Mood of the Boardroom

October 31st, 2008 at 11:30 am by David Farrar

I attended the Mood of the Boardroom Breakfast in Auckland organised by APN. The results of a survey of CEOs was presented, and then we had speeches from and questions to Dr Cullen and .

Now some may say why survey CEOs only? Well a CEO can and does have a massive impact on the sucess of a business. Just like a great principal can turn a school around, so can a great CEO. CEOs are where the buck stops. And the CEOs of our top businesses probably have more impact on our country’s economic prosperity than most Ministers.

The Herald reports from the survey (all scores are on a 1 – 5 scale so 3 is average):

  • Key 3.5 vs Clark 3.0 on overall campaign performance (Clark did better than Brash last election in the same survey  so CEOs tend to be quite fair while reflecting their backgrounds)
  • Clark leadership is 3.9 to 3.6 for Key
  • Vision and strategy has Key 4.0 to 2.5 for Clark
  • On trustworthiness Clark is 2.6 and Key 4.0
  • Put’s NZ interests over party has Key 3.8 to Clark 2.3
  • On experience Clark 4.4 vs Key 2.9
  • Economic management Clark 2.5 to 4.2 for Key
  • Overall 90% prefer Key to Clark (last time it was 72% Brash to 28% Clark)

Cullen spoke first and got a great laugh when he said “Welcome to both of my supporters in the audience, even if I had to pay your airfares to be here.”

He then spoke about the three Is and three Ss that he says are crucial:

1. Innovation
2. Infrastructure
3. International Connections
4. Skills
5. Savings
6. Sustainability

On the deposit guarantee scheme he said he doesn’t like doing it, in fact that it was the second worst option. But the worst option was to do nothing. He is worried about the moral hazard it creates.

Mentioned (ever so casually) that US Secretary of State Condi Rice would be calling him later that day to brief him on what is planned for the G20 meeting. The US incidentally is playing a real leadership role – even the US Federal Reserve is doing a $15 billion cash-swap facility with the NZ Reserve Bank – something not covered in much detail in the media considering how extraordinary it is. Uncle Dubya is helping Helen out :-)

Cullen did have a little snipe at some of the business leaders telling them that it was no time for the “top end of town” to be lecturing Government, when the Gordon Browns are bailing out the Gordon Geckos. Went on to say they need to work together, and wants to sit down with business groups after the election re the planned December mini-budget.

English started off with a scathing attack on Labour saying look at the front page of Herald as to whether Government is qualified to lead. That instead of focusing of helping they are working on smearing the Leader of Opposition by innuendo and influence. Said it was a disgrace and why Labour are not qualified, despite Dr Cullen’s best efforts.

Bill also asked what sort of strategy is it to say trust us and after the election we will tell you what we will do.

He said that National trusts business to innovate and to get through recession as they have previous ones.

He gave Cullen credit for include the Opposition in briefings on financial stabilisation and shares Cullen’s misgivings. He said the Australian guarantee is unravelling a bit and they should learn from that.

He said a National Government is not going to whip out rug from under people as we go into recession – people need security. Also that it was important not to over-react to fiscal outlook. The key is to get through the recession and lift long term prospects for economy.

He said the combined tax cuts would be the largest fiscal stimulus in 15 years.

Highlighted how Clark has said National’s borrowing for infrastructure was reckless, dangerous and gambling with future and then two weeks ago announced similar policy to National’s.

English said changes in attitude as important as policy and that having Key as PM will be important. Said he is the most relentlessly optimistic person Bill has ever met and that is why hundreds turned up in Invercargill to meet him (Winston got 50).

Bill concluded “That is why I’m voting National.” Cullen offered response and quipped “Well I’m not voting National.”. Was very funny.

Bill also called Cullen only economically literate member of the Labour Party.

Someone asked for a grand coalition and Dr Cullen said a recession is no reason not have give people a choice, and it is one of a moderate centre-left or a moderate centre-right Government. Nice to have him confirm National as moderate centre-right.

Herald Economic Editor asked a great question to English on why this recession is different from previous recessions that one needs to intervene for people who have ignored all the warnings about inflated house prices, and don’t take on a mortgage you can’t afford. His column yesterday makes the same point.

