OPINION
Each week Stuff asks New Zealand’s business and community leaders how they think the economy is going, and what they believe are the biggest challenges.
Immigration expert Andrew Sayers is a founding partner of investment platform iNZvest, owner of Sayers Advisory Services, and president of the Hong Kong New Zealand Business Association.
He says New Zealand is at a crossroads and needs a reset, and suggests the country could take a leaf out of Singapore’s book and develop a long term strategic pathway.
”The cost of the focus on the pandemic is the lack of focus and actual traction on future-looking initiatives, and this will cost us in the longer run.”
How do you feel the New Zealand economy is tracking currently?
Overall, I feel there is a lack of cohesion and strategy to governance of the economy. We need a reset and a long term strategic pathway.
The numbers suggest that New Zealand’s economy has managed with the huge challenges presented by the pandemic (in part due to expansion of government debt).
However, the economy is at a crossroads, challenged by the continuing impact of Covid-19, high inflation, rising interest rates, a softening housing market, and the potential for significant migration inflows and outflows.
Now, more than ever, we need a roadmap to the future as a collective social and business community. While the gross domestic product numbers and forecasts sound favourable, there are many challenges to overcome in three to five years.
Covid-19 has presented unprecedented challenges to governments globally. However, the cost of the focus on the pandemic here has been the lack of focus and actual traction on forward-looking initiatives, and this will cost us in the longer run.
What are you most concerned about right now?
Again - the lack of any central cohesive plan.
New Zealand has many entrenched issues. These include:
- The apparent consistent decline in standards of our education system (compared to education globally);
- The greater divide between those that have and those that don’t, and the growing dependence on social welfare;
- The multi-generational dependency on the state. To my mind, sound social welfare policy also requires financial incentivisation of the unemployed to redeploy. Band-Aid policy such as the social housing in motels doesn’t cut it;
- Lack of investment and capacity in key sectors such as health, education, policing etc.
I am baffled that the Government thinks that higher taxation is the pathway to reduced government debt or economic growth. No government in history has taxed its way to prosperity.
Tax policy/cost is a key decision-making tool for business/entrepreneurs. Domestic and foreign businesses have choices where they base operations.
We need to redevelop an attractive investment landscape in New Zealand to retain and attract local and foreign entrepreneurs.
The later part of my career has been working with high net worth non-residents that invest in New Zealand, looking to establish business in New Zealand, or invest new capital in existing business. This in turn creates new intellectual property, upskills already talented Kiwis and ultimately contributes to the tax revenue.
We as an economy need this smart capital. But policies such as the ban on acquisition of residential real estate (a policy based purely off a political agenda, not based on actual housing sales data), a new high headline tax rate (that in actual fact raises very little tax), and mooted changes to raise the investment amount required for investor visa migrants are all examples of policies that discourage foreign investment.
We as a nation have no reason to be elitist about our place in the world. High net worth members of the international business community have choices where they live and invest, and New Zealand struggles to compete globally on current policy settings.
What has the last year taught us about the New Zealand economy?
That the fundamentals of what built the New Zealand economy over decades to a large extent carried the New Zealand economy through this pandemic – the agricultural sector, and the resilience of many of New Zealand’s SME businesses and their owners.
We were fortunate with the timing of solid dairy prices during a time when tourism was decimated.
Are you optimistic or pessimistic about the economy this year? Why?
I am by nature an eternal optimist. I am optimistic from the point of view that businesses that have survived (and many have thrived) in the current environment are adaptable and sustainable. Other businesses will once again thrive once borders are open, and we return to a degree of normality (although this will take months and years to return to pre-2020 levels due to the huge task airlines face repurposing aircraft, crews and re-routing flights to our shores again).
But I am discouraged by the lack of fresh ideas coming out of any political party – that economic, education and social models and policies (and those of councils) have remained fundamentally unchanged over decades, but the world and society have moved on.
Politics now more than ever focuses on survival and not sustainable long term policy. Perhaps wholesale change to our electoral settings is the first step to a strategic economic reset.
The Monitor is Stuff’s unique set of insights to help the business community better understand the economic landscape, and maximise their success. Alongside the quarterly snapshot is an economic index showing the speed of growth across different parts of the economy.
Source Stuff Melanie Carroll
