Magazine article New Zealand Management

Ranking Realities

Magazine article New Zealand Management

Ranking Realities

Article excerpt

Like sports fans who blame the coach when their favourite team fails, business leaders berate the Government and its policies whenever New Zealand's economy rates unfavourably on international comparative tables. Tax cuts, reduced compliance costs and what-have-you are demanded to nudge us higher up the ladder--even when better-performing countries include Denmark, Norway and Sweden, where people are taxed much more heavily than we are.

The 2004 IMD World Competitiveness Yearbook, published last month, ranked 60 countries on their ability to "create and maintain an environment that sustains the competitiveness of enterprises" and--oh, the shame of it--New Zealand slipped from 16th to 18th place last year. Australia, meanwhile, was promoted from seventh to fourth place. New Zealand ranked last for environmental law and compliance obligations which hamper business competitiveness and 55th for introducing new legislation which restricts the competitiveness of enterprises.

Northern Employers and Manufacturers Association's chief executive Alasdair Thompson blamed the Clark Government for this state of affairs. "Government policies and slow response times are undermining our business environment," he huffed. "New compliance costs are mounting while old compliance obstacles, such as those with the Resource Management Act, are not being dealt with."

Carter Holt Harvey warned that its plans to invest hundreds of millions of dollars in New Zealand were in jeopardy because of rising energy costs and red tape. A few weeks previously, a similar warning about red tape was sounded by Fisher & Paykel Appliances' John Bongard.

Another bothersome news item at the time of the IMD survey's publication revealed that a British entrepreneur, Nick Allan, risked losing his residency. Allan had gained his permanent residency under the investor migrant category, and the rules governing this procedure require him to maintain the value of his funds above the $1 million mark for two years.

As Allan pointed out, this is silly--the rules encourage him to keep his $1 million in a deposit account earning 3.4 percent interest after tax rather than plough it into ventures of the sort that generate employment and economic growth.

The Government had the good sense to respond by declaring its intention to review the rules.

Government officials for some time have been examining the Overseas Investment Act and its administration. Work is, however, still in progress an official in Finance Minister Michael Cullen's office told your columnist. …

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