He also asked what is the point of ghettoizing the Cullen Fund? I thought Bill was rather unconvincing in his reply to both points – probably because he somewhat agrees with Fallow privately – but in politics you never get the luxury of agreeing with 100% of your party’s policies – not even the Leader. Holyoake once said he only agreed with 80% of what his Government did. Mind you with Muldoon it might have been 100% :-)

Cullen said that once you break that line of non involvement in the Super Fund, you have no defence to further involvements. Highlighted how the Greens support National’s policy on the Super Fund and they would like to invest it in many pet projects – none of which probably have much of a rate of return.

English did well though on Fast Forward and he had even Cullen nodding as he said the private sector is yet to commit a dollar for fast forward. English said the fast forward fund is borrowing money to then reinvest it in bonds. The structure is stupid. He supports actual research and National will put more money into fast forward projects, but not through the structure of a dedicated fund.

Overall both did very well I though. Both knew their stuff, agreed with each other on a bit but also exposed the weaknesses on both sides.

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23 Responses to “Mood of the Boardroom”

  1. PhilBest (5,120 comments) says:

    “Bill also called Cullen only economically literate member of the Labour Party.”

    And a little while back, Michael Bassett told us that in the great Lange Cabinet of the mid 1980′s, (Douglas, Prebble, Caygill, etc…..) Michael Cullen’s economic ILLITERACY was a standing joke………

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  2. stephen (4,063 comments) says:

    20 years ago huh…

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  3. baxter (893 comments) says:

    “Cullen said a recession is no reason not have give people a choice, and it is one of a moderate centre-left or a moderate centre-right Government”

    I fail to see how anyone at all could describe a coalition led by Clark and Cullen and involving a large Green partner could be described as moderate centre left. strident leftwing would be more apt, but that would be the truth, something Liabour can’t face.

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  4. kisekiman (224 comments) says:

    All that remains of Cullens legendary rapier wit is to quip the redundant “Well I’m not voting National.” How droll…Muppet.

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  5. grumpyoldhori (2,416 comments) says:

    Yep time to socialise those loses, and not a peep about how it would be socialism to bail idiots out who bought property they could not afford if one person in a relationship lost their job.
    Remember that woman who died because of an unpaid power bill, I can remember a number of Nat supporters ranting that it was her fault.
    Yet, when others make a similar error by trying to live above their means it seams a lot of so called centre right have become raving Labour type policy supporters.
    So who is against this bailout of the careless ?

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  6. goodgod (1,363 comments) says:

    He said a National Government is not going to whip out rug from under people as we go into recession – people need security.

    No Bill no! People do not need security, mothers with child might for a few months, but people need STABILITY not security.

    How many chiefs fail to see the difference and how many good intentions turn to custard. Communism is security.

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  7. pushmepullu (686 comments) says:

    The weaknesses on both sides? The things they have in common?

    I saw no weakness in Bill English. I saw a strong man ready to use his vast experience in the private sector to finally bring the benefit to the New Zealand economy.

    They have nothing in common except they both have a vision. Bill English has a vision of a New Zealand economy that is not collapsing due to Labour. Michael Cullen has a vision of himself in power, enriching himself at the taxpayer’s expense for another three years.

    The CEOs know well what is good for the country, and their favouring Key 90% is therefore decisive. New Zealanders would do well to favour the candidate of the CEOs, since history has shown that the politicians who meet the approval of big businessmen, the true leaders of the New Zealand economy, are always the right choices.

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  8. stephen (4,063 comments) says:

    I saw a strong man ready to use his vast experience in the private sector to finally bring the benefit to the New Zealand economy.

    On what planet does Bill English have “vast experience in the private sector”?

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  9. pushmepullu (686 comments) says:

    Bill English has a good knowledge of how to take a business and turn it into a profit, something nobody in the Labour Party understands the concept of… and if they did understand they would probably think it was immoral, unlike the lofty calling of socialist indoctrination in schools and unions. YEAH RIGHT

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  10. stephen (4,063 comments) says:

    Bill English has a good knowledge of how to take a business and turn it into a profit,

    Pity he’s never actually done it. David Parker and Cunliffe have plenty of experience in business, not that that necessarily makes them any good. Keep tha faith though brutha!

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  11. pushmepullu (686 comments) says:

    Stephen, you may be confusing Bill with a Labour politician. Bill has extensive knowledge of and experience in the private sector – how the fuck else do you think he’d get appointed finance spokesman?

