National leader Simon Bridges says low business confidence and sentiment threatens economic momentum despite record employment rates and a jump in Growth Domestic Product (GDP) growth.
National leader Simon Bridges. Photo: RNZ / YouTube
Mr Bridges admitted to Morning Report that the New Zealand economy is doing quite well and is not heading for a recession but believes GDP isn't as high as it could be due to the government's economic policies.
He said small and medium-size businesses were not as confident about hiring staff and investing, which was a risk.
"They (businesses) look at what's happening, it's coming at them with industrial relations, with taxes and so on, and they are signalling very clearly, it's not politics it's what they're seeing from policies, that their hiring and investment intentions are going to be lower," he said.
GDP figures grew one percent to the three months ended June, while last week it was announced unemployment rates were at a 10-year low.
"GDP unlikely to be as high as could be" - Simon Bridges
Mr Bridges said the lack of business confidence shouldn't go unnoticed.
"When you look at growth, which has been 3.5 to 4 percent for the last two to three years, we are going to come off on that.
"Does that mean people are going to be in disastrous situations? No I'm not arguing that, but actually we shouldn't take it for granted," he said.
Mr Bridges said the government's fuel taxes and oil and gas exploration ban would come back to haunt them.
"I don't think actually the economists are on the whole when they look out a year, year-in year-in, are going to say we're going to be at 3.5 to 4 percent.
"I'm actually making the case that if you get your policies right, if you provide a good sensible, consistent environment, I would argue with actually less regulation and red tape, that is a better environment for businesses and households as well."
Earlier this month Finance Minister Grant Robertson dismissed business confidence surveys, saying history shows "business tends to be a bit more pessimistic when a Government has Labour at its core".
"We are not taking our careful approach to economic management to earn a few points in a business perception survey," he said.