1. What is 2017 looking like for your business?
The financial services sector in New Zealand continues to benefit from three key trends - the growth in KiwiSaver, global, robust economic growth and strong interest in New Zealand as an investment destination.
As we move into 2017 it is possible that the extreme attraction of NZ as a very favourable investment destination for global investors fades a little. What we are really thinking is not so much a sharp turning point, just this influence coming off the boil a little.
Perhaps at the margin, large global investors may notice stronger global growth which could encourage a switch of investment flow into other countries, but also higher global interest rates may shape how investors think about higher yielding markets like NZ.
Digital disruption and consumer trends to the use of mobile access for financial transactions will most likely continue at a strong pace.
2. How does that compare to 2016? How did last year shape up for you and your staff?
2016 turned out a lot better than expected, with stronger growth, and lower volatility than we expected given events like Brexit, the US election and expectations of higher US rates. We continued to hire staff, and we think this trend of growth will continue in the funds management industry.
3. What are the issues affecting your industry and what impact are these likely to have over the next 12 months?
Global trends point strongly to the need for improved transparency, high compliance requirements and easy access to quality research, advice and efficient transactions.
For the markets in 2017, we think growth trends both in NZ and overseas will start the year strong. The risk globally is that inflation might drift up a little, and that markets could become a little nervous both about that trend but also politics in Europe and actual policies under the new US president. So far, however, equity markets seem to be focussed on the positive potential for growth to strengthen.
4. Going into an election year, what are the three biggest issues the Government needs to solve?
It is tough as a New Zealander seeing the devastation in Kaikoura; clearly we need our best engineers and planners to develop strategies for our infrastructure. Once these strategies are developed the Government need to get the message out to the rest of NZ and the world.
To a large extent, this is an apolitical issue, but messaging will be important. On a larger scale it seems that the public also are backing better infrastructure planning, or at least disclosure of planning in Auckland. Nothing is going to change momentum in 2017, but if NZ is going to persist with 70,000-plus migrants then the Government needs to consider Auckland's public infrastructure.
Also migration - it seems likely that the debate over migration will be a core part of the election cycle. I suspect that we probably need a clearer strategy on migration. To what extent are our policies on migration consistent with investment in housing, education, health and other public services?
5. What role does the business community have in tackling these problems?
Businesses thrive on policy consistency, the same messages, and good public policy development. Businesses employ people and invest if they have certainty. A lot of our recent growth has been based on this certainty. But productivity growth rates are still relatively poor in NZ.
We can't blame all the poor productivity growth on government infrastructure spend, although Auckland transport bottlenecks are clearly a factor.
Businesses need to embrace new technology; examine the advantages of, for instance, migrating IT infrastructure to the cloud.