More fundamentally, I have a view that New Zealand’s long-running strategic disadvantage — we are the smallest, most remote developed country in the world (by quite a way, if you are asking) — is about to become our biggest advantage.
There is no doubt we live in a deeply troubled world right now. Talk of a third world war is less ridiculous than it’s been in decades. And with more elections for more peoples next year than at any other time in history, according to the Economist, the forecasts on how these may go is troubling. The Economist also says that were a US election held tomorrow, Donald Trump would win, and this has the capacity to send the States and the world into something of a tailspin.
As stated, our distance, relative smallness and prosperity can be sources of real comparative advantage. The wealthy want to come here for holidays, to live and to invest. We need and can grow off all this. Just as Bill Foley has come and invested in things like wine and now a football team, so others can also come and make our place a better one.
In the same vein, I see at least five things about the new Government which provide more real reason for optimism, in no particular order.
Inward investment
New Zealand needs more inward investment, and it’s exciting to see in the National/Act agreement a plan for reform of our overseas investment regime. This needs to be wide to ensure the scale of what we need can be achieved. We need the next Bill Foleys of this world, and when they come, we need them to be able to invest.
At the Auckland Business Chamber, we’ve been gearing up in anticipation. Our international team is growing to ensure we can increasingly facilitate more inward business interest and act as an honest broker in advising about the scene here and the specific opportunities. I predict 2024 to be the start of years of harvest on this.
Private sector infrastructure
There is a consensus we have an infrastructure deficit, an ambition to do great things, but with an understanding the Crown can’t pay for it all. Work to bring (both domestic and international) private sector know-how, funding and finance to big infrastructure like never before has the capacity to be this Government’s most enduring positive legacy. Chris Bishop, Shane Jones and Simeon Brown: we are all ready to help you do this as quickly as possible.
Local government city deals
Across the board in the new Government, there seems appetite to really change up how it works with local government. Talk of city and regional deals can be turned into reality, enabling more prosperous, vibrant cities and communities through greater partnership and more funding tools.
Technology
It is fair to say Judith Collins has entirely grasped how important this area is for New Zealand’s economy. At the Auckland Business Chamber we agree, and to that end we will shortly be releasing a report on how Auckland can be a world-class tech hub, with technology becoming our region’s number-one sector. Opportunities in areas such as creative technology, fintech and health tech are huge if we are prepared to do what it takes to succeed.
Cutting red tape
David Seymour’s regulatory reduction agenda is sure to be a winner with business. Too much red tape adds cost and saps confidence. By doing things such as repealing Fair Pay Agreements and reforming employment and other health and safety laws, the Government will create a better business environment.
A final thought. Chris Luxon has made clear he and his ministers want a new way forward, with deeper engagement and collaboration with business and the private sector. This is required for all of the above to move closer to reality. Partnering is key.
One thing Sir John Key’s government did which was very effective in his early days was a jobs summit (held within months of his election), where business and wider private organisations came to the table and ideas were put forward without fear or favour. This resulted in initiatives such as a national cycleway, a home insulation fund, irrigation systems and more. There is room for a second iteration of such a summit, to ensure we accelerate growth around such things as overseas investment, infrastructure, our cities and technology. Such a move would be yet another reason for optimism.
Auckland Business Chamber is an advertising sponsor of the Herald’s Dynamic Business report.
