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Advocacy for business by the BusinessNZ Network | |
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Soft demand is now the dominant feature of the New Zealand economy, according to NZIER, as economic activity slows while households cope with higher mortgage rates. Lack of demand is also a key feature in today’s BNZ-BusinessNZ Performance of Manufacturing Index which shows NZ’s manufacturing sector has been contracting for 15 consecutive months – longer than during the Global Financial Crisis. ‘New orders’ in the manufacturing sector have now been in contraction for 21 consecutive months, the PMI shows. | | | |
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Soft consumer demand is among the factors helping to reduce NZ's headline inflation rate - along with an easing in housing costs and net migration and significant reduction in government spending – but it’s not enough to get interest rate cuts this year, banks say. While tradeables inflation is falling along with the inflation rates of many other countries, NZ's domestic inflation - including rents, insurance, property rates, electricity and services - is still high. Banks and institutions aren't forecasting interest rate cuts till 2025. | | | |
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The Govt has set a goal of doubling the value of NZ’s exports in 10 years, an ambitious goal that will require an extra $95 billion in goods and services exports. NZ’s current export profile is dominated by primary products that face constraints increasing volume, so the drive for more value is critical. Promising sectors include aquaculture, space, renewable energy, minerals, IT, gaming and creative services. BusinessNZ says the goal necessitates more capital investment to allow exporting businesses to grow, which the Overseas Investment Act has been restricting. | | | |
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Associate Finance Minister David Seymour has given new instructions for administering the Overseas Investment Act - enabling lower-risk investors to invest more readily, reducing compliance costs on applicants, and not duplicating regulations from other areas. BusinessNZ’s Catherine Beard says the changes are positive, but the OIA is still far from welcoming to overseas capital, and other OIA settings need improvement too. “We should remember NZ has the OECD's least open FDI policy and a rewrite of the entire Overseas Investment Act is warranted,” Catherine Beard says. | | | |
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Emissions trading settings |
BusinessNZ and the BusinessNZ Energy Council recommend retaining current ETS structures and principles to ensure NZ’s lowest-cost pathway to net-zero, but say frequently-changed ETS settings are making it hard for businesses to reduce emissions. Their joint submission to the Ministry for the Environment says any consequential problems from the ETS such as over-afforestation should be managed separately from the ETS rather than by further changing ETS settings, and fixing the allocation amounts of NZ units well in advance would also improve business confidence to invest in emissions reduction. | | | |
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The Holidays Act revamp is underway, with key changes relating to annual and sick leave. Annual leave: currently employees aren’t entitled to annual leave till they’ve been in a job for a year (though the leave in fact accrues over that time) – this will change from an entitlement to an explicitly accrual basis. Sick leave: currently calculated per 10 days’ worked, this is hard to calculate for irregular hours - it will change to a pro-rata system where a % of work time counts as sick leave regardless of hours worked. Businesses wanting to be consulted on the changes can register here. | | | |
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Health & safety consultation |
BusinessNZ supports the consultation on health and safety regulations announced today by the Minister for Workplace Relations and Safety. The BusinessNZ Network requested a review because of concerns that regulations in a number of industries are not fit for purpose, with the protection of staff from health and safety hazards in many cases remaining at risk, BusinessNZ’s Catherine Beard said. BusinessNZ is inviting member businesses to contribute their views to the consultation. | | | |
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AdvocacyUpdate is an update on recent activity & advocacy by the BusinessNZ Network | |
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