    As for Parker and Cunners neither of them have done an honest day’s work in their lives but they know the value of money alright – providing it’s somebody else’s, going into their pockets.

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  12. stephen (4,063 comments) says:

    experience in the private sector

    That being? All up, I think you’re operating on faith and not a lot else…like evidence.

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  13. llew (1,533 comments) says:

    That being?

    According to his bio he’s been a farmer and a (drumroll) “policy analyst” (SHOCK! WTF?!!). Doesn’t say who he analysed policy for but farming is technically private enterprise (he says hesitantly).

    how the fuck else do you think he’d get appointed finance spokesman?

    That seems to be a good question.

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  14. llew (1,533 comments) says:

    Oh and he has a commerce degree.

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  15. stephen (4,063 comments) says:

    he’s been a farmer

    So he knows how fun farm subsidies are…

    …doesn’t say who he analysed policy for but farming is technically private enterprise (he says hesitantly).

    I can just imagine someone telling a mid-late 1980s farmer that he needs to hire a Wellington-based policy analyst…English may have worked for Treasury though, off the top of my head.

    Oh and he has a commerce degree.

    And English Lit!

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  16. llew (1,533 comments) says:

    Oh, and pushmepullu says he has extensive knowledge & experience – so it was probably a very big farm.

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  17. georgebolwing (677 comments) says:

    Yes, Bill was a policy analyst in the Treasury in the three years before he entered Parliament in 1990.

    In one of life’s little ironies, he work in the social policy area when Michael Cullen was Minister for Social Welfare. They have declined to comment on what they tought of each other at the time: which is acually probably a good thing for public service neutrality.

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  18. PhilBest (5,120 comments) says:

    David Parker, the Labour Cabinet’s token “business experience” person…………

    That would be the dodgy legal deals that bilked an honest tradesman out of his life’s savings a few years ago, eh? The dodgy legal deals that he got off scot free over because someone forged a letter in the Companies Office Archives?

    Sorry, can’t find any online story, you need to read “Absolute Power”.

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  19. stephen (4,063 comments) says:

    Cunliffe: “business economist and strategy consultant with the Boston Consulting Group”

    Philbest, you aren’t looking very hard.

    georgebolwing, yeah that is tad ironic.

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  20. kisekiman (224 comments) says:

    Despite the opinion of the Greens and other misguided townies, farming is indeed a business and one which underpins our fragile economy. Bill probably does know how much fun farm subsidies were when they were slashed wholsale in 1984 by the incoming Labour Govt. Being confronted with a 50% drop in income and concomitant drop in equity certainly helps to sharpen one’s business skills. But let’s not dwell in the past, Bill is gong to have his hands full dealing with the future and he looks a lot more capable than Cullen the oh-so-clever train & logistics expert. The Aussies must still be pissing themselves over that deal and Labour has the nerve to bleat on about millions of ACC dollars potentially going to Aussie insurers.

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  21. stephen (4,063 comments) says:

    I doubt anyone is arguing farming isn’t a business, or that it doesn’t underpin the economy.

    “Being confronted with a 50% drop in income and concomitant drop in equity”

    Yeah, think i’d rather run off and be an analyst! Though I doubt he was going to work on farm forever with those qualifications. I also doubt he had much to do with running that particular business seeing as he was fresh out of uni – I could be wrong, maybe that’s how they did it back in the day.

    But let’s not dwell in the past,

    Agree. This is a pointless but slightly interesting discussion. Even learned a thing or two. Perhaps a little odd Cunliffe doesn’t have a finance/revenue portfolio of some description.

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  22. Dilbertian (16 comments) says:

    I might be genralising a wee bit, but seems to me that over the past 100 years, whenever there has been a major crisis – like war or depression or terror attacks – the govt uses it as an excuse to expand their reach and influence.

    We are now witnessing another extension of that under the credit crunch. The only thing that will come out stronger from the current “crisis” is govt. And by extension those grey bureaucrats that implement the whims of corrupt people like Clark, Peters et al.

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  23. stephen (4,063 comments) says:

    “the govt uses it as an excuse to expand their reach and influence.”

    And business seems to tolerate it well enogh – ‘i dont hear a lot of ‘please stay out of this government, please!’ coming from them…

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