It was sold as the No Frills Budget. The Bread and Butter Budget. A better name might perhaps be the No Surprises Budget – we were promised infrastructure building and measures to address the cost of living, with little else to scare the fiscal horses. And that’s exactly what was delivered today – simple bread and butter with a little bit of jam for those struggling with a higher cost of living and difficulty servicing mortgages.
In this newsletter we would like to put a communications lens over the Budget and what the implications could be for your strategy or approach heading into the next 6-12 months.
What are the key takeaways for business? Government spending remains high, in the wake of Cyclone Gabrielle, taking the national debt level to around 37%. This leaves a debt issue to address, which will continue to divide those who support higher spending to rebuild stricken communities and support struggling Kiwis, and those concerned about the impacts of inflation, such as businesses facing ever-increasing costs.
Every generation is facing cost pressures, whether it be the price of doing business, education, mortgages or managing rising grocery bills on a fixed income. The range of measures to address public transport costs, energy bills, early childhood education and prescription fees will be welcome, as will investments in green hydrogen and other innovations to bring down the cost of decarbonisation for businesses. However, with little in the Budget addressing some of businesses’ chief concerns – productivity and high government spending – none of these are likely to shift the dial quickly on broader economic trends.
In this climate, building trust and communicating with customers, employees – in fact, all stakeholders – will continue to be just as, if not more, important as they navigate continued challenges. When people are unsettled, they will look for business to see how it has the interests of society at heart, beyond its own commercial interests. This is a period where demonstrating your commitment to values and societal contribution will build loyalty and generate trust.
This could be acknowledging and expressing concern for the pressures of high costs and constant change, or the ongoing impacts of the recent cyclones and flooding, and providing support and guidance however possible. It could be something more innovative to really demonstrate commitment and caring for your stakeholder community and the future of New Zealand. Many (and particularly those under 30) will be assessing whether you are green-washing or genuinely are making changes. The other risk is being seen to be price-gouging and making excessive profits.
Many businesses will be considering increasing pricing or making changes to products, suppliers, resourcing and business structures to manage the impacts of inflation. Communicating your values and purpose, from your consumer marketing to your investor relations, is vital. Rather than simply thinking, “everyone else is doing it”, you need to be transparent in order to grow and maintain trust and loyalty. Changes that are tangible should be communicated, measuring progress as transparently as possible along the way with solid data, and holding yourself accountable at every step.
The Budget has implications for your employer brand as well. Some announcements in the Budget could be positive for employers facing skills shortages, such as the continuation of the Apprenticeship Boost scheme, digital skills incentives, the return of the Training Incentive Allowance and from March, the early childhood education packages that may support parents to return to work sooner. The effects of these are unlikely to impact workplaces for some time, but the trend is towards a loosening jobs market.
This increases the likelihood of employer brand marketing and storytelling seeing greater impact. Continuing to build your employer brand, telling your workers’ stories and celebrating their successes, communicating your values, networking and marketing your profile, will likely be even more important in the coming months.
If there’s another major conclusion to be drawn from this Bread and Butter Budget, it’s that few ready-sliced solutions have been pulled out of the bag for businesses. While the Australian Budget introduced financial measures and energy bill relief for small businesses, along with support to transfer to greener energy, there’s little tangible support on this side of the Tasman beyond a commitment to becoming a “high-wage, low-emissions economy”. It’s likely that the bigger announcements are yet to come, as we head closer to what’s shaping up as a hotly-contested election.
For advice on any of these issues, or on how your business can build and maintain strong communications with customers, employees, suppliers or government, please get in touch with your Acumen account director or the Acumen team, [email protected].