I’m delighted to see the Government taking note of BusinessNZ’s advocacy on overseas investment with its decision this week to start building a more welcoming environment for investors. 

Today’s AdvocacyUpdate considers ACC’s $7 billion deficit which will impact all business levy-payers; and endorses anti-money laundering rules being made easier for businesses to implement.  We’re advocating on behalf of local firms wanting to win government contracts, and we’re supporting refocusing apprenticeship funding on the skills most needed in the economy. 

       Tēnā koutou katoa!   Katherine Rich, Chief Executive

The Govt has undertaken to improve policies on foreign investment and rewrite the Overseas Investment Act, a move consistently advocated by BusinessNZ.  CEO Katherine Rich says current overseas investment rules make it difficult and uncertain for overseas investors to consider investing here, and we are missing out on investment that is going to other countries.  “Capital is critically needed to grow businesses and assets and grow incomes, and New Zealand needs to make it clear that we welcome investment.”

Inflation is subsiding but economic stats, public and private, still teeter. Crown accounts for 2023-24 show revenue outpaced by higher expenses, while net core Crown debt ($175.5b) grew by $20.2b since last year. The latest household stats tell a similar story: over the last quarter household spending grew while household net worth, disposable income, and saving levels fell. Household debt now makes up 167% of disposable income, with debt servicing ratios rising. The economic context remains challenging for business, BusinessNZ says.

ACC books have gone from surplus to a $7.2 billion deficit in the last year and some ACC Accounts don’t have enough funds to cover the future cost of claims, creating an unjustified liability on future levy payers. BusinessNZ recommends ACC should improve its processes for accepting and managing claims, as the volume of claims is growing faster than population growth. ACC should also ensure all Accounts are fully funded to meet the lifetime cost of current claims, a legal requirement that is currently not being met, BusinessNZ says.