KSK
There are many things in life I don’t understand. Why water is wet, for example. Why decreasing the OCR did not result in anything other than the uncontrolled increase in house prices in a market awash with almost free money. But what goes up tends to come down. Or it did when I studied physics. And so now the Reserve Bank has done what it should have done months ago – increase the OCR to curb the runaway housing market. Having vilified and financially crippled the so-called mum-and-dad investors and made the rental market attractive to the figuratively three-piece-suited and literally deep-pocketed, they have again made tenants bear the cost of constrained rental stock.
However, the real pain is just beginning for those beguiled by cheap money, for mortgages that will undoubtedly outstrip the ability of many to service them at a time when employment is uncertain. I well remember the last time when signs of shame, Mortgagee Sale, were far from the exception.
A business wanting a line of credit must front up to its bank with a robust business plan that answers the ‘what if’ questions. Without such a document, the bank is unlikely to look favourably on the supplicant. But this government has no such plan. Nothing that even attempts to answer the hard questions. There are a lot of knee-jerk reactions that are like those of a Roomba as it hits the corners of the sofa or encounters a sleeping dog; random hits that send us spinning off on yet another tangent.
Auckland now has steps as well as stages. Steps that few seem to understand – the government itself is at odds with its own imperatives, and so we do not know if we can piss in our neighbour’s pot or in their backyard. Easier for blokes.
The pain of small businesses cannot be soothed with platitudes from on high. Business uncertainty is the only sure thing in these troubling times. The continued uncertainty and lack of planning is crippling business. A small to medium business enterprise is not a single entity. It is also a social construct. It is about families. It provides for those pesky and about-to-increase mortgage repayments. It puts food on tables, pays for new school shoes and uniforms and leaves Christmas presents under the tree for excited children. It is not all about the business owner – who, incidentally, is more often than not the last to be paid.
For all the tales of doom and gloom and the bagging of employers, they are at heart a principled and caring bunch. They value their staff. They know all about needing time off when young Johnnie or Jenny needs an urgent doctor’s appointment. They provide confidence. They take the risks to pay the piper. They stay awake at night worrying about payroll and GST and all the mounting expenses in the absence of income.
Business survives only on reliable cash flow – as the old saying has it: cash is king. And without cash, the king becomes a pauper. The domino effect of the inability to meet costs by the next in the food chain happens quickly. And it doesn’t take much. Especially in pandemic days when supply chains are jeopardised, contracts are at risk, the cost of materials rises faster than baking powder in a batch of scones and clients are reluctant to commit to earlier plans because of market uncertainty.
We have no idea what it will take to satisfy Ardern and her cohort. They roll out numbers; then they change. They have no idea of which direction they are going to spin off to next. Is it 90% vaccination? 70%? When will they decide to have a number and a plan that we can all agree to live with, and then attempt to meet that, or will we continue to Roomba our way through 2022 and beyond?
Give us some aims and measurable business objectives that can be quantitatively described to meet those aims. Measure how we are doing from a number of different perspectives. Assess our effectiveness on more than Covid cases.
Business cannot take much more. I have no idea how they are coping. I am full of admiration for them. Many, of course, are not surviving, and those tragedies will resound long after we decide to let Delta have its way. Give us a plan, Jacinda. A plan that answers the ‘what if’ questions. Business owners need certainty. Business employees need confidence, because like it or not, Christmas is not far off and our children will all be expecting Santa to have left them lovely presents – they have, after all, been very, very good.
