Improving New Zealand’s productivity and international competitiveness is a perpetual challenge for any government.
Under the Closer Economic Relations (CER) agreement, we have shared this challenge with our Australian cousins in recent years, and gained in the process, real momentum.
Recent milestones include the Joint Productivity Commissions’ December Report exploring further integration between the New Zealand and Australian economies.
New Zealand Prime Minister John Key and his Australian counterpart Julia Gillard held their annual talks in February this year, marking 30 years of CER.
It was with some anticipation that the business community awaited the next instalment – a series of reports on New Zealand’s economic competitiveness, titled, ‘New Zealand’s Competitiveness: Competitiveness at the Leading Edge,’ by Hong Kong-based consultancy Enright, Scott & Associates.
Export competitiveness
Released on March 1, the reports focus on improving New Zealand’s export competitiveness, which, with the obvious exception of the primary sector, lags our counterparts in the OECD. Not surprisingly, the overall take out was that while good progress has been made, there is still a lot of work to do.
The research was commissioned by a number of government agencies and, aside from the specific report which addressed Auckland-related issues, its finding was released with relatively little fanfare and received correspondingly little government and therefore media attention.
I found this surprising, given the National-led government’s focus on improving the productivity and competitiveness levels of New Zealand business, and its related efforts in progressing a number of important trade agreements with our overseas trading partners.
Disappointing reaction
Economic Development Minister Steven Joyce, whose Ministry of Business Innovation and Employment was one of the agencies that commissioned the reports, told Radio New Zealand that he did not like some aspects of the findings.
Apparently, they did not take account some of the recent initiatives of the Government.
Fair enough, but this reaction is disappointing. Surely, what is most important is the potential opportunity to drive meaningful changes to better position New Zealand to participate in the Asian Century boom.
It would be far better for the Government to focus on the valuable insights and learning in the reports. Some of these resonate with CPA Australia and our own efforts to improve financial management practices across the public and private sectors, thus contributing to improved productivity and competitiveness.
Concerted efforts
These include the following:
Education – fostering better links between business and universities so that education and training resources can be directed to the sectors where they are most needed. In particular, New Zealand needs more managers with international business and entrepreneurial characteristics, as opposed to those with just accounting or legal backgrounds
Taxation – make sure that our taxation system offers a strong incentive to individuals and companies to base themselves here instead of overseas. A mutual recognition regime for trans-Tasman imputation credits is also an imperative, in our view
Positivity – we need to develop more positive attitudes towards business and in particular, celebrate our successes and young achievers
Last year, CPA Australia also commissioned Enright, Scott & Associates to undertake a similar study on Australia’s economic competitiveness.
The results are due soon and to our knowledge they will be the most comprehensive analysis of its kind done in Australia.
However, the real value from this work will be in comparing the New Zealand and Australian findings and using the knowledge gained to further our joint economic interests.
Rather than comparing our competitiveness with European nations, as these latest reports have done, we should instead be looking at the fast-growing Asian economies as a benchmark.
The economic futures of New Zealand and Australia are becoming ever more closely linked with Asia, and fast-developing economies such as Indonesia and Malaysia represent huge opportunities for our export businesses to be genuine participants in the Asian Century.
While some may not like the methodologies or the findings of these latest New Zealand competitiveness reports, the reality is that reports like these provide ideas and a roadmap for New Zealand’s future engagement with the rest of world, particularly Asia and we ignore them at our peril.
David Jenkins is New Zealand Country Manager for global accounting body CPA Australia. He is based in Auckland. CPA Australia is the Sponsor of the ‘Best Accountant of the Year’ category of the Indian Newslink Indian Business Awards 2013.
