeper hole than the GFC on a per capita GDP basis, this conversation, never desirable, is a chronic and infuriating distraction from working to revive our moribund economy. This is a different foundation to the left’s critique, but it is striking that almost no one in either mainstream wing of our politics is demanding this debate.

The gut howl from Hooton represented an early warning signal. The mood of the boardroom survey provides a strong backing from data. It suggests that while Act’s messages might be continuing to resonate with a segment of the electorate, the wealthy and influential business community voting bloc is growing extremely restive at the continued race-baiting. This mood of the boardroom reads like a harsh rebuke for a wasted year from someone the boardroom previously considered an ally.