Dialogue: NZ still a great place to call home

By STEPHEN TINDALL*

Baycorp's recent announcement of the shift of its head office and primary share market listing to Australia has again raised the issue of a transtasman exodus.

There are many valid reasons large New Zealand companies would want to move relocate and no doubt Baycorp's directors decided that in their circumstances, it was the right thing to do.

The temptations to move are numerous: the ability to attract more investor attention in a bigger capital market, the opportunity to be closer to customers in a much bigger market, and, arguably, a more business-friendly environment.

The move of listings and offices across the Tasman is not good news for New Zealand, no matter how you look at it, unless you are indifferent about where your grandchildren grow up.

When companies move their head offices from New Zealand they are moving most of their senior jobs. The New Zealand operation remains but becomes more like a branch office.

With the senior jobs go opportunity and money that would have been spent in New Zealand. Those with ambition gravitate to where the decisions are made.

There is also a flow-on effect as those providing legal, financial, printing or other services lose business to overseas counterparts.

There are many reasons for businesses to remain based in New Zealand. It is true that we have only a tiny population and that businesses wishing to expand must sooner or later invest overseas. But these days, it is possible to run global enterprises from virtually any location.

Despite changes that have unsettled the business community, New Zealand remains a great place in which to do business. We retain a legal system based on sound principles and have a heritage of honesty.

Final appeal to the Privy Council gives business people confidence that the Judiciary cannot be bent to the will of politicians. New Zealand is one of the least corrupt countries on earth.

Our education system, while undoubtedly capable of improvement, is certainly no worse than that of the western countries with which we like to compare ourselves.

People don't focus solely on monetary issues when they make their decisions on where to live. It is the people in a company who make it successful or not.

New Zealand is a great place to live and to bring up children and by locating in New Zealand, we can draw on the talents of fine, hard working people.

It remains a low-cost place in which to do business and despite our frequent dismay at the inadequacies of the Auckland transport network, we do not yet face the daunting commutes experienced in Sydney.

The horrific cost of housing in Sydney and the punitive personal tax rates make the cost of living for employees higher there and this is reflected in the costs of doing business.

From New Zealand shareholders' perspectives, location is important as they lose the benefit of imputation credits if a New Zealand-based company changes its domicile. This means they would effectively go back to being taxed twice on the earnings of their company, so their interests need to be balanced against any perceived benefits from relocating.

New Zealand companies changing their primary listing may lose their place on New Zealand fund indices, resulting in a selldown of their shares by index-linked investment funds, although this may be offset by entry, albeit as smaller players, in much larger Australian indices.

In the final analysis, those in business who love this country must take the lead in promoting the interests of New Zealand.

If everybody takes a narrow view of moving, we will end up with a depopulated and comparatively poor but scenic country.

It will no longer be a good place to raise families as we will not be able to afford the amenities we have come to expect.

Young people will leave to seize their opportunities.

If we can share a vision of the kind of society we can become, and are prepared to make the decisions needed to turn vision into reality, we can reverse the spiral.

The Warehouse Group wants to play its part in shaping a future for New Zealand by building a vibrant Australasian business, based right here in New Zealand.

* Stephen Tindall is founder of discount retail chain The Warehouse.