October 7, 2026

Business finally feels better. One in four SMEs still won’t spend before the vote

A professional businessman working at his desk, reviewing documents in a modern office environment.

Business leaders are not asking the next government for a revolution. They are asking it to keep the economy on course, hold tax settings steady and stop making them guess. The latest pre-election surveys show genuine recovery in sentiment, alongside a hard, measurable cost from the uncertainty of the campaign itself.

The mood has genuinely turned

The Baker Tilly Staples Rodway pre-election survey found 58% of nearly 350 business leaders think the government is managing the economy well or very well, against just 14% for the previous Labour government before the 2023 election. Some 49% say their performance improved over the past year, nearly double the 25% recorded in a 2025 pre-Budget survey, and 59% expect further improvement. A third, 34%, still rate the government’s economic performance poor or very poor.

David Searle, national chairman at Baker Tilly Staples Rodway, says the numbers show “the improvement is real for many businesses”, producing “a stronger, if still muted, sense of optimism.” His caveat is just as telling. Most firms expect some improvement only “as long as the Government holds to its current course,” while that 34% points to “significant pockets of hardship remaining.”

Forsyth Barr’s much larger September survey of more than 2,050 respondents backs this up. Around 60% view the government as supportive of business against 15% who call it obstructive, and nearly four times as many expect profits to rise over the next year as expect them to fall. That is a legitimate win for the government, and it should be reported as one.

The waiting game has a price

Here is the catch. Clarity Insight’s survey of more than 500 SME owners found 24% are delaying big hiring and investment decisions purely to see who wins, despite feeling better about the economy. MYOB found about 34% are scrutinising budgets and cashflow more closely through the campaign.

That is an uncertainty tax, levied regardless of the result. Every deferred hire and shelved fit-out is activity the economy does not get this quarter. Forsyth Barr found nearly 90% of business people consider the election important to their business, so the hesitation is rational. It also tells politicians that policy volatility, not just policy content, carries a real economic cost.

Stability beats reform on tax

The Deloitte and Chapman Tripp survey for BusinessNZ makes the preference explicit. Asked for the single most important issue for sustained growth, 57.7% named the economic environment, well ahead of infrastructure at 16.5%. Some 61.8% want no change to personal tax rates, 57.6% want corporate rates left alone and 65.3% oppose a wealth tax.

Capital gains tax is the exception. Support sits at 46.0% yes against 45.7% no, which suggests business is genuinely divided rather than reflexively hostile. Neither camp should claim a mandate from that.

Thirty-year plans, not three-year cycles

The sharpest signal in the research is this. An extraordinary 94.7% of respondents support bipartisan 20 to 30-year approaches to infrastructure planning and funding, and for the first time businesses ranked energy ahead of transport as the investment most likely to drive growth. With 80.4% concerned about future energy prices, that ranking is no surprise.

Business also wants it funded sensibly. Only 11.1% back higher taxes for climate adaptation and resilience, while 55.9% favour reprioritising existing spending, according to Deloitte’s analysis. That is a fiscally conservative position, not an anti-investment one.

Even BusinessNZ, hardly hostile to the coalition, warns that deregulation alone is not the answer. Its election document argues “the biggest costs businesses face are not form-filling costs” but exposure to volatile fuel prices, weak climate resilience and “the costs of ongoing investment uncertainty.” That should land with whoever forms the next government.

Optimism on a thin base

The hard data explains why confidence stays muted. GDP rose just 0.2% in the June quarter, and real gross national disposable income fell 0.4%. Businesses expect inflation of 2.99% over the next year and unemployment of 5.22%, easing only later. Treasury’s pre-election fiscal update frames the fiscal pressures as structural. As Deloitte partner Liza Van der Merwe puts it, “productivity is the engine of economic growth”, and that engine is still idling.

What happens after the count

The message to every party is unusually clear. Business has regained confidence, wants tax left largely where it is and wants energy and infrastructure taken out of the three-year political cycle. The fastest economic boost available after polling day costs nothing, which is certainty. Settle the result quickly, signal settings early and that frozen quarter of SME investment starts moving again.

Sources

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