We’ll get a sense of just how far PM Christopher Luxon is prepared to go when he fronts Auckland businesses at the Cordis hotel tomorrow to unveil another plank in his economic growth agenda.
Word around Auckland late this week was to expect an updating of New Zealand’s Active Investor Plus Visa framework. That’s the benefits we promise investors if they put capital into New Zealand firms or invest in greenfield ventures – often a fast-track pathway to citizenship or simply residency.
This, together with Luxon’s plan to attract major international funds to invest in developing New Zealand’s next round of Government infrastructure, will raise the country’s profile further.
His investment summit on March 13/14 has been well-telegraphed. But that is just round one in lifting this country’s profile, not to borrow the cliche that we are “open for business” (we were only ever closed during the Covid lockdowns and that stopped people at the border – not trade) but to actually do business.
His Cabinet is making the right moves – but they are still way short of bold.
On January 27, Cabinet ministers Nicola Willis, Erica Stanford and Louise Upston fronted media at Wellington Airport.
From my hotel room in New York, I watched online the ministerial trio announce that New Zealand was launching a new Digital Nomad Visa category.
Willis laid out that New Zealand was “open for business”.
Enticing digital nomads to stay on beyond their current tourist visa time limits is a good idea. But frankly, for some years now many people have been running their businesses while on the road or having a “workcation” in a great climate – it’s one of the benefits of digital technology.
It is exactly what I was doing as well – though from sub-zero temperatures in New York – not from the fabled beach deck chair.
The real benefit will be in converting digital nomads – or their bosses – to a more “sticky” relationship with New Zealand, by setting up two-way businesses here that invest and employ people and open doors for our people to do business with other countries.
Digital nomads are in demand – some 60 countries court them with many requiring sizeable proof of earnings to cover rental payments and medical insurance so there is no risk they will become a burden to host country taxpayers.
There are tax issues and the Government has reminded prospective working visitors of their vulnerabilities.
I hope it works.
I am less sanguine about the vexed issue of the absurd visa fee hikes and restrictions this Coalition Government has slapped on tourists – particularly those from China.
Prior to Covid, tourism was the big export earner for the New Zealand economy.
At that same airport briefing, a journalist asked Upston – newly in the tourism portfolio – if there were plans to reduce the fees.
Said Upston: “The feedback I received from a big operator … who was responsible for a lot of visitors in from China was they just want to know that New Zealand is welcoming them.
“So my message very clearly for someone in China who is considering whether or not to book a holiday in New Zealand is we would welcome you with open arms to come and visit New Zealand whether you want to be on a Digital Nomad visa or whether you just want to come and have a holiday with your family – you are welcome here.”
Upston may have just taken on the portfolio. But frankly, her response was fatuous and dead wrong.
The facts are undeniable: As the accompanying table shows: Chinese tourist numbers are lagging – even compared with Australia. In the 12 months to October 2018, 451,344 Chinese tourists visited New Zealand. Last year there were just 245,305. As I have written before the shortfall represents a major loss of income for New Zealand, with Chinese tourists spending $6537 a trip on average.
Chinese arrivals in October and November 2024 saw zero growth over the same period last year, while Chinese arrivals in Australia during the same two months increased by 30%.
Singapore, which introduced a visa-free policy for Chinese nationals in early 2023, also saw a substantial uptick. Chinese arrivals in October and November 2024 increased by 80% to 409,205.
Prospective Chinese visitors now face an increase in the visa fee to $341, the removal of the ability for documents to be submitted in Mandarin instead requiring official certification in English, slower processing times and the introduction of the $100 tourism levy from last October (which also applies to some other markets).
As Stanford well knows the New Zealand Business Roundtable in China and Chinese-related tourism entities have been lobbying her for months to reduce the direct cost of Chinese visas and remove some costly anomalies. Trade and Investment Minister Todd McClay has also been lobbied and has also taken part in an absurd pass-the-parcel game at the ministerial level.
The NZ Business Roundtable in China has repeatedly warned that Chinese tourism recovery here will lag unless the Government makes some serious changes. McClay was also confronted directly at a Chinese Chamber of Commerce event in Shanghai late last year on the impact of the visa hikes and conditions on inbound tourism to NZ.
It is an undeniable fact that the swingeing immigration hurdles that New Zealand has placed in front of Chinese businesses and tourists are hampering bilateral relations and preventing a full recovery of what was once one of our most lucrative tourism markets.
Willis has indicated there could be moves to streamline visa requirements. But the Government has been slow to act.
Tourism is a sector Luxon wants to boost as a signature element of the Government’s growth strategy. But he cannot afford another repeat by a portfolio minister resorting to spin instead of fact-based analysis if he wants the growth strategy to be taken seriously.
He is ideally placed to spruik New Zealand’s tourism profile on his many trips abroad. He did so when chief executive of Air New Zealand.
The last minister in the portfolio was a busted flush. If Upston can’t make a go of it, the Prime Minister should take on the portfolio himself.
