“Electricity generation for us is like training at altitude – we have done it for decades and the world is waking up to it,” says Newfield.
Morrison & Co, which manages publicly-listed Infratil, has taken that step of exporting expertise. Infratil has majority ownership of Singapore-based Gurin Energy, a renewable energy development platform, and has committed US$233m (NZ$392m) for wind and solar projects across Southeast Asia, North Asia, India and Japan.
“New Zealand shareholders are participating in the growth of renewable energy in North America, Asia and Europe. We are taking New Zealand expertise to solve big problems in the world,” says Newfield.
Infratil has also invested in radiology. “We have a strong healthcare system and this can be turned into an export earner such as teleradiology. The idea of having medical specialist care delivered by a New Zealand doctor is appealing.
“Doctors in New Zealand can read MRI scans from around the world, even overnight to UK patients.
Newfield says governments (in New Zealand) have been focused on building concrete infrastructure and they can lean more on technology and build digital infrastructure.
“We can develop telemedicine rather than building big hospitals; we can use road pricing to spread the demand on roads rather than build big highways; we can also introduce demand management and peak generation technologies rather than building Lake Onslow – a Muldoonism big think project.
“There is a risk of government getting in the way. The Lake Onslow hydro project is an example of government over-reach – it feels like a solution looking for a problem.
“Technology, private capital and the right market settings will address that,” says Newfield. “We need to build for a 21st Century society, not the 20th Century we have lived in.”
Newfield is worried that New Zealand has an undeveloped capital pool to wrap an ecosystem of capability around it.
“New Zealand needs more long-term pools of capital like KiwiSaver and the NZ Super Fund. We need the people managing those pools to have the confidence to look ahead 10 or 20 years, and not worry about liquidity and members wanting to cash-in in the short-term.
“The Australian super funds are very happy to lock money away for 20 years and invest in great things in society.”
He says New Zealand frets too much when talented people leave for overseas. They end up contributing to the country offshore. “Of course, we want a free flow of talent in both directions, and the ability to bring in expertise when we need it.
“In our business, we send talented people overseas and help shareholders in Infratil make good investments. They funnel their knowledge and expertise back to New Zealand.
“There are labour shortages in New Zealand – it’s one of the things driving inflation.
“But strangely, wherever I go in the world, there’s a labour shortage. I just don’t know where the people are or have gone.”
On the tax front, Newfield says New Zealand business does itself a disservice when it harps on about lower taxes and not wanting a carbon price.
“We should focus on how we can win globally. New Zealand has a relatively low tax environment, especially for wealthy people and we have the opportunity of leading the world with decarbonisation credentials.
“We need a proper carbon price and not continue subsidising fossil fuels. It does seem odd that we tax people who work and consume but we don’t tax passive earnings from inheritance and other sources. We are probably taxing the wrong things.”
Paul Newfield’s top three business priorities
· Breaking out of being a small, low income, low productivity economy by exporting expertise not commodities
· Building social cohesion and reducing inequality so that we can avoid the path of populism and dysfunction
· Making the most of our competitive advantages in a decarbonising world.
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