Business groups say election uncertainty is frustrating and could slow spending

Business groups have said the uncertainty after New Zealand's election is frustrating, and warned that the delay in forming a government could affect decisions at some small firms.

The election was held on Saturday 7 November. The result put a National-led coalition in position to form a government with ACT and New Zealand First, but that depends on the count of special votes, which are still to be counted. Reuters said final results are due on 27 November.

IceHouse chief executive Olivia Baylock said some firms had put off decisions in the hope of a clear result. She said the outcome had been frustrating for them. Citing an MYOB survey, she said election uncertainty had stopped a quarter of firms from making purchases.

BusinessNZ chief executive Katherine Rich said business leaders understood why the result was taking time to become clear. She said the government that eventually forms would need to be stable and have a coherent programme. It would also need to build confidence in the long-term direction of economic policy.

Alan McDonald, head of advocacy at the Employers and Manufacturers Association (EMA), said businesses were in limbo until the special votes were counted and negotiations were completed. He said that going into the Christmas period without a government could dent consumer confidence and slow spending. Retailers, he said, need a big Christmas season. McDonald also said business needs stability on policy settings, but that New Zealand was unlikely to know until after Christmas whether it would get that.

Market analysts expected financial markets to react calmly on Monday morning to the uncertainty over the result.

The EMA's election policy directives, issued in July, called for fewer policy shocks and more certainty for business. Its post-election directions include a plan for manufacturing, a clear future for energy and stable settings for the business community. In October, John Fraser-Mackenzie and the EMA team said the group's key priority after the election was policy stability and certainty, and a pathway to future prosperity.

BusinessNZ's election survey found that businesses want the next government to keep the economy growing, hold tax settings steady and deliver long-promised infrastructure.